There’s usually something at the cause of a shift in pattern, and looking past Black Friday’s whirlwind, there was a definite shift in consumer…
When it comes to running a tech startup Hannes van Rensburg has seen and done it all. He even wrote a book called Cash in, Cash out, which documents the story behind Fundamo, the mobile payment platform which he sold to Visa in 2011 for $110-million.
Van Rensburg (pictured right), who is also a trained nuclear physicist, gave some further insights on entrepreneurship at last week’s StartupGrind event held during the SA Innovation Summit at Cape Town Stadium.
Here are his seven top insights:
1. Starting a business is not something to do likely, seriously, it can take a toll on you so do it for the right reasons
“Being an entrepreneur is hard, you lose things. It’s not easy. There are a lot of people that fail, there are a lot of people that get hurt on many different levels,” says Van Rensburg.
“I know many, many entrepreneurs that are hurt inside and what they think of themselves and where they are, so it is not something to do likely.”
Recalling his experience running Fundamo, Van Rensburg says he had a difficult time growing the company in South Africa and struggled dealing with corporates. Instead, the company gained traction in Zambia and was successful in Zimbabwe and Uganda.
“It was really hard for us. When we started the company, it was really hard to sell to corporates. I have some really bad scars from trying to sell to corporates.”
So how then does one psyche up to prepare to run a business? “You’ve got to be busy with something you feel passionate about. Doing something because you want to make money, I think you’ll be doing the wrong thing. Do what you’re passionate about, focus on that and the money will come.”
2. Solve real problems
“Africa has huge problems, but we also have no legacy. We don’t have to decommission something and then build something new.”
What then made Fundamo stand out was that the company solved real problems. “Fundamo solved a real problem, that was the mantra of what drove us,” says Van Rensburg.
3. Your fundamental values can affect your relationship with co-founders
“When I was young the thing I had to struggle through is to find those values. What do I think is right and what do I think is wrong, what are things I will do and I won’t do?
“It doesn’t have to be like that for everybody, but for me if I don’t find a match in terms of fundamentals of what I believe is important, hey you know what then we cannot work together,” he said.
Van Rensburg recalls how he parted with a co-founder at Fundamo because of a clash in fundamental values.
“Ultimately, I know that’s the right approach, I asked this person to leave summarily, like get your stuff go, right, to that degree, you’re not going to be here for another minute. And it was a very hard decision for me to take and I think it was the right one,” he said.
‘If you have difficulty with what you are currently doing just carry on, just push through with it’ – Hannes van Rensburg
At the time the team at Fundamo as well as the shareholders understood his decision, he said. “Legitimacy in what we do is not just a legal function, the rest of the organisation, the employees, understood it. They were actually waiting for me to do it. My shareholders understood it because was in the correct position.”
In addition, Van Rensburg says it’s also important to factor in experience and capabilities when considering a co-founder.
“You have to remember that you’re getting into something that is going to have an impact on your life and the person you are going to do that with is going to be fundamental and instrumental in what’s going to happen to you, so think about that right from the bottom out.”
4. Figure out the right balance between confidence and knowing when to ask for advice
“The biggest challenge for a successful entrepreneur is to figure out the judgement of how to balance between those two, everything you do you can’t get advice for and sure as hell you also don’t have all the answers, you have to be very confident about where you are going and what you want to do.
“I’ve seen so many entrepreneurs just going off and doing what they think is best, whereas a little bit of sage advice would have helped them a lot,” says Van Rensburg.
5. Stay the course – not always good to pivot
“Some people talk about this pivot thing, that when it’s not happening then just pivot and do something else. We never pivoted. It doesn’t matter what you do, It’s going to be hard. If you have difficulty with what you are currently doing just carry on, just push through with it.
“If you pivot you’re going to find something that’s also hard to do. I’m not saying that you shouldn’t pivot because there’s good examples of how to pivot. I’m just saying in my experience we stuck with what we wanted to do for effectively 11 years,” says Van Rensburg.
6. Know when to exit and plan it well from the start
By 2010 Fundamo was recognised as one of the biggest mobile payment platform in emerging markets, at least one in every three mobile payment transactions was running on the Fundamo platform at the time in those countries it was present in. In 2009 Van Rensburg even received a banker of the year award in Pakistan.
Around the same time big companies like Nokia, Ericsson and Sybase were starting to enter the space.
“I decided very consciously that it’s time for us to exit, we were very successful, we were growing fast, but we just did not have a seat at the table,” he says.
In 2010 the company started looking for buyers, in what Van Rensburg terms a “structured well planned process”. “We ended up with five buyers which we whittled down to two, and then Visa put a firm offer on the table in February of 2011. We had a massive due diligence hearing in the city (Cape Town) in June 2011 when the transaction was completed.”
Van Rensburg says whether or not one plans on exiting, it is important to build a company the right way as it is a good basis to run a sustainable company as well as to go through due diligence when the time to sell comes.
“We were fortunate in terms of the people that were working with us and the guidance that we got that our organisation and the governance of the company was very well done, all our financial statements were audited all our contracts were filed, we understood the implication of every clause in our contracts. We initially didn’t, but when we matured those things were all in place.”
7. Don’t retire – it’s a bad idea
After the exit, Van Rensburg worked for Visa for two years at one time he was part of a Visa delegation to the World Economic Forum in Davos. “Then I just felt that’s it. Now I’m going to do that thing that people do when they exit and it’s called retirement or sabbatical or whatever the case maybe.”
“For those of you that’s considering it (retirement) it’s a bad idea, don’t do that, it wasn’t good for me, I went through a major process of trying to figure out what is my worth in this world and started looking at what I could do,” he said.
Van Rensburg says he is currently working on a “very very ambitious startup” and is now based out of Naples, Florida.
Featured image: From left to right Sandras Phiri, StartupGrind Cape Town director and Fundamo founder Hannes van Rensburg.