Bad news busters – GG, Wheatley heading for London to tell real SA business story

BizNews will take its successful conference format to London on 15 May, sharing insights with SA expats a fortnight before the watershed 2024 Election. Among the seven keynote speakers are SA informal market specialists GG Alcock and Warren Wheatley – one a rurally raised white zulu; the other a highly educated chartered accountant – offering a similar tale of a nation with huge potential and abundant hope. They shared a taster of their messages with BizNews editor Alec Hogg, who will be hosting the landmark 15 May event. You can register here.

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Highlights from the interview

In the interview with GG Alcock and Warren Wheatley, the discussion revolves around the potential for South Africans, both those residing abroad and those still in the country, to invest in entrepreneurial ventures. Alcock emphasizes the abundant opportunities in South Africa, particularly in rural areas, for business growth and development. He challenges the notion that South Africa is on the brink of revolution or suffering, highlighting the resilience and satisfaction of many communities.

Alcock shares inspiring stories of individuals who have successfully started businesses with minimal resources, showcasing the untapped potential for scaling up existing enterprises. He advocates for a focus on supporting and expanding current businesses rather than solely creating new ones, calling for investment and assistance in these endeavours.

Overall, the interview underscores the positive outlook on South Africa’s economic landscape, encouraging investment, innovation, and community development to harness the power of human potential and contribute to the country’s growth.

Extended transcript of the interview ___STEADY_PAYWALL___

00:00:08 – 00:00:36
Alec Hogg: We’ve now had six BizNews conferences: BNC one, two, three, four, five, six, the most recent in March, middle of March in Hermanus, where we had 500 delegates and 28 keynote speakers, amongst them, GG Alcock, who’s going to be coming with us to London. We are taking the BizNews conference concept to the South African community in London, our tribe members all over the world, but many of them in London.

00:00:36 – 00:01:03
Alec Hogg: And he’ll be also, well, one of the other seven keynote speakers is, my old friend and the founder of Alvest Warren Wheatley. Now I’ve asked the two of them because the concept that they’re talking about is very aligned to just, join me today and have a little chat about what the audience in London can get to see.

00:01:03 – 00:01:31
Alec Hogg: And guys, just you don’t really need an introduction to the BizNews community, but, I think you’re going to be blown away by the people who will be in the audience in London. We’ve got the top team of Nedbank, London, Stone Hague, which is one of the big asset, private wealth companies, Vitality, you know, the certainly the most successful international company, from a South African business.

00:01:31 – 00:01:58
Alec Hogg: It’s a big offshoot of discovery. Lord Peter Hain will be there. Two other lords as well. what I found quite funny was that Peter Hain was the anti-apartheid activist for the Springbok rugby tour, in which Tommy Bedford, one of my boyhood heroes, was the vice-captain. And it’s probably before your time, but both of those guys are going to be in the audience, Peter Hain and Tommy Bedford.

00:01:58 – 00:02:21
Alec Hogg: So this is going to be quite an event. Plus, the many others, Our partners from the Financial Times. Have got a big delegation there as well, but you two guys are going to be on the stage. You’re going to be talking to a different community, the international community, three days before they go to vote. two weeks before we go to vote here in South Africa.

00:02:21 – 00:02:26
Alec Hogg: And, GG our community knows you well, but what are you going to be telling them over there?

00:02:26 – 00:02:53
GG Alcock: Thanks Alec. Yeah. So, I’m going to obviously talk about my area of speciality, which is the informal economy. But I think importantly, we are surrounded by bad news. And yet there’s such a really powerful story to tell about the Kasipreneurs and that part of the economy and a part of it is also how it creates opportunity for the formal economy.

00:02:53 – 00:03:15
GG Alcock: And at the BizNews conference, actually, the CEO of Capitec said, you know, they’ve been doing some work with me and they’ve recognized that the massive opportunity and growth for them is in what they call the emerging economy. You know, and so I think that part of what I’ll be talking to is just what are the opportunities?

00:03:15 – 00:03:40
GG Alcock: And just looking at that, even from a business perspective. Now there’s two sides to this coin. One is to say, wow, look at these amazing entrepreneurs and what help they need. And the other side of the coin is what are the massive opportunities represented by the space, and the economic activity happening there. The other thing I think is that, you know, everyone’s kind of looking at the election as if, like, that’s the end of the right.

00:03:40 – 00:04:07
GG Alcock: and I think very importantly, the so what? Afterwards, you know, we need to carry on building our economy and getting our country in order. And so part of what I’m talking to is that this is the space that represents a lot of the hope and the opportunity to build, going forward. And, and I think that, that, you know, business by its nature, it needs optimism and hope and a sense of, of the future.

00:04:07 – 00:04:17
GG Alcock: I do a lot of talking around what trends in this kind of space. So part of it will be, you know, what is happening, what are the trends in the next few months to years and so on.

00:04:17 – 00:04:46
Alec Hogg: You’re also a director of Altvest, and I’m really excited that, Warren is coming over to tell us about the obvious story, because it is a way into the informal market in many ways. And an opportunity. Warren, maybe you can tell us a bit about the story you’re going to be sharing with, London Tribe A but an opportunity to, well, to make a difference if you’re sitting, far away as an expat.

Read more: BNC#6: GG Alcock Q&A – Why SA’s unemployment figures are way overblown, supporting the ‘Kasi’ economy

00:04:46 – 00:05:24
Warren Wheatley: So think, my message is going to be building on, GG’s because I finally have reliable, verifiable data that proves categorically that SA has absolutely resilient entrepreneurs and that whatever the outcome of this election, that’s unlikely to deter them in their efforts and that they are deserving of admiration from capital markets, are not this absolute exclusion that they’ve suffered all these years.

00:05:24 – 00:05:59
Warren Wheatley: So I finally, from an Altvest perspective, have really good, tangible news to share with the BizNews community who have supported us from day one. we’ve deployed over 150 million in capital to around about 20 or so cap, entrepreneurs. They’ve been responsible with our capital. They’ve added returns to it and they’ve returned it to us. You know, there’s the old adage in asset management that it’s not return on capital, but more return of your capital.

00:05:59 – 00:06:27
Warren Wheatley: That’s important. and that has happened and that’s going to continue to happen. And the message I’m saying is that, you know, while South Africa doesn’t necessarily meet the criteria of, you know, the Moody’s or Standard and Poor’s and that sort of thing, we actually have a way and the mechanisms and know how to deploy capital into the nooks and crevices of the country.

00:06:27 – 00:07:01
Warren Wheatley: Where not only will you get your capital back, but with a healthy return as well. And in doing all of that increase in our ability to create impact, create jobs and to do all that other wonderful things capital is capable of, if we let it run its natural course. We’ve got fantastic stats. We’ve saved over 170 jobs, so our loans, our capital has prevented 3 or 4 businesses from closing.

00:07:01 – 00:07:28
Warren Wheatley: we’ve initiated projects. where over 158 jobs were created as a result of, of our initiatives. And this is just a small little company in a small enclave in, in Sandton doing this. And we can do more if we have the support of big international investors. And so that’s that’s my message.

00:07:28 – 00:07:56
Alec Hogg: So interesting because Andrew Middleton will also be with us. And he’s doing something similar in the electricity area. And I see the news today that his company Gosolr has now got Patrice Motsepe as a backer. They’re going to make they’re going to expand $250 million that they’re going to be putting into the solar market. So it just shows the these initiatives that entrepreneurs like you are doing, can very quickly gather momentum.

00:07:56 – 00:08:22
Alec Hogg: But if it’s interesting to me that the news flow, if you like, offshore, is very much, South Africa’s in trouble. And they got a terrible election coming and it could be worse than it is at the moment. And the middle class is state proofing themselves to make sure they’ve got private schools, private security, private everything. whereas in the informal market, none of this is landing and things are going ahead.

00:08:22 – 00:08:42
Alec Hogg: And if you GG if you were to take the data, that that is sent around the world on unemployment and so on about South Africa, which excludes the informal market, you’d be splitting your wrists or certainly wouldn’t be coming along to even think of of what this country country has to offer.

00:08:42 – 00:09:11
GG Alcock: Yeah. You know, Alec my argument is that, you can’t just look at, formal employment, in essence, payslip employment, someone with a payslip, outside of that is a huge body of people who, are, earning non payslip incomes as well as, a range of other incomes. you know, and I will be talking to this, but you know, everything from the back room rental sector is a massive 20 billion rand a year sector.

00:09:11 – 00:09:41
GG Alcock: and that’s passive, incomes by the home owners. And we don’t again, you know, we don’t measure that. And then those people may be earning a really good income from their home. but they, we measure them as, as, unemployed. And the reality is, you know, there’s a lot less unemployment out there. My argument is, it’s closer to 12%, not the 32% that is, is, mentioned.

00:09:41 – 00:10:15
GG Alcock: and I mean, we see this across, you know, a range of different formal businesses who operating in the sector, who still continue to do very well. despite this. And how is that possible unless they are higher incomes? My argument is that there’s about 750 billion rand conservatively in, turnover happening in this, in the sector, literally across every sector, from beauty to auto sector to consumer and home construction, retail and so on and so forth.

00:10:15 – 00:10:46
GG Alcock: So, you know, the tragedy is we have this negative image because we are now looking, you know, at one thing, which is that pay slip, income in terms of employment. the other thing is that, you know, the, the middle classes, I would say the higher middle class are state proofing themselves, but the lower middle classes and the township sector also state proofing themselves, you know, they’re getting on with life and, and, not relying that much on, on many services.

00:10:46 – 00:11:13
GG Alcock: and we’ve just seen it as loadshedding has had a big impact on a lot of businesses in that space, but many of them have been incredibly resilient, and found ways to survive and carry on with their businesses. and that’s a story we should actually be telling. You know, we, and we often talking to the minority, you know, any according to statistics, only 10% of households in South Africa living on the breadline.

00:11:13 – 00:11:37
GG Alcock: Now, you know, maybe 10% is terrible, but it’s not 90%. And yet the headlines will talk to to that figure. and there’s a lot of forget things where we do talk to the lowest common denominator. You know, it bleeds, it leads. I’m reading a remarkable book at the moment called humankind A Hopeful History and talks to media throughout the ages.

00:11:37 – 00:11:55
GG Alcock: has been to this incredibly negative, image. And that negative image has been shaped policy and shaped, certain decisions. And if we can put this more positive thing on and it’ll shape decisions in a different direction, in my mind.

00:11:55 – 00:12:21
Alec Hogg: The late Daniel Kahneman, in his wonderful book thinking, Fast and Slow, were thinking slow and fast, kind of which way round, uses the example of, human beings are being hard wired for receptive nine times more for bad news than good news. And I guess if you’re not in the business of news, what are you going to be providing people with?

00:12:21 – 00:12:43
Alec Hogg: If you get nine times the bag on your buck for the bad news and the good news? And sometimes I think, Warren, that people, international people offshore must think that we nuts here in South Africa. Why stay here if you read the headlines and believe it? And yet we love it. I mean, I, I couldn’t think of living anywhere else in the world than in the, in the country that I live in, potholes and all.

00:12:43 – 00:13:07
Alec Hogg: And yet there is a, maybe a misperception, and yet you from your side, Warren, have managed to at least start opening the door to the very conservative, formal institutional sector to start realizing that there is a, an opportunity to invest in the informal, smaller market.

00:13:07 – 00:13:42
Warren Wheatley: SoAlec the last six months have been incredible for me, right, because my days has been spent having positive conversations with 3 or 4 amazing entrepreneurs per day, every day. You can’t help but feel positive about life, about the country, and about everyone’s collective future. When when that is your day. Every single day. And the only feeling I have is that I’m under resourced to solve the problem meaningfully.

00:13:42 – 00:14:11
Warren Wheatley: And when you gave me the opportunity to potentially address that lack of resources by addressing the community that is, you know, arguably over resourced, though they probably won’t admit it, but they hope there is more access to capacity across the pond. So I’m jumping at the opportunity to form my toolbox up with with more tools to help the guys.

00:14:11 – 00:14:37
Warren Wheatley: I’m meeting guys and gals actually, that are meeting every single day. It’s incredibly overwhelming to see the amount of positivity, the amount of people that are just fed up with the status quo and just won’t have it anymore and don’t want to be in lines to receive grants, or don’t want to rely on the government to paint their house, or to tar the road and that kind of thing.

00:14:37 – 00:15:12
Warren Wheatley: And I’ll just folding businesses around, creating solutions. And at the end of the day, I think whoever the government is and that’s why, who actually wins this election almost. You know, I’ve actually stopped watching the news. I rather read emails from, entrepreneurs with great ideas that that’s how I like to go to sleep you know, before I, I put, the news on in the background and try and fall asleep and just wake up grumpy and angry and confused.

00:15:12 – 00:15:40
Warren Wheatley: Yeah. You need 3 or 4 powerful requests for capital. And you, you spend the night dreaming and dreaming about pitching to big capital allocators. So, yeah, the last six months have been incredibly rewarding and, I’m amped. I’m ready to go. I want to go there and bring big investors back. And it’s not our it’s not our big businesses.

00:15:40 – 00:16:10
Warren Wheatley: Are we tired of big M&A deals? you know, the BHP and Anglos, that’s been done. We’ve done it. Everyone’s bored of it. We need to actually allocate the money onto the into the economy for real. you know, lets give it to people to buy stoves and ovens and bakkies and trucks and, generators and tools and, you know, walk in refrigerators.

00:16:10 – 00:16:37
Warren Wheatley: Those are the things we need to allocate our capital into. and that’s where we’re going to go the and ask for capital allocations. And we’ve built the mechanisms, you know, between GG and I, you know, we work very closely in, in solving these problems. We know where we know where the golden nuggets are. and we know how to get the cash and we know how to grow and extract that.

00:16:38 – 00:16:59
Warren Wheatley: And I finally, have a set of data that I can prove the hypothesis I’ve been talking about for the last two years. We’ve got the systems in place, we’ve got the governance in place, and we’ve now got verifiable audited evidence that we’ve been talking the truth all along.

00:16:59 – 00:17:27
Alec Hogg: It’s a good story, and we are really looking forward to having the two of you address the community in London. But GG, I guess one of the big questions that will come for South Africans who’s sitting over the water because they’re still South Africans, even if they’ve been there 20 years, is why not come home? Are you going to be giving any or if you ask that question, would you how would you respond?

00:17:27 – 00:17:28
Alec Hogg: How would you respond?

Read more: BNC#6: GG Alcock – ‘Kasinomics’ 101, the multi-bn Rand sector that no one talks about

00:17:29 – 00:18:16
GG Alcock: Yeah. Look, I mean, I think that my starting point is, you know, anyone who’s still wanting to leave and hasn’t looked around and realized how many positive things there are is making a mistake. And those who have already left, I mean, I think that there are huge opportunities, and I think that the opportunities, you know, to what Warren’s talking about, are in kind of entrepreneurial activity. And even, you know, I do my day job is to advise companies. I mentioned a Capitec example on strategies and stuff for South African markets, both formal and informal. And, you know, everyone who looks at it, all those companies go like, “Jeez, that’s incredible. The opportunities those who get it right.” It really is powerful. And this talks to the massive opportunities if you’ve got the entrepreneurial skill and you look at South Africa outside of just your narrow little high and middle-class space and look broader at the economy, even rural towns are booming.

00:18:16 – 00:18:47
GG Alcock: And then the storyline is rural towns are dying. You know, rural towns like Pongolo and Burgersfort are doing incredibly well. And the people who put in shopping centers there are doing incredibly well. And so on. And so I guess my thing is like, why aren’t you coming back and investing in setting up whatever entrepreneurial venture, but not where you would have had it, in Sandton and Menlyn but in Pongola or Burgersfort or Umlazi and so on.

00:18:47 – 00:19:16
GG Alcock: And that’s really where the opportunities lie. I think the other thing is that, you know, people are like, everything’s gonna be incredible. We’re gonna have a revolution because everyone is unemployed and, and, and, people are dying of hunger, which, of course, is not true. And that is another kind of factor. You know, is that actually, this sector has managed to generate incomes and, and, build people homes and, and, spend on a beer at a local tavern which now has a flat-screen TV and, and, Wi-Fi.

00:19:16 – 00:19:53
GG Alcock: And so people are actually very happy with where they are we’re not on the verge of some form of revolution and suffering. And so. And we actually have a very sound, a middle, lower middle-class township, rural, whatever you wanna call it. Population. And that’s not to say there aren’t problems, but the problems are actually smaller than we realize.

00:19:53 – 00:20:13
GG Alcock: And, and, actually what we need is more people investing and saying, how do we fix the problems and how do we get the people like Warren’s talking about who’ve gone out there and said, no matter what, I’m going to build this business and generally have built it with no formal funding, borrowed from family, cashed in the pension, whatever it might be.

00:20:13 – 00:20:37
GG Alcock: I was actually with a baker So just as an aside, met a baker in Soweto, a week ago and now we’re chatting because I ran a program with Supreme Flower work, a loyalty program with township bakers I said, hey, when did you start? Because he’s got a really cool bakery. Does very, very well.

00:20:37 – 00:21:15
GG Alcock: No, no, no. And he said I was a Unisa librarian, and I decided I would cash in my pension and start a bakery and now he’s opened a second bakery, which his wife runs down the road, and he does a couple, you know, a thousand or more loaves of bread a day and rolls and so on and so forth.

00:21:15 – 00:21:36
GG Alcock: Now imagine if that guy could, you know, I said and now the second one, how did you start that? He said, he laughed, he said I took a little bit more out of my pension. imagine that guy. And he could get some support and didn’t have to rely on his pension. And he had someone coming out and and helping set up a bakery support franchise or whatever it might be.

00:21:36 – 00:22:02
GG Alcock: You know, again, there’s these huge opportunities and they just need help. I talk a lot about, you know, we need scale-ups, not startups, there hundreds and hundreds of thousands of businesses that we don’t need to start new ones. We just have to help the ones that are there to scale up. And. And what are the opportunities for anyone outside of South Africa who’s quite happy to invest in entrepreneurial ventures?

00:22:02 – 00:22:09
GG Alcock: where they are and has never thought, wow, maybe there’s entrepreneurial ventures in South Africa I could invest in as well.

00:22:09 – 00:22:14
Alec Hogg: And it’s an area that they know better than probably anywhere else in the world. Sorry.

00:22:14 – 00:22:18
GG Alcock: The sunshine is longer as well.

00:22:18 – 00:22:48
Alec Hogg: That’s why solar is doing so well, as we’ll hear from Andrew as well. But, it’s a wonderful story. I’m hoping that your travels to the UK are safe and peaceful and look forward to seeing you on that side of the pond pretty soon. I’m Alec Hogg from BizNews and you’ve been hearing GG Alcock and Warren Wheatley telling us more about the power of human potential.

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