How Emil Henrico Built His R20-Million Business From Nothing In 3 Years
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Player: Emil Henrico
What they do: Cloud and Virtualization migrations provider
In 2016, Emil Henrico was employed by Dimension Data as a problem and escalation manager. And then something happened that changed his life. He attended a Management Development Program at GIBS, and realized he needed to launch a business.
“The task was to identify key problem areas within the current business models and structures that we were operating with,” says Emil. “Specifically, for clients that are too large for a small IT company to service, but also too small for a big IT company to service. I realized there was this incredible gap in the market, and right there iSSC was born.”
iSSC launched with one client and one employee. “Initially, our vision was to become another Dimension Data or EOH – a major player that was servicing an under-serviced sector, but that soon changed,” says Emil.
“Our initial goal was to use a Cloud platform from a big company and service the day-to-day running out of iSSC, and we did well. Within a year we’d grown from one client to ten, and by month three turnover had increased from R20 000 per month to R450 000.”
Finding additional gaps in the market
Emil had been right about the gap he’d spotted – the business was becoming increasingly profitable thanks to Microsoft Azure’s Cloud offering for SMEs, and the entrepreneur realized he needed to refine his focus.
“Most big corporates take anything from 12 months to three years to adopt new technology,” he says. “It takes time to both sell this technology and then support it. But smaller businesses can turn around decisions within weeks. They’re fast and agile – which means they need service providers that are just as fast and agile.
“We were already doing that – this was our first gap, but I realized that there was another area we weren’t addressing – the clients we have moved on to the Microsoft Azure platform needed almost zero support. The system is so advanced and automated that our focus moved to migrating clients to Microsoft versus doing a normal outsourcing strategy, like the rest of the players in our market.”
This pivot meant iSSC became a cloud and virtualization service provider – a very different model to IT support.
Streamlining operations and saving overhead costs
The next step was more internal. “I looked at my business model, and realized that like many businesses, our biggest expenses were offices and staff.
“I sat down, had a few brainstorming sessions and considered the fact that all the big players in the market preach ‘work from home, modern workspaces and virtualization’, but none of them are doing it themselves. They want to sell it to clients, but they don’t actually practice it.”
At the time, Emil had launched Virtualize My Company, a service offering for iSSC’s clients, and he decided to put his own product into action.
“We adjusted our approach to workspaces and the business’s overall strategy,” he says. “My staff work from anywhere. Our service desk, reception and office numbers are all virtual.”
The result was that by 2019, Emil could continue growing his business without employing more staff, and his turnover doubled. For many growing businesses, overheads are a major cost – a problem Emil had solved for himself, becoming the ideal case study for future clients.
Thanks to spotting a gap in the market, finding the right product market fit and changing internal operations and strategy, iSSC has grown from a R20 000 per month business into a company with annual turnover of R20 million in just three years – off a lowered cost base and with solid margins.
We chatted to Emil about the biggest lessons he’s learnt on his journey, and what advice he would offer to other startups.
Q. How did you manage to launch iSSC with no startup capital?
Our first employee cost us more than what we made from our first client. The saving grace was that I was employed full-time when we launched iSSC and I funded the salary of the employee out of my pocket to get the company off the ground.
The lesson is that you don’t need money to start something, you need a good idea and determination. And of course, you need to just start.
Q. What was the biggest lesson in your start-up journey, and how did it affect your business trajectory?
Never be scared to change. Too many companies do something because it’s what they’ve always done. The reality is that if you don’t keep up with where the world is going, you won’t remain relevant, and you won’t be in business in a few years’ time.
Q. What was your biggest lesson once the company was more mature?
No one will feel the same about your business as you do. In my experience, as far as possible don’t ever involve a partner (unless you launch together with the same vision and values).
In general, things will go wrong, and finally, make sure your contracts are water tight. We have lost a lot of money as a result of dishonest people who haven’t honoured agreements. You can’t trust a handshake in today’s business landscape. Get it in writing.
Q. How have you overcome unexpected hurdles?
I had no financial background, which means that when I launched iSSC, I had no idea about VAT, Tax, profits, PAYE or any of the other fancy financial terms bandied about.
You ended up needing to trust the people doing your finances because you can’t do them yourself.
As a business owner, if you don’t understand how much you need to charge for services to make money, you won’t make money 0 it’s that simple. If I could turn back time, I would have studied anything in finance.
Since I can’t, I’ve needed to focus on upskilling myself in this area – don’t ignore it! My advice to anyone that does not know what to study one day, do something financial, you can use it for the rest of your life, in your personal capacity or in business.
Q. Have you needed to pivot the business, and if so, why?
Yes and no. I haven’t really had to pivot. We changed the focus of the business, but we were already delivering the service – we just figured out a different way to package and speak about the solution.
Overall, my advice would be to not do what other people are doing, and to deliver great service. It’s so easy to say, but much harder to achieve. Everyone asks me what makes iSSC different from other companies, and my answer is the service that we deliver.
I hate bad service, and so I make a point to deliver excellent service to my clients – and my staff are expected to do the same. It’s the foundation of our culture.
Q. If you could offer other startups advice, what would it be?
Start small, make sure your idea will work, and then go for it. I feel the one thing that lacks in most young people is determination. If you want it bad enough, work hard enough. For the first year I worked almost 24/7.
If you don’t have a good support system or a supportive partner, then don’t do this. It will take every single bit of energy out of you to start a business and that is only the beginning. The work and effort never stops.
Q. If you could offer other, more mature businesses advice, what would it be?
Don’t be afraid to change, adopt and learn new things. I see this often. I catch up with an ex-colleague and I discover that they’re still thinking the same way as they were five or ten years ago.
It won’t work. Life has become fast paced, and you need to keep up with that pace, or you will be left behind.
Q. Why do so many businesses fail operationally, and how can this be avoided?
My feeling is that in some ways this statistic will continue into the future – perhaps even getting worse as businesses struggle to adjust to new circumstances.
By that same token however, I think we will also see many new startups that will make it big precisely because they’ve already adapted to a changing world, and are embracing it with new solutions to old problems.
I think the biggest differentiator for most companies though is speed. Clients want what they want now. If a client wants a new laptop, for example, they don’t want to wait six weeks for a quote and another six weeks for delivery. Do it now, or they’ll shop somewhere else.
Q. They say an idea is worthless without execution – how have you found this to be true in your own business journey?
This is 100% spot on. When we did the first Azure build, we did not have a clue what we were doing or even how we will achieve it. We had an idea though, and the team to execute, and the ability to do just that has changed our lives.
When I sold my idea to my first customer three years ago, and I didn’t even have a single staff member. It was the ability to deliver on that idea that made all the difference.
Q. How did you determine who your target market was, and how have you reached them?
As the company evolved and we moved our focus to Azure, the target market has changed. Based on my own experiences, I don’t think any company should have a specific target market, it’s limiting your vision.
When we started, I focused on smaller companies that had fewer than 400 staff members. I considered anything bigger the playground for big enterprise companies, and at that stage we did not want to compete with them.
Today, I have clients that range from ten to 11 000 employees, and I compete head on with IT giants around the globe.