Bootstrapping Journey: self-funding your startup in South Africa

“You’re only as good as your last game,” is a common saying in the world of sport. The same goes for business and sales, and especially when a company relies on its product to sustain itself from the get-go (instead of a providing a medium- to long-term promise to investors with open cookie jars). Software company Journey is one of the many startups in South Africa and the rest of the continent that decided to self-fund its business.

The company made its first sale under the name Journey to a small ISP also based in Stellenbosch in 2010. The software would help people schedule jobs on a web portal and was the team of four’s only source of income at the time. The startup relied solely on sales for about five years. It didn’t join an incubator, accelerator or invite well-known board members to boost their level of expertise and “lead the way”.

The team, made up of Conrad Hofmyer, Ralf Kistner, Malan Joubert and Philip Joubert, decided the best route for them would have to be self-funding — building Journey from the ground up. It worked, but not without some hard work and lessons to be learnt.

Initially going by the name Embark Mobile, the team built apps for individual clients in order to make ends meet. But as part of its overruling vision, the group of engineers also worked on Journey — a cloud-based platform intended to be the fastest and easiest way to build custom enterprise mobile apps, which could then be deployed to the business clients’ employees.

From working out of one of their parents’ houses to their own office space, the team cooked up software that is now being used by big names such as On the Dot, H2O International and Metro Emergency Services.

Incubators are good. They provide comfort: a nice, cozy office space with fast internet speeds, freshly ground coffee, sage advice right around the corner and possibly wads of cash in return for parts of your business. Bootstrapping, on the other hand, requires an entrepreneur to put everything on the line. It’s where business gets truly personal — there’s nothing to fall back on. You’re bare naked out in the cold and your survival instincts need to kick in.

It’s more intimate when your next salary relies on whether or not your company’s going to make a sale. “We survived by being very, very cheap. We tracked all our income and expenses in a simple Google Spreadsheet that we shared with everyone in the team,” adds Joubert.

Journey Co-Founders from left to right: Linsen, Philip, Ralf, Tielman, John, ConradThe road most travelled

As pointed out by the Omidyar Report last year, about 18% rely on venture capital, angel seed, government funding or other methods. The report further notes that more than 45% of entrepreneurs rely on family loans, 19% on private equity and 18% on bank loans.

What a lot of startups here are missing is that Africa is very different from the US. Starting a consumer startup here is near impossible — the odds are just stacked against you. Especially when you’re bootstrapping.

It’s not always been an easy road for Journey, which had to travel over some bumps and gravel before meeting up with the freeway. One such bump was making a name for itself. Without the know-how you’d get from a group of industry experts, how does a group of engineers with no sales experience market its product?

This is a common situation startups find themselves in. An innovative, possibly disruptive, idea takes shape and a group of computer boffins or industry-specific experts try and make a living off of it. Great ideas need business experts in order to become sustainable. Referring to the brain drain, Joubert says, “Finding good advisors is always hard but it’s especially hard in South Africa, where lots of the best entrepreneurs and domain experts leave the country.”

Lessons to be learnt, tales to be told

Journey started big. Maybe a bit too big. The team embarked on its first campaign when it found an Excel sheet via Google that had a list of 1,500 companies in its target market. “We were terrible at cold calling and had a terrible hit rate. But through sheer willpower we managed to get some companies interested,” Joubert tells Ventureburn. While potential customers might mean potential money, they would soon find it to be one of the most exhausting things they’d ever done.

During one such sales trip, while juggling meetings using a rented vehicle and an ounce of determination, the team found themselves in a car with a flat battery. Tielman had to push start the rental right in front of the customer’s main entrance.

“When you’re a new startup it’s almost impossible to sell to the banks or telecoms companies. We wasted months trying to sell to these giants and had nothing to show for it,” explains Joubert.

Journey found that,unlike the big banks and telecoms, SMEs not only had similar needs for mobile applications but there were more of them willing to give startups a chance. The sales cycles for smaller companies is also much faster, which means you’re often closing deals during your first meeting. This became the company’s new target market: SMEs.

Another nugget of wisdom Journey shares about marketing with a limited budget is to not only focus — but excel — at customer service. To leverage this, the startup’s site features in-depth case studies of its clients’ experiences.

Joubert tells the story of when they went to Journey co-founder Kistner’s wedding, and sneaked out to fix an issue for a customer:

“The wedding was on a farm and we didn’t have 3G signal. So we find ourselves driving down this dirt track hoping to get signal so we could log into our systems. It was a bizarre experience to be dressed in suits, cramped in the car on a dirty road with cows grazing next to us while we fixed the issue. Our customers noticed our intense commitment and we got a lot of referrals from them.”

With the B2B market in sight, Journey is now a platform that aims to let companies build enterprise apps in a matter of days. One example would be the South African branchless banking solutions company Tyme, which has become one of Journey’s most memorable customers. Tyme needed a tablet app that let its roaming agents open up bank accounts on-the-go, without any paperwork . The innovative bank says that it chose the Journey platform because it can securely and efficiently manage the entire account origination process. The app is now one of its most promoted features.

By leveraging its easy-to-use user interface, the Journey software platform has recently gained a lot of traction, and has hooked client businesses from the UK, Australia and the US. It’s also working on a number of programmes to help other startups and entrepreneurs in South Africa. When asked whether self-funding is worth it, Joubert says:

“I don’t think there is an easy answer that is true for everyone. What is true is that it’s much easier to bootstrap a tech company now than it was 5 years ago. The most important thing is to realise that these days fundraising is an active choice, you don’t need VC to build a startup.”