How Joshin Raghubar's Eagerness to Learn Has Helped Him Build a R115-Million Business Joshin Raghubar started his career as an intern. He put up his hand for any job. Today he runs a R115 million business and continues to launch companies, and he still believes the ingredient to greatness starts with always showing up.
You're reading Entrepreneur South Africa, an international franchise of Entrepreneur Media.
- Player: Joshin Raghubar
- Company: iKineo Ventures; includes iKineo marketing agency, Sprout Performance, Explore Sideways and The Field
- Launched: 2000
- Turnover: R115 million
- Visit: ikineo.com; exploresideways.com; sproutperformance.com; www.thefieldinstitute.com
When Joshin Raghubar was 23, he found himself heading up the Africa Connection Rally, an ambitious project that spanned the African continent and aimed to break the world record for the amount of days taken to drive across Africa. The logistics involved were staggering. How did he find himself in such a trusted and important position? Because he showed up. He was at the office at 9pm when his boss and the chief of staff of the Minister of Transport were brainstorming it. By the next day he was spearheading the project.
This is his story.
When we started out, we had a desk in CiTi's offices and were hooked into its Internet cable. We were bootstrapping the business, had no money, and couldn't afford connectivity costs until CiTi's Bandwidth Barn helped us share those costs. I'm still involved with the Barn today, because I know how essential that support is to start-ups.
The secret to business success isn't just having the right product or idea and product market fit. It's not only cash flow and getting paid. It's the culmination of your ideas and mindset; making connections, helping other people and businesses and operating within a community. Often, it starts with just showing up.
Success often begins with understanding yourself. I've been laser focused on some things, and at other times I've had a number of different things on the go. That's when I'm happiest. You need to know yourself and play to your strengths. If you're better at focus, do that. I need a few things on the go — not too many, because then I get frazzled. But there's a sweet spot, and I've found mine.
Fostering a Success Mindset
I've been like this since varsity. I was on track to become a CA, and I did the normal vacation work at large consulting firms for years one and two. By year two I realised that the work was interesting, but not a full expression of myself.
By years three and four I was doing all kinds of things after hours and during term breaks: I was a runner on a film set, a barman, I started a few small businesses. I was interested in the world and I didn't pigeon-hole myself. I was on the lookout for different experiences.
I was even on the management of the UCT chapter of AIESEC, the largest student organisation in the world for business students. This gave me access to University labs and computers. Raymond Ackerman was on our board and we ran business incubation clinics. I wanted to be involved in everything and still do.
I'm multi-dimensional, and so are my work and interests. When I'm working on a few projects at a time, I'm more productive. But to focus on different things in business, I need a team that plays to my strengths and weaknesses. I've built up an incredible foundation. It doesn't happen overnight, but if you're interested in scale and growth, you need to build an infrastructure that supports your passions, goals and dreams.
For example, learning is a big part of what drives me. In a fulfilled and happy life, learning and growth are important. I've pushed myself into many incredible spaces because of this love for learning. Opportunities have opened up for me because I'm out there. For example, I was selected as a Yale Greenberg Fellow in 2016. This required four months away from the office at the Yale campus, and I was able to do it because of the team I've built up around me.
Keep the bigger picture in mind
Many entrepreneurs are so focused on the day to day needs of their businesses, they miss the bigger picture. This programme is Yale's flagship global leadership programme, and it was an inflection point in my career. If I'd only been focused on the time away from the office, I wouldn't have even applied.
Instead, I took the risk, and ended up with a group of 16 incredible emerging leaders from around the world: A human rights worker from Syria, a female politician from Afghanistan, China's largest independent media entrepreneur, artists and film makers. It's designed to be diverse, and for us to learn from each other and contribute to the Yale community. We had unlimited access to all courses on campus. It was incredible.
Nine times out of ten, success begins with just showing up. This was how I ended up project managing the Africa Connection Rally when I was just 23.
I'd done some vacation work for Ravi Naidoo's business, Interactive Africa. By the time I finished my degree, I had an interview lined up with JP Morgan in London. But I'd graduated in December, and would only be leaving for London in March. I wanted to fill the time, and so I went back to Ravi and arranged to work for him for a few months.
I loved it. I joined an entrepreneurial business rather than becoming an investment banker. I was young, but I could speak the business lingo, and I was eager to learn. I developed a habit of leaving the office at the end of the day and then returning after supper to do some extra work in the peace and quiet. I'm not great in the mornings, but I'm creative at night.
Seize the day
One night I got back to the office and the Transport Minister, Jay Naidoo's chief of staff, was brainstorming with Ravi about the Africa Connection Rally. The rally was celebrating a historic telecomms agreement that stretched across Africa. The idea was to break the world record and drive across Africa in 26 days.
I was called into the session, and by the next morning I was running the project. That's when I started appreciating the power of showing up. No one was going to seek me out and ask me if I wanted to be involved. I had to speak up, offer real opinions, and more importantly, a passion and willingness to get involved and give it my all. That's what entrepreneurship is, but it's also the basis of any success we have in life.
As a start-up, you need to be confident. What you're doing is tough; you have to keep taking risks. Once you're through start-up phase, you need to grow. But you need to find a balance. You can't be so self-assured that you don't learn from mistakes, because you will make them.
For us, the Cool Aid was a discussion group called the Idea Collective, run by myself and a few friends. We were fresh out of varsity, employed, and interested in how tech was changing business, marketing and the way we communicated. We launched a series of exclusive events to discuss these topics and invited business and social icons. This helped us to build a great network and repository of ideas. We were a think tank for tech, and were often invited to comment on tech-related issues.
On the one hand, it was incredible. We had put ourselves out there, and were developing a network that would be invaluable. When you're building a business, your network is exponentially more important than funding.
But in other ways, it blinded us to the realities of launching a business. We were all employed, with this great idea that we could create our own ventures. We had no venture capital and were incredibly naïve about the realities of a start-up, but we were fuelled by our own cleverness, and the fact that we could see what the future held.
With that in mind, I resigned after 30 months at Interactive Africa. Working with Ravi made me want to test my own entrepreneurial chops, and I thought I was ready.
Becoming an entrepreneur
I was the only one in our group who quit my job and we had no cash flow. While I believe a business can be bootstrapped without funding, the secret to success for any bootstrapped business is cash flow. Without it you're dead in the water. Our idea had been to build cash flow and then raise capital, but we hadn't considered how long that would take.
To make the business work, we needed to stop drinking our own Cool Aid. We were smart, tech-savvy guys who had built a great network and gained exposure, but that wasn't going to build a business. We also needed to bring in some cash — immediately. Without cash flow there was no business, and so we needed to sell something.
My experience was in the convergence of marketing and data. I believed in the concept of mass customised communications and targeted database-driven marketing. We designed flash mailers, and these became our biggest revenue stream.
Based on this and big email campaigns, we built a marketing division called iKineo that focused on customer engagement and one-on-one marketing. We believed we were uniquely positioned to solve a new marketing need. We could speak tech, we understood development and we had business and marketing backgrounds. But we were ahead — we spent more time educating our customers than selling to them for the first five to six years. We needed another "big' idea while the market caught up.
Be the disruptor
We might have had a reality check, but we were also still young and ballsy — and we believed we'd embarked on a journey that was changing the way brands would market in the future. One of the key areas we identified as ripe for disruption was the tobacco industry. With restrictive smoking laws coming into effect, the tobacco industry needed new ways to market its brands.
I've always believed in being an open source person. It's a term that covers everything — being open to new experiences, new ideas, and particularly new people. It's an essential trait for successful networking.
It also gave us the confidence we needed as a start-up founded by kids who weren't yet 25 to approach British American Tobacco (BAT), the largest tobacco manufacturer in the world, to pitch our new marketing idea that we believed would solve their problems.
At that stage, BAT had no plan to counter the new advertising laws, and no understanding of the power of data. For decades, big tobacco had sold a lifestyle through sponsorships, billboards and big screen advertising — all of which was about to end.
We pitched something completely different for Lucky Strike: An exclusive opt-in party that required fingerprints, joining a database and the excitement of a surprise. It created high target engagement, and grew a database for the brand. They asked us if it was possible. We said absolutely. There were two of us in the business and we believed we could drive BAT's entire customer engagement model in South Africa. Maybe we were still drinking our own Cool Aid.
The Lucky Strike parties worked, and slowly the power of data and digital marketing began to take hold. Fewer customers needed to be educated on what iKineo could do, and more were asking us for quotes and solutions to their marketing needs.
As the business grew, we never lost sight of what worked well for us, and we created a new exclusive networking group with Moët & Chandon as our partners. Members took turns to invite industry icons to speak at the events. It was an incredible networking experience, and has opened many doors for me over the years. Maria Ramos, Paul Harris, Russell Loubser, Robbie Brozin, Wendy Luhabe, Herman Mashaba and Isaac Shongwe were all guests at these evenings.
The power of networks
Through these relationships, I was invited to join the Aspen Global Leaders Network, the Africa Leadership Initiative and the Bertelsmann Foundations's Global Transformation Thinkers Programme, all of which required nomination. Once you're out there, and people know you, your ideas and what you stand for, offers and opportunities follow. This is how I learnt about the Yale Fellowship. 11 000 people applied and only 4 300 completed the application. This was then shortlisted to 50, and 16 were chosen after an interview process. This opportunity wouldn't have arisen without my connections. This is my best advice — be open. Network. Build relationships. There is nothing more powerful than people.
Through these experiences, one thing became clear: Much of leadership and business success comes down to the art of storytelling. I've taken a Harvard course on narrative leadership, and I've watched great industry captains over the years, and they all share this trait — they can tell a story. They know how to capture your imagination. Looking back, that's what we did with Lucky Strike and all of our early clients, while we were educating them on the direction marketing was taking. It's also why the Idea Collective and our Moët & Chandon evenings worked so well. They were all about story telling.
You need to be authentic, and willing to share. Great leaders are open, honest and transparent. They are willing to share their successes and failures. You can only join networks like these if you're adding value. Relationships are additive, not extractive. Even as a young person I felt like I was adding value because my perspective was different.
These experiences taught me two things. First, I did have a story. The reason I went into business when I come from a family of teachers and doctors was because half of my life was pre-1994 South Africa. I turned 18 and voted in 1994. I was conscious of our country's political liberation, but the economic liberation still hasn't happened. I wasn't a political change driver, but I can make an economic impact. My biggest lever for change is business. It's why I'm still so involved in the Bandwidth Barn and CiTi.
The second is that it's in my nature to understand future trends and tech drivers, pain points and challenges. Innovation and funding opportunities are all about pulling these together, spotting the gap and then telling the story so clients understand it. It's one thing to have an idea, but you need to be able to sell it. You have to explain it, unpack it and pull those threads together. And that's where the art of storytelling is so vital.
Understanding the new texture of business has also been important. It's no longer just about the bottom line. Business needs to connect to social dividends. This is at the core of everything we do.
We thought we'd be a venture creation business when we launched. The reality is that this takes money, which we didn't have. We bootstrapped everything, which always takes longer than you think it will. So we built iKineo as an agency to generate cash flow.
If you don't have capital you will always build a services business first. They're cash flow generative, because all you need is an idea that you can deliver on, and then you get paid — no manufacturing is required, and your cash cycle is good.
For years, 90% of my day was focused on this, and not venture building. Today that ratio has shifted, but it's taken time.
In 2003, two years after we launched, a friend invested enough capital to buy out the other partners. He's still a shareholder today. Since then, we've grown organically, self-funding iKineo until we could start incubating new ventures within the business.
We've been able to do this because I never lost sight of the long-term strategy: To accumulate capital and create an environment and infrastructure that could support new ventures and realise our dream. We tried it earlier, but we didn't have capital, time and infrastructure for new venture development. We systematically built our capabilities, learnt by failing a few times, and put those learnings into our model and new businesses.
Although the agency has been our backbone, it's also an increasingly challenging business model. When we were smaller we were more profitable. In this industry, as you grow you change from a value or IP-based model to a resource plus model. While we were building the business and coming up with new and innovative solutions for our clients, we were able to price ourselves according to our IP and ability to deliver.
But, as we grew and targeted larger clients and advertising contracts, we started following the industry and large corporate template, where clients tell you how many people they expect on their account, estimate your costs and then give you a percentage mark-up. The problem is that an account is measured by the people on it, and they're dedicated resources. If you lose that account, you can't redeploy them back into the business unless a new account is landed. You end up employing more people at lower margins.
I fought this model and lost a large corporate client because we said no to the resource plus model, but eventually we had to align with our industry. We knew this wasn't where our future growth lay. It's been an important part of the path to get there, but it's never been our final destination. When you reach a stage where you have to follow set procurement models to land big clients, you either agree or reposition, and that's what we're doing with our new ventures: Sprout, Explore Sideways and The Field.
Sprout is a programmatic media business that we've developed with partners from Silvertree Capital, which was launched by the co-founders of Zando. Peter Allerstorfer and Manuel Koser came from Germany to launch Zando in South Africa. In two years, they built a business with 200 employees, and an incredible model for hiring people and mastering online marketing and retargeting.
Three years ago, there was an entire issue of The Economist dedicated to programmatic advertising. We started asking ourselves where online buying was going, and where programmatic media buying would be. I called Manuel to ask his opinion, and discovered he was leaving Zando and launching a tech investment firm. We realised we were ideal partners. They had the knowledge and experience in this field, and we could incubate the new venture in iKineo.
Explore Sideways is an internal start-up. It's the product of two distinct business developments. The first is that we believe the future of agencies lies in the ability to be strategically involved with a client's R&D. To test our theory, we developed an app for Western Cape Tourism. They couldn't afford it, so we carried it ourselves in return for their endorsement. It was designed as a platform to find all 500 Cape wineries in one place. It's a fragmented industry, and there was a need for this information, particularly to put the smaller wineries on the map.
But it was difficult to monetise, and we realised that its users were mostly tour operators, who tended to only use the wineries they knew well.
The second development involves the consumer shift from products to experiences, and international spend on luxury experiences is on the rise. The result is that Explore Sideways has developed into an immersive luxury travel tech business.
In two years, we've built up an incredible team. We've had 3 000 guests to date, including various international celebrities and their families. We're in our niche, and on a growth path. The plan is to take the business international, and we will be in Napa Valley in California by the end of 2018.
The Field is our third start-up. It's been incubated within iKineo with three managing partners who are all experts in their fields, Ann Lamont, Alison Jacobsen and Barbara Dale-Jones.
The Field helps large organisations through the digital transformation process to become future fit. We partner with the best educational brands in the world, including Stanford, to offer African and European executives global programmes at a fraction of the cost.
Like iKineo, the business is generating cash flow through consulting and coaching to big corporates while the rest of the programmes are developed, and we're focusing on people change management, product development and an innovation lab.
Our venture build strategy is based on three pillars: Create the space to excel, have the required investment and working capital, and then attract the best talent.
The third pillar is absolutely vital to the success of these ventures. Today I can spend 90% of my time on new ventures, but I can't focus equally on three start-ups and two more in development. Our success lies in the people driving these businesses.
In Sprout we have a CEO and CTO who moved here from the Netherlands because programmatic is new in South Africa and the skills don't yet exist here. Before we could convince Stijn Smolders, who was newly married with a baby boy, to take a chance with us as Sprout's CEO, we needed to derisk the business and create the right space for him.
Explore Sideways is run by Brittany Hawkins, who is an American wine marketing expert. She will be instrumental in our international expansion.
Ultimately, you need strong back-end and support systems and the ability to pay competitive salaries and offer shares. We've learnt that running a business takes on a different dimension when management feels ownership. Our managers deliver and have a great attitude, but shares reward and focus those abilities.