Depressed? Study local entrepreneurs

GREAT entrepreneurs are wired differently from the rest of us. They not only see opportunities in crisis and uncertainty but act on those opportunities in the knowledge that, even though not all of their ideas will work out, on balance they will win more than they lose.

They don’t ignore politics but are able to filter the deluge of daily negativity to its barest essence. There will always be more reasons to not do something than to do it. If we all sat on the sidelines and moped about the state of the nation, we really would be in trouble.

Asked this week whether he was becoming disheartened by the state of the economy and high-level political instability, Discovery founder Adrian Gore said: “We must build and not be short-term in our thinking.” Profound. Powerful.

Great South African businesses have been forged in the fires of uncertainty.

As thousands of South Africans stockpiled bottled water and baked beans for a post-election Mad Maxstyle apocalypse in 1994, Gore, a young actuary at the time, was sowing the seeds of a disruptive insurance business that is now on the verge of challenging the banking industry.

Today, Discovery is worth R80-billion, and its Vitality incentive scheme is attached to health insurers’ products in 14 countries.

It has a 25% stake in Ping An, the biggest health insurer in China. Asked if this was Discovery’s answer to Naspers’s Tencent investment, Gore played down the potential of it being a gamechanger. Still, stranger things have happened.

Hundreds of global businesses have burnt their fingers in China. Until it bought a one-third stake in Tencent, Naspers was among those. Now it is worth more than R1-trillion, more than the combined value of the big four banks and three insurers, Old Mutual, Sanlam and Discovery.

SABMiller, which will cease to exist next week when it is absorbed into Anheuser-Busch InBev, is worth R1.5-trillion thanks to the buyout. It survived the South African War, two world wars and the draconian restrictions of nearly half a century of apartheid, and thrived when the country was no longer a pariah.

At the opposite end of the scale are today’s start-ups. And there are plenty.

One example of a gutsy start-up grown through crisis is Tekkie Town. It was acquired by Steinhoff this week in a deal probably worth close to R2-billion.

Founder Braam van Huyssteen hit on the idea of a discount retailer of sports and lifestyle shoes while working in his mom’s Mossel Bay clothing boutique 20 years ago.

He saw how upwardly mobile workers on gas rigs would pay a premium for branded clothing, and, when a consignment of 12 000 discounted pairs of Caterpillar shoes became available, he mortgaged his house to buy them to sell on at a profit.

Word got around that there was a guy able to shift shoes, Jordan got hold of him, and the rest is history.

Nothing has happened by accident. The business has grown conservatively. He started in 2001 with a single shop, and it took years for him to open a second. It has taken on no debt, and Van Huyssteen has grown his footprint (sorry) to more than 300 stores by investing everything back into the business.

During the financial crisis of 2008, rather than cut back, he nearly doubled in 18 months as landlords offered him cheap leases to ensure that they kept occupations high.

Last year, Van Huyssteen sold a “significant minority stake” in the business to emerging-markets private equity firm Actis for $65-million (about R929-million). Now Steinhoff has bought out the lot for an undisclosed sum.

Van Huyssteen is salivating at the prospect of piggy-backing on Steinhoff’s global footprint. It will need a rebrand in other countries but the concept will travel well.

Now, Google: what is “Tekkie Town” in Polish?

Whitfield is an award-winning financial journalist and public speaker