Leaving your full-time job in order to pursue your dream of being an entrepreneur is difficult. This week Vusi Thembekwayo explains how, with a little determination, this process can be made smoother.
MELITTA NGALONKULU: Welcome to the Small Business Conversations podcast. My name is Melitta Ngalonkulu. Ditching your full-time job in order to pursue your dream of being an entrepreneur is not an easy decision to make. This week we speak to Vusi Thembekwayo who … has made waves internationally and is the CEO of (venture capitalist, supplier development and enterprise development firm) MyGrowthFund. Vusi, thank you so much for your time. How did you make the big move?
VUSI THMBEKWAYO: My journey is a bit interesting because it was kind of entangled. I started doing public speaking when I was at school, and then just immediately after that, I started speaking professionally. I started invoicing clients as I was developing a career in corporate. And then I had my first business around 2006/2007. That didn’t go particularly well and I got a job. Immediately after that job, I started my second business. So I’ve been blessed in the sense that I’ve had opportunities all across my life.
MELITTA NGALONKULU: But Vusi, I suppose that transitioning from a full-time job to entrepreneurship is not an easy journey.
VUSI THMBEKWAYO: It’s a tough one. I think one of the things you recognise the minute you become an entrepreneur is the support functions you have when you’re in a big corporate. When you’re in a big corporate and you’re in operations, or you’re the one doing deals or transacting, there’s a whole ecosystem of support. If there’s a team member who’s not performing, HR will support you, if there is a marketing challenge, marketing will support you and if there is an IT problem, IT will support you.
When you become an entrepreneur, certainly in the early days, you are HR and marketing and IT and the rest of it.
And so I think where many entrepreneurs actually get bogged down is they stay right at that early stage, fire-fighting and putting out problems, and they don’t allow themselves space and latitude to grow.
My recommendation for most people who want to get into business is actually that you should get a job first. It’s a great opportunity to learn how to run a business by being mentored by people who are professional managers, but also learn from somebody else’s balance sheet rather than your own.
MELITTA NGALONKULU: Vusi, what challenges would you say that you faced, and how did you cope [in starting your own business]?
VUSI THMBEKWAYO: Sure. Well, it depends. Market access is always a big challenge for most people – you launch a business, it’s hard to get customers, and how do you build a brand? So that was a challenge of the early days. And what I learned is that the answer to that challenge is just slog on. All you can do is show up every single day, make commitments to clients, and then see those commitments through. And if you default – because you will, you will make an error sometimes – own up to those errors every single time. That was the big challenge in the early days.
And then, as we started growing, the challenge was around how you build a business and scale it, without over-leveraging on your balance sheet. So, you know, if you’ve got a R10 million opportunity, but you’ve only got an R1 million worth of assets, how do you make sure that you can tackle that opportunity, deliver on that opportunity, without tarnishing name and reputation, (and) at the same time without over-leveraging yourself as a business? So that kind of growth-stage business, that was an interesting one.
Now my challenge really is around managing complexity. The way I’ve built the business is we now have a network of partners all around the continent, and it’s really just around managing complexity. When you realise that in delivering the product of value that you said you would deliver to your clients, you don’t do it alone. You’ve got other people with whom you work and you rely on their processes and their systems to make sure that you’re efficient….
But the answer to each of those has been to recognise at each time where I’m capable and competent, and where I lack, and then on-board the competencies that you lack. And it’s a big skill, I think, for many entrepreneurs to understand.
In the early days, the skill might be that you don’t want to be doing the IT support yourself; but for me now the skill is if we’re doing something in Uganda or Kenya or Tanzania, I don’t necessarily understand the local nuances around legislation and regulation. So find somebody there who’s going to be a partner and who will support you. Either way, it’s about managing networks, managing relationships and making sure that you’re managing expectations.
MELITTA NGALONKULU: Vusi, when you’ve been working for a company for a long period, doing the same job, you tend to lose a sense of perspective. How do you move away from that when you’re running your own business?
VUSI THMBEKWAYO: It isn’t without a sense of difficulty. I think for the people who are front end in most big businesses, it’s easier. That’s not to say it’s easy – but it’s easier. So if you’re dealing with customers every single day and you’re at the coalface of how the business works, if you’re in engineering and you’re the one actually delivering projects, and you’re the coalface of how the organisation works, it’s easier for you to maintain a sense of perspective because you’re seeing the organisation deliver value to customers every single day. You’re right at the intersection between the way the internal mechanics of a business works and the way the external environment receives the work of those internal mechanics. For many other people who are in different parts of the organisation – say you work in finance in an engineering firm – you can lose a sense of perspective about the world.
I think the answer to that question is to practise a little bit of empathy and to try to experience the world through the customer’s perspective and to try to spot opportunities that way. This is why I’m firmly of the view that not everybody can be an entrepreneur, and I think we need to be clear about that. But also you don’t want a country that’s full of entrepreneurs.
You want the people who are going to be those who can take risks, who are mad visionaries. But then you want those people to be supported by people who understand how to mechanistically build the entrepreneur’s ideas.
So the entrepreneur goes: “We’re sailing from, say, Europe to the Americas. How are we going to get there? I’m not sure. We’re going to build this thing called a boat, and we’re going to use wind to propel us as we sail through the seas and the oceans.” That’s the entrepreneur.
The mechanistic people go: “Alright. So what kind of water are we going to use? How much labour is it going to take, how much raw material?” And so forth. Now, without that attention to detail, mechanistically the vision will fail. And one of the things I’m learning is how important it is to manage both the vision, as well as the mechanistic details on delivery.
So you have to be ruthless, absolutely ruthless, on managing delivery and managing details. I assure you, I’ve seen many great businesses, many great ideas, and many phenomenal entrepreneurs who potentially will fail because they opted out of managing detail.
Detail is everything. And you have to be absolutely ruthless when it comes to managing detail.
MELITTA NGALONKULU: Vusi, I’m sure you’d agree with me that you also have to be ruthless when it comes to disrupting industries as well. So, when you feel like you have come across an industry that you can actually disrupt, how do you know that this is exactly what the industry has been calling for?
VUSI THMBEKWAYO: Yes, great question. Because we are a company that spends its time helping entrepreneurs accelerate and build their businesses, for us understanding your propensity to respond … and your propensity to be disruptive [is] absolutely critical. So we have this model that we use in the firm, and I’m happy to share it.
We believe that the key focus has to be an NPS, this thing called Net Promoter Score that marketers talk about. And when you do an NPS, customers will rate you on whether they are detractor-neutral or promoters. The idea is you always want to move your customers, right? You want to move them from neutral to being promoters, and you want to move them from being detractors to neutral. That’s the idea. And then you’ve got to ask yourself, can we do that and at at the same time deliver the product or service cheaper and better and faster?
Now, to be tactically better than your competitor, you only have to do one of those things – be cheaper or better or faster. But if you really want to be disruptive, you have to do all three of those things cheaper and better and faster.
That’s a very high level of understanding. I have to tell you, making it work is an absolute dog show, but that’s also where the magic is. The magic is in the delivery of that ideology.
So if somebody wants to create a new business in insurance and they want to disrupt the big insurance companies, they have to look at themselves by saying: “The value has to be for the client, or for the end-user customer, that’s NPS. And how am I going to make sure that I’m cheaper or better or faster than a large organisation that has the competencies, that has the economies of scale, and that has far bigger distribution than me?” If you can answer those questions, that gives you a sense generally of whether or not you have the opportunity to build something.
MELITTA NGALONKULU: Vusi, this basically means that small business owners need to learn how to take leadership.
VUSI THMBEKWAYO: One hundred percent. I’m of the view that when you’re a small business manager, three of the most critical skills are strategy, people and sales. That’s my personal view. If you can’t perform those three roles well, you’re going to battle to build your business.
Strategy is important because you need to be able to see the wood [for] the trees. You need to be able to understand the environment you’re working in, and you need to be able to smell what’s happening in your ecosystem and in a new environment. I remember saying, internally in our own business at the beginning of lockdown, that the first thing I can guarantee is that lockdown won’t be 21 days. And the second thing I can tell you for free is that many of the small marginal players will die, because they don’t have the liquidity or balance sheets to survive this period. I was right, so that’s a little bit about having the nuance, the strategy. It’s really about how you read the environment that you’re in – what I call “see through the corner”. If you’ve ever driven a car around the curve and you can’t see around the corner, what you want as a great entrepreneur is the ability to be able to see through the corner because that allows you to understand the speed that you can take the corner through. So that’s the first bit
The second bit is that everything you build requires people. It just is the way it is. Even in the world of the fourth industrial revolution with automation and robotics, we still need people. You need people to buy into the idea, to buy into the vision, to back it, to work it and to execute it. And so your ability to work with people is absolutely critical.
Now, notice I said, “work with people”. I didn’t say “be liked by people”. In my mind, some of the best entrepreneurs are people who are not particularly popular. And so, when you are building a business, you need to make a decision: do you want to be liked, or do you want to be effective, because often those are not the same things. So that’s the second part.
And then the third part is around the ability to portray an idea, to communicate it effectively and get people to buy-in. And that’s this thing around sales. When people hear “sales”, they often think about the used-car salesman, right? That you walk onto the floor and he opens the car and lets you sit in and smell that smell of new leather – which, by the way, isn’t new; it’s a spray they spray on the secondhand car, so that it smells and pushes up the value of the car.
That’s what most people think about. But that’s not where it stops. If you watch the CEO of a Fortune 500 company today, do an interview on Bloomberg 1.0, what you realise is that he’s selling. He’s selling his idea, he’s selling himself, he’s setting his vision, he’s selling the purpose for that business. And so learning to convince and sell is absolutely critical.
It’s clear, though – I must make the point – sales is not marketing. Those are not the same thing, and many entrepreneurs make that mistake. Many entrepreneurs think that building a Facebook page, having a great logo, a fantastic website is selling. That’s marketing. That’s branding.
Selling is “This is what I sell, here’s why you need it, and here’s how much it’s going to cost you. And, by the way, buy now.”
MELITTA NGALONKULU: Vusi, there appear to be very intense skills that an entrepreneur needs to build over time. So would you say that when you started off in the industry these were things that you knew?
VUSI THMBEKWAYO: That’s an interesting question. No, no, absolutely not. Absolutely not. And I don’t think anybody’s born with those things, frankly. I think those are skills that you learn. I learned how to sell working for a fantastic digital agency. I’ve got to tell you, in the mid-2000s – when the World Wide Web was the World Wide Wait – I used to work for this digital agency, worked for this amazing Jewish guy. He was the most incredible salesman that I’ve ever known, and that’s where I learned how to sell. I learned strategy working at Metro Cash & Carry, because part of my role was to be able to spot market opportunity and to build value propositions for that marketing opportunity. And one of the things I had to learn was how you communicate and translate strategy.
So it’s one thing to see it, to instinctively feel it, but how do you convince people internally in the business that they should marshal resources towards it? So my job was to see it. But, once I’d seen it, I had to build a business case to go and convince treasury to give me the capital, convince operations to give me the resources, convince IT to build me the technology, and then convince the board to give me the time and latitude to build a business. So that’s kind of where I learned strategy.
And “people” is a constant learning journey. I don’t know of a single person that has the people thing completely on the nub, because that’s about understanding personalities; it’s a lot about understanding character. And I’ve got to tell you, I still call it wrong. I still bring people into the firm who disappoint and let us down. And then I still bring people into the firm who are absolutely phenomenal. So the people one is probably the one that has the greatest sense of variation, but it’s also the one where we are all constantly students. You are never a master of that because people by their very nature are dynamic creatures.
MELITTA NGALONKULU: Just before I let you go, Vusi, three tips that you would give to a person who’s just started a side-hustle, and they’re realising that it’s doing well and considering making the big move to just running the business full time – what would you say to them?
VUSI THMBEKWAYO: The first thing I would say is to keep your costs low. It’s age-old sage advice. I think if you read ‘The Richest Man in Babylon’ (a 1926 book by George S. Clason), that’s literally one of the most important pieces of advice that come out of there. Make sure that you know what you’re doing and keep your costs low…. Now, it sounds easy and dramatic, but it’s very hard; it’s hard to keep your costs low because we’re human beings and we have egos. The minute you’ve built your business, or you’ve got a little bit of traction, you want to go and get the fanciest piece of real estate, the greatest, fanciest office, with the most fantastic, most modern piece of furniture – and all of those are fixed costs. Those are fixed costs that you immediately write off, because you get no return from those. No one’s going to phone you because you’re based in a particular office park. So the first point to make is to keep your costs low.
The second thing to say is to take the long-term view. Early successes don’t mean that you’re going to only have successes. You will be tested.
And at some point, the thing that works today will stop working, and you will have to try and find a new way to do it. So take the long-term view.
And the third thing is to remain teachable, The single most important thing you can do, if you want to build yourself just as a human being of value – frankly, it transcends entrepreneurship – is to remain teachable. And teachable is about having a sense of humility. It’s about having a sense of perspective. It’s about surrounding yourself with people who will take the time to guide you and to show you your own missteps, but also bring and introduce to you new ideas and new knowledge. So you’re never an expert. I say this to every single person in my own business.
And even to all the entrepreneurs that we support, you are never an expert. You must constantly be a white belt. The day you become an expert is the day you start to die, because that means that you presume that what you know is all there is to know. Constantly remain teachable, remain hungry. As Steve Jobs said, “Stay young, stay foolish.” That was the idea. Remain teachable, stay white belt and you will do well.
MELITTA NGALONKULU: Thank you so much for your time. I must say we’ve learned quite a lot in this episode.
VUSI THMBEKWAYO: I’m humbled. Thank you so much for having me.
MELITTA NGALONKULU: That was Vusi Thembekwayo, the CEO of MyGrowthFund. Listen again next week to the Small Business Conversations podcast with me, Melitta Ngalonkulu.
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