Adrian Gore, CEO of Discovery. Picture: RUSSELL ROBERTS
Adrian Gore, CEO of Discovery. Picture: RUSSELL ROBERTS

There’s an ad on the radio about how great minds are inspired to higher levels of creativity, purpose and achievement in adversity. Shakespeare was supposed to have been at his most productive during the regular plagues that hit London in the early 1600s; Sir Isaac Newton, on an enforced break from Cambridge, developed his theory of gravity while home with his parents for similar reasons. Being in lockdown, the theory goes, makes us bored and allows our brains the freedom to be creative. That may be true. Perhaps adversity also scares us into doing things we ordinarily would not consider in more complacent times. Shakespeare needed material to keep this theatres going in a fiercely competitive market and Newton probably would have come round to gravity regardless of whether he’d been at home with mom and dad or not. Still, it gives hope in an uncertain time – and that’s not a bad thing.

There are hundreds of stories at the moment about how people are having to “pivot” to keep enterprises going. The Financial Times ran a feature recently about a group as diverse as a cellist, entrepreneur and scientist all using the lockdown to tap into their creativity. Cellist Liz Hanks saw her European concert dates dry up, so now she teaches online and records music from home. Madrid-based entrepreneur Balvinder Powar told the FT how he was forced to get creative and now teaches food production to students at one of the city’s leading business schools, while taking a course on neuroscience to help him in writing a new book on leadership. They are thinking creatively to find new ways of doing their jobs to earn a living.

If you have been bored in this lockdown and have nothing to show for it, you have wasted the opportunity of a lifetime. Adversity is a wonderful breeding ground for new ideas. It is usually at a time of deep uncertainty that most people hunker down and seek to ride out and survive whatever crisis may be most prevalent. Nothing wrong with that. But that’s not how progress happens. True innovators do extraordinary things while the rest of us are waiting for a sign that it’s safe to proceed.

What do the following SA companies have in common: Bidvest, Discovery, Baby City, Spark Schools, SweepSouth, Yoco, Capitec, Tekkie Town and Nando’s? There are others. But let’s leave it here just for the purpose of illustration.

All have started during times of adversity.

Bidvest and Nando’s were start-ups in 1987. Two years after PW Botha’s infamous Rubicon speech and in the midst a sovereign debt default and a civil war that was claiming lives on the streets daily, Brian Joffe bought a food service business called Chipkins and took the first steps to creating an empire. While he was doing that, Robbie Brozin and Fernando Duarte were buying and rebranding a Chickenland outlet in Joburg’s deep south that became Nando’s, which now has more than 1,000 outlets in more than 35 countries.

Discovery and Baby City were founded in 1992. FW de Klerk had released political prisoners and unbanned the ANC, the PAC and the SACP just two years before. There was very little to suggest that the country would get to a democratic dispensation in one piece. Despite that, businesses were being created. Young entrepreneurs were seeing opportunity and acting on their instincts in even the darkest of times, giving a real sense that building businesses requires the extraordinary ability to not only see through uncertainty but to be able to navigate the considerable obstacles that adversity creates.

Gore began Discovery at a desk at RMB after the young actuary pitched his idea – he had no team or product at that stage, just a vision that health insurance needed to work differently – to a banking executive called Laurie Dippenaar. It took him six months to make his first hire. Today the group employs more than 10,000 people and has expanded to offer a suite of financial services products, including a bank it created at the peak of calls for nationalisation of the Reserve Bank and commercial banks.

Baby City was conceived (yes, I know) in 1989 and came to market in 1992 as the country’s first dedicated supermarket aimed exclusively at serving young families. Michel Aronoff’s father ran a successful chain of six baby boutiques, but his chartered accountant son, seeing the opportunity that large-scale retail offered, convinced his father it was time to change. The family recently announced the sale of Baby City to Dis-Chem for R430m, and the listed company has expansion plans, despite the depressed economic environment exacerbated by the pandemic.

Capitec survived the early-2000s small banks crisis which claimed as many as 20 rivals. The crisis was sparked by the collapse of Saambou in the midst of a boom in reckless microlending. The contagion spread to BoE and Nedbank, which was saved by a government guarantee on deposits which calmed the sector – but not before a host of small banks had disappeared. Banking sector regulation tightened up and today Capitec has some 14-million clients with a retail banking strategy that has seriously challenged the dominance of what used to be called the big four. Thanks to Capitec’s expansion, that definition is less clear today.

Tekkie Town began life as a small boutique selling top-end branded clothing to oil workers in Mossel Bay. Braam van Huyssteen worked with his mother and experimented in the early days selling end-of-range job lots of boots and shoes. His first contract required him to move a million rands worth of Caterpillar boots that he borrowed against his house to buy, before successfully placing them at a decent margin in farmers’ co-ops. He started Tekkie Town and expanded slowly in the early 2000s; his real growth spurt came in the midst of the global financial crisis of 2008/2009 when landlords were willing to offer long-term leases at low rates to growth businesses. Van Huyssteen understood consumers wanted value without paying high prices, and, using that principle, was able to expand aggressively. It all ended in tears and recriminations, of course, following a series of transactions with Steinhoff which saw him ousted and holding shares in the listed entity worth a fraction of what his business was worth when he had sold it to Markus Jooste.

There is no single event around which to structure a “built in tough times” story for Yoco, SweepSouth and Spark Schools – these are all businesses that raised capital and grew despite the toxic business environment that characterised the second Zuma administration. GDP growth rates were going down the tubes, yet Katlego Maphai, Aisha Pandor and Stacey Brewer saw an opportunity to build businesses in payments, tech-powered gig-economy-linked domestic work and affordable private education at a time when individuals and large corporates were offshoring billions of rands.

Sure, boredom can get your best ideas to come to fruition, but adversity has its merits too. For problem solvers, it’s the ideal environment to thrive in. I for one cannot wait to see how the start-ups of 2020, forged in the uncertainty that surrounds us, evolve into the future.

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