Start-up to R500m: In-store marketing transformers

Prepare to be inspired. Two entrepreneurs now in their mid-30s found themselves penniless after the dot com bubble burst. So they listened to a girlfriend who was doing in-store promotions to make some pocket money. And switched back into the real world, starting a business called The Creative Counsel specialising in that field. Today that start-up has around half the South African market with R500m in turnover and 650 permanent employees. I enjoyed some reflected glory when Ran Neu-Ner said during the interview their first entrepreneurial endeavour was inspired by one of my radio shows. As they were leaving the studio, his business partner Gil Oved insisted it was true. Unfortunately that business flopped. But as with many of the best entrepreneurs, they dusted themselves off and started again. With spectacular results. They’re now looking to expand into other African countries. Thereafter, who knows? – AH 

ALEC HOGG: Gil Oved and Ran Neu-Ner join us in the studio now to discuss the secrets behind being successful entrepreneurs. They are the winners of the Young Entrepreneur Award that we’ve been putting together here at CNBC Africa. Ran, you were telling us off-air that you guys came to South Africa as young children.

RAN NEU-NER: Yes, we were five years old. In 1981, we came to South Africa. Both our parents were engineers and there was a big shortage of engineers in South Africa. Our parents came here on a one-year expatriate contract and 30 years later, we’re still here.

ALEC HOGG: Thankfully, you are because you’re making a contribution. The one thing that grows any country is entrepreneurship. I was fascinated to read, on your background, that you guys are now a R500m turnover business and employ 650 full-time staff. What is perhaps more interesting even than that, is what you do.

RAN NEU-NER: We get consumers to buy products. We create experiences around brands that get consumers to change the way they buy things. At a very basic level…those people that you see in store…those ones that give you a toothpaste or yoghurt sample: we train them, we place them, we monitor them, and we give feedback to the clients on how the sessions went. When you talk about 600 staff, we give about 15,000 people work every single year. We have 600 permanent staff, but we’re probably one of South Africa’s largest employers. We take the unemployable, we train them, we give them skills, we send them out into the trade, and we probably give 15 to 20,000 people work every single year. It’s amazing.

ALEC HOGG: What gave you the idea, in the first place?

GIL OVED: There was no idea at the time. We got lucky. We were coming off a very, failed business. After three years of being in IT, we realised that we weren’t going to be IT millionaires, and we were looking for something to do. What we realised is we enjoyed the partnership. We liked entrepreneurship. We just didn’t know what we were going to do with it. Ran had a girlfriend who was in first-year law and she was promoting as well. He realised that we were making less money than she was making, placing promoters. We thought that this was a low barrier to entry business. We get into that, make a little money – just enough to pay the petrol to get to the car, and then to get to the office from there and basically, that was the beginning of the Creative Counsel.

We never thought it would become this. We never had a big vision. It was literally, a chance. We took a chance and won the prize. We worked hard, focused, and made it to what is now, 13 years later.

TUMISO GRATER: Gil, many people who are probably watching this show and can identify with being in a position where they wanted to start businesses. They may have failed. You obviously have to have a business plan in place to approach certain people. What did you do? How did you actually get started? I think that’s the thing. That’s what people want to do. Where do you go?

GIL OVED: Tumi, there is no silver bullet and I don’t think any entrepreneur can tell you he has the right ‘ten steps to success’. I think there are certain fundamentals that apply to everyone, but it’s not about whether you should start to create a business plan or not. I recommend it in certain cases, but not in others. The fundamentals are that you have to believe in yourself, you have to back yourself, and you have to have a vision for your own destiny. Not for the business, but for your life. Do you want to become the master of your destiny or not? Are you going to be passionate about what you do? Are you going to be authentic and integral? Those things are fundamentals that apply to any type of business in any industry. As to whether you should do business plans and raise capital, or rather try to do it in-house: those things are variable.

ALEC HOGG: Yes. There are too much ‘ticking boxes’. Again, you are an example – as most entrepreneurs are – of actually getting out there and doing it. The late Bill Lynch was the South African Entrepreneur of the Year who won the World Entrepreneur of the year in 2006. He said ‘just do it’.

RAN NEU-NER: I agree with him. Just do it. You can spend a lot of time procrastinating, doing business plans, and finding reasons why not. When you’re an entrepreneur, quite often, what you start out doing isn’t what you end up doing. Gil mentioned that we had an IT company, which failed in the dot.com bubble. We probably spent six months writing a business plan for that, we raised a lot of money, we went out into the market and on day one, and we did something completely different from the business plan. That’s the true spirit of entrepreneurs. You have to be able to see the opportunity and seize the opportunity.

ALEC HOGG: What company was it?

GIL OVED: It was a company, called Wealth Maker.

It was inspired by you, you’d be glad to know, back in 1998 when you did a talk show on a radio station.

It was the dot.com bubble. We started an online trading company. I was an ex-stockbroker, Gil was a marketer and it went bang in the dot.com bubble. We lost everything. We went back to live with our parents. We mortgaged our cars again and we had no job, no money, and worst of all, we had no confidence.

ALEC HOGG: But you had a girlfriend.

GIL OVED: I had a girlfriend and she stuck with me.

ALEC HOGG: She was a first-year law student.

RAN NEU-NER: Yes, and now she’s actually, very successful. She’s a fantastic lawyer.

TUMISO GRATER: You should have married her. Gil, let’s talk about the fact that you said you create employment and you employ people. People are always talking about the barriers, the fact that you have to tick boxes, and regulation. How are you adapting to that, for example making sure that you have the right BEE scoring cards? Tell us.

GIL OVED: We’re very cognisant of the importance of regulation and making sure that we tick those kinds of boxes. For the record, as far as we’re concerned, BEE should not be about ticking a box. Broad based BEE is real and something the country needs, so we’re very proud of the ratings we’ve achieved. It’s truly broad based. We give back to blacks, females, and impoverished people. One of the things about BEE is the beauty of the pyramid, which I think is great – enterprise development and real skills development. We focus on those things as much as we do on just the equity part. One of the things we’re proudest of is there is a swath of the economy that is considered to be unemployed and unemployable, and I hate that term ‘unemployable’. We really don’t believe in that.

There is a way to achieve all your regulations and tick all the boxes but at the same time, identify people who are entrepreneurial, who are hungry to be given opportunities all around the country, and where you can enterprise develop them (as we have). They are a bunch of people who can add value to the economy through promotions, through marketing, and through salesmanship, and I don’t think enough of it is being done.

ALEC HOGG: Just quickly, where do you find your people?

GIL OVED: All over.

ALEC HOGG: So if you place ads, I’m sure thousands of people apply.

GIL OVED: We have ads. We do it on Facebook and LinkedIn. We have satellite offices in rural areas, going out to source and locate people. We look for things like culture and ability to sell, and then we train them. We get them up to a certain level where they can actually, add value to our brand.

ALEC HOGG: Brilliant. Gil and Ran, congratulations on the contribution that you’re making to this economy and may you be an inspiration to many other entrepreneurs. Thank you to Gil Oved and Ran Neu-Ner who are the co-owners of the South African AABLA Young Entrepreneur of the Year award.