TUMISANG NDLOVU: In this week’s SME Corner we speak to the founder of LinkdPro, Scelo Makhathini. Scelo, take us through your business model.
SCELO MAKHATHINI: Essentially LinkdPro is Africa’s first online digital platform, which connects companies with independent professionals.
TUMISANG NDLOVU: Why choose this route?
SCELO MAKHATHINI: LinkdPro is actually inspired by two trends that we’ve seen in the market….First of all we saw that the professional services model was actually ripe for a disruptive alternative and that alternative so happens to be LinkdPro. The second trend that we noticed while we were busy developing LinkdPro is the fact that a lot of experienced people, particularly independent consultants, are actually leaving their permanent positions and are starting to consult independently. So then on the other hand what you would find is that companies who are looking for expertise on a project basis actually struggle to find these consultants. So what we’ve created is basically a solution that connects the two.
TUMISANG NDLOVU: It’s an interesting model in that it is basically an agency that just works online. Now take us through how one gets on this system?
SCELO MAKHATHINI: If you are a consultant then there are [a few] things that we typically look for.
One… that you need to be from a top-tier consulting firm or professional services firm, such as a law firm, a consulting firm or an investment bank, for instance.
The second thing… is do you really have practical industry experience; do you possess an MBA or similar postgraduate degree; do you have international experience?
Those are the things that we typically look for from a consultant perspective. So if you feel that you do meet those requirements, you can simply go onto our platform and register to become a consultant. The registration process is very simple – it takes you less than five minutes to register – and then afterwards we will then do our vetting process and then if you do qualify you’ll become part of our community.
TUMISANG NDLOVU: What did it take to set something like this up?
SCELO MAKHATHINI: A lot of hard work.
TUMISANG NDLOVU: It sounds very technical.
SCELO MAKHATHINI: Yes, it’s a lot of hard work. There is one thing that I didn’t touch on: if one is interested in becoming a client and actually tapping into this massive talent pool that we have, becoming a client is very simple. It takes less than three minutes; it’s actually free to become a client. It’s also free to become a consultant.
So what will then happen is that if you are a company that is interested in taking advantage of this huge talent pool that we have at the moment, you simply go onto our platform, you click on ‘become a client’ and you complete the registration process. We then give you a call to assess whether or not we can actually fulfil your project needs and then afterwards we give you access to a dashboard, and that dashboard is very secure: you can post projects online but those projects are only available to be seen by you, as a client. So if there are competing companies on the platform they won’t be able to see those projects – it’s 100% confidential.
You also have the option of then saying that you don’t want the project to be viewed by our pool of consultants, which means that we’ll then use sophisticated algorithms to do an automatic match and that’s how the platform essentially works. So after a client has posted a project on our platform, we then use sophisticated computer algorithms to match the project needs with the pool of our consultants.
TUMISANG NDLOVU: Hence, I say it’s a technical process, putting it together. What type of skills were needed to bring in and set it all up?
SCELO MAKHATHINI: Obviously you need business skills, but you [also] need a lot of technical skills. We are fortunate in that we’ve got my co-founder, Eugene de Beer, who’s a great IT guy and he’s done some incredible work. So he’s put the platform together and then we also needed someone to take care of PR and communications; we also need[ed] someone to raise some capital to put the platform together and market the business. So it took a lot, but fortunately we have a team that really complements each other in terms of the skill-set.
TUMISANG NDLOVU: The most important question is how do you make your money?
SCELO MAKHATHINI: We make our money when we have delivered on our commitment to our clients. So we are in the business of helping clients find hard-to-hire specialised skills, which are essentially your independent consultants, who are so fragmented at the moment because the market is so fragmented and, hence, the establishment of LinkdPro. So after we’ve helped the client to engage an independent consultant on a project basis, we then charge the client a commission, which ranges between 15% and 20%, depending on the complexity of the project.
TUMISANG NDLOVU: How has the industry received you guys then?
SCELO MAKHATHINI: ….After five months of being in business we actually have a pool of more than 300 consultants and that’s just after five months. So the reception has been quite warm because independent consultants understand the frustration of actually marketing themselves and of actually getting project work – it’s quite tough. What you normally find is that the guys are so busy doing projects that they never worry about the next project, so business development tends to be neglected and that’s the solution that we have provided. So we have received a very warm reception from the market, particularly consultants.
The clients also like the model. If you look at our client base at the moment it’s largely made up of JSE-listed companies, so we’ve been very fortunate. The problem resonates with almost everyone: everyone is aware of someone with exceptional experience in a particular industry; they leave their permanent employment and then what often happens is they then consult to the company. So everyone really understands the model and they understand the problem that it solves as well.
TUMISANG NDLOVU: Most definitely. What challenges have you faced in this journey?
SCELO MAKHATHINI: There have been some challenges along the way but we are under no illusion, we know very well that starting a business is quite tough, so we fully embrace those challenges and we just take each day as it comes.
TUMISANG NDLOVU: Any highlights at this point?
SCELO MAKHATHINI: Signing up JSE-listed clients.
TUMISANG NDLOVU: Wow, I thought you would say that [laughing].
SCELO MAKHATHINI: But the model is not just for big corporates – there’s a big opportunity that I don’t think South Africa has actually woken up to, and that opportunity is particularly in the small and medium-size businesses … this is a market that’s largely untapped by your big professional services firms. So what we are then saying is that if you are a small or medium-size company it is now possible to get professional services at a price that you can really [afford]. These consultants are people from big consulting firms, big investment banks and big auditing firms. So if you are a small business and you are looking for top talent that is affordable, I think LinkdPro is the best place to go to.
TUMISANG NDLOVU: That said, what are your views on the current SME space in South Africa? Do entrepreneurs have enough support? What is it that we need to be doing to be ticking the right boxes in South Africa?
SCELO MAKHATHINI: Entrepreneurship in South Africa is definitely in a tough space, but we do acknowledge the concerted effort that is being made. There’s this recently-established R1.2 billion SME fund, which is definitely a step in the right direction. If you look at our business at the moment we are largely self-funded. We’ve been fortunate enough to receive some seed funding from a Johannesburg businessman, who has helped us and seen the value of the model, but we are largely self-funded.
Looking for funding is actually quite a long process, so it’s better to start with what you have and also make sure you use your networks, but don’t let the lack of funding stop you from reaching your dreams. It’s quite a tough space and no one is going to help you unless you help yourself, that’s the most important thing.
For us, we are not chasing funding at the moment. We are acutely aware that we need to deliver on our promise to our clients, but also on our promises to our consultants and we think that with the resources that we have … we are in a comfortable position.
TUMISANG NDLOVU: Lastly, where to for the business?
SCELO MAKHATHINI: There’s a lot that’s going on, some innovation as well, but what we’d like to do is basically just focus on making sure that we solidify our position here in South Africa particularly because how we’ve positioned ourselves as a digital platform is … as the go-to skills platform on the African continent. We have a warm reception on the rest of the African continent. We’ve got consultants sitting in Nigeria, for instance; we’ve got consultants sitting in Kenya; and these guys are really itching for project-based work and they know what we can deliver. We’ve posted some amazing projects as well that we’ve received from some of our clients, so the guys are pretty excited and I think we are making the right noise.
TUMISANG NDLOVU: An interesting project indeed, thank you so much for your time.
SCELO MAKHATHINI: Thanks very much for having me.
TUMISANG NDLOVU: That was the founder of LinkdPro, Scelo Makhathini, in this week’s SME Corner.