At a recent Stellenbosch Digital event, held at the Nedbank Stellenbosch LaunchLab, one of Entersekt‘s co-founders, Dewald Nolte, gave a talk on the company and its journey. What was interesting about his stories were all of the lessons that the founders had learned over the years.
The company started back in 2008 in Stellenbosch. It has since grown to over 60 members of staff, with the majority being technical, as well as having offices in Johannesburg, Mauritius, Amsterdam, and Atlanta.
It hasn’t been an easy journey for Entersekt’s team. Here are the three key takeaways we learned from his talk.
Nolte stressed how important it was for all founders in the startup to be on the same page. The biggest factor for this alignment is whether people wanted to build a company for the long-run, or one to sell off after a few years.
“Are you in this for the long run? Do you want to build something that is going to be a valuable company over the years, that will continue to evolve over time and continue to survive over ten years? Or is this a three to five-year stint where you make a lot of noise and intend to sell the company?”
This mindset can affect how a company evolves and where their product development and identity lies.
“You build something very differently if you want to sell it versus if you want it in the long run.”
With Entersekt‘s founders, the question needed to be asked in order to guide what they were going to do. He gave this advice to everyone in the audience: “Do yourself a favour and ask that question to yourselves. Do we want to build to sell or are we building this for the long-run?”
As all of the founding members of Entersekt were students, after a while they realised that they weren’t really sure what they were doing. Nolte’s older brother, Schalk, was soon brought in as CEO. He had both engineering and management backgrounds.
The older Nolte soon secured a meeting with an angel investor in order to get the company’s first round of funding.
“Today it’s still very difficult in South Africa to get funding. People here want you to prove that you don’t need money before they’ll invest in you, which is a weird concept.”
When they pitched to the angel investor, the guy was standing up and on the phone for most of the meeting; it was difficult to perform the pitch. Later, the angel led them out and said to Dewald that he could see the passion they had and was happy to back them.
Nolte says that passion saves companies; it’s the guy working until 2am that has the drive. He adds that investors usually go for entrepreneurs with the passion as opposed to the ones with ‘the idea’.
With all of the old board members being techies, they all needed to take a step back and get the right people to head things up. It wasn’t an easy decision, which Nolte remembers.
“We had to take a step back as founders on the board and have experienced people on the board. That was the first thing we had to do. I remember some guys standing on the balcony and actually crying when they had to step down from the board. It was tough because someone else will be making decisions for your baby.”
They later came into some trouble when expanding into the US market. Nolte says the company hired someone based in the US that was a strategist from a corporate background and not an entrepreneur. After three years and not a single sale, they needed to go back to their entrepreneurial way of thinking, but then the strategist turned on them.
“Next moment, instructions come to the board to do a CEO review. It’s not the right CEO and suddenly you’re being attacked and it’s difficult enough. He was able to time it so well in terms of just before a board meeting and actually accusing you of certain things. There wasn’t enough time to prove it wrong so it looks really bad.”
That is when Nolte discovered how important personal and business relationships are.
“If you don’t have people relationships you will fail. It’s all about people. Even tech is sold to people. We were able to buy time because we had great relationships with our core employees, with our board, with our shareholders to actually expose it for what it is and we actually went through that and we made it out the other side.”
Nolte reflects that sometimes people with less experience are the right fits for a position.
“Even though you’re young and you don’t have a few years’ experience, sometimes you do know what you’re talking about and it’s finding that balance with guys in the right capacity.”
Nolte was still worried as the US strategist had all of the contacts they needed and more, but as one board member put it: “Rather a hole than an asshole.”
Stellenbosch Digital is a community-driven organisation that aims to link corporate, entrepreneurial and social initiatives in the digital sphere by promoting mutual recognition and starting conversations both online and at regular meetups.