by Abed Tau
That year, I also got involved in promotions during the FIFA 2010 World Cup™ after one of my lecturers introduced me to a relative who had been awarded the national contract to manage the MTN fan parks around the country. It was a great achievement, but he had a major problem: he didn’t know a single person who could either run the fan park or manage promotions in Limpopo. Since I was spending every second weekend in the province and had developed relationships with hundreds of students, I realised that there was a massive opportunity for me here. My prior experience in promotions also helped. So I ended up running the MTN Fan Park in Limpopo. Yes, it was just as amazing as you would imagine: I remember that there was so much money going through my bank account that the bank called me in to explain what was going on, actually freezing my account until I could prove to them that I wasn’t involved in money laundering! To put things in perspective, the lowest earning of the 28 promoters I employed to run the fan park took home R40 000 during the month they worked for me.
Towards the end of that year, I teamed up with a friend to launch a business marking test papers at UJ. Students who had just written tests usually had to wait quite a while for their results, and this was where we saw our opportunity. We hired the top 50 Honours students from the previous year as markers, fast tracking all marking so that students who had written tests on Friday were able to receive their marks the following Monday. The university supported our idea, and we ran the business for six months – well into our second year of work. We made a tactical error here: we agreed that UJ would pay us a salary, whereas it would have been more lucrative if we had invoiced for every batch of tests marked. This meant that, although the demand for our services grew and, with it, our workload, we continued to earn the same salary. The model just couldn’t be scaled. Eventually, unable to handle the workload, we resigned.
My final, and favourite, venture was Pop-It, a business that tapped into the craze for gourmet flavoured popcorn. I ran this business with a friend and our ‘venture capitalist’, who had lent us money for equipment. Our little business offered butter, sour cream, salt and vinegar and chutney flavours; we employed five youngsters from KwaThema, Springs, and operated out of a garage with no windows or ventilation belonging to my friend’s grandmother. This was an insane period in our lives: we churned out 2 000 to 4 000 packets of popcorn every week and found our way into 23 retailers, mostly forecourt shops and convenience stores. Our product was flying off the shelves, but that brought its own set of problems: we never had enough stock, our cheap machines kept breaking, and I constantly had to dodge calls from retailers who wanted to order more product that we just didn’t have.
Our business was so successful that UJ’s finance department even based a question in an Honours exam paper on it! All this happened while my friend and I were serving our articles. He’d arrive at my house with the stock packed into black refuse bags at 4am; I’d rush to deliver the popcorn to stockists before heading out to visit my audit clients. We eventually collected used boxes outside Game and Makro to use as packaging for the product, and finally made enough money to buy a van and do deliveries properly. It was a great business that we kept alive for two years, until the realities of our situation forced us to stop: We could never keep up with the demands of the retailers; our labour force was always on strike because of wages, and – unsurprisingly – we never got a health and safety certificate for our garage factory.
So, why have I told you about all of these businesses? To let you know that the first door you knock on will almost certainly remain closed – and, even if it opens, it might not be the right door for you. As an entrepreneur, you have to try many things, pivot, fail and start again. You’ll find that the one thing most entrepreneurs have in common is that they’ve started, and failed, several times.
But you shouldn’t let that deter you. Granted, the situation changes as you accumulate responsibilities, but if you’re not married and don’t have kids, pets or a mortgage, it really doesn’t matter if you live at home with your parents and eat tinned fish or noodles every night. You can chase all your desires and dreams, trying different businesses. As you’ll learn later in life, time is the truest form of wealth – and if you’re young and unfettered, you should make the most of where you are right now. Try everything you want to, business-wise, and who knows – you might end up founding a business that means you never have to find a job.
There will come a time in your life when you’re bound by school fees, car payments and bonds, and it will become much harder to explore your entrepreneurial side. If you don’t do it while you still can, you’ll probably spend the rest of your life asking ‘What if?’
There’s a lesson here, and it’s a tough one: it’s easier to find success as an entrepreneur if you make do without life’s comforts. In many ways, comfort is the enemy of entrepreneurial success.
CHAPTER 2
WHY DO YOU DO WHAT
YOU DO?
Why do you do what you do? Show me someone who knows the answer to this question, and I’ll show you a highly motivated person who is certain to succeed.
Like many entrepreneurs, I have watched Simon Sinek’s inspiring TED Talk, ‘Start with Why’. This video examines the world’s most successful leaders through the lens of three questions: Why do they do the things they do? How do they do those things? And what, exactly, is it that they do?
I have to agree with Simon. It’s critical to know why you want to start a business; and that ‘why’ must be so compelling that it keeps you going during tough times.
As Simon says, people don’t buy what you do; they buy why you do it. This thinking led me to find my own why. You see, for a long time I didn’t really understand where my entrepreneurial enthusiasm came from. As a child, I had a drive to create and build, and this ultimately fuelled my dream to become a business owner. More than that, however, my why has always been about creating a better life for my family, especially for my father.
My dad was born in 1944, at a time when being a black South African meant social and economic exclusion, in the poverty-stricken province of Limpopo. In 1960, at the age of 16, my dad moved to Johannesburg to look for work. He started working at a mine in 1963, earning R2 per month. Five years later, he had found a job at Citibank and was earning R22 per month. My father eventually obtained his matric in 1973 and landed a job with a monthly salary of R98. His luck started to improve in 1982, when he joined Vista University and started earning R800 a month. He finally earned a qualification in business administration, and worked at the Department of Education as an assistant director in the examinations department until he retired.
My parents had seven children, and they were great parents. Although our family didn’t have a lot of money, we lacked for nothing, especially because we felt so loved.
My mom was a teacher while we were growing up, and later became a full-time homemaker. She passed away when I was 13 years old, two days before I was set to start my first day of high school. My last memory is of her telling me how proud she was of my achievements, because just a few weeks before her death I was named valedictorian at my primary school, having achieved the highest marks in my grade.
My mom’s passing was difficult, especially for my father, who now had to raise seven kids – all feeling confused and lost – all by himself. Somehow, although he was never rich, he managed to send all of us to some of the best schools in the country.
I think that my father thought of me as a lazy kid who never did his homework, never studied, and was never home on weekends, partly because I was rebelling. Because of his position at the Department of Education, he was able to access my matric results before they were officially released; I think he wanted to check how badly I had failed. To his pleasant surprise, I had several distinctions, and my overall average was 79 per cent. I’d even earned the highest history mark in the district.
My marks landed me a bursary through Deloitte, a professional serv
ices firm. This was a godsend, because I understood that my dad could not afford university fees. Although he gave me a monthly allowance of R500 during the four years I lived at the university residence, it wasn’t enough to cover all expenses, including food and toiletries, but my older siblings helped where they could. The amount never changed over that time, but nor did my father skip a single payment. It arrived like clockwork on the fifteenth of the month, when he received his salary.
I was delighted when I finished both my undergraduate and postgraduate degrees in record time, not only so that I could start earning my own salary, but also because I wanted to be able to help out at home.
I started working in 2010. My first pay cheque came to around R9 800 after all deductions, and I remember thinking: this is it. This is what it feels like to be rich! I was earning a staggering 20 times more than my monthly allowance at university; no wonder I felt that I had all the money in the world.
That’s the funny thing about money, though: within three months, I was moaning that I was underpaid and wondering how I was supposed to survive on such a measly salary. So I sought advice from my dad. I will never forget what he said when I showed him my payslip: ‘Wow, you’re 21 years old and you’re earning almost as much as I did in my last year of work before retirement.’ I don’t think I slept that night. I kept thinking about everything he had achieved on his salary, while I was already broke and in overdraft. I had so many questions, like how had he managed to raise seven kids on that salary? How did he afford our food, not to mention my monthly allowance? I immediately regretted every time I had complained about the sum and asked for more money.
I later had an insight of sorts when we were shopping at Woolworths. It was a full year after I had shown him my payslip, and I had convinced him to let me buy him some new clothes. As we approached the till, he said, ‘You know, the last time I bought clothes was when your mother was alive.’ This was around 14 years after her death. That just brought home to me what an amazing person he is – and not only as a father. He is also an incredible community leader.
I think everyone has moments of perfect clarity in their lives, and the ‘slip reveal’ was mine. That was when I realised that my dad is my why. He is every single reason for what I do. It’s because of him that I wanted to become a business owner. I want to become successful and hopefully be able to take care of him, so that he never has to worry about money again. Tebz has exactly the same philosophy: she got into business so that she could help her family. For us, it’s never been about making millions. I think that any modicum of success we’ve enjoyed is thanks to these convictions which run so deep.
But it’s not just about family (and this includes our siblings and their children). It’s also about creating jobs for young South Africans and lifting the effects of poverty. As one of my friends says, ‘Poverty is a violent act.’ I think that anyone trying to contribute to poverty alleviation has found their life’s work.
Here’s another reason why I think it’s important to have a why which is rooted in a deep conviction rather than the desire to be rich and famous: I once read a great quote that said, ‘When you feel like quitting, remember why you started.’ You see, if your reason is superficial or you don’t have a strong why, you won’t have the commitment to continue when it gets hard – and believe me, it’s going to get hard.
I think it’s natural for your why to change and evolve over time. My dad remains my why, along with the rest of my family, but my wife has also become a very big why. And I imagine that my why will change again once we have a family of our own.
I repeat: choose a good why. Wanting to be rich or famous or popular is not a reason that will get you out of bed when the odds are stacked against you.
CHAPTER 3
BORING IS GOOD;
STAY FAR AWAY FROM EXCITING
When Tebz and I first started our business, we had no clue what we really wanted to do, and we remained clueless for the first year of operations.
All we really knew was that we were incredibly excited to finally be free to follow our dreams, and to be rid of the trappings of corporate life. But that feeling quickly dissipated as months went by, without the bills going ‘bye’.
We must have got involved in at least five different businesses during our first six months as entrepreneurs. My first venture was an investment in a Soweto sports club: lots of fun, many late nights – and no money. I left that business after three months, having lost the entire R40 000 nest egg I had accumulated while employed.
Tebz, meanwhile, was trying her hand at running an event coordination business, which was gaining very little traction.
We took a chance investing in several businesses that we thought looked really exciting and sure to deliver great results – and we lost all our money within the first six months. I remember thinking that my career as an entrepreneur had been very short-lived. In just six months, I had gone from posting on Facebook ‘Last day at Deloitte; thank you for the memories. Now I’m off to entrepreneurship’ (a post that garnered 500 likes) to updating my LinkedIn profile so that my network would know that I was looking for a new job. I couldn’t believe that I was, once again, considering full-time employment.
Looking back, I don’t know how we survived. At the time, Thamani was able to pay us a stipend of just R3 000 a month. We had just moved into our first workspace, a 30 square metre office in Parktown that a kind friend subleased to us at the below-market rate of R4 000. Tebz and I had debated long and hard about whether we should, in fact, spend money on premises but, frankly, I was tired of pretending that we had an office while meeting potential clients at restaurants. What’s more, those restaurant meetings weren’t exactly cost-free: we still had to pay the bill, even if the potential client didn’t convert to a paying one. It became a pretty expensive exercise.
At the time, Thamani was the least attractive of the businesses we were involved in. It wasn’t exciting; it wasn’t venture capital. Our business model hinged on physically collecting invoices in boxes, then returning to the office to capture these so that they would be presented in a professional manner.
This marked my first lesson in business. Human beings crave excitement, even in business. We want the cool factor; the apps, the venture capital, mergers and acquisitions, strategy consulting – all the stuff that makes our jobs sound more glamorous and fast paced. What I learned, though, is that the ‘most exciting’ businesses are also the most brutally competitive, while the ‘boring’ businesses are the ones that thrive.
We quickly learned that our boring bookkeeping business had a very real chance of success. Very few chartered accountants consider doing bookkeeping, and so we had an immediate competitive advantage in our market. Yes, the work was mundane; tedious, even. But it was perfect. It took us a comparatively short time to acquire clients and build a business. That’s why my first piece of advice to aspiring entrepreneurs is this: remember that a boring business is good. In fact, it’s great. Do the stuff that no one else wants to do, and you’re halfway to becoming a millionaire.
The following graphs illustrate the different types of businesses I’ve identified through my own experience. I don’t claim that they’re rooted in scientific evidence; however, I believe that they offer valuable insight and, at the very least, some points to ponder before you go into business.
These graphs demonstrate my belief that there are three types of businesses: Difficult businesses, boring businesses and exciting businesses. You’ll find these different types of businesses across all industries. Look at restaurants, for example. The fine dining scene appears to be very glamorous and exciting, but few people make money from it. Now, if the same cordon bleu chef applied his skills in a corporate canteen serving plain old cheese and ham sandwiches, they’d probably find themselves earning very well in a short span of time. Then again, this is a space that few Michelin Star chefs would find attractive.
Difficult
businesses
Graph 1 highlights the reality that the more difficult a business is, the greater the chance of failure. Let’s be clear here, though: every business is hard, but some businesses are exceptionally hardcore. I’m talking Elon Musk, space travel difficult. You’ll know your business fits into this category because it generally involves almost impossible barriers to entry, and is typically highly technical.
As you can see on Graph 2, difficult businesses have a high probability of making serious money – if you manage to push through the challenges, that is. So if, like Elon, you do manage to figure out space travel, you stand a good chance of becoming very, very rich.
Graph 3 shows that the most difficult businesses are also the least competitive. Most people lack the resources (whether financial or cognitive) to attempt to travel to Mars. This is a huge benefit for the owners of difficult businesses, because you generally don’t have to worry about a competitor creeping up to steal your lunch. The market can typically accommodate the two to three players that inhabit difficult spaces with ease.
Boring businesses
As with difficult businesses, the more boring a business, the higher the probability of success. In truth, every job – even those that seem outrageously exciting – has boring elements. We’re generally able to push past the dull times because we accept that life can’t always keep our pulses racing. A boring business is something different, however: these are the jobs that no one wants to do. People would rather part with their hard-earned cash than do these jobs themselves. I’m talking about plumbers, waste removal, cleaning services, bookkeeping, manufacturing toothpicks, running a canteen that makes nothing but toasted sandwiches …