More Useful Stuff
- +You Have No Idea How Many Of Your Coworkers Are Masturbating At The Office
- +Are You Sure Your Tie Looks Sharp? Watch This Tutorial And Ace The Half Windsor Knot
- +I Was Young, Rich, and Successful—and Had Crippling Anxiety. Here’s How I Beat It
- +Level Up Your Dress Shoe Game In These 4 Steps
- +10 Things Every Man Should Keep In His Office
Kevin Wood’s previous life was good. Not just any kind of good. It was 70-grand-a-month kind of good (and that was five years ago, mind you). He had worked for a leading retail chain for 20 years, brought in the best sales figures in the country, and was as successful as he could get. He loved what he did. Well, maybe not loved. He liked his work. In fact, when he thought about it, there were a few things about his work that irritated him. And here comes that niggling, persistent “But…” “But there was just something missing,” he says. “The bulk of retailing is repetitive so if you know what you’re doing, you can do your job with your eyes closed. I got to the stage where I didn’t want to be part of the furniture.”
It’s that desire to find that missing something when there’s “just something missing” that can turn employees into entrepreneurs – and you into your own boss.
Entrepreneurship is not easy. It’s not even an easy word to spell. And being good at it is hard work. That’s what all of our country’s top entrepreneurs that I spoke to said. They came from diverse backgrounds and different fields of business, from beer barons to hair-dye tycoons to Internet mavericks. Some of them are genuinely talented; others are genuinely talented at outsourcing others’ talents. But they all know the difference between talking and doing, and always did the latter before the former. And that’s why they can put their ample supplies of hard-earned money where their mouths are.
Wood had heard the sweet nothings before. “When you’re in a corporation, every guy talks about opening up their own business. The reality of it is, it’s just talking. The doing part is difficult because you’ve got to give up that safety net. “I don’t know if somebody told me this or if I learned it myself: whatever you decide to do, you’re always going to get nine people who tell you, ‘Don’t do it.’ But it’s the one person that says, ‘Do it,’ that you listen to.” Kevin found that missing something in a bar in Nieu- Bethesda when he needed something to wash down his kudu salami and was presented with a bottle of homemade beer. Now he runs Darling Brew, a major player in South Africa’s rapidly expanding craft beer industry.
Wood is now his own boss with his own net profits and his own annual leave. “I want to work hard, but I want two or three months off to spend in the bush because that’s what makes me happy. And now we’ve found something that allows us to do that in a year or two’s time.”
IT ALL STARTS WITH A BRILLIANT IDEA
If a business idea isn’t served to you with salami, a good idea is to do something you’re really good at. David Perel, a former professional go-kart racer, discovered something he was really good at during his lunch breaks while working as a web developer. “I used to open up Microsoft Paint and design racing helmets for fun.” He now leads the design for Obox, a business he co-founded that sells premium themes for WordPress, Posterous and Tumblr.
Daniel Ting Chong, internationally acclaimed artist and designer, believes that nurturing an idea is like building a house. “It starts with research as your foundation. Once you have a core idea based on your research, you have to look at your idea to see if it’s viable and differentiated enough.” “It’s what’s referred to as the paper tiger stage”, says Abey Mokgwatsane, CEO of Ogilvy, a leader in an industry that makes invisible ideas become visible. “It looks ferocious but it’s only on paper.” He says if you’re running an idea by anyone, make sure that person is an expert. “Seek opinion from people who have better insight than you do on a particular matter.”
Vusi Thembekwayo, entrepreneur and motivational speaker, maintains that if you want to be successful, you must be significant. “You must have something that your competitors cannot copy, and deliver something your customers cannot do without.” When you’ve refined that brilliant idea, implement it. Now. “The world is changing so fast you are forced to adjust your mindset to survive,” says Mokgwatsane. “The big don’t always eat the slow but the fast always eat the slow.”
A WINNER’S GUIDE TO QUITTING
Many entrepreneurs are, by definition, quitters. The men I spoke to were a line-up of drop-outs from mind numbing corporate jobs, stagnant casual labour gigs and irrelevant academic careers. They didn’t quit their jobs because they had a bad day at the office or because their boss was a stiff. Their choice to go solo was the first of many calculated business decisions. A few years ago Sheraan Amod was studying engineering at varsity and asked himself: “Do I want to follow the course that others expect of me, or do I want to follow what I’m truly passionate about, regardless of the consequences?”
Amod dropped out and cofounded Personera, a personalised merchandising platform for brands on Facebook. He believes there is a much greater education in experience. “The most learned people I know have invested far more in self-education than in their formal education. Continuous
learning is a philosophy that I subscribe to.”
One of the benefits of going independent is that it lets you set up office wherever you want. Take Alec Hogg, who broadcasts the SAFM Market Update every night, not from a studio in Auckland Park, but from a barn on a farm in the KZN Midlands. He runs all his business interests – including serving as executive director on the Moneyweb board – from here because technology says he can. “Five years ago this would have been impossible,” Hogg says. “The radio show works because of digitisation. I use Skype to engage with our editorial team in Johannesburg and Cape Town, so I’m pretty much as available as I was in the Melrose Arch office. With the Internet and DStv, you’re as connected to the news as you want to be. ”
Hogg heartily recommends going rural. “Distance cuts down a lot of unnecessary distractions, including time wasted in the traffic. I have much more time to think nowadays, which was a luxury in the city. An hour of thinking is worth ten hours of doing.”
DON’T QUIT YOUR DAY JOB… YET
Not all of us have instant capital or savings from years of a hefty salary, but there’s something you do have: the 16 hours that you aren’t in the office. It’s not impossible; Clark Kent and Bruce Wayne have been working two jobs for years.
David Perel and his brother Marc started Obox this way, overlapping their start-up with their careers. “I always tell my friends that if you want to start a business, don’t quit your job,” says David. “We ran Obox on the side for a year. When we realised that we could pay our own small salaries, we jumped ship.”
At the beginning of his venture, David Perel was inspired by a video clip of charismatic serial entrepreneur Gary Vaynerchuk. “One thing he said was, ‘Stop crying and start hustling’.” Watch the clip on YouTube: Vaynerchuk is strutting across a stage at a conference, clutching the mic like a rapper. He’s buzzing with enthusiasm, yelping motivations like a dervish powered by caffeine and helium. He’s emphatic that you can work harder than you are and earn more than you do.
David took this to heart. “You do your day job from nine to five. You come home, kiss the dog, and then hustle from eight in the evening ’til three in the morning. Do that until you’ve got something sustainable,” he says. “A lot of people say, ‘I don’t have enough time’, but how many TV series do you watch when you get home? How many hours do you put in on the PlayStation? It comes down to how badly you want to take your idea forward and work for yourself. If you want it badly enough, you’ll find the time.”
As an entrepreneur, you have to work hard. There’s no getting around this. Last year’s results from the FinScope National Small Business Survey showed that the average work week for entrepreneurs is 63 hours. “When you work hard, things just pan out,”
PICK YOUR PLAYERS
When you choose to team up with someone, resist the urge to pair up with likeminded people. Sheraan Amod joined forces with someone with a completely different cultural background and expertise. “There is absolutely no point in partnering with someone who is a clone of yourself,” he says.
“It’s essential to add new perspectives and skill sets into an organisation.” The Perel brothers don’t believe that you shouldn’t do business with family. “We have completely different skill sets, so we trust each other to do our own thing and do it right,” says David. “It doesn’t matter who your business partner is. You will succeed as long as you both have the same vision and values.”
YOU ALREADY KNOW HOW TO RUN A BUSINESS
Your years of desk bound drudgery spent working within the routines of a corporate job are not necessarily a waste of time, but rather an invaluable education in running an enterprise.
“I have no regrets from my corporate life because there’s no way we could’ve got the business off the ground without that background,” says Wood. But first, you need to change the way you see businesses – in fact, you need to see yourself as one. “Your personal situation is no different to a company’s,” says Prof John Ford, associate professor of the Gordon Institute of Business Science at the University of Pretoria. “Households and businesses both incur daily expenses.”
It makes sense: while a business would have to pay for wages, taxes, cost of sales, etc, to keep operating, you personally have to pay for clothes, food, transport, etc, in order to fund your own money-making operation (a.k.a your salary). “Capital items need to be replaced over time as the cost of maintaining them might become increasingly prohibitive or they become redundant through technological changes,” says Ford. “Everybody is in business for themselves. As an employee you need to reflect on your income and consider how you can utilise, or possibly enhance it, as you incur expenses and capital purchases. You need to realise that at a certain age you’ll be forced to retire and will have to live the rest of your life with a significantly reduced income stream – and the sooner you take cognisance of this, the better,” Ford warns. Before you draft your resignation letter, here’s the fine print: it’s likely that you’ll earn more money by actually staying in your job.
Quitting to pursue a passion doesn’t necessarily mean it’s going to come with medical insurance, bonuses and steady income. Pursuing your own business is a matter of priorities – it’s about building real wealth through aligning your income with the lifestyle you want to live. Sometimes sticking it to the man may also mean sticking it to the dream sports car. If you’re okay with that, keep on reading . But keep in mind that doing something you love doesn’t necessarily mean that you won’t make boatloads of money in the process. “When I was at Edgars there was something missing. Now I love what I am doing and there’s nothing missing,” says Wood. “All I’m doing is using what I’ve learned.” Here are the lessons that he – and many other entrepreneurs who’ve declared their independence – learned:
1. FIND THE NEXT BIG THING
“I like to look at big opportunities, where there’s a lot of disruption happening,” says Vinny Lingham, CEO of Yola and multi-award-winning South African entrepreneur. “I’m actually launching a new company quite soon. I’ve had to look around the market to see what I think is going to be big.” “Disruption” is the keyword here. You’ve got to look out for that new thing that’s making all the noise.
2a. DO WHAT YOU CAN DO…
“If you want to wind me up like a clock, tell me what I can’t do,” says Wood. “If you focus on everything you can’t do or shouldn’t be doing, then what’s the point in being here? I always say to people” ‘I don’t want to know what I can’t do, I want to know what can we do?’”
2b. …AND GET OTHERS TO DO WHAT YOU CAN’T
“What I got right and a lot of other managers got wrong, was I focused on what I was good at, and the stuff I was crap at, I got people who were very good at it,” says Wood. “That drove the success. It wasn’t down to me, it was down to the collective. “I’ve been fortunate in that I’ve been exposed to people who are very good at what they do in their specialised environments.” Wood used the contacts he had amassed over the years to promote his business, and hired a former co-worker to head up the marketing of his brand. At Obox, David Perel did the same when his brother joined him. “I realised he was a whole lot better at programming than I was, so I left that up to him and started doing all the design work.”
3. USE FEAR AS A MOTIVATOR
After leaving his job, Wood had to train himself to handle the unpredictability of entrepreneurship. “There’s just a huge amount of fear of the unknown, and I thrive doing something I know jack sh*t about. It was just straight into the deep end, and you just freakin’ swim. For me, the biggest driver was fear nothing else.”
4. DON’T PROMISE, JUST DELIVER
As it is a rare commodity, offering service will make you stand out. “It’s so easy to offer service because nobody does,” Wood says. “Don’t tell somebody you’re going to do something and don’t do it. If someone orders his beers, he’ll get them. I don’t tell him that I offer great service, he just gets it.”
5. THINK LIKE A CEO
So you don’t consider yourself a business type of guy? It’s easier than you think. Elaine Rumboll, programme director for the Business Acumen for Artists course at the UCT Graduate School of Business, says that business is just another language and the more fluent you become, the easier it is to operate in that space.
But you have to get your principles straight. Rumboll says it is crucial that you work out what your “burn rate” is. “People who don’t have a classic background in business often underestimate how much it will cost to keep their business going and how long it will take it get a product or service up and running.” Don’t be fooled by numbers, she warns. “Turnover is about ego, real business is about your net profit.”
6a. TREAT PEOPLE LIKE PEOPLE…
Offering good service comes down to how you treat your people, says Wood. “It’s not just your staff, it’s the people you deal with – respect them and know their names, there’s nothing nicer.” Mashaba agrees. “When dealing with people, in particular my clients, I am a strong believer in being honest, disciplined and keeping your reputation intact.”
6b. …BUT BE A PRICK WHEN YOU HAVE TO
I ask Wood to name the biggest mistake he made when he went solo. “Not being a prick,” he replies. “You’ve got to be a prick, and you’ve got to tell people that. It’s about being ruthless.” After almost two years of uncertainty before income started trickling in, Wood had lost the grip on his prickness. “When I started work, my confidence was ultimately shot. You know what you want but you don’t know how to demand it, so you try to be nice but then people deliver second-rate work. In my corporate job people knew who I was so if I asked for anything, I got it. In this industry nobody knew who I was, and I had everybody pulling my chain because I wasn’t being a prick.”
7. TAKE ON CHALLENGES
This is something Herman Mashaba knows all about. He’s the man who started Black Like Me hair products without any qualifications or work experience, only to have his factory burned down. Now he’s one of South Africa’s most celebrated entrepreneurs. Mashaba says the best way for you to deal with challenges is to appreciate that your life will be full of them. “Most people make mistakes by having this false belief that life is easy, and someone else has to take charge of their existence. I have always accepted and maintained that life is forever full of challenges. This mental state helps me to face challenges as opportunities as opposed to problems.”
8. ACHIEVE BIG WITH LITTLE
“Do as much as possible with as few resources as possible,” Lingham insists. “When we started Clicks2Customers, there were four of us living in a house. Our first employee worked in the lounge. Share a place with your co-founders, and get your costs down because it’s always going to take you longer than you think.”
9. GET IMMERSED IN YOUR CONSUMERS’ CULTURE
Vusi Thembekwayo says you can learn a lot from foreign township traders who reap a rapid turnover because their business strategies are shrewd, simple and clear. “If they are from Bangkok and operate a business in Lebowakgomo, they will learn, understand and speak better sePedi than the locals. For them, understanding a customer’s culture and operating a business that caters to him are two sides of the same coin. They learn you before they serve you.”
10. STAY IN SUPPLY
“If you offer somebody a good product, you make sure you’re never out of stock and you make sure you look after the pipeline,” says Wood. “There must always be stock in that pipeline.”
11. MASTER YOUR ENVIRONMENT
If you’re savvy enough, you won’t need to part with unnecessary start-up expenses. Thembekwayo says that township entrepreneurs don’t have the capital to invest in complex IT systems, so instead they develop an amazing instinct for what will work in which market. “In Limpopo, they keep and trade mopane worms and sell it at a premium. Why? Because their market sees it as a delicacy. In Bloemfontein, they sell White Star maize meal instead of Iwisa because that particular market believes White Star is superior. In the Eastern Cape they issue week-long credit to their customers because not repaying your credit is a deeply shameful act in rural South Africa. They count on social pressure for risk management.”
12. THINK LIKE A WINNER
Motor racing in Europe taught David Perel the invaluable benefits of having a winning mindset in business – something that’s often overlooked in entrepreneurship syllabuses. “I came from a mindset that we could beat anyone,” he says. “There are no borders on the web – if you have a website, you’re not a South African with a website, you’re on a massive thing called the Internet and you need to measure yourself against the best. When we launched themes, we didn’t charge rands, we charged dollars, and we immediately headed for the US market.”
13. ROLL WITH THE PUNCHES
When you own a business, instead of dealing with a handful of colleagues, you’re suddenly dealing with thousands of consumers –each with their own opinion. “It’s about listening to what people have to say,” Wood says. And people won’t always say nice things to you. “Open yourself up to direct criticism. I’ll never have a secretary who screens calls. If you’ve got something to say, say it to me.”
14. BE YOUR OWN ROLE MODEL
You need to be the unique businessman that you are. “If there’s one thing I can’t stand, it’s leadership books,” says Wood. “It’s a cloning process. How can I think like Jack Welch or Richard Branson? Richard Branson didn’t read leadership books; he did his own thing.”
15. DO IT PROPERLY, YOURSELF
As a professional racer, David Perel was forced to take the DIY option. “I was my own mechanic, whereas other people had as many as ten. It taught me that no matter how hard you are working, you could probably work a little bit harder and smarter. And no matter how much you’re struggling, there’s always a way out if you are clever enough.”
16. KEEP LEARNING
You’ve got to listen to the experts, says Perel. “There are a lot of arrogant sportsmen who don’t listen to their coaches, but there’s always something you can learn,” he says. “I’m not concerned how much money people have, I’m concerned about how they made that money.”
17. PUT EVERYTHING BACK
So what should you do when the money starts coming in? “Every cent we make we put back into the business,” Wood says. “Because if you don’t, you can’t grow. We have cash flow in our business. I don’t stick that money in the bank, because I don’t want to pay bank charges. I want a sustainable business. I don’t want to be here today, gone tomorrow. To do that you have to have sustainable business practices. You always have to have liquid cash.”
18. MAKE DECISIONS THAT MAKE MONEY
An entrepreneur’s success is testament to the good decisions he makes. Lungisa Matshoba, co-founder of Telfree and Yeigo Communications, likens decision-making to gambling. “The best players win more because they don’t take every risk. They take the risks that are most likely to work out. You can’t do this without information,” he says. “Look at the market, look at other companies targeting the same market. Understand as much as you can, and if you still feel it’s a risk worth taking, then dive in head-first and remain flexible enough to adjust, if the opportunity changes.”
When you do your research, don’t focus only on the numbers. “Unless you’re a bank, spreadsheets are the worst risk calculators because they don’t tell what happens in the real world and this can’t forecast human behavior,” says Vusi Thembekwayo.
He adds that the best way to develop your instinct for making decisions is to exercise it. “Take small risks with small rewards and watch the outcome. In time, you’ll become better at sifting through the nonsense, getting to the crux of the matter and calculating risk. That’s why seasoned business people can tell an opportunity from a mousetrap in minutes. Don’t bet what you’re not willing to lose, to gain what you don’t have to have.”
19. EXPAND YOUR EMPIRE
When profits start appearing, you have to be anything but complacent. “I’m not going to stick with Darling Brew the way it is,” Wood says. He’s enlarging his brand by bringing out a clothing range. “I don’t know what’s going to happen once we get involved in the apparel business, but I’m very open to whatever that is.”
Where he wants things to happen is outside South Africa. “We’re looking at Brazil. We might not get there, but we might get to Maputo. If I don’t think about getting to Brazil, I’ll never get to Maputo.”
When it comes to growing your brand, strength lies in diversity. “Being diverse makes you flexible for change and lets you work in new spaces all the time,” says designer and illustrator Daniel Ting Chong. “It’s important to be good at certain things, but be good at it and try something new.” He alternates between art and design work. “They’re the complete opposite, but they balance me.”
Besides bringing creative balances, offering diverse services also improves bank balances. “Working in different media also means you can broaden your client base,” Chong adds. And that’s the difference between an artist and a struggling artist.
20. HOW TO MAKE PEOPLE GIVE YOU MONEY
In last year’s Finscope South Africa Small Business Survey, 39% of small business owners cited a shortage of capital as a significant obstacle in starting a business. But investment capital isn’t only for blue-chip companies; Sheraan Amod got a leg-up into the business world with the help of something called angel investing. Angel investors are wealthy informal investors who provide capital for start-up businesses –and they’re often the only ones willing to take financial risks in backing an early-stage company. “They usually bring powerful professional networks and mentoring expertise,” says Amod.
“This is invaluable to hungry, less experienced entrepreneurs.” Your challenge lies in convincing investors that you are worth their time and money. Amod insists that when preparing for negotiations, it’s crucial that you have a clear understanding of what it is that you want, what you won’t compromise on, and how much you are willing to give away to get it.
When he goes into negotiations, David Perel listens to the listeners. “When I walk into a meeting I look at the big talkers and the listeners, and it’s usually the listeners who deliver,” he says. “I often turn down the volume of the voices of the guys who promise the world, and I take what they say with a pinch of salt.”
“Regardless of exceptional or underwhelming performance –because most startups experience both phases many times – keeping investors well informed is the best strategy to maintain a healthy relationship with them,” says Amod. It was Vinny Lingham who injected capital into Amod’s business plan. “I strongly believe that you back the jockey, not the horse,” says Lingham. “I’d rather back a brilliant entrepreneur or a brilliant team with a bad idea than a bad team with a brilliant idea. Because I guarantee you, the bad team with the brilliant idea is going to screw it up, and a great team with a bad idea are going to figure out the right idea.” “I look for guys who are passionate about what they’re doing. I look at their background: have they grown up with the silver spoon in their mouth or are they gritty entrepreneurs? But the most important thing I look for is ethics. I don’t mind losing money if it’s an honest loss.”
Sometimes, Kevin Wood cracks open a bottle of his primary product and reflects on the story so far. “I look back and I think, you must have been off your rocker to leave behind what I had, and to go to nothing,” he says. “Now I work eight days a week and I don’t know I’m working, because I love everything I do. Now I don’t report to some CEO. Now I don’t have to ask for forgiveness. And all I’m doing is using the skills that I learned.” “When you run the biggest retail store in the country and you have the highest gross in the chain, you can’t get a bigger high.” And here comes that alleviating, redeeming, “But… all of that pales into total insignificance to the buzz I get when I walk in with my wife into a restaurant and nobody knows us, and everybody’s drinking our beer.” Cheers to that.
By Ian McNaught Davis