- Player: Polo Leteka
- Company: IDF Managers
- Established: 2008
- Visit: idf.co.za
The availability of funding
The market is turning, and it is becoming more realistic to try to attain growth capital. That said, I do think bootstrapping is important.
Start off small, create value first. Go for growth funding instead of trying to get hold of seed funding. It is expensive to get funding early on. Moreover, you seldom even know what your financing requirements are when you’re just getting started.
Growth funding vs seed funding
When it comes to seed funding, you’re really only selling an idea. There are very few guarantees for all involved, and, because of this, it is an expensive way to finance.
You often need to give away significant equity, which makes life much more difficult.
With growth funding, you are trying to grow something that is already established, and that has real numbers to back things up. Because of this, it is cheaper to get hold of finance – you’re not just selling an idea.
You’re talking more intelligently about the opportunity and can draw on actual experience, which means you’re having a more sophisticated conversation with potential investors.
Growing too quickly
Growing a business is tricky and can trip entrepreneurs up. In a lot of ways, a new business is just like a baby. A baby needs to learn how to sit, crawl, walk slowly, and then run. A business is the same, and growing is the ‘running’ phase of a company.
A lot of lessons need to be learned before an entrepreneur can safely start focusing on expanding a business aggressively. As an owner, you need to really get to know your business first. You have to find out what works and what doesn’t.
Growing a business is risky. Liquidity is needed, and the risk exists that you’ll over-leverage the company. You also need to take into account what effect growth will have on your suppliers, staff and clients.
As the saying goes: You need to back the jockey, not the horse. I’m drawn to entrepreneurs who prepare well for a pitch. I like people who do research, know their target market well, are passionate and work really hard.
The business opportunity being presented is important, of course, but, for me, it is first and foremost about the person. Only if I like the person do I start looking closely at the business.
How to pitch
Firstly, you need to get to the point very quickly. Too many entrepreneurs get caught up in the minutiae of the business. Or they start spouting jargon. I believe in simplicity. Don’t make things too complicated. Keep the concept simple — state the basic problem you’re trying to solve.
It is also important to know your potential investors. Do they have a specific investment philosophy? Do they demand a fixed ROI?
Thirdly, you need to know your numbers. Assumptions have to be clear, tested and believable, especially when it comes to growth funding. You need to know your market and your business very well.
Lastly, you shouldn’t try to hide your mistakes and failures. Investors like to know that you’ve learned lessons, especially if those lessons were hard-learnt.
Business is about relationships. You don’t want your partner to feel as if they have been taken advantage of. You want the other party to feel that their needs are being taken into account.
Our default position is often selfishness, which is not conducive to a long and positive relationship. When you try to win every battle during a negotiation, you often end up losing the war.
Instead, work towards common ground as much as possible. Don’t be too short-term in your outlook – focus on the bigger picture.
The art of pitching
Some people are better at it than others, but that doesn’t mean that it can’t be taught. You can get better at it, but it takes work. You need to practice and refine your skills.
A lot of it is about being able to read your audience. If you’re serious about improving your pitching skills, it might be worth finding a coach to work with.
Your business plan must have a very clear budget. You need monthly, quarterly and annual figures. You don’t need to stick to the budget absolutely, but it helps you to see if you’ve over- or under-spent.
Your budget should be fluid — managers must be able to get approval for expenses if needed — but a budget is your first point of control. A proper accounting system is also crucial.
Channeling The Fire Of Authenticity: Asia’s’ Top ‘YouTuber’, Joanna Soh
Joanna Soh’s introspective look into why her YouTube channel is not a ‘side project’ and how she makes a difference to her audience.
“The best project you will ever work on is you” – Joanna Soh
The scene was the rooftop of the Cascades Residency in Kota Damansara, Malaysia where the tranquillity of a high vantage point, the colourful deep blue of the pool, and the hypnotic sound of a waterfall created a suitable ambience to interview Asia’s’ top ‘YouTuber’, Joanna Soh.
I only interview entrepreneurs and leaders with a sense of purpose and a deep love for what they do. Joanna Soh is no exception, her smile carries the fire of authenticity, tenacity, caring, and vulnerability. This fire has most definitely spread as Joanna is Asia’s’ top ‘YouTuber’ with well over 1 Million followers and she openly shared her fears and struggles, that in itself is a valuable lesson to all entrepreneurs. Within the willingness to admit to your fears and weaknesses lies great strength and it is an understatement to exclaim that Joanna is a strong woman.
She is driven by the purpose of adding value and making a difference to her audience and is uplifted by the feedback of her fans for they mean so much to her. As I saw a childlike sense of awe and gratitude in her eyes when she spoke about her achievements I was reminded of the master poet Rumi’s’ advice to us all:
“Sell your cleverness and purchase awe”.
Stop making everything so complicated and stop taking yourself so seriously are only some of the basic lessons that Joanna’s’ entrepreneurial journey has taught her. She acknowledges that the ‘road less travelled’ of entrepreneurship can be a lonely journey and reminds the reader that when she started she also had no audience and had to build her brand. That is the reason why having a strong purpose is so valuable as it ensures longevity and makes it hard to give up on your entrepreneurial dreams.
Related: Make Money from YouTube Videos
Starting out Joanna stumbled upon a YouTube article that revealed that there was only one other Asian girl that was sharing fitness related content and took the gap with great agility. Her behaviour reminded me of Julius Caesars’’ famous words:
“I came, I saw, and I conquered.”
Joanna used and still uses basic discipline as a focal point for her brands’ growth. From the start she was disciplined enough to not treat her YouTube channel as a ‘side project’ but instead ensured that she at least worked eight hours a day on her project and meticulously researched all the technicalities of building and scaling her now famous brand.
This influential leader taught the author that there is a science behind building a strong following on YouTube. Every videos’ title is very important and whom you tag is also a priority. All these seemingly small details and mechanisms create compound interest over time when you build your brand on YouTube.
Joanna understands the importance of business metrics and daily tracks the amount of subscribers she has. At this juncture I would like to point out that Joanna’s’ followers grow by thirty thousand per month on average!
Although her background working as a TV producer in England has helped in creating a foundation for her it is most definitely not the only contributing and critical factor to her success. This YouTube stars’ relentless purpose of adding value to her followers has driven her to create ‘evergreen content’ that will still be relevant in five years’ time.
Lean in a little closer
I hope that the reader now ‘leans in’ and carefully listen to this YouTube icons’ advice, and more importantly apply the learnings contained therein:
‘Do not start a channel with the mind-set of getting rich nor famous quickly. Rather start with a clear and defined purpose – Why are you doing it, and what is really going to drive you?
Do not just upload a lot of content and then stop
Consistency is critical so therefore upload according to a pre-set schedule carefully keeping your target audience in mind. Do not limit yourself even in choice of platform, just put yourself out there. Simplicity is very important and therefore leave your audience with very easy to understand tips and practical solutions.
Discipline is a key value
Whether you are tired or not and even when you are not getting early traction still keep on doing it and be patient enough to receive your reward later. Build discipline over time and always remind yourself that helping people and adding value to them will always make you feel more grounded and centred.
Understand your audience and they will keep growing with you. Know who your audience is and work towards that strength. I know for example that eighty percent of my audience is female and continuously track the demographics of my audience. Slowly but surely take on branded sponsors whose vision and activities align with yours.
Carefully select who you follow online and feed off that persons’ energy
Do not confuse yourself and your purpose by following too many people from different industries.’
We concluded the interview and I felt inspired not only by her success but mainly by her tenacity and fierceness as a leader combined with the willingness to share her vulnerabilities which ultimately makes her stronger and stronger.
Follow Joanna Soh and you will learn something valuable. I already am…
10 Inspirational Quotes From Successful Actress-Turned-Entrepreneur Jessica Alba
Jessica Alba isn’t just another Hollywood face — she’s also the founder of a billion-dollar business
While many only recognise Jessica Alba for her performances in Sin City or Fantastic Four, in the entrepreneurial world Alba’s name goes beyond her role as a Hollywood star.
Rising to fame as a young actress, Alba saw much success early on. However, it wasn’t until 2015, when Alba co-founded The Honest Company, that she became a prominent name in the business world. What originally began as a beauty line has since grown into a billion-dollar 500-plus-employee business that sells safe and healthy baby, personal care, cleaning products and more.
It’s safe to say Alba can teach you a thing or two about entrepreneurship and running a successful business.
To learn more, here are 10 inspirational quotes from the actress-turned-entrepreneur.
Dylan Kohlstädt Of Shift One Marketing Weighs In On Digital Marketing For Start-Ups
Digital marketing maverick Dylan Kohlstädt unpacks how start-ups can maximise their marketing spend, get noticed and reach customers through savvy and cost-effective digital campaigns.
- Player: Dylan Kohlstädt
- Company: Shift One Marketing
- Visit: www.shiftone.co.za
How can start-ups go about using social media, networking and word-of-mouth to grow their businesses?
You have to be active on social media, that’s a given, but the only way to cut through the content marketing clutter is to produce content that moves the needle, and the only way to do that is to really immerse yourself in your customer segments. Ideally, it’s video-based, and ideally, your customers are creating the content for you.
Social media is digital word-of-mouth — so if you’re doing it well, customers will become your sales reps, and refer friends to you. Make it as easy as possible for customers to buy from you (usability testing), and for them to refer you.
Why is it easier to market your business than before?
Digital marketing is cheap, and you can set it up and manage it yourself. It also means that you can segment your markets like never before, and reach micro targeted segments with just a few rands. Facebook ads are super cheap, as long as you’re not chasing ‘likes’. You might actually get a few sales from them. Just remember, there’s a lot of rubbish you’ll have to trawl through first.
On the other hand, why is it also harder with such overcrowded markets?
Everyone has competitors, because all it takes is a website and a few bucks and you’ve got a business. Niching is critical. You have to understand your market. You have to be unique. You have to appeal to them, and their needs and emotions.
You have to understand their needs really well. Marketing plays a critical role in brand building — without the research involved in marketing your business, you might not understand your target audience well enough, and your product or service might not hit the mark as a result. Similarly, without a clear brand, you’re going to be lost in the sea of competitors out there.
How can start-ups access their beachhead markets through digital marketing campaigns?
It’s important to be very clear on who your customer is and what your niche is before embarking on a digital campaign. The more niche your market, and the more defined your product, the more success you’ll have and the cheaper your marketing becomes. I encourage start-ups to complete detailed market analysis covering:
- Who is your customer? Include market size, description, demographics.
- What need drives them? What is the gap?
- What are their emotions? What emotions cause them to make decisions and how can you appeal to these emotions, bearing in mind that emotions make people buy, while logic makes them think.
- Which product is right for them? Which product meets their needs?
- What is your message to them? How are you going to package all of what you know about them to create messaging that is compelling?
- What channels are they on? Where are you going to find them? This is critical as you need to target channels that they’re using, and not only the ones you’re comfortable with using.
- What content do they need? This will inform your content marketing strategies.
Related: Can Your Marketing Team Speak Data?
If you don’t do research, you make assumptions. The more time you spend on this process, the cheaper and more effective your marketing will be. It will also help you avoid one of the most common mistakes start-ups make when it comes to establishing who their target market is — you want to be niche, not broad.
Nearly all markets are accessible via digital marketing, and if they are not digital, then SMS and radio. The more information you have about your customers, and the more niched you are in segmenting them, the better your results.
How can a start-up figure out who their real target market is? Any tips?
There are many forms of research out there, but the ones I personally advocate are:
- Usability testing: Get six to 12 customers to use your website and products. This gives you endless insights into who they are and what drives them, as well as the correct wording to use throughout your communication with them.
- Dipstick research: We go to customers, wherever they are, and talk to them, find out who influences them, find out what drives them, find out their feeling about your product and your competitors.
- Content research: Once you’ve identified the voices in the community, reach out to them to get content, establish them as influencers to the community, and create content that is appealing to the market, because it comes from the market.
What should start-ups avoid doing?
Many companies avoid the channels they are not comfortable with. Many agencies produce content that appeals to the account management team, and not to customers. Don’t make big production TV ads or sign up an agency that just wants to win awards — rather create YouTube content that your customers will respond to.
Start-ups often think they need funding to launch. When is this not actually the case and why?
In a services industry, you can get away with bootstrapping. With tech companies, you’ll need to rely on sweat equity (which generally means partnering with a developer and giving them shares in the business) if you can’t afford to pay them. You might just get stuck with someone that isn’t that great at development, but at least they are working on your project for free.
If you do go the bootstrapping route, you need to keep your costs low. You definitely don’t want offices. Instead, run your small team through collaborative online platforms like Trello, Slack or Asana.
Don’t be in a hurry to get funding — it comes with a whole new set of trouble and it might kill your business. Instead, loan what you can from the 3Fs (friends, fools and family), or even a bank loan if you can get one. At least you retain ownership of the business.
Why is cash flow more important than funding in many cases?
Funding isn’t the panacea that start-ups think it is. There are many alternatives to finding an investor, including overdrafts and loans from friends. Cash flow is critical for the day-to-day running of your business. Funding might only pay out in a year’s time, based on performance, and in that time you might run out of cash.
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