Shaw / Hallendorff The First Kudu

Building a tech start-up in Africa
1. Auflage 2023
ISBN: 978-1-7764432-7-7
Verlag: Tracey McDonald Publishers
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 216 Seiten

From 'naughty lists' to sprinting swans, wandering ducks to Amarula-based incentives, The First Kudu takes you on the roller coaster ride of a start-up, and dives into real learnings along the way. The narrative invites you to journey through the chaos with the young team and unpacks in gritty detail what goes into building a tech start-up - with stories of fun and failure honestly told in equal measure. The First Kudu tells the story of HouseME, a rental technology company founded in South Africa that grew to 34 employees and 50 000 registered users, processing hundreds of millions of rands each year. The company won awards, raised several rounds of funding and was sought after by competitors. It was exciting. It was excellent. And then ... It was dead. Ben Shaw (former CEO) and Lorne Hallendorff (former COO) provide a whirlwind tour of what goes into building a start-up at the southern tip of Africa and what they would do differently, were they to do it again.

Autoren/Hrsg.

Shaw, Ben

Hallendorff, Lorne

Leseproben

BEN A heavy hand landed on my shoulder and I turned my head. A senior associate was staring down at me. It was 2014 and I was in the Johannesburg M&A department of one of the lar­­­gest investment banks in the world. Start-ups were a world away. Just a moment earlier I had sent him one of my deliver­ables for the evening. ‘Sir,’ he said, ‘is this the best you can give me? If it is, I’ll re­­view it and understand your limits. If it isn’t, never do it again.’ He sat down at his desk and went back to work. I asked for more time. It may well be that every analyst who sent him a piece of work got that response the first time. Or perhaps there was something materially incorrect in what I had produced. Regardless, by the time he received my second email a few hours later, the slide deck I shared was deemed far more acceptable. We worked together regularly after that. In investment banking, freshly-graduated new employees start off so far in the deep end that it’s unclear whether it’s the crushing pressure, lack of sunlit hours, or holding your breath that causes drown­ing. It’s a transformative experience. And whatever you’ve heard about banking is probably true – to some degree or other. I started in January that year and just a few months later found myself in New York City on a training programme with hundreds of other analysts from offices around the world. We all shared respective banking war stories and noted down tips for surviving the various people we were assured we would come across. One Sunday afternoon in the middle of the programme I escaped from the office and headed to the menacing borough of Queens to absorb some of the local culture – far from Wall Street. A few stops later, I arrived from the underground station on a street that appeared as familiar as ones back home. A short while later I was learning fast. ‘You can measure the wealth of a neighbourhood by the ratio of coffee shops to barbershops,’ the old man shared with me astutely. ‘And don’t tell anyone you’re from South Africa. They’ll think you killed Mandela.’ The old man, who shared his afternoon with me as a self-­appointed tour guide, was thoroughly enjoying himself. As we walked on deeper into the borough, he mused aloud, speaking in the confident, distinct dialect of a proud New Yorker. He insisted on alternating between really interesting insights, and half-terrifying promises of violence from those on the street that my ‘white face might provoke’. I chose to believe he had a sense of humour. I learnt a great deal that day. It was fascinating to hear his experiences growing up in the ’hood – the history of the musicians he had known from the area, and particularly his insights into the state of street culture, and property: which he saw as his real passion.  I had mistakenly been too honest with him an hour earlier, explaining that I was particularly interested in visiting Queens because of its rap music, which had brought me such joy over the years. I had never seen such happiness in a man’s eyes as when – in exchange for some of his time and insight – I agreed to rap part of a song in the middle of the sidewalk to prove my interest…  I gave some lyrics my best effort and as I finished the old man was beaming (guffawing would be more accurate.) He escorted me for much of the afternoon. ‘Dogg, you given me a real story to tell!’ he proclaimed happily as we began our walk. By my recollection, we had started with a ratio of coffee shops to barbers at 2:1, but were deep in the 1:5 territory by the time I said my goodbyes and bought him a coffee (from the only coffee shop on the street), and retraced my steps, vowing to never consider a rap career no matter how close to drowning banking may take me.  In the months that followed, the lyrics to 50 Cent’s Many Men1 would blare through my office headphones at least thrice a week. Like many other songs in the rap genre, the lyrics speak of endurance and hustle and still remind me of that colourful tour of Queens. Songs of resilience and success through adversity were exactly the sort of musical accompaniment appropriate to surviving in investment banking – and beyond. Banking, however, was always a means to an end. The university dream of working in venture capital – a dream which had taken me to Silicon Valley a few years earlier to learn about the ecosystem – had been shaped by interesting advice: Become a venture capitalist: lose years of your life to M&A investment banking followed by a top-tier MBA, or alternatively risk your life, friends and family by founding your own business and exiting young, rich and ruthless. You’ll shape the world. Whilst perhaps not encouraging, the advice was sufficiently pragmatic for me to follow and, prior to banking, I launched a number of my own companies whilst at university. This was a task made considerably easier due to the Fellowship programme that I was part of. The Allan Gray Orbis Foundation still runs this Fellowship – aimed at educating potential high-impact entrepreneurs across South Africa. In fact, this is where I met Lorne, who became HouseME’s COO.  The Fellowship instilled in all Fellows a sense of camaraderie and respect and encouraged us to build companies and develop entrepreneurial skills as fast as possible. In the years preceding my first full-time job, I had built an LP-to-CD conversion and scratch-cleaning service, a student blog and amateur investment podcast, and a PC hardware sourcing and resale company. They were each great fun, but would break-even on a good month, so I decided that it was time to try another route toward venture capital. Investment banking it would be. At the end of 2013, I moved to a new city to take up my banking job. It was during this move that HouseME was first conceived. My knowledge of property rentals was fairly limited at the time and I knew only that I wanted to be close to my new workplace, with secure parking.  My landlord had a thorough application process and yet no way to price the monthly rental. At the end of his vetting and credit checks, he brought up the rental price quite casually: ‘It depends – what would you pay for it?’ My incredulity at this negotiation did form a few business ideas that I thought to share with him – but any notion I may have had of building a better process for him was short-lived. I paid what I recalled it had been advertised for, and didn’t think more about it. As the hours at the bank ramped up, I didn’t return to the possible solutions I had crafted for a long while.  In any case, the majority of my life had moved very quickly from the home to the office – which kept thoughts on improving property negotiations far from mind. But a career in banking is all about building efficiency – insisting on fair market pricing as a conduit for frictionless transacting. Frankly, when I would discuss property with those around me and reflect on my personal rental experience, I quickly realised that the local rental market had none of that.  Quite by coincidence, around the time of my lease renewal 12 months later, I attended a dinner party at which I learnt that a good friend of mine had had his rental application re­ject­­ed because of the colour of his skin. We had grown up together and attended the same schools, same universities and came from the same suburb and church circles. I couldn’t believe it. I called him afterwards to make sure I had the story straight. More than efficiency, the rental market in South Africa needed an ethical solution. These very different, but equally compelling problems of the South African rental market began to gnaw away at me. I gradually spent more and more time thinking about what could be done. Slowly – and without any particular eureka moment – the first principles of HouseME (originally ‘houseMe’) began to take shape. Note to self, looking back at that time: never brand your company with a lowercase first letter – it makes starting sentences with your company name rather challenging. To build a disruptive start-up, you need two factors to work in your favour: you need to be counter-positioned, and you need to be right about it. Positioning HouseME within legend­­ary US investor Howard Marks’s matrix as both non-consensus and right2 was the objective of my time spent in research, and the crux of the idea. In my mind, the more I thought about it, it simply did not present in any other quadrant. It took roughly six months of after-hours work on the idea to bring it into a coherent, presentable opportunity for others to digest and critique. It then took several more months of full-time work to raise angel investment, conceptualise an MVP and find a co-founder. But before coming to that, let me be clear on what after-hours work meant, and how this period of side-hustling to 50 Cent songs almost ended in disaster.  A great mentor of mine was in town for a week and we made plans to see each other for dinner on the Friday to connect. I had to cancel because of work. Saturday lunch was the same and he laughed as we met for breakfast that Sunday morning – before my 9.00 am work meeting – when he shared that, ‘You have been my most difficult-to-schedule appointment of my...