Suits & Sneakers | Small business lie

ah boy I'm nervous hey I know what it is it's Gillan and his stupid music so go to us and play music like that for black people because like where where hey where where when I started speaking professionally I used to wear suits and all-stars never sneakers always all-stars the the suit represented where I was going the shoe spoke about where I'm from each and every single person in this room has a Facebook account yet the creator of Facebook doesn't know any of you exist because the power of what the Americans do is they teach their children to think and build for the global community we teach them to think and build for the people around the corner but the reason we are likely to do nothing about what we've learned here is simple because we like the status quo and we will look for evidence to confirm what it is we believe we all want the same things but in truth we are divided because we forget that what this country needs from all of us is a little bit of faith what is faith faith is the ability to see the invisible believe in the impossible and trust in the unknown [Music] [Music] somewhere some mana so I I know it's quite late in the evening but if you give me the next 30 minutes of your attention I hope to make it worth your while before I start ah boy I'm nervous hey I know what it is it's Gillan and his stupid music do you listen play music like that for black people because you're like cuz like wait wait hey where where I also have to say that I I I find our beautiful country fascinating did you notice how old and Lumos had they all stars tied while they were up yeah do you notice now I don't know if the Malou must know this but the whole point of the All Star was you never had to tie the laces hey man guys you must learn hey the comrades must levels my limits I'm gonna be a bit difficult with you here today I'm also going to be slightly controversial if for no other reason other than I think it's about time we're in an interesting time in this beautiful country of ours when never before has the centre of power shifted from the old structures established pre historically through law today to the ordinary man on the streets who exercises his right and my view was that most of us don't understand the power that we have and we don't even know how to exercise that power so here are two interesting businesses one of them was owned by a friend of mine his name is Juan daily he tells a fascinating story about how these started locks and culture in the early days and I don't know about you but mark the reason I took this on very interestingly is when I started speaking professionally I used to wear suits and all-stars never sneakers always all-stars and clients and people would ask me why and it wasn't a gimmick it's cuz when I grew up I think it's part of the reason I got quite emotional earlier when I grew up the only shoe that was branded my mom could afford to buy us was all stars and so for me the the suit represented where I was going the shoe spoke about where I'm from and I think many of us in the room can relate to this so my good friend Wanda started this interesting business called lotion culture he started it in 95 96 formally started it in 98 at the peak of his business I ran about 80 million rand and turnover around the same time he started his business 10 years prior this interesting business was started called mr. price mr. price today is just about an 11 billion I ran business those numbers are dated by two years so here's the question if what one dealer does and want him artha my good friend of MrPrice does is the same thing why did one of them odd grow with the other by a mile here are two interesting businesses I made an interesting entrepreneur called Tebow tobol he operates and lives in Alexander he's runs a business that was run by his dad was run by his granddad before him his business is as puzzle his popular commodity of sale in his puzzle shop is it Gorda all of us here know about Yokota if you don't you've not had a quintessential South African experience now he's been running his business for years but I asked him when did you formally start take taken over the business was when he left high school in 2005 last year he employed three people he did 53 thousand rand and turn over the entire year as an interesting business called quarter Joe's was started by a group of people that belonged to famous brands they started their business in 2013 what do they sell the same gotta wood table cells in Alexander and yet in three years they've grown their business to 20 million rand though do 60 this year they'll do a hundred next they'll be doing a billion maybe in seven years time if what he did were terrible and what God the Joe does is the same thing why is the Tubbs business not growing what's a bank put up your hand if your mom and dad ever had a stock fell or belongs to one my mother belongs to so many stock fell she was broke on the second of every month I was like mom why she's like a mad dog I'm like mother [ __ ] and we're not allowed to swear in my household that's why I speak so proper it's true dusty doesn't a job but you know shock the black people when he's born dusty started swimming cuz for us yay Ivan houses are different I look at my own household like my wife and I grew up very differently my wife comes from a proper posh background so when our kids are naughty my son's name is Lucy the third born again jet level some child LEDs levels when my son's no-tell watch more chicas Vicki don't take the corner I'm fascinated by this idea of corners there's a black person I'm like how is this a punishment and then I worked it out you know why black people never send kids to the corner cuz in the in the rural areas where we come from those around us no Cod has beds if you're watching I hate gonna lean hey alright I'll stop pasta so my mother belonged to stock fell on stock fell on stock fell there's an interesting stock fell we met up with in the Eastern Cape they're called sang lore but they've existed since 1985 do you know what a bank is a bank is a stock fell the simple idea that you put your money somewhere when [ __ ] needs to buy a home he goes to the bank says a bank I'd like to lend money what they do is they collectively take all the money you've put in as deposits lend it to me if I'm a good risk price the risk calling it interest they use this thing called the interest rate and the worst I behave as a consumer they primeplus me over a 20-year period and I pay the money back the bank makes a bit of interest and they pay you back your money so all the bank is is nothing more than a stock fell that has the licence to lend the money art so my mother's belonged to a stock fell this particular stock first Engel has existed since 85 last year they collected three hundred thousand rand in total collections of the members of the stock fell APSA has existed only since 91 at epsilon she did 4.

6 billion rand in turnover now if what apps are does in C ANOVA does essentially the same thing then why are the people of Ono in the Eastern Cape who belong to the stock full of some of our still ridiculously poor and what I will argue here today very simply is this that you and I have been fed a lie the lie is about this great idea called small business start one just start they tell you and stay small never disrupt don't move things too much employing a person may be to you show me one thing that you and I look at around here today that's been changed or fundamentally disrupted by small business you will not find it 1978 my grandfather now late grandfather I started a business his business was as puzzle and he took his garage looking to make a bit of extra income and converted his garage to a shop and the neighbors would come down the street to buy for monk for my grandfather's puzzle shop to this day were famous in our home for that special in the 1990s he expanded who moved further up the road and up the road there were two other houses and into those two other homes he got into their garages and converted those interest puzzle shops and you know what happened in the 90s my grandfather was living large he now had three spazzy shrubs but he started in 1978 when my grandfather died now four years ago he died with once Puzzle shop and not much money to speak of in the same year 1978 when he started his puzzle shop for young entrepreneurs met in a small little town called stellenbosch in the independent province of Cape Town hmm Cape Town Prairie and when they met you know what they did they put together a little bit of money one of them had a bit of money to speak of his name was Chris - he had started a business called Pepco a decade earlier so they put in a little bit of money into the pot and they created a business that was essentially as puzzle shop they called it shop right so in the same year my grandfather started his puzzle shop so - did whitey Poisson and his friends start shop right shop right this year this year we'll do a hundred and twenty-four billion rand and turnover my grandfather died was nothing to speak of my contention is that whilst there was a deliberate system that sought to keep us as a people disenfranchised the greatest victory of that system is not that it kept black people disenfranchised is that it taught you and I that it's okay to think and do small and this is a line that's been fed so much to us that we believe it we believe it it's permeate even in our education systems we believe it and so when we start businesses we think small I can't tell you how many entrepreneurs I see start a business register go to the bank open get a bank account go to stores get a tax clearance and then start filling our database registration forms just to get that one tender because we're all thinking in a linear fashion we're all thinking small I just sell is going to be slightly controversial if we really want to take this country forward if we really want to do away with this problem of 43 not 38 43 percent unemployment of young people under the age of 31 and of that 43 percent unemployment of those young people 67 of them are young black of the component that's young and black over 80% of those are young black and female we don't change that problem in any other way other than building a country that's substantially better than it is right now we only do that by teaching the majority of people don't think small it pained me when I was in Drgon's Den watching people come to pitch because it hit me over and over and over again that specifically my people were thinking in exactly the same way so how should we be thinking it's one thing to kind of spell out the problem what's the solution right my view and we talked about this in our firm we run a fund there are four different types of businesses the first is a start-up wants to startup it's the one guy it's him he does the job and he's easy to spot too cuz he goes to the client on the Monday meets him sells to the client on the Tuesday goes to the client's office and delivers the work on the Wednesday goes to his office and emails the client the invoice on the Thursday phones the client asking for his money and on the Friday he pays his landlord he's every single part of the value chain that's not wrong except so many of us have been taught that that's what business is we don't know that there are other phases of it if you're not a startup you move a level up you become what we call an offer I'm a survival entrepreneur they're easy to spot one guy two or three people in the office feels a bit important he drives usually a merc why well because any self-respecting entrepreneur knows that the best car is a BMW no one drives a merc this AMG for what for if you not a survival entrepreneur what are you you then become what we call a success entrepreneur now if you ever read The Sunday Times or you read the media in South Africa and you'll hear them talk about these people called ten the preneur most of them are nothing more than success entrepreneurs you know what success entrepreneurs are people who make money to show you that they make money very simple I make it so I've got to show you that I make it I wear the right kind of suit I live in the right kind of suburb I Drve the right kind of car I send my kids for the right kind of school the other word in my good friend Alan who I saw earlier calls them is lifestyle entrepreneurs I make money to live the right kind of lifestyle notice we've not created anything here we've not unemployed more people we've not built the country we've not grown our GDP we've not done anything to create a better country all we've done is we've taken a few people and given them a better lot so that's happened what's really required is for us to create hyper growth entrepreneurs the thing here is these people are very rare very rare because one they take the long term view two they don't believe in their own PR three they understand the value of networks is not the network but the ability to unlock value in that network and three and four but perhaps most importantly is they understand the value of education not a degree not a certificate education two days ago I had a guy walk into my office he's a growth entrepreneur this guy he just doesn't know it he's an engineer he's 34 years old dough balls is his name and there was very interesting because he came to my office it he's looking for a bit of funding he's got contracts that he's been servicing has been trying to finance the contracts themselves it's just not working this is to me I needed a bit of funding I said what do you need debtor equity and we sit down we look at his balance sheet and here's what I found fascinating about on doors he's an engineer by training but when I asked him specific questions about his business the mechanics of how it works and then the finances of that business he knew it backwards he knew how much of his overdraft he used on which month and what the interest rate of their overdraft was and what the interest portion cost him in that overdraft he knew how much his tax liability was gyah what is that liability was most of us don't know that who run our businesses he knew what his capital structure was as an engineer know what his capital structure is yet this guy just does six seven million rand a year but he's a growth entrepreneur he's genuinely interested in building a better South Africa so I was on this show unfortunately I since learned that I was the bad guy on the show did you know this because I was like but I'm the nice guy but what then I go to place people like Oh Lucy yes you're so mean yes whoo yeah you know the worst thing a black person can say to you I don't know you know what means who means there are no words for you there's just no words I can't explain it again this is what I love about this country the nuance of what we miss right I mean I I you know I you know there are certain things that where I come from that when you say them they have such depth meaning and substance a simple thing like this now I could say that in the boardroom but yeah the other guys wouldn't get it if I said to a black person even if they had two PhDs and they were chairman of the board we are going to the stratum Chad you said to me you don't miss it so a lot I would love this about this country right another one is how we greet you ever notice yeah you're not black people can greet each other worth saying a word it's like you know this is this is a da how's that how's the family how's the kids how's everyone how's things since I've last seen you how are you all of it with Chester and the other guy replies the order reply it's just a wink you know the wink is the wink is we're all good it's all good the home long got approved we live in large it's okay one wink but here's what I really love about us I don't know if you know this but where I'm from we speak in numbers numbers like for us numbers is a language so if you want to say to someone that you are uncomfortable you need to go to the lavatory to relieve yourself what you would say is ADA I'm gonna buy your size six nine you four five rooms of what a second of ma'am write it down I'll explain it when we're done very quickly I'm running showing town but I just want to quickly show you two things so I was on the show Drgon's Den and this is how I came up with this theory about the problem with small business I want to show you two examples of entrepreneurs who came into the show and other thinking was wrong the first con would introduce you to is the president he called himself mr. president but mr. president had a theory his theory was that the eye has as much intelligence and sensitivity as the anus two things that should never ever be compared but he compared them then proceeded to tell us where that the show was shot in August he said by December that year which is about three maybe four months by December that year his business idea which was about understanding the sensitivity of the anus as an intelligent body part would be worth 1 billion rand necessarily wouldn't invest we thought the idea was just stinking but have a quick look at mr.

president guys can you hit play absolutely this is what looks like and it's been painted as such as an application what you see it around yeah what you see here is a package of different items all these items are to help an S or to monetize the opportunity study the behavior of the human eye in relationship with the human anus nobody has ever conducted us the human eye relationship absolutely the human anus ex-cops I think honestly I think the it's just let's just get to the point here what I discover is the fact that these two organs are equally intelligent as far as sensitivity is concerned we have a deal locally and in the u. s. all right locally there's the stores there the the brand that we have a deal with they have a 140 stores across I call who are they should I say the name is micro stores locally whoo mica so Marcus stores have agreed to stock your product absolutely they need about ten thousand year to get a start it's a cash deal - cash - yes believe what you get paid they're down talking this is just not my game and I'm worried that I'm gonna be flashing money down the toilet yeah I respect I have to say that I'm out thank you the crystalline Clanton Taba but unfortunately I won't be parting with my money today you know there's so many other challenges in South Africa at this point in time and yours I do not think it's a serious priority thank you very much do I have to say no I already said don't you love levels response so when we were doing the show we called lay with the Oracle because someone would come and present something stupid and they were just like you know the philosophy of what you're doing we're like labor no it's stupid its challenges now there's an interesting idea here's how it actually worked listen to this it's a dispenser you put water in the dispenser you take your toilet paper double ply I hope and you would put the toilet paper in your hand and before you use it apply as it were you would dispense water into it to make it soft and wet because if you wipe with something that's soft and wet it wipes better than if it's hard and dry fascinating except that there's a little thing called wet wipes I don't know if you've heard of them you've heard of them you buy them at disc em you know Ivan saltzman's business you open it up in the wet wipe it comes out the way it is so what's the tund it's real problem he's got two real problems the one is his thinking is wrong he's trying to fix the problem that doesn't exist a lot of us do that you fixed a problem that doesn't exist why well because you go to an education system that tells you to identify issues that are there apply problems that already exist or solutions that already exist and hope to make it better than everybody else most of us in truth are a dummy community we copy the neighbor that's why we drive the same brand of car we're the same brand of suits live in the same suburbs send our kids to the same schools because as human beings we find I don't know if you know this but psychologically we find value in the tribe that I belong to a group of people now the second gentlelady is very interesting I won't waste much time watch this I need this investment so badly because is going to be the key to starting up my business and to making a success of it and pursuing my entrepreneurial dreams 360 mobile beauty is a mobile beauty salon that offers mobile Beauty hand services to our clients all in the comfort of their own homes 360 Beauty does away and moves away from traditional salons as we know them we do away with brick and mortar and buy by leveraging innovation and technology and mobilizing our technicians we offer a quality unique service that's different from the norm in a time where time itself has become very expensive and people are on the go and don't have time to sit in traffic waste Pedro get to a salon even for the gentleman and still have to wait for your stylist then be rushed through it because your stylist is trying to move a lot of people through the chase for them to make turnover I've adopted innovation through my cell phone mobile app and I've mobilized my technicians to deliver our service in the comfort of our clients homes at their office attend events wherever they choose where they in terms of revenue generation have allocated and I've broken it down to two segments services and product because a lot of salons are making money from product sales I've apportioned it to say 60% is in is is is raised from from sales 40% is raised from product I've allocated a minimum spend for us to be able to go and render the service to a client of eight hundred rands this is based on the research that I've done with salons and the prices they're charging for services and the like eight hundred rent is based on what it's based on what a woman with Spain for here for her nails for a pedicure for treat so this is average spend so this is every space so for someone to be able to book with us and for us to go to them they need to be spending 800 rands either both service and product or product alone or service my challenge is I'm not convinced of the numbers you know I'm not I'm not convinced that there's a big enough market that is going to be spending 800 rent each time no I completely different but how big is that market doesn't the point I'm making is growing companies and South Africa at the moment is kinky they sell here an average of 2,500 bucks yeah we can split it two ways because I can support with a complete development of the app from office and really just remodel this thing we can rework it together but I really like I think I like her thinking and we could really work this thing together nicely I think a five-way split of the 350 would be would be a great to the vote of confidence in you as a person are the two of you interested before we even consider it are the two of you interested in diluting any further so for me I understand the risks of what she's getting into say it for season I mean through it and gladly sir I'm sorry I mean very quickly what did she do right one she knew her market did the research this is the basic stuff - she came in with uber amounts of integrity she'd actually prepared she walked in but three and this is for me what got to me about this young lady is she was thinking in an exponential way she wasn't thinking incrementally she actually thought about the problem as it exists and how do you create a solution to the problem that is not only sustainable but scalable building an uber but for his stylists now what many people don't know who watched the show he's ruined granted money to do the show this was our own money so if I commit two million I ran to a single business I'm committed that's it I'm in so we put in about eight hundred thousand ran into this young lady at various stages in her business she's only just turned cashflow positive but at each time when we've put in money there's been so much dilution in the business that I now own probably less than 0.