With little more than R2 000 and dreams of greatness, two entrepreneurs have built a giant
Zibusiso Mkhwanazi and Neo Mothlabane were 18 and 20 years old respectively when they started Csonke.com. Between them they had nothing but their IT and accountancy skills, R2 000 start-up capital and a dream to be in the top five IT companies in the country within five years. “We didn’t have a car so we used to take taxis to see clients. On the days that it rained, we’d have to cancel meetings because we’d get so wet walking in the rain,” remembers Mkhwanazi. But, as John Barry, founder of Adcorp, says in his interview at the back of this issue, South Africa is one of the last great countries where, if you put your mind to it, you can achieve anything.
This was their thinking exactly. In January this year, Csonke.com bought 30% of Krazyboyz Digital, for an undisclosed sum, forming one of the largest African digital agencies. Mkhwanazi is Executive Chairman and Mothlabane Managing Director of the Johannesburg office. Csonke.com also has the option to acquire a further 21% of Krazyboyz Digital which will, in future, allow it to attain majority shareholding. The rise and rise of Mkhwanazi and Mothlabane is a story that’s nothing short of remarkable. Mkhwanazi relates how it all began: “With the little capital we had we needed to focus on one thing that would land us a big client.“ They scanned the market and decided that web development was the way to go. But, there was one small problem. Neither of them was a designer. Refusing to be discouraged, they approached design students at the former Technikon of the Witwatersrand and asked them to submit examples of web design work. “We took the work and started selling it and landed our first significant client, Mazwai Securities, now Barnard Jacob Mellet,” explains Mkhwanazi.
It was a taste of things to come. Blue IQ followed, then Lotto and then Thebe Investments. “We just grew and grew - it just exploded,” he remembers, “And importantly it gave us the confidence we needed. Because as a small start-up you have to first convince a giant that you can deliver what they need, and then you have to actually deliver it. It’s a really big challenge.” In both instances, the pair proved successful and income slowly started coming in, eventually funding the company’s growth. But, ever aware that IT was a high-risk market, particularly at that time in the aftermath of the dot.bomb, Mkhwanazi and Mothlabane made an important strategic decision to keep overheads as low as possible. “We were very clear on one thing: the only salaries we were going to pay were our own and a secretary’s,” he recalls. They bought one car to share and instead of taking on staff, continued to outsource the design work on a contract basis, a practice that remained in place right up until Csonke.com bought into Krazyboyz Digital.
Mkhwanazi explains the thinking behind the merger. “We needed new markets and to expand our services for the existing clients that we had grown with. We were strong on web design but we weren’t strong on things like presentations and digital signage. And we were approaching that five year mark and still weren’t in the top five!” They started scanning the market but in the end Krazyboyz, which was also looking for a partner, found them at a serendipitous tender briefing. The deal was eventually financed through assets and cash. The merging has presented Mkhwanazi and his new team of directors with an array of challenges. “When you combine two companies there is always the risk that you will get two separate camps. There was the perception that people would lose their jobs and be replaced because there was now empowerment in the business. You have to get people to trust you,” he says, adding that communication and a united group of leaders who publicly come out in support of each other has made all the difference. To date, not one staff member has resigned. “It’s all about leading by example,” concludes Mkhwanazi. Small wonder then that Krazyboyz is at an all-time high.
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