This article was published in the 31-July-2014 issue of Finweek Magazine
It is widely believed that koi and goldfish can only grow as large as the enclosure they are in. Some grow big and others stay small, it’s all about the size of the pond or bowl.
This got me thinking about businesses in South Africa and the constraints posed by our environment here. Your business can only grow as big as the environment it is in. So if you want to scale, can you do it from South Africa? Continue reading →
This article was published in the 10-July-2014 issue of Finweek Magazine
My former boss Kabelo ran his own business before moving into the corporate world. So he had a valuable perspective on both the corporate and the entrepreneurial “be your own boss” environments. At that time I had only ever worked for a large company. One day in the car park we were both admiring a sleek, red Aston Martin convertible. Kabelo roused my interest in the start-up world when he said, “Want to own that car? You won’t do it working here. But you might if you start your own company, because you’ll write your own paycheque. Think about it.” Of course, he hadn’t quite cracked it himself, but his words made a lot of sense.
In this article, we unpack the pros and cons of working in a start-up versus a corporate. Hopefully this will help you decide whether you should work for someone else or start your own business. Continue reading →
This article also appeared in Finweek Magazine in their 25-April-2013 issue
Overnight singing phenomenon Paul Potts stole the hearts of millions of people around the globe. The soft-spoken mobile phone salesman came from humble origins in Bristol, England, the son of a working-class bus-driver father and supermarket-cashier mother. From the age of six Potts had been bullied in school for being poor, which had eroded his self-confidence. A serious bicycle accident in 2003 and subsequent financial troubles motivated him to enter the debut series of Britain’s Got Talent. Despite not having sung in four years, when he started singing on that stage in 2007, he blew the judges and audience away with his surprisingly incredible voice. With his breath-taking performance of “Nessun dorma”, Potts went on to win Britain’s Got Talent and receive worldwide acclaim, with his debut album One Chance topping sales charts in nine countries.
There is something captivating about underdogs like Paul Potts. When we see the longshot win against the odds, it makes us believe that nothing is impossible and we really can achieve our biggest dreams. This is true both in our personal lives and the business world. There are many examples of small companies taking on the industry giants and winning: Apple vs. Microsoft and IBM, Virgin’s Richard Branson, Whole Foods’ John Mackey, Southwest Airlines’ Herb Kelleher and Fedex’s Fred Smith. Locally we’re seeing it in the cell phone industry with Cell C versus MTN and Vodacom.
Yes, it is possible for minor players to take on big companies and come out on top. How they do it? Here are some of the strategies that work: Continue reading →
This article also appeared in Finweek Magazine in their 28-Feb-2013 issue
In 1999, the Webvan Group promised to transform the grocery shopping industry. Thanks to an über-successful IPO and other sources such as venture capitalists, it raised a staggering $1.2bn in start-up capital, rivalling big players like Amazon.com. Fast forward to 2001, when Webvan went bankrupt, barely 18 months later. The cause? It ran out of money.
How is this possible?
When investors inject capital into a business, they want a return on their money. And the expectation is that rapid growth will usually fuel this return. Americans even have an expression for fast-growing firms: “gazelles” are publicly traded companies that have grown at least 20% for each of the previous four years, kicking off with US$ 1m or more in sales.
This article also appeared in Finweek Magazine in their 7-Feb-2013 issue
Four years out of our MBA degrees, my MBA classmate Joanne* was working in a senior position at a leading global FMCG company. She was extremely well-paid, got to travel extensively and had all the usual corporate perks. Everyone thought she had the perfect set-up. But inside, Joanne was desperately unhappy. Her dream was to start her own business, and she would spend all her spare time researching an idea she was passionate about. However, she had two children whose private education didn’t come cheap, a sizeable homeloan to pay off, and her husband’s investment business had taken a knock in the global financial crisis. So the family depended on Joanne’s salary. As much as she wanted to quit her job in corporate, she didn’t think she could. Sensing her unhappiness, Joanne and I met for lunch to explore if there was a way she could successfully make the leap from corporate to a start-up. Some valuable lessons came out of our discussion that hopefully can help others in the same predicament.
I made the transition in 2007 and it was the best career decision I have ever taken. The entrepreneurial environment, however, isn’t for everyone. And corporate will be extremely tempting when you hit the inevitable rocky period in your venture. Before making the leap from corporate to start-up, you need to understand what you’re getting into and if you’re cut out for it.
So the first question to address is: What traits do you need to have in order to succeed in a start-up? Continue reading →
In my previous life in corporate, one of the biggest time-wasters was the budgeting process. We would write off three months preparing budgets for the next year. Invariably we tweaked last year’s numbers, added some inflation and extra for contingency, and there you had the new spend which you had to defend.
Why is this exercise destructive for your business?