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 Staying on course on the rough seas of business expansion

 

 It is the beginning of the year, and cousins Kgotla Tiro, 36, and, Karabo Tlhagwane 33, are bracing themselves for another white-knuckle year of growth for Dv8 Technology Group, the Midrand-based IT and Telecoms consulting firm they started some ten years ago.

The name of their 15-employee company, pronounced “deviate”, reflects their commitment to doing things differently from the norm. Everything they do is based on their passion for innovation. Yet many entrepreneurs would recognise the struggles of Tiro, the MD, and Tlhagwane , COO, as typical of business owners who need to juggle pot-boiler work for paying the bills on the one hand, and doing “real” work on their long-term dream of making an impact on society at large.

How do they manage this balance, and make sure that they stay on course in the rough seas of business expansion? The first principle that the two owners of DV8 seem to exemplify is that of having a clear vision.  This is what got them into business in the first place. As trained IT and Telecoms experts, the two could have looked forward to a comfortable career in the corporate world, but they decided to start their own company while still in their twenties. Research shows that the most common age for venturing into entrepreneurship is between 35 and 45.

Tlhagwane reckons their early start had something to do with the culture of youthful entrepreneurship in the IT industry, but his main reason for leaving the world of employment after only three years was that the path of employment was predictable. “I could see my career ceiling, and I didn’t like it,” he says.

If it was unpredictability he wanted, he certainly got it. Scarcely two years after starting their business from Tiro’s house, they partnered with a Middle Eastern Telecoms firm  that wanted to set up base in South Africa. Even though they had to sell their stake when the company was later sold, it was an invaluable learning experience. They gained exposure to the flourishing IT and innovation industry in Israel, they got a taste of international business at the forefront of the technological revolution and learned a lot about complex corporate structures and deal making.

After their exit from the Israeli partnership, they set up their base in Midrand and started riding the white waters of pitching, winning and executing IT contracts for a wide range of clients from corporates to government departments.

Despite reasonable growth and success, DV8 found it difficult to raise finance from the banks. In one case, they were contracted by ZTE Corporation (Chinese) second largest telecoms vendor in the world on a Cell C project to help with the roll-out of their 3G/4G network to in several cities throughout the country , but could take on only limited work because the banks refused bridging finance. But later on, over the years through their business network, they were referred to Business Partners, who, based on the strength of their business, provided much-needed working capital.

Tlhagwane acknowledges that it is difficult to plan too far ahead, in such a robust and dynamic industry, and volatile economic climate when their operation can grow from 15 to 50 employees in a matter of  a few months if they suddenly win another contract or roll out a solution that the market embrace. Because of this, their annual strategic planning sessions in February each year is an exercise, with the advisory board, based on what they really want to achieve for the year  versus the achievements of the previous year.

By far most of the planning they do takes place at project level, where the execution of each specific contract is carefully plotted and tracked. To help them with this level of planning, they developed an application called Task Tracker, which is fast developing into a marketable product.  This is in line with Tiro and Tlhagwane’s goal of developing their own intellectual property – IT applications, products, systems and innovations that they develop and own themselves.

Even though it is very difficult to spend time and resources on something that may only give a return on investment in many years’ time, the development of their own IP is not simply a vague dream for DV8. They are already deep into the development of software they call The Bridge (M&E)™,, an education monitoring and evaluation system through which schools, colleges, governments, training institutions and  business can track learner performance and measure impact of intervention programmes to pro-actively  pick up problems before it is too late.

The fact is that innovation funding or venture capital in its true sense is scarce in this part of the world. Tlhagwane acknowledges that they are forced to work on innovation projects “in between contracts”, but they have nonetheless made steady progress seeing some of the concepts Dv8 has developed into tangible solutions. Apart from The Bridge (M&E)™, the company is running a pilot with Primestars called “eDuCaTe” a programme that has benefitted more than 200k learners.

Here, DV8’s experience holds a lesson for entrepreneurs who never get around to the ideas they have bubbling on the back burner. One of the spurs for their progress on The Bridge was to participate it into a business-innovation programmes. It may not have won anything, but it galvanised a solid plan for it.

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