Startup africa 1 july issue

www.startupafrica.co.za

JULY 2017

startupAFRICA

profiling and breeding the next generation of African entrepreneurs

DIAMOND INDUSTRY VETERAN

MOLEFI LETSIKI SPEAKS

ABOUT BEING A DIAMOND IN A ROUGH INDUSTRY

FAMILY-OWNED TAILOR EMPIRE

AU GOLD Paying homage to the City of Gold

ETHIOPIAN FOOTWEAR STARTUP RAMPING THE INDUSTRY

LEBO GUNGULUZA THERE’S MORE TO ENTREPRENEURSHIP THAN MONEY

July 2017 startupAFRICA 1

By Baradi Moletsane

I can’t begin to express how stoked I am for playing a vital role in being a contributor to the birth of a new era. I call it an era because I strongly believe that startupAFRICA will form part of a culture that bridges the gap between the African entrepreneur and their entrepreneurial dreams. This culture will expand, thus manifesting itself because of the support of those who wish to see Africa thrive economically. And although the journey hasn’t necessarily begun, every page of this publication represents the foundation in which the era will start.

My father once told me that in order to excel in business, we need to find inspiration from solving problems, and this means coming up with solutions instead of seeing the negative in unfavourable situations. His words reinforce what Victor Kgomoeswana says in his book Africa is Open for Business. Victor says: “In Africa, regardless of poor roads, lack of banking services, absence of decent shopping malls, unreliable electricity supply – every backlog is an opportunity for those optimistic enough to look where and how you can solve a problem”, Africa is open for business.

With that being said, I am here to welcome you to our very first experience of something magical.

Like, the metamorphosis of an insect, let’s watch this embryo develop and flourish, as we believe that business aspirants, entrepreneurs, millennials and Africa as a whole has long anticipated a culture that will polish fine minds and tenacious efforts of those who are working towards a better Africa.

Welcome to the dawn of a new and powerful era.

Welcome to a birth of a better Africa.

startupAFRICA Managing Director Themba Mashaba Editor-In-Chief Baradi Moletsane Assistant Editor Cue Sibiya Marketing Director Brandon Khambule Chief Techology Officer Mandla Mona Graphic Designer Tumelo Moyaba www.startupafrica.co.za Info@startupafrica.co.za Startup Africa SUAmagazine SUAmagazine

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BREWING A DREAM FOR AFRICA!

July 2017 startupAFRICA 3

ENTREPRENEURS ON COMMON START-UP MISTAKES ~ By Baradi Moletsane

they have not paid their 40% deposit, which is part of business regulations.

This is something costly and quite risky because people don’t always pay timeously. In some cases, you need to chase the client for payment, which is time consuming and costly. I am still learning.

Anon – Supply Chain

A big part of starting a business is having a plan then having the discipline to act on it. Many people, especially millennials, have a misconception that startups are glamorous and that liquid will flow in as soon as the business has found its feet. startupAFRICA recently had a chat with a couple of entrepreneurs and millennials who are in business from various industry focuses, wanting to know about the mistakes made in their early business ventures. Here is what some of the people we spoke to had to say.

“One of the biggest mistakes that I made on my journey of becoming a business woman is that I didn’t take the time to do ample research. I was so eager to make money that I lost sight of how things would pan out in the long run. I was so eager to get my business started that I left my job too soon and somewhere along the line, ended up facing tremendous financial issues.

Shirley Zulu – Business Consultant and Makeup artist “My problem was underestimating the importance of putting together a “dream team”, I was so concerned about my business being operational that I hired people who did not share 4 startupAFRICA July 2017

the same vision as I am. A year later, I found out that some of my team members were working on their personal interests and gaining revenue on the side at the expense of our business. I remember going home and crying after thinking about the three years that I spent investing in this business.”

Anon – Fashion Buyer and Retail Business Owner

“With me, the fault lied in being superman by micromanaging all of the tasks that needed to be completed as well as spreading myself too thin.

It has cost me time and money.

I have learned that it is better to employ the right person for the job, this has decreased some of my stress significantly.

Phaki Mashigo – Carpenter “I had (and sometimes still do) this habit of doing jobs for clients even if

“I am in the hair business and I used to allow family members and friends to come and do their hair for free at my salon, I was able to do this because my business venture started on a very good note. As time went by I started calculating the costs of all of the favours and I almost fell off my chair.

Business is not charity. I wish I could have been a lot smarter about this.

Busisiwe Dube – Salon Owner

“I happened to make one of the poorest decisions by going into business with someone who is desperate for money.

In the beginning I was drawn by his tenacity and hunger for success, I automatically made an assumption that we will never hit rock bottom because this person is passionate about making this work. Needless to say, my business partner started becoming greedy and as a result, when revenue would come in, he would demand half the cut as opposed to making investments and saving in order to sustain the business.”

Anon – Business Woman

startupAFRICA: THE BIRTH OF A NEW CULTURE Whenever my team and I come together to think of ways we can appeal to our audience with every single page in the magazine, and I hear them say the word “publication” – I always correct them and say that startupAFRICA is more than just a publication. Technically, we are a publication. So they are correct to a certain extent. However, I wish people could understand the collective aspirations that we have for young people on the African continent. They are astronomical.

The word publication doesn’t do what we aspire to do, justice. And that is why I refer to startupAFRICA as a culture.

I call it a culture because I strongly believe that startupAFRICA will develop into a culture that bridges the gap between the African entrepreneur and their entrepreneurial dreams.

This culture will expand rapidly, thus manifesting itself because of the support of those who wish to see Africa thrive economically.

Although our ideas are fuelled by a vigorous tenacity to see the lives of young Africans (as well as the lives of their loved ones) change, this platform is far bigger than the team and the composition of its ideas. This platform is a soapbox for the voices of Africa and we had long reached a conclusion that the most fitting way to afford these voices an opportunity to be heard is through the birth of a digital magazine.

But why digital?

Technology, through the creation of smartphones, has revolutionised work and play throughout the globe.

It is so comforting to know that technology, especially smartphones, is not exclusive to the upper class but rather available to almost every global citizen. Moreover, the globalization of technology means that the entrepreneur in a lesser-developed country has access to the same tools as their counterparts in richer countries.

Baradi Moletsane, editor-in-chief of startupAFRICA magazine talks about the role that startupAFRICA will play to conscientise the minds of Africans as well as to bridge the gap between African entrepreneurs and their entrepreneurial dreams.

I love how technology has broken the barriers of exclusivity, meaning that a young individual entrepreneur from an underdeveloped country can take on the might of the multi-million dollar existing product from a developed country.

As the growth of China’s smartphone market and its smartphone industry grow, technological entrepreneurship will have profound, long lasting impacts on the entire human race, and this is why it was important for us to tap into the digital space.

and to operate in their truth.

Themba Mashaba, startupAFRICA’s Managing Director, visited a restaurant in xxx. After learning about a beer brand – Soweto Gold, owned and brewed by business partners xxx and xxx, Themba ordered the beer upon arrival. The owner of the restaurant informed him that the pub does not sell the beer as it is not popular nor is it known to the restaurant’s customers. Themba then persisted that the restaurant looks into adding the Soweto Gold to the menu in an effort to support and familiarise customers We are here to showcase with a product that was established by and celebrate the efforts young black entrepreneurs. The owner and initiatives of people who later reached a conclusion that he will purchase minimum stock of the beer have dedicated their time towards developing start-ups to gauge how well it will do from a sales perspective. Themba took it upon and progressive businesses that contribute to the growth himself to urge his social circle to visit the restaurant and give Soweto Gold and success of the African a try in an effort for it to gain favour Economy. and credibility. This is because he has StartupAFRICA is here to close the supreme confidence in what xxx and gaps on the African continent, and xxx are doing as he knows that they around the globe in equal measure. Our have a clear understanding of the goal is to profile the sharpest minds knowledge and passion that goes into and the greatest ideas on the continent. the product. Themba has faith that in We may not be the direct key to the the near future – Soweto Gold will be entrepreneurs’ big break. However, we making waves in the very same way believe that affording them a platform South Africa’s popular beers were in to tell their story will play a vital role in their initial stages. In a nutshell, what their journey to success.

Themba did at xxx encapsulates what I prostrated myself to this idea because we, at startupAFRICA, are here for.

I can recall a time I had conversations We have implausible admiration for with young business aspirants who entrepreneurs, those none-conformists are walking around carrying valuable who refuse to be trapped in an office ideas. Some are relentless in pursuing set up in return for a lousy salary their dreams and some are afraid, but notification that appears once in 30-31 I don’t for a second believe that any days. We are here to showcase and young person should go to the grave celebrate the efforts and initiatives of with a billion dollar idea because they people who have dedicated their time do not have the resources and privilege towards developing start-ups and to see their aspirations come to fruition. progressive businesses that contribute startupAFRICA is here to show the to the growth and success of the African world what young people on the Economy. And for me, being a part of continent are doing, as well as to afford this team is an honour – a one that I them a platform to tell their own stories take great pride in.

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REDISCOVERING KENYA THROUGH TUDOR TAILOR-MADE TOURS & TRAVEL

While living in South Africa, Tudor Claxon was focused on up-skilling himself in the Audi Visual space. This enabled him to get opportunities to work in highly populated countries such as Nigeria and India in various filming and missionary projects. That’s where he started out as a professional radio and video producer.

Following his much-needed experience, Claxon decided to come back to his roots – his motherland – Kenya, to pursue Missionary work.

However, after a few years of hustling and bustling for funds and sponsors to support his vision, life became harderan-harder.

“That’s when I decided to branch into a different kind of business which has always been my passion and it required less capital which was a tours and travel agency,” says Claxon.

Starting Tudor Tailor-Made Tours & Travel brought forth so many opportunities for him as he was now able to raise funds to support his projects and turn them into success.

“During all the trips I would make 6 startupAFRICA July 2017

while driving clients and tourists around our country,” continues Claxon, “I came to a realisation of the vulnerability of our children, especially the girl child, being so gravely affected. After countless times of trying to highlight their cries which yielded no fruits, I decided to register a Community Based Organisation called Strategic Missions.”

Strategic Missions supports vulnerable children whom – due to the level of poverty in their families – have either been tricked, trapped and trafficked into child prostitution and have been exposed to sexual abuse and affliction to get some money or basic needs.

“We continue to spread awareness concerning the quickly growing evil among our children and parents. We want to secure these girls and restore their hope, restore their lives as young vibrant children and educate them. It is imperative that we surround them with the love and affection they need to live good lives just like the rest of us,” says Claxon.

GOMYWAY HAVING ITS WAY ON THE ROADS ~By Cue Sibiya Since its launch in 2015, Go My Way, has been making headways in the Nigerian tech ecosystem. It was funded by Angel investors with years of experience: Sim Shagaya (CEO/ Founder, Konga), Co-creation Hub and Bill Paladino (Ex-amazon and Naspers executive).

The app is a ride-sharing marketplace connecting passengers with ride owners going along the same route and have empty seats to spare. Their aim is to provide a solution to the transportation problem in various parts in Africa via a people-powered transportation network.

In addition, they are helping protect the environment by reducing carbon emissions as well as reducing traffic congestion in big cities.

BENEFITS Compared to public transport, GoMyWay offers the cheapest, fun and most convenient way to travel across the country or within a city. Based on a formula that takes into account travel costs (e.g. fuel costs), the platform suggests a fee that car owners can charge their co-travellers. Passengers pay the stated amount to the car owner.

Besides helping both passengers and car owners save more, verified members get to make new friends, meet potential business partners and conveniently arrive at their destination.

A SAFE COMMUNITY GoMyWay has four verification levels for all members: Facebook, Phone number, Email and Valid ID. There is also member ratings/reviews as well as a dedicated support team to monitor activities on the platform. Co-travellers are free to contact car owners of their choice, and in turn, car owners can accept or decline requests.

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NIGERIA’S FIRST PEER-TO-PEER LENDER;

FINT

By Cue Sibiya

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Starting FINT, the peer-to-peer lending platform, was more a chain reaction than it was a decision. startupAFRICA spoke with Chiwete John-Njokanma, CEO at FINT, who shared his ambitions of solving the issue of credit, not only in Nigeria, but across the continent.

Tell us a bit about yourself.

I’m a Nigerian millennial from a middle class family (the last born of four children). I attended Corona Primary School and Atlantic Hall for Secondary School; both in Nigeria. After which I took a gap year to play tennis at the IMG Nick Bollettieri Tennis Academy in Florida, then went onto Adelphi University in New York to study Economics and Political Science. I’m a sports enthusiast, I play tennis and golf actively, and I’m also passionate about haute horology and politics.

What inspired you to start FINT? Before I started FINT, my team and I were working on a payment platform that we believed would revolutionise mobile money in Africa, but I watched

that dream go up in flames. There were three things that put a nail in that coffin. The first was our inability to get a mobile money license, and after that came the lack of funding. As if those two weren’t enough, we had failed to factor in the difficulties that working remotely would bring, since two of us were still in university. Unfortunately, we had to shut it down.

All of that happened in September 2015.

It was the beginning of one of the most difficult periods of my life so far. I had just graduated from university and I moved back to develop the aforementioned platform. There was no plan B. For three months, we had a company, but no product. During that period, we researched opportunities in the Fintech space that could be applied to Nigeria.

We had no other option. That’s when we decided on peer-to-peer lending.

Every Nigerian will tell you that it’s almost impossible to get an affordable loan from a bank. You could have a stable job paying a comparatively decent sum, but if the collateral requirements didn’t kill you, then the interest rate would. My childhood was full of stories about people who were unable to do the things they

wanted because they had no support.

That’s why, when the idea that we could create a peer-to-peer lending platform that offered better than anything on the market hit us, there was no looking back.

Since looking back was not an option, you had to set yourself apart. How did you manage to achieve that?

Nigeria does not have a credible credit rating system. However, we plan to change that rhetoric by creating a platform that effectively captures intending borrowers risk positions while helping our customers through providing accessible credit sources and revenue streams. We aim to garner users’ trust which is fundamental. Not only do we uniquely solve the problems aligned with consumer credit, we do so with a team that is dedicated and passionate about the cause we are championing.

As a millennial, how do you get people to take you seriously in business?

Have a serious product or service July 2017 startupAFRICA 9

with a strong value proposition that delivers. As a “business person”, you are effectively a marketing executive. You need to understand your product and customer profile; constantly analyse your target market as well as your competition and be ready to engage in conversation surrounding your firm and industry’s core issues, while articulating your points appropriately.

Sounds like you’ve learned a lot so far…

Absolutely, and I must point out that a lot of things do not come easy. This is not to say – in any way – that there is an expected period of “suffering” (for lack of a better word) before one achieves their goals. Essentially, working smart is quite important and the power of networking and networks should not be downplayed.

Not only do these things lead you to goal realisation, the power of a great team of people who are intelligent and driven will definitely enhance the experience.

Why is now the best time for your startup to exist?

Accessing credit, particularly consumer credit, is still an issue and now is as good a time as any to tackle it in a manner that effectively boosts consumer confidence.

By creating a unified system that analyses people’s probability of repayment, we are essentially ensuring that capital is transferred to where it is most needed.

Tell us about the first time you received your first cheque from a client?

We had tried to get in touch with several institutional clients to get funds committed as investors on the FINT

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platform. One of the institutional investors set up a meeting with us. I and two of my colleagues attended the presentation and we presented to 14 people. We had a six-minute presentation; and were faced with a four-hour session of questioning. We had to defend our mechanics, as well as show our current systems so that the clients understood the product in totality. It was a mixed bag at this point and they were our first meeting. At the tail end, the MD/CEO joined us and asked that we re-present our pitch and asked one question. After about 10 minutes of pondering and complete silence; he asked his team to commit the requested funds for investment.

What do you think are the myths of being in business?

One misconception that I have encountered is that “entrepreneurs are in control and have freedom”. While you typically may not have a “boss” per se, you still have obligations to handle and challenges that must be tackled, hence freedom and control are indeed subjective.

The other is the get rich quick idea. It takes a while for you to go from idea to generation to profit making and ultimately financial growth on the entrepreneurship path. The steps in-between take some a lifetime, while others 5-7 years on average.

But luck/opportunity and good judgment play a heavy role.

How do you attract your employees?

What’s the best way to recruit?

Team members/employees are not only driven by the material aspects (financial perks) of their job. The softer aspects of the job hold a lot of value, and a lot of employers fail to realise that. Home/work balance and a conducive environment are a good example. Furthermore, it is important to create your workplace as a community and stress the value of the work that your employees do; as well as share the vision and dream with them. If they believe in it, they would be flawless and brilliant in their execution. Our team comprises of people who live and dream our product and see the impact it can have. Those that are not yet with us and do not have that passion would be inspired to action.

Who do you look up to in the African business industry?

Chuka Eseka, MD/CEO Vetiva.

Intelligent, unassuming, humble and driven. He is an inspiration to my team and I. Where do you see your business in five years?

Developing our Nigerian business operations, while diversifying our product line vertically as we expand into and cement our presence in at least two African countries.

Our dream is to be Pan-African. The credit challenge Nigeria and its indigenes faces, are the same issues other Africans face. It’s our hope for Africans to be financially empowered with FINT creating channels and platforms for them to invest in themselves.

TM

POWERED BY July 2017 startupAFRICA 11

AFRI-BERRY; THE LONG AWAITED SKIN DOCTOR It’s just about going out there and seeking the necessary help and advice

~By Cue Sibiya

After an accident left her with over 150 stitches on her face, Relebohile Moeng, a GIBS master’s degree graduate, turned to business to find a solution.

Countless consultations and expensive medications later she was told the only way to minimise the scarring was through plastic surgery.

It was then when she and her husband decided to launch AfriBerry in 2011. Moeng describes Afri-Berry as an award winning, youth empowering, and leading South African manufacturer of organic and cold pressed skin and hair products solutions that demonstrate visible difference to the end user.

With just R10,000 in funding, after six months, they were able to hire 15 people. Moeng is the head of Operations and the Creative Director of the business and her husband is the CEO. The private label skin care product division of Afri-Berry was developed in 2011 out of customer need for high quality, naturally-based skin and hair care products produced in smaller batch runs.

By 2012 the company and the DTI had

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established a relationship.

“The government is willing to help; they are looking for people with ideas that are working. It’s just a matter of knocking on their doors, there is help there. They can even help with the testing of products. The fundamentals require seeking the necessary help and advice,” says Moeng, although she and her husband state that waiting for government funding shouldn’t be your only recourse.

The SABS approved Afri-Berry has been going for six years now, with their products in all Sweet Penny and Head to Toe stores. Afri-Berry is also found in 20 beauty spas around Gauteng.

Afri-Berry’s visions is to bring their African Experience to the world, to share their knowledge of Africa’s natural bounty, to honour Africa’s heritage and give back to this wonderful continent.

“We endeavour to provide quality African Earth skin and hair products that will surpass customer expectations, while continually improving our processes through the use of innovative ideas and including the finest natural ingredients sourced

all over the African continent.

This we do through, not only our technologically advanced extraction, processing, purification and production methods, but also through constant research into consumer trends and keeping up to date with the ethnobotanic discoveries and applications,” says Moeng.

BEAUTY AND THE BRAINS: KREAMY COSMETICS With numerous beauty products in the market, it is imperative for cosmetics startups to separate themselves from the rest and be exceptional. That’s a challenge that has been easily negotiated by Kreamy Cosmetics.

While their offices recently opened in January 2017, they spent the previous year mainly focused on thorough research and experimentation with various ingredients, regimens and skincare or hair care problems.

The South African company was founded by Zanele Magadzi, in Giyani, Limpopo. Magadzi started this company after she suffered from alopecia (a skin problems), which helped her see the gap in the market.

“My plan was to come up with a concept that includes using all natural, inexpensive and effective products to achieve the best hair and skincare goals,” says Magadzi.

Not only did she realise that she was sitting on top of gold, she also saw a gap in the market regarding the engagement between the seller and buyer. She then tried a strategy that she plans to use as the range widens, which is having video tutorials, catalogues and face-to-face engagements with the clients using only the products in the Kreamy Cosmetics range.

“This,” according to Magadzi, “tackles another struggle in the beauty industry, which is the annoyance of going to different retailers, buying from different brands, not being able to find certain products and – most importantly – spending a lot of money on some products.”

A STEP AHEAD FROM THE COMPETITION Kreamy Cosmetics takes pride in bringing skincare, hair care and beauty solutions to the masses. Their main focus is to encourage people to use organic, natural and unprocessed cosmetic products for the best results.

“We currently use the rawest of materials sourced from all parts of Africa to bring solutions to our valued clients. We also supply ready mixed products so that the client

does not have to go through the daunting process of mixing different products together. Our products are personalised according to the client’s needs. We do not only supply the products to the client but take our time to explain to them what each product does before selling it to them,” says Magadzi.

KREAMY COSMETICS PRODUCTS

as Olive Oil, Coconut Oil, Grape-seed Oil and Jamaican Extra Dark Castor Oil – are mixed and blended with essential oils to aid in different skin and hair needs.

Shampoo and Conditioner These are mainly used in to add moisture and for easy detangling.

Infused with essential oils that aid in adding moisture to hair.

African Black Soap FUTURE PLANS A 100 percent natural soap that Kreamy Cosmetics will soon be adding originates from Nigeria. Ideal for all more products to their range including sorts of skin problems including but makeup and more face and body care not limited to acne, eczema, dark products. They want to open a store marks, sunburn, dry skin, oily skin and where clients can come in for face-touneven skin tone. face makeup, skincare and hair care tutorials. In addition, they also want to Butters start giving other individuals products The Kreamy Cosmetics range has four to sell in their areas for income types of natural, organic and unrefined purposes. butters i.e., Avocado Butter, Cocoa Butter, Mango Butter and Shea Butter.

All these butters are good to treat dry skin, sunburn, uneven skin tone, scars and marks, stretch marks, eczema and acne.

Hair Oils Main carrier oils such

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www.khaliques.co.za Sandton +27 (0)11 783 2468 The Oriental Plaza +27 (0)11 836 4418 Cedar Square +27 (0)11 465 1613 Mall Of Africa +27 (0)10 007 3506

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To date, the Tshwane network is the largest municipal public Wi-Fi network in Africa, with 1,050 Free Internet Zones deployed across the City, 2.9 million unique users and more than 700,000 monthly connections. I think it’s safe to say that it’s far past its initial stages.

6. What are some of the challenges that the project has faced since its birth?

The biggest challenge is the deficient of power. The free Wi-Fi network is dependent on a stable power supply. This is the most common reason why free Internet zones are down.

startupAFRICA’s team recently caught up with Duduzile Mkhwanazi, spokesperson for Project Isizwe, an initiative which has managed to afford South Africa’s capital city with a connectivity upgrade, in addition to the aim of extending free Wi-Fi to major parts on the African continent.

After a promising conversation of how this initiative will aid many young people who seek employment – Mkhwanazi had some good insight on what the initiative aims to do at large.

fruition?

The project of the deployment of Free Internet Hotspots relies heavily on Municipal Subsidies. Project Isizwe started its Project in 2013 at the Capital City of Tshwane.

1. Can you give us an overview of Project Isizwe and what the project is about?

Project Isizwe is an NGO which we birthed in 2013. The goal here, was to connect low-income communities across South Africa, by facilitating high-quality Free Wi-Fi networks at the lowest possible cost in public spaces, mainly for the purpose of education. Project Isizwe as an NGO, was founded as a response to address the digital divide that exists in the new democratic South Africa.

4. How did this idea come about?

In November 2013, Project Isizwe, in partnership with the City of Tshwane, launched the first phase of the Tshwane free Wi-Fi project, Project Isizwe used its non-profit structure and its preferred third party entities to deploy quality Free Internet Zones throughout the City at a fraction of the traditional telecommunications price. Bringing public space Wi-Fi to citizens of low-income and rural communities throughout the municipal region.

2. And how do you plan on ensuring that free Wi-Fi for all comes to

5. Has the plan rolled-out already or is it still in its initial phases?

3. How much money will go into the project and how is it being funded?

So far, the City of Tshwane has spent R245 million excluding VAT for 1,050 free Internet zones of the Project – a lot has been and will be invested in this project.

7. How do you think that this initiative will assist millennials who wish to go into business?

Wi-Fi is a great enabler of alleviating a number of socio-economic challenges.

The World Bank stated that for every internet connection in a developing state, the GDP grows exponentially.

In Tshwane, we have a number of millennials running their businesses from the network.

8. Can you tell us something about the project that you think is worth noting?

The Tshwane Free Wi-Fi project is the biggest municipal public Wi-Fi network on the continent. Project Isizwe, as an NGO, aims to ensure that all South Africans are within a walking distance from internet connection, by offering an advocacy, facilitation, consultative and measurement role.

In addition, Project Isizwe has joined the global movement by advocating and lobbying for the Internet as a human right. Free Wi-Fi addresses 31 of the 170 United Nations targets under the 17 sustainable development goals.

9. Word of advice for young entrepreneurs and business aspirants?

Internet access gives aspiring businesses the opportunity to engage with clientele, market their business and network with other similar companies across the globe. Continue to work hard and don’t throw in the towel. Project Isizwe is doing everything it can to bridge the technological divide.

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LEBO

GUNGULUZA EPITOME OF SELF-MADE MILLIONAIRE

By Cue Sibiya

16 startupAFRICA July 2017

The beautiful continent of Africa is filled with so-called self-made millionaires, but Port Elizabeth-born, Lebo Gunguluza, 46, epitomises what it really means to be one.

With a net worth of $36 million (R480 million), it is hard to believe that he was only armed with $5 (R60) when he arrived in Durban in 1990.

Gunguluza grew up in the depths of Magxaki location in Port Elizabeth without a silver spoon in his mouth. He swore to escape poverty and make his first million at the age of 25. Like all plans in life, they change and one must adapt and that is exactly what he did when he failed to reach his target but that did not discourage him.

His father died when he was a child and his mother worked as a nurse. There was not much money to go round and what she had managed to save for his tertiary education went on getting him, his brother and his sister through high school in the turbulent late 80s.

“There were so many boycotts at the time that I missed two years of school, so my mother took her savings and sent me to Woodridge College, just outside Port Elizabeth, which was a multiracial school,” he says.

“It was a great move on her part as I managed to get a really good education there, but it meant there was nothing left over for varsity.”

Gunguluza says his dream to study business was enabled by his appetite for risk. He had no money and no place to stay, but he also had nothing to lose.

When he graduated in 1994, he had a debt to pay back. But, armed with a degree, some work experience and a formidable ability to sell, he took his pick from several job offers and went to work at the SABC as a sales executive.

Gunguluza did well at the SABC. His drive to succeed was unremitting; he was promoted four times in the space of two years and became marketing manager for Metro FM by age 24. But his impoverished family back in Port Elizabeth was still dependent on him and he was simply not earning enough to take care of everyone, even though they believed he was coining it in Joburg.

That was when he decided to save enough money to go to the US for a few weeks and do a specialised broadcasting course which would boost his earning potential. But his gameplan changed when he got back and was recruited by advertising mavericks, Herdbuoys.

“My salary doubled, but the ad industry is a tough business to be in. I was working really hard but still not making much headway.

There was no way I was going to make that first million. Then something struck me. I

was really good at throwing big parties at home. Why was I getting all these people to eat my food and drink my alcohol for free, when I could be making money from them?”

He took the plunge once again, leaving Herdbuoys and he started Gunguluza Entertainment. He had no money for cash flow in the business, but he put his considerable ability to leverage situations to great use. In addition to being a skilled salesman, Gunguluza is a networker of note. It’s a talent that comes easy to a person who’s passionate about entertainment and media.

“There was a night club called Insomnia in Sandton that was not doing too well. I approached the owners and told them I would bring the crowds if they let me take the door.

That way they could make their money by selling drinks.”

It was a great idea that took off immediately. Why? “Because there were no clubs for young and trendy black people in the north at the time. Most of them were in Hillbrow or in the townships. On the first night I made R7,000 and I knew I was on to a good thing.”

Changing direction slightly, he started to book artists he had come to know over the years and quickly became a popular talent manager. By this stage he was making about R100,000 per event, and also taking the opportunity to build his brand.

“I made sure I was on radio all the time and I positioned myself as a local entertainment expert,” he says. Then, in 1997, he heard that a new youth radio station was about to be launched and his skill in sales came to the fore once again.

Eventually, Gunguluza made his first R1 million when he assisted with the launch of YFM. However, he spent that first million in one year. Instead of using that money as seed capital, he bought a GTI and partied like there was no tomorrow. By the end of 1999, he was flat broke. His car was repossessed and he was blacklisted.

“I hit rock bottom for a few reasons. Aside from the flashy lifestyle, I realised then that you have to choose your market sector carefully. Entertainment is a fickle industry and promoters can be unscrupulous. Often we would not get paid on time. I made up my mind that whatever I went into next, it would be in a space that pays well and has structure.

Although he did not have much experience in communications, Gunguluza was a media maven. He approached Penta Publications and started to sell media space for them. It was a steep learning curve and Gunguluza took full advantage of it, getting to know the tough world of magazine publishing

and corporate events. Satisfied that he had picked up enough, he left nine months later and started working on his communications business, Corporate Fusion, a name that indicated a new direction for him – the rigour of the world of big business. Within 18 months it was generating more than R2 million. He ran it from his townhouse with a single telephone line.

With his appetite for risk growing stronger, Gunguluza knew it was time for him to go to the next phase if he really wanted to grow the business into something substantial. He contracted with several big clients and, through his knowledge of radio and print media events, he launched several awards shows – lavish evenings that became the talk of the town.

He also began to build an extensive public sector network that saw him consulting on communication strategies with several municipalities. By 2003, at 33, his business was turning over R14 million, a result of several big ticket contracts he had secured with blue chip companies. He’d reached his next milestone before the age of 35 and had become a corporate communications specialist by applying his now considerable media and publishing experience.

But then he dropped the ball once more.

Blinded by his success, he bought a Porsche and started travelling the world.

Although he did not repeat the same mistake he’d made before with cash flow, this time round he left the business in the hands of others.

He soon lost touch with what was going on in the company and came home one day to the biggest crisis he had yet confronted. An event for one of the country’s largest financial services companies had turned into a shambles. It was so bad that Sunday Times columnist, Gwen Gill, went on about it for several weeks in her social pages, ripping the event to shreds. Gunguluza lost the client, as well as R7 million worth of other business in three weeks. Four months later he was in debt to the tune of R4 million. He could no longer pay salaries and had to retrench staff, a period he recalls as the most painful time of his life.

He sold the office building he had bought back to its original owners for R1 million, and bought a Primi Piatti franchise in Rosebank. With his background in entertainment, he and his wife were determined to build the restaurant and use the cash they made to pay back all their debtors. As a result July 2017 startupAFRICA 17

of his flair for fun, it soon became one of the most popular Primi sites in the country, and turnover growth was high. It was the place to be in Rosebank. But Gunguluza’s relationship with his wife soured and they separated in 2008.

He handed Primi over to his ex-wife and started focusing on the other business interests he had been growing quietly in the background.

“I hardly ever slept at that time. When I was not at the restaurant, I was developing a new media business and creating new partnerships. I had managed to settle all my debt and build a company that had already turned R2 million by the time I was out of Primi.”

Media, hospitality, technology, property and investment – those were the five sectors Gunguluza wanted to be in.

“I wanted to use the media business to develop other companies within the GEM (Gunguluza Enterprises & Media) Group of Companies. I was now chasing my R1 billion goal, but I knew that if I started from scratch it would take far too long. My strategy was to acquire an interest in existing companies and triple their turnover by boosting their sales and marketing. Really, it was the same strategy I had applied years back to quadrupling the airtime I got from YFM, just on a bigger scale.”

Next, he partnered with Uhuru Communications, the publishers of SAA’s Sawubona magazine, that same year and several other youth and campus publications. He also leveraged his public sector experience by launching Municipal Focus, also in partnership with Uhuru, which covers the business of local government with a nationwide distribution to municipalities and government departments.

He is also growing his capital interest through projects he invests in and which make him easy returns. That’s what’s enabled him to grow GEM into a multimillion rand business in just two-and-a-half years.

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PERFECT OPPORTUNITIES IN AGRICULTURE Broadening the lens and bridging the knowledge gap

“In the past, my HR was a mess. I would hire people just because I liked them. Today, we have strict hiring policies and procedures and we are particular about the people we employ.”

Gunguluza says that because he was born to sell and market, his focus as chairman is on building the brands of each of the companies in the group so that they can attract more business and seek out new opportunities.

Having seen his own star rise and fall many times, Lebo Gunguluza is determined to help young black entrepreneurs to understand the value of having a business plan and holding onto cash. That’s why he founded the South African Black Entrepreneurs Forum (SABEF) in 2008.

There were several reasons for founding SABEF, he says. Following his divorce, he was alone and realised that he and others could benefit from some sort of support system.

Many people were being retrenched at the time and he was also keen to help them see that it was possible to become self-employed if you did not have a job. There is no need, he stresses, to sit at home and wait for help from government. Beyond that no one realises more than he the value of structures and plans, which is something SABEF seeks to provide for young business owners.

“SABEF is not only a great network for entrepreneurs, it helped me to grow my own relationships with both the public and private sectors. I have a huge base of people to tap into, which has also enabled me to become a successful consultant to government.”

Now, that’s a story of a self-made millionaire.

population, increasing food demands, climate change and environmental impacts, technology advancement and new institutional arrangements offer both challenges and opportunities for agricultural development and food systems.

Hlami Ngwenya Welcome to the PERFECT Opportunities in Agriculture.

Agriculture in a nutshell: Agriculture remains one of the important sectors in Africa in terms of food security and as a pillar for economic growth.

Like many other sectors, agricultural development is dynamic and marked with multifaceted challenges at various levels. Achieving sustainable agriculture and food security requires triple wins solutions that integrate the economic, environmental and social dimensions. The emerging global trends such as globalization, increasing

Agriculture beyond farming: Despite the importance of agriculture, many people -youth in particular- do not find the sector interesting. They do not see it as lucrative enough or SEXY to be the career of choice. One of the major contributing factors is that Agriculture is still seen from the dominant and tunnel view of primary production or ‘farming’. While farming is an important aspect, narrowing the perspective of agriculture to this alone, has an influence in alienating the young people away from sector.

Many programs that aim at attracting the youth into agriculture revolves around agricultural value chains such as agro-processing and agro-business.

While this expansion is able to attract some youth into sector; the assumption is that every youth that has to engage in agriculture should either be a farmer or be involved in agro-processing related activities. However, the

July 2017 startupAFRICA 19

reality on ground shows that there are other functions that are equally important to support the agricultural development processes beyond farming and value chains. Understanding agriculture beyond farming requires broadening the lens through which one looks at the sector, and thus open untapped potential that sector holds for the youth.

PERFECT Opportunities unpacked: While Farming is crucial, there are other functions that are equally important to support the functioning of the sectors.

The ‘PERFECT’ here is used an acronym that represent a wide range of opportunities that exist in the sector beyond farming. The acronym stands for Policy, Education & training, Research, Farm-

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ing, Finance, Extension & Rural Advisory Services, Communications & Knowledge management, Technologies & Trade. All these provide PERFECT alternative opportunities for youth in agriculture.

Harness untapped potential: Globally, Internationally, continentally, regionally and nationally there exist dozens of opportunities, capacity building & training initiatives, events & engagement platforms (face-to-face or virtually), funding opportunities (for programs, scholarships etc.), mentorship programs, exchange programs and other development related programs along the PERFECT continuum, that remains untapped.

The Agricultural issue of StartupAFRICA aims at unpacking the opportunities in Agriculture along the PERFECT value chain.

You will be introduced to many organiza-

tions, on going initiatives, programs and approaches all dripping to fill the PERFECT opportunities lake. The aim is to help develop the capacities of people (and youth) as individuals and organizations to access, appraise and use the existing knowledge and opportunities to enhance their personal and organizational growth. While building entrepreneurs is the main focus, the aim is also to build a cadre of individuals and organizations who are knowledgeable, better networked and technically strong to deliver effective solutions and contribute to the advancement of the agriculture along the PERFECT continuum.

MANDELA DAY CONTRIBUTION

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SHOCKING FACTS YOU PROBABLY DIDN’T KNOW ABOUT MANDELA?

1. Mandela’s father had four wives who all lived in different villages. He was the youngest of his father’s sons.

2. When Mandela started off as a lawyer, he wore the same suit every day for five years.

3. The name “Nelson” was given to him by his teacher on his first day of elementary school in the 1920s.

4. In 1962, Mandela received revolutionary training in Morocco and Ethiopia.

5. The apartheid government offered to release Mandela on no less than six occasions, but he rejected them, on principle.

6. While he was in prison, Mandela would read William Ernest Henley’s “Invictus” to fellow prisoners. The poem, about never giving up, resonated with Mandela for its lines, “I am the master of my fate. I am the captain of my soul.”

7. Because of Mandela’s decades-long imprisonment, few people knew what he looked like or had seen a recent photograph.

8. Mandela was recognised in the United States and Britain as being a terrorist. It wasn’t until 2008 did the United States officially removed Mandela from its terror list.

9. Mandela received more than 250 awards, including honorary degrees from more than 50 universities worldwide.

10. 90 heads of states travelled to South Africa to attend his memorial service.

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REMEMBERING MADIBA THIS JULY -PLACES NAMED AFTER NELSON MANDELA-

Hundreds of streets, buildings and other community facilities have been named after Madiba ~ By Cue Sibiya From Africa to Asia and Europe to the Americas, hundreds of streets, buildings and other community facilities have been named after former South African President, Nelson Mandela.

Here, using data from Google maps and lists held by the Nelson Mandela Centre of Memory, we have located many of them.

Here, using data from Google maps and the Nelson Mandela Centre of Memory, we have located many of them.

TOP 5 KEY MOMENTS IN NELSON MANDELA’S LIFE “Let freedom reign. The sun shall never set on so glorious a human achievement! God bless Africa!” ~ Cue Sibiya

Nelson Mandela, the anti-apartheid leader who became South Africa’s first Black president, was regarded as one of the great figures of the past century for his generosity of spirit, sacrifices in the name of equality and his efforts to reconcile the races in South Africa amid the ever-present spectre of conflict.

Here are a few momentous occasions in the life of Mandela, told partly through his own words: 1. TRIAL IN 1964

April 20, 1964: Charged with sabotage, Mandela delivered a statement during his trial in Pretoria that revealed the depth of his resolve in the fight against apartheid and his willingness to lay down his life in an effort to end the white racist rule.

“During my lifetime, I have dedicated myself to this struggle of the African people,” said Mandela. “I have fought against white domination, and I have fought against black domination. I have cherished the ideal of a democratic and free society in which all persons live together in harmony and with equal opportunities. It is an ideal which I hope to live for and to achieve. But if needs be, it is an ideal for which I am prepared to die.”

Two months later, he and seven other defendants were sentenced to life in prison.

2. RELEASE FROM PRISON IN 1990 Feb. 11, 1990: Mandela walked out of South Africa’s Victor Verster prison near Cape Town after 27 years in captivity, holding hands with his wife, Winnie.

He held up his fist and smiled broadly. Mandela’s release after so long was almost inconceivable for deliriously happy supporters who erupted in cheers as hundreds of journalists pressed forward.

The world watched the electrifying occasion live on television. Because of Mandela’s decades-long confinement, few people knew what he looked like or had seen a recent photograph. Mandela said he was astounded by the reception.

“When I was among the crowd I raised my right fist, and there was a roar. I had not been able to do that for twenty-seven years and it gave me a surge of strength and joy,” wrote Mandela.

He also recalled: “As I finally walked through those gates to enter a car on the other side, I felt – even at the age of seventy-one – that my life was beginning anew.”

3. INAUGURATION IN 1994 May 10, 1994: Nelson Mandela became the first Black president of South Africa after democratic elections, taking the oath of office at the Union Buildings in Pretoria, South Africa’s capital.

Leaders and other dignitaries from around the world attended the historic occasion, which offered many South Africans another chance to celebrate in

the streets.

At the close of his inauguration speech, Mandela said, “Never, never and never again shall it be that this beautiful land will again experience the oppression of one by another and suffer the indignity of being the skunk of the world. Let freedom reign. The sun shall never set on so glorious a human achievement! God bless Africa! Thank you.”

4. RUGBY WORLD CHAMPIONSHIP IN 1995 June 24, 1995: Mandela strode onto the field at the Rugby World Cup final in Johannesburg, wearing South African colours and bringing the overwhelmingly white crowd of more than 60,000 to its feet. They chanted “Nelson! Nelson!

Nelson!” as the president congratulated the victorious home team in a moment that symbolised racial reconciliation.

Mandela’s decision to wear the Springbok emblem, the symbol once hated

by Black South Africans, conveyed the message that rugby, for so long shunned by the black population, was now for all South Africans.

The moment was portrayed in “Invictus,” a Hollywood movie directed by Clint Eastwood. The film tells the story of South Africa’s transformation under Mandela’s leadership through the prism of sport.

5. FIFA World Cup in 2010 July 11, 2010: A smiling Mandela waved to the crowd at the Soccer City (now FNB) stadium at the closing ceremony of the World Cup, whose staging in South Africa allowed the country, and the continent, to shine on one of the world’s biggest stages. Mandela appeared frail as he was driven in a golf cart alongside his wife, Graca Machel.

Mandela had kept a low profile during the month-long tournament, deciding against attending the opener June 11 after the death of his great-grand daughter in a traffic accident following a World Cup concert.

The former president did not address the crowd on that emotional day in the stadium. It was his last public appearance.

Long live Nelson Mandela…

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soleRebels scooping honorary awards left, right and centre

Bethlehem Tilahun Alemu is a globally acclaimed serial entrepreneur. She is the founder and CEO of soleRebels, the world’s fastest-growing African footwear brand and the only WFTO Fair Trade footwear company in the world. She is also the founder and creator of Republic of Leather a super cool new company that is changing the way people around the world buy and love luxury leatherwear.

And just as she changed the way the world enjoys shoes and leather she is about to do the same for another beloved Ethiopian gift to the world, COFFEE, via her newest brand Garden of Coffee which launched in July 2016.

Alemu is the founder of perimeter consulting which provides strategic consulting services. Under perimeter, she created, launched and leads Made By Ethiopia, a ground-breaking public-private partnership that is transforming the entire dynamic of Ethiopia’s footwear and leather export sector’s, creating over 100,000 new job opportunities and over 24 startupAFRICA July 2017

$1 billion in export revenue .

Growing up in a poor suburb of Addis Ababa, she decided that there was only one way to defeat poverty and create lasting prosperity – use local craftsmanship to make world class products that can compete and win in the global marketplace.

She decided on footwear and today tens of thousands of pairs of shoes leave soleRebels factory every year. Her business has been expanding rapidly and today exports to no fewer than 45 countries and is targeting 50 stand-alone soleRebels retail stores across the United States by 2019 and 500 worldwide by 2022. soleRebels is on track to be the first global branded retail chain from a developing nation to open 100 stores and achieve over $250 million in revenues by 2020.

Here are some Selected Honours and Awards she has bagged: • FORBES Magazine Africa’s Most Successful Woman : Bethlehem Tilahun Alemu • FORBES Magazine 20 Youngest Power Women List

• • • •

• • • • • •

FORBES Magazine: Fastest Growing African Shoe-Brand - soleRebels – Launches World Economic Forum Young Global Leader [YGL] Ventures Magazine : The 20 Most Powerful Women In African Business Most Influential Person of African Descent : Bethlehem named to MIPAD alongside Beyoncé , Lewis Hamilton, Usain Bolt , Trevor Noah , Rihanna , Didier Drogba, and Chimamanda Ngozi Adichie Top 10 Young African leaders Transforming Their Communities Named One of The Women Leading Sustainable Fashion alongside Stella McCartney United Nations Goodwill Ambassador for Entrepreneurship Top 100 Young Economic Leaders: The Institute Choiseul [2014 , 2015 ,2016] Pink Ribbon Red Ribbon Ambassador for Breast and Cervical Cancer Number five on List of The Top seven African Entrepreneurs Who Inspire Innovation

KIAKIA IS RESHAPING THE BORROWER-LENDER EXPERIENCE ~ by Cue Sibiya

“Anyone unable to get a loan from us is definitely not qualified for one anywhere else.” That’s how confident and successful the KiaKia service and system has proven to be since its launch.

Access to loan in Nigeria and Africa from traditional financial institutions by individuals and small businesses is almost impossible and difficult, and in the rare occasions where available, the process is physically rigorous, slow and lengthy, almost invalidating necessity for the financial credit. That’s where KiaKia has positioned itself as a very simple and fast, but highly effective and efficient solution.

We had a chat with Olajide Abiola, Co-founder and CEO of KiaKia. YOU CAME UP WITH A REMARKABLE IDEA, BUT FIRST, WHAT INSPIRED THE NAME? The name is an ironical one. KiaKia means “real-time” in Nigerian local parlance. We opted for a name that was easily relatable and was ironical to the typical reality and experience of an average loan seeker with the mainstream financial institutions.

ARE YOU EXPLORING TAKING YOUR BUSINESS TO THE REST OF AFRICA? OR ARE YOU COMFORTABLE WHERE YOU? The addressable market and the gaps in the Nigerian market alone is bigger than that of 10 to 15 countries combined.

However, we are not comfortable operating or serving the Nigerian Market only. So far, we have received signals and open calls to expand into Kenya and Ghana. As at 2012, the consumer loan portfolio of South Africa stood at $293 Billion. This has since topped $350Bn. During this same time, Nigeria, with a larger GDP, boasted of a paltry $7bn. As can be seen, the market gap in Nigeria is so large. The SME statistics is worse.

The size of addressable market in terms of consumer and SME loans is similar to what was obtainable before the advent of GSM. Nigeria today has the largest GSM market on the African continent and the 5th in the world. We are absolutely

interested and positioned to expanding into other countries in Africa, but not without adequately closing the huge gaps in Nigeria.

WHAT INSPIRED YOU TO START YOUR BUSINESS? Widespread nagging lack of access to consumer and business loans by the millions of the lower-middle class, middle class and SME operators in the country.

We had a clear and thorough understanding of the situation, based on extensive and in-depth research that it was possible to identify creditworthy and credible borrowers and grant them loans. Our play with data and technology validated our belief and conviction and we went ahead to do just that using predictive analytics, big data, machine learning and digital forensics.

DO YOU HAVE OFFICES OR DO YOU WORK FROM HOME? We have one office and we also work from home. We are an entirely online credit scoring and lending company. There is no single paper process or physical meeting in our loan applications and collections.

Everything from application, processing, disbursement and collections are done seamlessly online.

HOW MUCH CAPITAL DID YOU HAVE WHEN YOU STARTED AND WHAT CHALLENGES DID YOU FACE RAISING CAPITAL? When we started, we had to put our money where our vision and mouth was. We realised that very few to non-existent investors would want to put their money on an innovation such as ours in a financial market where the default rate was high. We self-funded with a little over $10,000 and raised $45,000 at the end of our Private Beta Phase, which lasted four months.

After that phase, it was clear that we had a viable product and system that could handle loan applications entirely online within minutes.

The major challenge in Nigeria and most part of Africa is that most investors are unimaginative, don’t understand the peculiar market forces, don’t understand the

psyche of the market and see startups as portfolio investments. Also, they expect African entrepreneurs to perform magic while comparing them with entrepreneurs in from the West, who have huge and broad advantages across multiple indices. African funders, investors and VCs need to be more imaginative and visionary.

HOW DO YOU GET PEOPLE TO TAKE YOU SERIOUSLY AS A BUSINESS PERSON? My work ethic and results. So many things can’t be faked and performance is one of them. Data and numbers don’t lie. I am privileged to lead a team of super intelligent, talented, loyal, committed, productive and disciplined people as Co-founders and employees.

Within just six months out of Private Beta phase, KiaKia is already profitable without a single advert or marketing spend with a team of just five people. We have an average customer uptake of 400 monthly. These are facts that cannot be cooked-up. As I said earlier, numbers and performance don’t lie. An unserious business person cannot accomplish this.

Seriousness always delivers results.

WHY IS NOW THE BEST TIME FOR YOUR START-UP TO EXIST? Everything is being leapfrogged to the digital platform. The UK took the lead in Financial Technology, especially as it relates to lending, with the launch of Wonga about 10 years ago. Since then, nothing has been the same again. The rapidly growing and expanding level of digital connectivity and literacy makes it incumbent to deliver financial services through the internet. In Nigeria alone, there are over 90 million internet connected devices. What more suitable, efficient or more effective platform or better time to deliver digital finance service than now? The number of working class and middle class is rapidly rising and the volume of usable digital data continues to explode and climb exponentially.

These are raw materials for the financial services industry.

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VULA MOBILE connecting patients with specialists

TELL US ABOUT THE FIRST TIME YOU RECEIVED YOUR FIRST CHEQUE FROM A CLIENT? The first 8 borrowers on our platform made their loan repayments several days ahead of the due date. On an aggregate, about 19 days early for the eight borrowers. This was a very pleasant and exciting experience because when compared with a leader like Wonga in the UK. They experienced their first loan default within a week of launching the service. The excitement got better when customers accessing larger loans sizes between $1,200 and $5,000 made early loan repayments too. This was what made us introduce a cashback policy. We return cash to customers who make early repayments.

CAN YOU SHARE THE MISCONCEPTIONS OF BEING IN BUSINESS? In Nigeria, the major misconception is that being your own boss means financial, social and physical freedom without accountability or responsibility to anyone. People also feel you are rich once you are in business. Some even feel the revenue or company’s monies are the founder’s and can be accessed and used anytime they like.

HOW DO YOU ATTRACT YOUR EMPLOYEES? WHAT’S THE BEST WAY TO RECRUIT? Without any religious interpretation given to this, I’d say the best way to recruit is the way Jesus Christ recruited his disciples. I prefer the informal and casual approach to recruitment where people are observed and seen in their true elements and not in structured interviews where job seekers put on their best behaviours. It is also important to cast off all types of stereotypes, prejudices and generalisations, this way, it is easier to see people in their true light.

IF YOU SOLD YOUR START-UP TODAY, WHAT WOULD BE THE

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TONE OF THE CONVERSATION? WHAT WOULD YOU WANT TO GAIN? WHAT WOULD YOU WANT TO AVOID LOSING? For now, the issue of sales is not even on the table, we want to build a legacy and sustainable model first. I wouldn’t trade off my team for anything in the world. It is hard to build such a valuable team that combines such talent, discipline, commitment and loyalty. I won’t trade off my startup line for anything.

WHAT ARE YOUR SHORT-TERM GOALS? We see ourselves as Africa’s truly digital bank. We see ourselves as the de facto digital financial market place for individuals and businesses.

Any advice for African startups?

Business is not a walk in the park and a true entrepreneur must possess cross-functional skills and be disciplined in several areas. Anyone who cannot get the most out of $1 or improvise, should not start a business. Unlike being an employee where the Pareto principle covers for a lot of people’s inadequacies and unproductivity, in business, customers pay the bills.

Vula is the brainchild of Dr William Mapham, who conceived the idea for the app while working at the Vula Emehlo Eye Clinic in rural Swaziland. He experienced first-hand the difficulties faced by rural health workers when they need specialist advice.

“I’m passionate about improving healthcare in rural, remote and underserved areas,” says Dr Mapham.

That’s the reason he started the Vula Mobile referral app to solve the problem of a lack of specialist medical skills in rural communities. It was originally designed in 2011, but only registered three years later.

Dr Mapham is a firm believer of the “family first” rule. Him and his colleagues work from home and adapt their working hours around their family commitments.

A $5,000 flash grant from the Shuttleworth Foundation helped him kick-start the business back in 2011 when he had very little business skill. Billed as a health solution, without a clear path to revenue, Vula was not initially attractive to Venture Capitalists (VC).

“I went to a lot of VC pitches where many people got a free vision test and eye examination. Numerous people loved what Vula does and we raised capital of R450,000. The bulk of our funds, R4 million, have come from Innovation Prizes,” says Dr Mapham, who desperately needed to find a solution.

The problem with the current system is that, in the public sector, referrals typically require faxes and human operated switchboards who “beep” specialists and connect doctors via landlines. Although these techniques are likely to become obsolete in the future, they are currently embedded systems and health workers are often resistant to change.

When it comes to the WhatsApp, many health workers are personally frustrated with the current system. For example, it can be difficult to describe an x ray, but sending a picture enables a health worker to get advice from a specialist. People use WhatsApp all the time in the health sector, which is not the ideal solution for medical data. So Vula has to compete with this type of messaging app.

What, then, sets Vula apart is their Built in On Call system. “No need for a switchboard or complicated call rosters. Vula connects health workers directly to the correct specialist on call.

REASONS WHY

“Even with WhatsApp,” continues Dr Mapham, “you would need to find out via a switchboard who is on call before you could send a message. This saves a great deal of time for health workers.”

In addition, each health specialty on the app uses a unique referral form.

This helps guide health workers and provides the specialists with a succinct package of information that helps them make a decision quickly.

What particularly stands out about Vula is their Online Real Time Dashboard, which enables both real time monitoring of patient referrals. Data can also be downloaded for evaluation. A function not possible with faxes, landlines or WhatsApp. Dr Mapham admits that at the moment he is learning from his colleagues when it comes to business. “I offer the medical insight into health systems.” A combination much needed in various industries.

One of Dr Mapham’s exciting moments so far was presenting at the Royal Society of Medicine’s Biannual Innovation day. He describes the meeting as a “mind-blowing experience”.

“I didn’t know until I came back home that meeting that Vula was the first South African Innovation to be presented there,” says Dr Mapham.

The MBChB holder from the University of Cape Town says that now is the best time for Vula Mobile to exist because it will soon be hard to find and buy a fax machine. “Landlines are becoming less common. I checked an online shop, there are only two fax machines available for sale. There are hundreds of mobile phones being sold.

So the time is right to switch referrals to a mobile system,” he says.

His advice for startups owners is that they must always ask for help.

“You will be amazed at what you can get for the price of a cup of coffee.

Don’t bother forcing people to sign NDAs, they just slow any initial conversation down and can waste time.

And lastly, there will be tough times, but in the words of one of my heroes, Helen Keller, “Life is either a daring adventure or nothing at all”.

AFRICAN STARTUPS SHOULD HIRE INTERNS

Whatever the reason you decide to take on an intern, make sure you structure their internship so that both you and they can make the most of it. ~ by Cue Sibiya Ask any startup owner and they’ll tell you that the idea of hiring low-paid or unpaid interns is quite a compelling prospect. Indeed, a team of talented, productive interns can allow startups to remain focused on high-level strategy while others do the busywork. Tell me, then; what entrepreneur could refuse such an opportunity?

The problem is that many startups do a terrible job hiring and managing interns, causing the process to become more time-consuming than not having interns in the first place.

Below are some best practices about hiring and managing interns at an early-stage startup: 1. Maintain a broad, consistent pipeline of potential interns If you’re hoping to hire great talented students, then you’ll need a huge pool of applications at the top of the funnel.

It should be someone’s job to make sure your startup’s presence in all these intern pipelines is kept up to date every semester.

2. Minimise the time you spend interviewing interns As a startup founder (or early employee), your time is extremely valuable. If you’re considering an intern for such a temporary (and maybe even part-time) position, then it’s insane for you to spend several hours on the phone and live-interviewing a bunch of candidates. There are many ways you can “automate” the process of narrowing down candidates while minimising face-time, at least until you’ve narrowed down to finalists.

Send the candidate pre-interview reading materials. This could be as simple as directing the candidate to check out your website and to prepare questions about your company and the position.

3. Give interns a large, long-term project In addition to all the random menial tasks that you plan to assign to your interns throughout their time at your company, you should always give them at least one (non-critical) long-term project that they will lead themselves. This could be a marketing campaign, a video project, a simple satellite website or any number of other large projects that are likely to take a few months.

4. Create development opportunities for your existing staff Hiring an intern can provide valuable development opportunities for your existing staff who are keen to get some coaching and mentoring experience. Get them to design and structure the internship programme and take ownership of the young person’s development during their internship.

You can treat this as a mock line management exercise. It can be a great way for you to discover who on your team has the skills and aptitudes to take on a management role in the future. There will also be some positive morale implications for the member of staff.

Whatever the reason you decide to take on an intern, make sure you structure their internship so that both you and they can make the most of it. If you follow all of the tips above, you should be well on your way to creating a lasting and productive internship programme for your startup.

July 2017 startupAFRICA 27

MOLEFI LETSIKI A DIAMOND IN A ROUGH INDUSTRY ~ by Baradi Moletsane

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“Never in my journey in business have I believed in instant gratification, when I tell people that the first time I made a profit from my diamond business was after nine years of its establishment, their jaws always drop” Molefi Letsiki, Founder and Diamond Trader at Molefi Letsiki Diamond Holdings, shares with us his battles and triumphs of working in the diamond industry for over 10 years.

“I grew up in a township called Evaton, which lies North of Sebokeng – in the Vaal Triangle region. As a young boy, my father was a diamond cutter by profession.

The irony of being an African child in this context is that most of us have never seen a diamond in the rough. I had only heard my father talk about diamonds, but never had I imaged them to be so fascinating and marvellous,” says Letsiki.

Letsiki recalls how his first encounter with this marvellous stone was in high school, a meeting that was unintentional because after a long day at school – he had no choice but to patiently wait for his father to finish at work before they could make their way home. The tedious traditional waits saw him taking up a sudden interest in observing the procedure of how a diamond transitioned from its shapeless form into a breathtakingly impeccable jewel. “It was right there-and-then that I subconsciously fell in love with diamonds,” he continues.

After his year of matriculation, Letsiki decided to study IT and talks about how IT was “quite the thing” at that time.

“Three years down the line, I threw in the towel having had an honest conversation with myself about the little passion I had in this field of study,” says Letsiki.

It was during that time when his dad started his own diamond cutting and polishing company that he realised working for his dad presented a greater chance of being one step closer to his dreams. The establishment of his dad’s company came at an opportune time, a time when he knew very well that he couldn’t eradicate his love and passion for working with diamonds.

“In 2005, however, my vision had far surpassed the role that I played within my

dad’s company – without contemplation, I made my move and started my own company,” he continues.

Letsiki’s time spent developing the business was nothing short of taxing.

“One of the advantages that helped me to keep my head up at a time when the industry was taking raids at me, was my knowledge and understanding of the natural order of business, of which I attribute to the lessons I learned working for my father. My curiosity was a catalyst to the success story as it forced me to ask the right questions – pressing ones, until I found the answers I was looking for.”

Working in an industry that is white male dominated and epitomises the dynamics of generational wealth and “tough to compete with” family businesses, was challenging for the diamond veteran.

“I would have people ask why they should do business with me when there are people who have been in the industry for ages and have managed to excel in it,” says Letsiki.

After a few years, his tenacity and curiosity pushed him to expand his business by doing more than cutting and polishing.

“I decided to cut out the middle man and take the liberty of selling the diamonds directly to the jewellers and private buyers, as opposed to selling to dealers who would sell to jewellers and private buyers.. Whenever I would reach a stumbling block, I remembered the patience I cultivated at a young age – watching my dad transform these stones into the finished product. It was in those moments that I remembered that one cannot reach the height of success without discipline and patience,” he continues.

In 2014, Letsiki started exploring all the avenues that revolved around the business.

If he wanted to succeed in his endeavours, travelling and learning from intercultural activities was non-negotiable.

“I began to attend exhibitions abroad and learned more-and-more about how people from all walks of life admire diamonds.

But even in my learning, it didn’t make sense to me why America, China and Europe were the places with the highest consumption of diamonds, when this

stones came from the African soil. It was in moments such as these when I wished that I could share my passion with my peers, and this is why I have decided to look into tapping into creating products for the younger market,” says Letsiki.

After receiving numerous requests from his peers to make wedding rings and various kinds of jewellery pieces for them, it dawned on him that it was important to continue expanding his business.

Apart from having to expand the business and invest his time in its growth and development, Letsiki talks about how he aspires to educate millennials about the diamond industry and its dynamics.

“I want people to understand that a diamond is an investment. One of the advantages of owning it is that you can sell it a lot quicker than you can sell various commodities. In addition, you can buy and sell it in any currency, travel with it as well as sell it at a higher price than its purchase value. There’s a great universal desire for diamonds, you are not limited to buyers when you travel globally because so many people are willing to buy them.”

Letsiki tells us about how having to invest his time in educating young people about diamonds can birth a culture that allows millennials to explore it as a profession.

“I often have to educate people about how they need to stop looking at diamonds as unnecessary or unattainable luxuries.

There are families that buy diamonds and keep them as a form of investment for generations to follow. The youth is so concerned about instant gratification and anything that involves trends that they tend to frown upon careers that are unfashionable and require great discipline.

I believe that if you’re in this industry, you need to understand that discipline and patience will take you far.”

In closing, we asked Letsiki what’s the one thing he is proud of when it comes to his business as well as the values he refuses to compromise, and he responded: “I am proud to hold the title of President of the South African Young Diamond Beneficiators Guild, of which I am a co-founder of, and Vice Chairman of South African Diamond Dealers Club, which I had long been applying to be the member of with no succession, and, for me, to hold this titles indicates that I have earned my position within the industry. In addition, I take pride in the fact that our diamonds are purchased from a legitimate source not involved in funding conflict. Moreover, our diamonds are in compliance with the United Nations resolutions and I can safely guarantee that our purchases are conflict free, based on our personal knowledge July 2017 startupAFRICA 29 and/or written guarantees provided by the supplier of these diamonds.”

THE OFFICE SPACE STRUGGLE CONTINUES FOR STARTUPS Choosing office space can be quite challenging as a startup because your decision will have so many repercussions for your business. The wrong location, for example, could cost you employees or clients. What’s more, you have to base your choice on your startup’s future needs, not just your current situation.

Given that landlords prefer lease terms of three to five years, entrepreneurs should consider these questions carefully before signing on the dotted line: 1. IS THERE ROOM FOR MY STARTUP TO GROW? Any startup must consider not only its immediate needs, but also growth and other factors that could change space requirements over the course of the lease. If you can’t afford to take extra space to give you room to grow, try to negotiate a shorter lease term or add language to the lease that gives you the first right of negotiation on any adjacent space that becomes vacant, says Eric Zwane, Manager at Eris Property Group 2. IS IT THE RIGHT LOCATION FOR MY KEY EMPLOYEES? Consider where your key employees live and whether the space is convenient for them. A long, expensive commute may push them to seek employment elsewhere. “When considering a move, you might want to let your key staff weigh in so you don’t risk losing them,” says Jacob Mosehla, Property Consultant at living large properties.

3. IS THE LOCATION CONVENIENT FOR CLIENTS? You also want your office to be accessible to clients, as transportation costs continue to rise and people may not be as willing to travel to patronise your business. If you leave an urban location for a cheaper space in the suburbs, consider whether the lower expenses will make up for the possible loss of clients.

Even in the age of video conferencing and Skype, it’s important that faceto-face meetings be manageable, says

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Mosehla.

4. DOES THIS OFFICE SEND THE RIGHT SIGNAL? Think about the signal you want to send when you pick your location. Your office space will be much more than a collection of cubicles; it will also be a sign to others of how much money you’re making. “I’ve seen startups spend for a lavish space they’re very proud of. They invite clients to see it, and the clients wonder if they’re paying them too much for their services,” says Zwane. On the other hand, if you don’t spend enough, people may wonder about the financial health of your company.

5. ARE THERE HIDDEN COSTS I’M NOT CONSIDERING? Calculate the full cost of the space–rent, utilities, construction costs, moving expenses, and other costs that may not be obvious. Because there can be hidden expenses, Mosehla recommends hiring a professional broker to help you understand your total outlay. “You have to look at the costs associated with the move, even restoration of the space you’re moving from,” he says 6. WHAT IS THE PARKING SITUATION? It’s important to consider the amount of parking available at your proposed location, as well as the potential cost to employees and customers. If parking is tight, is there a place where employees can park so customers get the most convenient spaces? Negotiating special employee rates and validating customers’ parking tickets are good ideas, but they need to be worked into your budget, says Zwane. “If it is difficult and costly for your employees or customers to park, they might not be your employees or customers for as long as you would like.”

7. IS THE OFFICE COMPLIANT TO THE PROPERTY REGULATIONS? Before choosing a building, make sure the landlord is responsible for compliance with the necessary Acts and regulations, says Zwane. “This could be an enormous

cost. Why gamble?”

8. WOULD I CONSIDER SHARING AN OFFICE? Sharing space with another company saves money not only on the office rent, but also on the cost of common areas like kitchens and bathrooms, says Mosehla. For referral purposes, it’s ideal to share with complementary businesses, such as an architect with a builder or a PR firm with a Web designer. There should be a formal agreement between tenants, even if it’s month to month. Also, “if it is a good fit for you, you want to make sure the lease on the space you’re sharing isn’t going to expire anytime soon,” says Mosehla.

9. WHAT IF I SELL MY COMPANY DURING THE COURSE OF THE LEASE? If you hope to sell your business, make sure the lease is clear about owner responsibility, says Zwane. Many leases force the original company and its owners to have liability in the future should the future tenant not perform.

“There’s nothing happy about selling your company only to find out two years later that the buyer hasn’t paid the lease payments and now the landlord is coming after you for unpaid rent,” says Zwane.

10. HOW SECURE ARE THE LEASE AND RENTAL RATE? The last thing you want is to get established in a space, then find at the end of your lease that your landlord is renting the space to someone else or jacking the rent way up. Zwane suggests negotiating language into the initial lease that gives you the option to renew. Although rental rates are usually negotiated at the time of renewal, you can also try in the original contract to cap any increase at no more than five percent. “Real estate is rebounding in many areas, which means rental rates are rising,” says Zwane. “If you can control how much, it’s a stick in your court.”

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A brief biology on the journey of

RITA KUFANDARERWA

By Rita Kufandarerwa

Poverty and hardship could be the greatest teachers after experience. Poverty and search for a better standard of living propel those who have the means to desert their countries of provenance to encumber other peoples’. Most African nations have had the misfortune of being led by greedy kleptomaniacs.

Like in any misgoverned state, bread and butter become goods of ostentation that are afforded by a few. Healthcare is a faint dream and a harbinger of death to the sickly. Education becomes an obsolete skill to possess. Personal freedoms are curbed and survival is an hourly target. Television and magazines show us how other people are livingclean, well-fed and wealthy. The urge and dream to leave becomes a necessity, least one is consumed by the nervy settings. And so we leave.

I am one of the many Zimbabweans who were catapulted to South Africa.

The dire circumstances that we existed in were enough to instruct me that if education was supposed to emancipate me- I had to take leave of Zimbabwe.

In 2010, I arrived in South Africa as an Economics student at the Vaal Triangle Campus of the North West University.

There was a lot to be admired in the South African tertiary education system. There were no disruptions to the academic activities and the standard of education was high relative to many African countries. At that time South Africa had begun attracting a different type of African immigrant- the ambitious student. Most universities reported an increased enrollment of international students as they became famously known; I was part of that statistic. The reason for getting a South African tertiary education was to be employable in South Africa- the land of realizable dreams as immigrants view it.

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NWU. There is a strong myth that anyone who is dark skinned is an immigrant. Oftentimes, I had to speak my native ChiShona language or take out my student card which had my surname to prove that I was actually a Zimbabwean. Because of the thick accent, a lot of fellows could deduce that I was not a pure MoSotho but to categorize me as an immigrant seemed extreme because of my light skin complexion. The skin conversation continued between me and my friends long after

we left NWU. It is still a jocular point of reference but very pertinent to how one’s skin complexion could make them susceptible to xenophobic undercurrents.

I am a self-confessed addict of intrigues. That characteristic of mine led me to learn SeSotho.

To come into a land as receptive as South Africa and not learn the local language seemed thankless to me. I asked all my friends to speak to me in SeSotho. They obliged without any difficulty and impromptu SeSotho lessons followed from my friends. By the end of the second semester, my SeSotho was pretty decent as I could get into conversation without stuttering. This development impressed my local friends as it earned me the title of “Shona speaking South African”. Being able to speak a local language is an advantage that many immigrants underestimate. With the language, one rides many storms quite comfortably.

Because of our first languages, not all of us will be

able to learn another language and fluently enunciate its syllables but it is a good skill to have.

To take on a language is to take on a culture. And so I took the South African culture in its entirety. In the yesteryears, I remember our family gramophone playing music by Letta Mbulu, Brenda Fassie, Peter Tenet, Dan Tshanda and Sello Chicco Twala amongst many artists. By the time I moved to South Africa, the sound had mutated and there was house music dominating the airwaves. I fell in love with the music and eventually the whole amalgam of South African arts. In my third year of studying, I wanted to write a movie script and shoot the film on our university campus. Being a writer was a default configuration in me; I knew I always wanted to write stories for the big screen. My dream of writing a script and shoot the film on our university died a natural death because my academics, unrelated to script writing took precedence. The dream claimed its space on the rubbish pile of broken dreams but intrinsically I knew that the arts were my forte and I would come back to them one day.

The pressure of job hunting found me ready for it in my fourth year of studying. After graduating with a Cum Laude for my first degree, continuing with my honours degree was the rational move because an immigrant has to be as exceptional as possible in order to be afforded an opportunity to earn an income in South Africa. The process of sending applications was my first taste of rejection. If a job advert did not clearly stipulate that it was a post only for South Africa citizens or Permanent Residents of South Africa (I was neither), it was a scam. This is how the labour laws of the land were bolstered and it was unfortunate that by the time I finished my studies, the

canticles of job protection were getting louder. 6 months after completing my honors degree, I found myself at home with no prospect of employment. It was easy to give up the search because the term “citizen” kept appearing like a morning alarm. An immigrant in South Africa will survive by either being exceptional or through connections. By saying this, I am not taking away anything from immigrants who have come to South Africa and made it big without the help of connections or being exceptional. In my case, that was how I found myself working for the FirstRand Banking Group.

My extinguished dream of becoming a writer came to haunt me like a congress of ghosts. As destiny would have it, I left the FirstRand Banking Group.

It was time to focus on my writing. The pursuing of writing as my passion did not present me with many challenges.

South Africa is a pluralist society, the remaining democracy in Africa and as such my political analyses articles found an ear. Opportunities in South Africa are not ubiquitous at the disposal of an immigrant; one has to go after them. The republic is a magnet for immigrants who want the slice of the cake, when legally sought after the rewards are in plenitude.

My story is similar to many as seen evidenced by the demographic statistics.

Immigrants come to contribute to the flourishing of South Africa. With finite resources and problems of its own, South Africa has defined Ubuntu in praxis as opposed to theory. It is the attitude that Africa should emulate. The attitude of welcoming your brother or sister and coexist peacefully. With my debut novel coming later this year, my testimony is that what South Africa has done for me, another country would not have done for me. What South Africa has done, immigrants must be able to reciprocate in the future. Home is not only the place of birth but also the country where hope is restored and warmth is given to you on account of humanity.

If ever they ask you where I am from, tell them I am from here.

HIGH QUALITY BOUTIQUE WINES FROM WINE COLUMN

~by Cue Sibiya

Amid concerns around the productivity of wine farms due to economic challenges and unpredictable weather patterns, the South African wine sector continues to rise above the waters. startupAFRICA sat with Nkonzo Mbetha, Director of the Black Space Group, to tell us more about his involvement in this space.

Mr. Mbetha, could you tell us a bit about Wine Column?

Wine Column is a premium wine and bubbly merchant group, with a strong focus on the middle class market in South Africa and the African continent.

What inspired you to start your business?

South Africa is one of the biggest wine producing countries in the world competing with the best.

There’s a shortage of wine entrepreneurs who truly understand the African palate and preference; we believe Wine Column is well positioned to fill this gap. What inspired us to start was the opportunity to educate the consumer about wines and educate wine-makers about the African consumer.

How did you come up with the name?

Column is a supporting pillar or structure. We believe that the wine industry needs a supporting pillar of wine merchants truly representative of the African population.

After couple of wine glasses we felt that this was the right name.

How much did you start off with?

We had no capital. We had to convince supportive wine estates to get on board. Through our holding company, a lot of money has been pumped to the business and we still continue to invest as we build.

No institution wants to invest in a

wine business of this nature and the government development finance institution does fund alcohol related businesses. Through that, we have realised that there’s no short cut to success, and business discipline is the cure.

Do you have some exciting moments so far?

We have had a pleasure of serving wines to Hollywood stars, wellknown businesspeople, and politicians. In addition, we have educated wine novices to wine connoisseurs in our short existence and inspired people not exposed to wine to consider wine careers.

Any misconceptions of being in business?

Business is not about getting rich quickly. I have also learned that we don’t account to anyone; we only account to our clients, staff, revenue services, Liquor Board and our wine partners.

What are your African ambitions?

Wine Column is an African business based in South Africa, currently we are exploring possibilities with a number of like-minded entrepreneurs in Kenya, Ghana and Nigeria.

The focus is to look at partnership models with established lifestyle businesses in various markets within the English-speaking parts of the continent. South Africa is the only recognised wine region in the continent, and we want Africans to have access to the best of wines produced on the continent.

What advice would you give to someone wanting to start a business?

Think through about what you want to start. Do research, business planning (not copying someone else), get mentors and just do it!

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MISCONCEPTIONS ABOUT DOING BUSINESS IN SUB-SAHARAN AFRICA

Every country is going to follow a different path… And what it means is that each country will have a different set of demands and needs. ~by Cue Sibiya

While sub-Saharan Africa being higher on the agenda for western executives, there remains many misconceptions about operating in the region. So argues Anna Rosenberg, head of Frontier Strategy Group’s Sub-Saharan Africa Research practice. Below are the main takeaways from her: 1. South Africa is the best place to run your business Many multinationals base their African head office in South Africa. But Rosenberg says this is not always the best strategy as South Africa is relatively far from the most important markets in sub-Saharan Africa. In terms of kilometres, London is nearly as far away from Nigeria, as Nigeria is from South Africa.

She suggests, instead of defaulting to South Africa as a sub-Saharan business hub, companies must ask themselves: ‘Where do we need to be local’. “And generally, companies need to be much closer to their priority markets if they want to sell locally. So if you want to sell into Nigeria, forget about South Africa, you need to be there. If you want to be in Kenya, you need to be there, you can’t do that via South Africa.”

2. There is no competitive urgency to build a presence in sub-Saharan Africa Many executives still believe they can secure first-mover advantage in African countries. This is incorrect, according to Rosenberg, “There is already very tough competition from western companies, as well as from emerging markets players and African companies.”

She says companies can’t afford to wait any longer with their expansion strategies. “Executives have to overcome corporate objections by educating their home offices on the opportunities within sub-Saharan Africa, and most importantly, the long-term drivers of growth. And they have to emphasise the success stories of other international and local companies…”

3. Sub-Saharan Africa’s growth is all about consumers and commodities Sub-Saharan Africa’s economic drivers are evolving and creating strong demand for new products and services across economic sectors. Rosenberg highlights consumer and government spending, foreign investment, infrastructure growth

and technological advancements as some of the main drivers shaping the region’s economies.

“Every country is going to follow a different path… And what it means is that each country will have a different set of demands and needs. So for example, let’s look at Ethiopia. The country benefits from a lot of power and a very cheap labour force. Eventually that country is going to become a manufacturing hub and that means that industrial companies will probably be quite successful selling there.”

4. Fast economic growth equals quick returns “What is often underestimated is that Africa’s growth story is a long term game, it stretches over many years. Generating immediate returns is difficult because of the costs of operating locally.”

Rosenberg advises companies to hire staff locally and have managers on the ground.

And to eventually start manufacturing domestically to reduce costs and address supply chain issues.

She highlights General Electric as a company with a long-term investment horizon that is today reaping the rewards. “They advise governments at very early stages of development to shape their development strategies as these governments design master plans for infrastructure and healthcare. And this then leads to demand for their products.

For example, they advise them on railway infrastructure – that then leads to demand for GE trains. They advise them on healthcare infrastructure – that leads to demand for medical devices. That strategy has already proven successful for the company, but of course it requires upfront investment.”

5. Sub-Saharan Africa is too volatile and unpredictable for my business African countries are not necessarily less stable than other emerging markets, according to Rosenberg. There are also large variations between markets within the region – some are stable while others are more volatile. However, “it’s critical that companies differentiate between real and perceived risks – and don’t let perceived risks or short-term issues derail their long-term investment strategies”.

There will always be instances of vola-

tility and unpredictability, but instead of overhauling the company’s long-term strategies, management should rather adjust their short-term plans to deal with these disruptions.

6. A standard approach to market prioritisation will suffice in sub-Saharan Africa Many types of industry-specific data don’t really exist in sub-Saharan Africa, making it difficult for companies to pick the right markets to invest in.

“Let’s assume you want to sell toothbrushes in a market. Even if you would have data that shows you how many toothbrushes are currently being sold… this data wouldn’t give you an indication of how many more people will start to use toothbrushes as consumers get more health aware and start to use toothbrushes more regularly,” says Rosenberg.

“So the market size in sub-Saharan Africa is not only about what is currently being sold, but about the market potential that you can create for your business. As a result it is critical that companies combine macroeconomic indicators with proxy data… and most importantly, and I can’t stress this enough, qualitative insights.”

7. Relying solely on distributors is a sustainable Africa strategy For many executives it is common practice to first test the market potential through a distributor before committing significant resources. But the problem with this strategy, according to Rosenberg, is that it can only be effective for a short period because when it comes to opaque markets, local insights could make the difference between success and failure.

Companies need to have feet on the ground in their most critical African markets. Local representatives need to foster and manage close relationships with distributors, which can lead to better treatment of a company’s products and more effective service from them overall.

Another benefit from having local representatives is that it demonstrates market commitment, and as a result, the company gains customer loyalty. Having local teams in sub-Saharan Africa also means companies can respond more rapidly to changing market realities.

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EVERYTHING THAT AFRICA NEEDS TO KNOW ABOUT THE VODKA QUINTESSENTIAL – AU GOLD

BY BARADI MOLETSANE

StartupAFRICA chats to Dumo Ndlovu and Lungelo Fatyela, the owners of AU Gold, a 100% black-owned vodka and beverage brand that’s setting the gold standard and making waves in the city of gold.

Can you give us a brief description on AU Gold?

Au Gold Vodka is the first offering from the Au Gold Distillery, it is a handcrafted, triple distilled premium vodka.

Our Vodka is a fully licenced artisanal distillery that specialises in the production of quality handcrafted beverages. The distillery was established in late 2015, this was after a year of intense research and assessments based on the product.

There’s a memorable story behind every brand, what is yours?

The Au Gold brand is inspired by the city of gold, Johannesburg. Johannesburg is not only an authentic microcosm of South Africa but really of Africa at large, the city attracts individuals from all corners of the continent and all walks of life, all in pursuit of one thing – success.

The city only attracts a certain type of individual and that is what we celebrate, 36 startupAFRICA July 2017

their spirit. Au Gold Vodka is, in essence, a toast to the city of gold.

A black-owned Vodka brand sounds like quite the exhilarating tale, I’m sure the journey has been exciting?

We do not want to give you the impression that it has only been smooth sailing for us, the journey has been long and riddled with challenges. However, we choose to focus on the positive, for it allows us to move forward with purpose.

So, tell us about what it is that sets your brand apart from other brands in South Africa or on the continent as a whole.

Our brand – as is evident, is a uniquely and proudly African brand, celebrating one of the continent’s most iconic cities.

Au Gold Vodka is produced and bottled in South Africa. In addition, it is a fine vodka, distilled from a luxury cereal. Unlike most other vodkas, Au Gold Vodka is handcrafted in small quantities, meaning that; we are able to pay close attention to detail relating to the production process, we are also able to guarantee the quality of the resulting vodka drink.

Sounds like a lot of attention has gone into the production…

We have ensured to go the extra-mile, from the design and decoration of the packaging, paying close attention to detail in the actual production of the vodka drink. If you have had the pleasure of tasting Au Gold Vodka, you would also know that it tastes nothing like most vodkas on the market. This is intentional, Au Gold Vodka is handcrafted for the connoisseur, and some of our elderly customers from the former Soviet Union say that Au Gold Vodka is reminiscent of authentic soviet vodka. The quality of the drink speaks for itself.

Which markets have you targeted so far and do you have any plans for expansion into other African countries?

We only took Au Gold Vodka to market in September 2016. For the past several months, Gauteng has been our primary market for obvious reasons. The plan for 2017 is to take Au Gold Vodka national, we are already executing the roll out strategy – Au Gold Vodka is now available in the North West province, KZN and Gauteng and we will continue to roll it out to other provinces.

There are no immediate plans to expand out of South Africa at the moment and this is simply because we are yet to achieve a 100 percent penetration of the domestic market.

We are, however, always open to exploring new opportunities should they reveal themselves. There are many African markets that look really attractive to us, it’s just a matter of timing and having a solid plan.

What advice would you like to share with those who aspire to be where you are now?

Start, and do so early. Don’t overthink the starting process of any great idea.

Make a considerable effort to learn as much as possible about whatever it is that interests you, immerse yourself completely. The knowledge will enable you to leapfrog your competitors, as well as to invent and innovate.

I am a disciple of the 10 000 hours philosophy. If you want to be something or do something, you must dedicate as much time as possible to it. There is a reason they say experience is the best teacher, experiment with your passions, study them.

Apply what you learn and perfect it. If you want to be a filmmaker; watch as many films as possible, read about other filmmakers, make your own films. Learn and apply, then repeat until perfected.

RESEARCH SHOWS TECH STARTUP FOUNDERS ARE VULNERABLE TO

HEALTH AND RELATIONSHIP PROBLEMS Starting your own business might help you escape the drudgery of the 9-5 grind, but it comes at a cost. At the mercy of 80-hour working weeks, startup founders say the pressures of making it alone are crippling their mental health and eroding relationships, according to new research.

A joint study of 500 tech startups by capital firm BGF Ventures and market research firm Streetbees found that more than a quarter of founders are working over 60 hours a week in a bid to get their business off the ground.

Facing a deeply entrenched long-hours culture, 41 percent of respondents said they felt stressed every day, while 34 percent said it was having a negative impact on their social life.

According to the report, the nature of entrepreneurial work leaves founders particularly vulnerable to health and relationship problems. More than half said that they never switch off from the business, an issue that only becomes worse over time. Half of respondents said they were unable to switch off in their first year, rising to 65 percent three to four years in.

To make matters worse, wall-to-wall working hours don’t come as a guarantee of financial relief; starting a business had a negative impact on the finances of 40 percent of those asked and 31 percent said that they worried about paying their mortgage or rent during that time.

But despite the pressure and stress, founders remain adamant that being your own boss is the best way to go.

An overwhelming 95 percent said that running a startup is more rewarding than working for an employer, while 76 percent of founders said they would do it all over again.

Another 23 percent said “maybe”, and just 1 percent responded “no way”.

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