Entrepreneurship

Doctor Nicolaas Duneas was in a quandary: as he sat in his dishevelled office at the Tshwane University of Technology (TUT), he pondered the future of his company Altis Biologics. Founded in 2002, Altis was a small biotechnology company specialising in bone regeneration. Duneas was a trusted expert in his field, and Altis represented his life’s work. Now, in July 2009, the company was poised in a kind of no-man’s land. Duneas still needed to complete one more set of clinical trials before he could take his product to market, and for that he needed significant capital. Feeling like a very small fish in the big pond of global pharmaceuticals, Duneas wondered just how he was going to find the right funding and strategic partners to expand his business. Was he right to launch his product locally first? And was he being too ambitious by setting his sights on the overseas market?
 
No. Pages: 17
 
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Under Ive’s leadership, the Amanz’abantu Consortium became a model of integrated water service delivery to the rural poor. However, government recognized a need for accelerated delivery. One approach was to award a Build, Operate, Train and Transfer (BoTT) government contract to selected consortia. As an entrepreneur working in the social sector, Ive and his colleagues experienced serious obstacles. The privatisation of this highly politicised and bureaucratic sector was the subject of considerable polemical debate. Ive considered the way forward.
 
No. Pages: 28 
 
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Steven Fitzgerald looks relaxed as he arrives home from his fourth trip to South America this month. The chief executive officer of Andbeyond (originally Conservation Corporation Africa), a leader in luxury ecotourism, is taking his company to new climes. The company started in South Africa in 1990, spread its wings to other African countries and then ventured into India in 2004, where it has been successful – although with a few initial surprises.
 
Now Fitzgerald has set his sights on South America. “Once you have seen lions, tigers in India are very enticing, as are jaguars, sloths and macaws in South America,” he says. But, he asks himself, what have we learnt from opening in India that we can take with us to South America? And what should we be doing in setting up in South America that we didn’t do in India?
 
No. Pages: 10
 
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It was the middle of 1994. By then, 23-year-old Barry Berman had been trading in Cape Town number plates with short and unusual numbers for three or four months. The business was growing fast. But so was the canned fruit business that he had started with a friend at the beginning of the year. He no longer had the time to devote to both, and Berman wondered what to do. Should he ‘can’ the canned fruit and pursue the number plate business?
 
This is the first in a three-part series that follows the fortunes of Berman and his company. The other two in the series are Letlapa Plates: Empowerment on a (Registration) Plate, and Letlapa Plates: At a Crossroads.
 
No. Pages: 9 
 
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The night before his tender proposal had to be submitted, Barry Berman, the founder of Creative Plates, a company that marketed personalised vehicle registration numbers (PRNs) in the Western Cape and Gauteng, was about to negotiate the biggest deal of his life. To stand a chance of winning a contract to market PRNs for the Gauteng provincial administration, his company had to meet government affirmative procurement requirements. This meant that he had to negotiate a deal with a black-owned company. Across the table from him were Ramateu Monyokolo and Tlhalefang Sekano, both directors of the Letlapa Group, which had been specifically formed to take advantage of opportunities presented by government’s affirmative procurement policies. How much of a share could Berman afford to give to Letlapa before it became unviable? How could they structure the relationship so that it worked in the future?
 
No. Pages: 11 
 
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In November 2009, bidorbuy was the largest South African online marketplace. Following a failed attempt earlier in the year to purchase bidorbuy, kalahari.net – a subsidiary of Naspers and a highly successful online retailer – indicated that it was going to compete directly with bidorbuy as an online marketplace. Andy Higgins, managing director of bidorbuy, was a firm believer that, if his company could reach a certain level of wide-scale popularity, it would virtually be impossible for a newcomer to compete. Higgins therefore had to find ways for bidorbuy to do this before kalahari.net entered the market.
 
No. Pages: 18
 
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In December 2008, Charlene Lewison, marketing director of the Johannesburg-based family business, Birdi Golf Apparel, surveyed the company’s well-stocked shelves with pride – but also with a growing sense of unease. In the past 12 years, Birdi had become an established brand on both the professional and amateur golf circuits in South Africa.
 
In recent months, however, sales had started to slow as the economic crisis took effect, and Lewison knew the time had come to rethink her company’s marketing strategy and planning. Should the company look at new products, or perhaps new market segments? Should it retain its ‘niche’ status or broaden its base, or should it try to penetrate its current corporate business further? 
 
No. Pages: 18
 
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The first part of this case is set in 1985, when twenty-five year old Herman Mashaba and two colleagues decided to enter the ethnic hair-care market in a politically turbulent South Africa with an evocative name for their product and a R30 000 loan.
The case consists of four parts, each presenting a phase in the progression of Black Like Me from a “back-yard” operation in a black township, to an organisation ready to enter the global ethnic hair-care arena in 2002. The case presents the background of the entrepreneur, Mashaba, and his dream of independence, the choices he faced as the new South Africa emerged and global competitors entered the market, the consequences of his decisions and the recovery of Black Like Me.
 
No. Pages: 27 
 
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By 2007, the South African business environment had changed significantly. After 1994, democratisation had led to an abundance of business opportunities in South Africa, which foreign firms were keen to exploit. This only served to increase the competition faced by local companies, and Black Like Me was no exception. The new generation of customers did not share the same sentiments as the generation to which Black Like Me had first been introduced.[i]Therefore Connie Mashaba had to ensure that the Black Like Me brand remained relevant to the younger generation of customers, at the same time as maintaining its name and giving customers what they wanted.
 
No. Pages: 3 
 
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In September 2014, Calum McCracken, chief executive officer (CEO) of Next Generation Network Telecommunications (Pty) Ltd (NGN Telecoms), met with his partners to discuss the company’s Kenyan dilemma.

 

Doing business in Kenya had proved to be far more challenging than in any other country. Among other challenges, the company had to deal with fraud and negotiate from scratch with a new telecommunications operator, without success. This ended in a struggle to renew its Communications Commission of Kenya (CCK) licence. No licence meant no trading and the company eventually had to withdraw from the country.

 

Years had passed since the company’s first entry into Kenya, but McCracken felt the time was right for another attempt. What should the partners consider to avoid the challenges of the past?

 

No of Pages: 18

 

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Dale Hefer, managing director of ChilliBush Marketing and Communications had started ChilliBush five years previously, operating from her Johannesburg garage. The business had proven remarkably successful, with billings exceeding R1 million after her first year of operation and reaching more than R18 million by 2003. However, Hefer knew that ChilliBush had to attract the big brands if they were to reach the billings target they had set of R36 million per annum by 2006. In order to do this, she and her co-directors had decided to differentiate the agency by developing a process that would formalise their approach to integrating strategic thinking with the creative process, whilst including a remuneration process that was based on risk. They had taken it a step further by actually registering a holding vehicle for this process, calling it ‘Creategy™’. The question was whether Creategy™ would, in fact, give ChilliBush a competitive advantage.
 
No. Pages: 10 
 
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“We cannot just sit by and do nothing!” said Sebastian Olofsson to his uncle, Dan Olofsson, a Swedish IT billionaire and owner of a private game reserve in Hluhluwe (northern KwaZulu-Natal, South Africa). It was February 2003, they were both at the reserve and Sebastian had just returned from a guided tour of the vicinity that had exposed him to the dire poverty in the area and the human suffering there caused by HIV/AIDS.
 
Olofsson concurred. He had been thinking the same thing for some time. He had bought the land for the lodge in 2002, initially as a private retreat for his family and friends. He was now thinking of developing it as a commercial venture. He had been deeply affected by the need in the area, but what was it that he could do to make a difference?
 
No. Pages: 6
 
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In August 2002, Desmond Makondo walked out of the Johannesburg offices of digital products manufacturer, Hewlett Packard (HP), with a digital camera, two printers and an undertaking that he would pay the company R8 000 for the equipment within two months. He had no idea how he was going to do this, but he knew there was no going back; he had no choice. He had to find a way to make this equipment make money. But how?
 
No. Pages: 2
 
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It was December 2004, and Desmond Makondo had turned his photographic business, Digitally on the Move CC, into a profitable concern in the three years since he had walked away from Hewlett-Packard’s (HP) offices with a camera, two printers and no idea what to do with them. He had acquired a number of regular corporate clients and was photographing various events including golf days, corporate functions, conferences, graduations and more. Now he had the opportunity to bring a partner on board to help him develop and grow the business, but he wasn’t sure if this was the best plan of action at this stage.
 
No. Pages: 2
 
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By June 2009, Desmond Makondo was again at a crossroads with regard to his business. At the end of 2007, the two-year partnership with Edward Jardim had ended amicably when the two realised that the business couldn’t sustain a part-time partner who wasn’t able to work the necessary hours. Since then, Makondo had continued to run the business single-handed, being responsible for photography with the help of his six freelancers as well as administration, bringing in new clients and strategic planning. However, the immense growth of the business meant that doing all of this had become very stressful. Makondo knew that the situation could not continue. He would have to put structures in place to ensure the smooth running of his company, and to ensure that he did not burn out from exhaustion.
 
No. Pages: 5
 
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On 1 September 2009, as financial services firm, Discovery Ltd was about to release its annual results for 2008/2009, its chief executive officer (CEO) and founder Adrian Gore, took some time to consider the company’s trajectory since its inception 16 years ago. Discovery was now in the top 40 on the Johannesburg Stock Exchange (JSE). This year’s results were excellent: in the context of the global economic crisis, operating profit had grown by 32%. Still, Gore was not one to remain satisfied with these achievements. He had worked hard to instil an ethos of entrepreneurship and innovation in the organisation. Now he wondered whether he had done enough to sustain that into the future and what the next opportunity would be.
 
No. Pages: 25
 
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It was mid-September 2010. All 50 finalists in the annual First National Bank (FNB) Innovators Campaign were about to present their ideas to the judges. For CEO Michael Jordaan, this was a highlight in his calendar – he always looked forward to being inspired by the flow of new ideas.
 
FNB had become known in the industry as a leader in banking innovation. When Jordaan took over the reins in 2004, he took innovation to a new level through the Innovators Campaign. But now he was wondering how to sustain the energy the campaign had engendered in his staff. What more could he do to nurture the spirit of innovation that permeated the organisation?
 
No. Pages: 17
 
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Walking around a potential new building space of over 2000m2 in July 2006, Hein Koen and André Sharpe, joint founders of Habitaz, a provider of integrated virtual workspace infrastructure and related services, noted that they had achieved great success since the start of the business two years ago. They were, however, faced with the urgent challenge of making the right strategic decisions regarding the future growth and financing of the business. As they pondered their options, the directors hoped that they would end up making choices that could catapult the company to even greater levels of achievement.

No. Pages: 15

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In July 2009, businessman and entrepreneur, Martyn Mills of MCM Wines, reconsidered his marketing strategy. He had been exporting his own wine to China since 2003 and had recently signed an agreement with the prestigious South African wine estate, Groot Constantia, to export its wine to that country as well. However, conducting business in China was complex and expensive and, earlier that year, he had partnered with a new importer in China to help combat certain of the challenges. Mills wanted to support his new business partner as much as he could in promoting MCM wines; however, he had a limited budget. Given this fact, how could he grow his market in China, he wondered?
 
No. Pages: 22
 
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On 19 May 2010, Ndaba Ntsele – Ernst & Young World Best Entrepreneur (SA, 2007) and CEO of Pamodzi Investment Holdings (PIH), a diversified investment company – was preparing for the launch of Pamodzi Aviation the next day. The company had secured a licence from the Ukraine-based, government-owned Antonov Aeronautical Scientific Complex to service and sell Antonov planes in Africa. However, he still had to negotiate the terms of the relationship that Pamodzi Aviation would have with Denel Aviation, the organisation providing the necessary technical expertise and infrastructure for the venture. His gut told him that Pamodzi Aviation could make millions – if not billions – of rands, but he was aware that real-world realities might get in the way and he wondered if he had missed anything.

No. of pages: 12 

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Raizcorp chief executive Allon Raiz was faced each day with many applications to join his business incubation Prosperator programme. He knew what to look for in an entrepreneur, but it was not always “cut and dried”. In September 2012, he and his panel were considering an applicant who had passed all the tests with flying colours, and they were unanimous in their belief that he had what it took to be successful. His business, however, left them in doubt. It was a struggling IT support company, which they felt had no differentiating factors in an already overtraded industry.

Raizcorp believed in “backing the jockey but not the horse”, which often meant having to change the entrepreneur’s mindset and helping them explore new ideas. Would they be successful in this case? And was it worth the investment of time and resources? It worried Raiz, because he knew if the individual was to embark on a new venture, it would take some time before Raizcorp would see any return on its investment.

 

No of Pages: 12 

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Raizcorp was a South African business incubator founded by Allon Raiz in 2000. The company, which was the only privately held, unfunded, profit-making incubator in South Africa, provided a variety of business support programmes aimed at guiding individual entrepreneurs to profitability. By 2012, Raizcorp had established itself as one of Africa’s leading business incubators, supporting around 300 companies throughout South Africa, with an average 86% success rate. Raizcorp had developed a rigorous eight-step selection process through which it chose its entrepreneurs. Successful candidates embarked on one of the company’s Prosperator divisions, the two main ones being Partner Elite (an ongoing partnership with Raizcorp) and Arize (shorter programmes for BEE candidates).

According to Raiz, most of those involved in entrepreneurship in South Africa were in the early stages of their business and had no access to any sort of business incubation, with two thirds of them operating as survivalists and only 4% of businesses surviving for longer than 10 years. Raizcorp did not believe in a “one-size-fits-all” scenario for business incubation, but preferred to fit a programme to an entrepreneur, according to their individual needs and experience, and the nature of the business. In addition, personal development was a high priority for Raizcorp, where caring for the individual as well as the importance of networking as a support mechanism were stressed. Raiz constantly tweaked and reworked his company’s systems and processes to find better ways of operating, and to increase his success rate.

 

No of Pages: 12

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On 1 July 2013 Claire Reid, founder and director of Reel Gardening, a manufacturer of prefertilised vegetable and herb seed strips, met with Emily Jones, head of Reel Life, the community-focused arm of Reel Gardening. Reel Life aimed to address food security in South Africa by helping low-income communities plant food gardens using Reel Gardening’s products. Reid was concerned that Reel Gardening was not making the profits it needed to fund the growth she envisaged for Reel Life. How could they grow Reel Gardening into a more substantial business, so that Reel Life could have maximum impact on needy communities, she wondered.

 

No of Pages: 20

 

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In September 2016, Seapei Mafoyane, chief executive officer (CEO) of Shanduka Black Umbrellas (SBU), a business incubator targeting emerging black-owned enterprises, was busy writing her annual review for inclusion in SBU’s 2016 annual report. She believed that SBU had an essential role to play in ensuring the success of black entrepreneurs[1] in South Africa, among whom the failure rate was notoriously high.

No of pages: 18

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[1] In this case study, the author used the term entrepreneurship in its broadest form, and thus it implied all small businesses ventures and not only new, innovative business ventures. 

With many years of experience as an entrepreneur and businessman, Alan Reeves, chief operating officer (COO) of Legendary Retail Brands (LRB), which was the shareholder and administrator of the Mica, DIY Depot and House of Paint and Décor voluntary buying group (VBG) brands, was continuously thinking about the next step for the group. Member profitability was good, despite a tough economic environment, but Reeves was aware that this could change easily. “That’s why we need to plan ahead for the next five years,” he thought.[i] As he planned for the next board meeting in September 2016, Reeves considered the options for the group and what he could recommend regarding the way forward.

No of pages: 14 pages

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[i] Beswick, C. and Soicher, A. (2016), Interview with Alan Reeves, 13 July 2016, Johannesburg.


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