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Jrtl FIJ)I!llJs Vinny lingham, a small town South African, turned a desireto run his own
successfulbusinessinto reality through commitment,persistence,carefully
managedpersonal networks and a never say die attitude.

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BYED'ORILEY

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gt"* up in a small town in SouthAfrica,a I TRIEDUilSUCCgSSFUttY FORABOUTFIVEIIIIOIITHS
I
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TO
boy watching movies like Wa11 Sfrcef and GETFUI{DII{GI]I BOTIISOUTH
AFRICAAI{II TIIEUIIITED
wanting to be somethingmore. I always STATE$.But the South African venture capitalists didn,t realty
kn ew I want ed t o r un m y own s uc c e s s _ get the businessconcept - they didn,t think it would work _
' ful bus ines st,hat t didn' t want t o lea d a and the US venture capitalists weren't really looking to rnvest
bo r ing lif e. lt ' s pr obablya f air ly r y pi c a l in a South African-based company. So it made senseto run the
story of many entrepreneurs, but I guess company from the United States.However that brought with
what s et sm e apar t f r om ot her sis t ha t I it its own set of problems.
don't fear failure in the same way that many do. Sure, I don,t The funders wanted to know how I was going to get into the
want to fail, and I do everything I can to avoid it, but the fear States,how I was going to organise work permits and the like.
of failure doesn't prevent me from taking big risks. I think I At the time I didn't have any really good answersto those ques_
have courage. And this willingness to take risks with my own tions. I had to do researchto find out about the visa process,
money was definitely a big factor in landing the funding we did and let me tell you, it's complicated. The only way to really get
for Yola. I think it made a big difference that I had personallv
into the US is to apply for what's called an L1 Visa which means
invested about R2 million of my own money into the business.
]'ou ha\.e to work for a South African company and then get
It showed a willingness to put my own neck on the line, which
transferredto an associatedcompany in the United States.So
showed a real commitment to making the business work. And that's n.hat rve did. We set up SynthaSite in South Africa and
I think that we had a great idea as well. an associatedUS company, and then applied for visas.It took
four months and a lot of paperwork, but we succeeded.
lT ALt STARTED lf{ GAPE T0W1l. I was runnins one of mv
I had given myself a timeline of three to four months to get
previouscompaniescaIled Cl icks2Cust omers,unJ *" createi runding, but it took me closerto nine in the end. Fortunately
website-building software for our own internal use to build I had equitv built up that I could draw on ancl I liquidated
websites faster for our customers.We realised there was a mar_
some sharesI had in other companiesin order to keep the
ket for businessesto be able to build their own websites,instead
companv at-loai.
of having to pay someone elseto do it for them. The idea made
a lot of sense,particuiarly in the mass market targeting small rH 2007,wE mAilAGED
T0 RA|$E$5 Mil.u0lt FRoM
to medium-sized businesses.
COLUilBUS UEIITUREGAPITAI, which at the time was part
Every business needs a web presence,but entrepreneurs
ci JorarLnRupert's Richemont.Getting that initial investment
often lack the capital to pay a company to ffeate one for them. r..-a.: irig boost for us. It enabled us to set up offices in the
If we could give them the tools to create their own website for
U::::j Statesand to keep paying salaries,o thut we could
Iree, we would be on to something big. We alsoknew that the
:.:.:nue to n'ork on developing and improving the product.
world was changing and that software was moving increa._
L:rding that initial amount wasn,t easy.Generally you need
ingly to the web, so the idea was to put the software onlin=
:: :.:\"-esomething to show funders before they are willing
instead of selling it to people on a CD which they would ther-
- - -r..1'est.So firstly, we raised what's known as a convertible
have to install. Taking the company online would also oper.
: --,: - a small amount of funding which was put in by fam_
up accessto an enormous giobal market. With that, I decicie:
:--. =: ;riends just to keep the businessafloat. This stabilised
to leave Clicks2Customersin 2007.I bought the technolo:.
-:-:.:. and allowed us to get to the point where we had built
and the intellectual propertv out of the company and sp.*:
: - :.=::tng that investors might be interested in taking a bite
off a new company, Sr.nthaSitein March 2007which is rr-r-.::
-, ,. I: s easierto start with lower tunding requirementsand
eventually becameYola in -\pril 2009. - =: ::ild up to the bigger investment amounts.

rLy 2c:: ,rsK E N TR E pR E N E U R .co.z

f As5

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-
 The processhvolves paperwork and patience.The first thing
vou har-e to do is put together a short businessplan - some-
thing readable that you can distribute to potential investors.
This is the pre-funding businessplan. It focuseson the core
market, shows the opportunity and reveals why the busines.
is scalable.It really speaksmore to the'blue sky'and the busi-
nessmodel, while the post-funding businessplan gets dor,r'n
to the nitty gritty of how you are going to make it happen. Part
of writing a winning business plan is to understand the differ-
ence between the two. The first is a salespitch; the second an
execution plan. You put together the post-funding business
plan once you have a term sheetfrom interestedfunders - it's
longer and shows the details of how you are planning to spend
their investment to make the business work.
I was very fortunate when we were writing the busines.
plans to have a Harvard MBA intern, Brian Elliot, working ir.
the company. This is one of the many benefits of being se-
lected as an Endeavor entrepreneur.Endeavoris an NGO that
mentors and grows entrepreneurs in developing countries,
of which South Africa is just one. Having Brian as an intern
was an enormous help in putting together the post-fundinr
businessplan.

GETTIIIG
THEIUITIALFUT{DITIG IS OilLYTHEFIBSTSTEP,
H0WEVER. If you'rehopingto attractmorefundrng,asr\-e
BEEil
THERE,
DoNE
tT were/ you need to show investors that you can really run
with the business and make a successof it. So we workei
VtNNy LINCHAM lSNoTNtWt0ihechaitenge cf slarttng
a really hard at optimising the Yola product. The first thing
busine$s endfaisins fun.iing. Infact,he'ssomeihing afanald we needed to do was make it easy to use. We're technologr
hand. Tagetnisprev!0u$ lnt*rnet ssa!'ch markeiing cOmpnity, people but we understand that most businessowners are
incuBeta, offth* gruund. h#hadt0 OverfiOme ihefa0tthat technophobic and that they'd only use Yola if it was simple.
p*t*ntialinve$tOf$ sinplydidn'tiLnderstanC th* business We developed it so that userscan choosea template and then
*r howit lvnuldmakernofley. it'sa cilmm0n challsnge f0i" simply drag and drop text and images on to the site.You car.
sta*-ups intnelTsect0r, particuiarly tha$e thatarepinneering add whatever capabilitiesyou want and then you simply hit
nsr'.J
ff0del$ andwaysof dtingbusin*ss" Banks i,santed
tn the'publish'button and it goeslive to the web. It can take ten
"sse$tOsk" before they'dinvest. "lt waselsfirthattheyjust minutes to build a simple site or a coupie of hours to builc
didn'tuncierstand whatiftternat Search Marketing wasand something more complex.
howit couidmakemilney," hssaid.
8utrescur*efulne$s anda willingn*ss t0takebigpers*nal risks SOHOWDOII'E *IAKE MOI{EYFROIIIA FREEPROIIUCT?
arepart0fi-ingham's *NA.fj* saldhi$hause in*rd*rtl fund It's simple really. Users can chooseif they want to have their
incuBsia. "i thcushi if I lcstth*house andtttei:usiness failsd
then own domain name, such aswww.entrepreneurmag.co.za,or a
I'djustgeta jobandrentacccmmadation fortherestafmylife. Yola domain name like www.entrepreneurmag.yolasite.com.
T*ffe theth*ught cf nct*lrJnin$ mycwnbusiness wasr4,0!"$f The Yola domain name is free but we sell the other domain
thanthethilught *f i*singmyhcuse andn*verbeing abfetobuy names.This is one income stream and we've calculatedthat ii
anOther s*e,"hr says.TothsRl2$*flfi frcmthesale0f h!$hOuse one in even- 30 people purchases a domain name, it covers the
h€ad{isd a furihe!"R750*0fund*d frnmhiscredit cards. costsof the other 29 who choosethe free option, and allows us
Asr,vithYola, taking a per*onal riskpairl*ff"in*uB*ta mad*a to make a protrt. -\s the ratio of paying to non-paying customers
profltalmo*timmediately aildatt!'act*d a fr70fi0*Csumfrrm improves, so the br-rsiness makesmore money.
*n ailg0linvsstor whctook'l3!/o*quiiyinthebusiness" We also har-e plans to launch a template marketplace, which
lnlinding funding farYol*,Linghaffi mighlhav*been will pror-ide a second income stream.We will buy templates
talhirigbiggeifigilrc$ t0 bigger playeis, but;.1jspnil*silphyha$ from designers and sell them on to users who want them. It's a
femaiiled thf;same: befar*ycuex:lecl sc+etfieslsgt0fund bit like iTune: -,r:1erethe software is free but the content is paid
y*urbusin*$s idee.invsst y0ilf*rsnircn3!'ii'rii anai srflffte for. Horr-erei. *>e:: are still able to get a completely free web-
someti]ing wa*hinveating in. site if ther -,..'::.:- -rat': our selling point. They will just have
paid-for o::- - . : :. -,..'e
11,should they wish to choosethose.

66 |
 pRSFILE I
EIUTREPREIIEUR

Iil t2 M0ITHSWE'UE hioEETHAIrW0 fftttnil

ADBED
USERST0 OUE DATABASE.People embracethe productbe-
causeit's easyto use and we help them along the way. We've THESUGCESS
FAGTORS
developed comprehensive tutorials and help pages so that e A gr*atpr*durtthatspeaks dirsctly
tc:n existing neac!
people have accessto as much assistanceand information as e Anexperisiiceci,
irch-sauvy withpci$istence
sntrsprf;neur
they might need. There's 24/7 email assistanceand a commu- andl}a$$ion
nity forum where users give each other help and advice. c Thei,viilintness
t! mak*a per$snal invssi.*entinihe
We're aiming to have four to five million users this year, e0npany andtakeper$Onal risk$
which we believe is totally doable. Becausewe focus on the t A n*twOfk 0fc0ntacts bi.iiltupcvery*ars
to rivaiallnetw0fks,
SME market, the economic downturn is actually really good people
0t ffiBetinU andbuildingm*tuaiiy-benefici*|,
for us. Small to medium businessesare looking for ways to value-addiilg
relaiionships
save money and boost their businesses- and a Yola website Anabilig10ettraetiop lT lalentsventhoughYrlawasa stefi-
can help them do both at the same time. .'
upwithoilia longif&ck-fec*rd
Based on our initial success,we landed a further $20 mil- Theabilitytn learnfastaboljihcwtil $etup a ccmpanyin a
lion in funding from Reinet in February this year. The deal is
based on an equity structure and although we can't mention
the percentage of equity they own, we can say that it is less
i. foreign*ouniry

,i.-".,...,, ,..,...,..-.=...-. . .,, . ,....-.-,=,:

than 49%. We always knew that we'd need visionary investors
to backthis business,becausealthoughwe weren'treinventing
the category, the concept was new.
Of course, we had to sell the vision to them. But by then
we had establisheda track record based on the initial $5 mil-
lion investment and what we'd managed to achieve with it.
Reinet was createdout of Richemont, so there was a connec-
tion there.
FoRlauEsTons,I BEUEVE TltEEI{TREPREI|EUR
A$ IHp0RTAIT,tF HoTHoRES0 THAI|THEEUSfitE$S in turn will raise your profile and help build your network
C0HGEPT.For this reason it's essentialthat you are a person
with credibility and a reputation for doing businessin an open,
transparent and ethical way. I don't think you can build cred-
ibility; I think it's something that you prove. You either have it what I tell people when they ask about how to build the kind
inherently or your don't and then you prove that you have it
by the way you conduct yourseif. I know lots of guys who have
no credibility becauseof the way they do business.They're
unethical and no one wants to invest in someone like that.
And make no mistake, once you've earned a bad reputation, it
sticks. You'll never get away from it.
I can honestly say that I could have made a lot more monev
being unethical in the past couple of yearsbut that's not what
it's about. Doing unethical businessis cheating, and you might
make millions but you can't call yourself a businessman. Hon'
you build your wealth and how you make your moner.is
what's important, not how much you make.
PEOPLE OFTEIISK IIO|TTHEYGAIIGETIII TOUGH WTH :-,..':..-:i r-our dream. You'll gei there eventually. n
llluEsTon$,At|0 FoE ME F CAffED0U$tT0 pERSo[At
I|EflUOEKS.I addeveryoneI meetto oneof my socialner-
works, either Facebook or Linkedln and I'm in those nei-
works every day. I am very'out there' media-wise and I t.-
to maintain a good media presence,although until fair-'.'
recently I didn't have a PR agency. I blog and I also atte:::
Iots of networking events. My philosophy is that if I or_,-.'
meet one worthwhile person at an event, it makes that er .:_,
worthwhile. I also try to be personal with people becau.= _
believe personal relationships make all the difference. And I
genuinely like peopleso that helps as well.
But uitimately the key to successfulnetworking is to stay
in touch with people, and to offer them something valuable
rather than to look for what they can give you. So I don't
look for opportunities - I look for the opportunity to build
relationships.I think it alsohelps to learn as much about your
subject as you can so that people can rely on you as an expert.
tS This means they will use you as a valuable resourceand this
further. When you spread yourself too thin and you try to be
the'go to' person for everything, you make a mistake. Add
va1ue,give back, be genuine, interested and interesting. That's
of netn ork that's really valuable.
utTliIATEIY,THoUGH, THEFUl|DfitGJ0UEHEY G0IUIES
D0tHll T0 PERSISTEHGE.And persistence pays off. Many
people look at me and say,"F{e'sso Iucky to have landed such
a big investment in his company//but honestly, it has nothing
to do rr-ith luck. It's purely about hard work. Successmay look
like it happened overnight but that's very rarely the casein
realiir-.\ou har-eto be prepared to put in long hours, take
nsk and make personal sacrifices.And ideally, the best time
:.. ::ake them is rvhen you're young, which is why I encour-
i:= ','ounSentrepreneursto go for it. Understand that it's
. --- tr err. th ere, be prepared to be patient but keep chipping
OTI.ITE
,
EXCI.USIVE
: - : ': : '" a n e u r m a g . c 0 . z a l e x c l u s i v e . h t m l
LETRflIXG FROM FAILURE.
: : : : : : :, :' t- . " ny Lingham\ learnedfrom hisf rst-handtasteoffailure when
' : : : :, ., : ..
-,.preneur All tao often,such experiencescan porolyseentrepre
'., . : : :'. - :, :, :c kerisksagain. Find aut mare about how to learn
from fail ure
: .-:: .
: :-,.=chtina s)irit intoct.

J U LY 2009 ASKEN T R EpR EN EU R .C O . ZA| 57