Building a unicorn doesn’t happen overnight, IT executives at a packed RMB galleria were told.
In a panel discussion at the CIO Summit, Charles Savage, CEO and founder of EasyEquities, and Deon Moolman, head of technology at Yuppiechef, shared their experiences and lessons learned from building successful tech-based businesses, and how their startup culture stood them in good stead to build bigger businesses.
Democratisation of investing
The EasyEquities journey began in the early 2000s when Charles went on a quest to democratise access to investing. He felt discouraged by the work he was doing at the time, building sophisticated trading systems that saw some people lose money using those tools. He decided to take a break and reflect on what really got him into building trade platforms in the first place.
“It was fundamentally about driving democratisation and creating an access point where everyone could invest,” he said. Back then, the eco-system was really weak: no banking, no credit cards, and data was expensive. There were a lot of excuses why certain models couldn’t work. However, fast-forward to 2013 and all of those excuses had faded away, as the tech revolution ramped up.
Charles’s biggest desire was to democratise access to investment, and he sought the advice of friends and family members on why his platform wasn’t taking off. He even thought it was because of his poor selling skills, but the answer he got was exactly what inspired the business, and much of it had to do with the interface, Charles discovered.
“It’s too sophisticated,” they said. “It speaks a language we don’t understand. We downloaded your interfaces and honestly found it intimidating and were not sure if we were doing the right thing and felt excluded from the conversation.”
He recalled asking them: if these issues were resolved, would they then want to own shares and if so, what types of shares? It was in their response that Charles started to understand where the friction points were. It also revealed the desire and demand for shares that had always existed, but the interface was wrong. “EasyEquities was born from asking the people closest to me why they had never bought a share in their lives,” he explained.
Successes and failures
According to Charles, every successful business was a failed business at a certain point, but the starting point is creating a set of rules that don’t allow you to make the same mistakes you have made in the past.
“We looked at business models that were radically disrupting their sectors, and which disruption techniques we could use to our advantage at EasyEquities. Two companies stood out: Amazon and Uber. The friction point that Amazon solved was that people were always undecided on what books they wanted to buy, and Amazon solved that right at the transaction process by way of book reviews,” he said. “We do the same at EasyEquities, but instead put up share reviews.”
Uber’s business model remains his favourite to date and said that the company has an unusual approach to conventional business models, which didn't discriminate against the user based on how much they were worth, and this resonated with Charles.
“Our goal was that the R1 investor had to have the same access to all the products, services and functionalities as the R1 million investor. The problem with the financial services industry today is that the service goes to where the most money is,” said Charles.
“If you are well off, you gain access to all the wealth and investment products that you want and on the opposite end of the spectrum, if you have no money, you have nowhere to go. We sought to flip that narrative upside down and give the R1 investor the same power,” he continued.
He highlighted that EasyEquities could only be disruptive if it was socially relevant and created a platform that could be shared among friends and family, making them become the centres of influence.
Yuppiechef, on the other hand, has garnered most of its success from building everything itself, which could from the outside be perceived as counterintuitive. However, the online retailer did explore other options at first.
“At a certain point, we did decide to stop doing everything ourselves and bring other people in and not reinvent the wheel, but what we found is that we hit roadblocks in the way we were able to move forward. The solutions that we were using just didn’t seem to work out for us, reverting to doing everything ourselves,” said Deon Moolman, head of technology at Yuppiechef.
At the end, Deon shared his thoughts on what he believes makes Yuppiechef unique from other businesses, and said that their most unique selling point came from their way of working and the culture of sharing among IT professionals.
“I spend a lot of time with the team really focusing on the value of sharing between one another and having a culture of uplifting each other. We don’t have a hierarchical structure of senior developers at the top and junior developers at the bottom, but rather an environment where everyone supports each other,” Deon explained.
Charles concluded by saying that in order for any business to get buy-in, they have to achieve certain goals, which will build the confidence around that business. “What really made people turn around and start believing in us were incremental milestones. The first one was when Sanlam invested R100 million for a 30 percent stake in EasyEquities and this during a time when we were losing close to R150 million a year. This gave us some trust and affinity and put us in a global context.
“The second milestone was growing our retail audience, which built shareholder confidence ─ 65 percent of our customers come from trust and this solidifies us in the market because other people are referring our product to others,” he said.
The audience of executives appreciated the opportunity to gain insight into the agility and innovation contained within startups, and to learn the lessons that apply to any business – big or small, startup or established.