South Africa: Dragon's Den favourite speaks on the power of the Net

South Africa: Dragon's Den favourite speaks on the power of the Net
Christopher Tredger
By Christopher Tredger, Portals editor
, 06 Oct 2015
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What started out as a modest sized traditional florist business quickly flourished into an established online consumer-focused venture, one that recently secured a R3m commitment from local investors featured on the South African version of the Dragon's Den series.

When his mother's florist business hit hard times, Nicholas Wallander, Cape-based entrepreneur and co-founder of SA Florist, realised there was a window of opportunity as traditional florists buckled under the pressure of tough economic factors and the dominance of major retailers and online florists.

Wallander knew the industry well enough to understand its challenges and shortcomings. He also had 16 years of ICT experience he could immediately tap into.

ITWeb Africa spoke to Wallander about the company's journey, his experience and his view on how the internet has revolutionised business practice.

Chris Tredger: Please explain how SA Florist came about and its value proposition?

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Nicholas Wallander: My mother has been a florist for 30 years and, as a result, I've got a reasonable idea of the challenges and shortcomings that exist in the industry. Having worked in the ICT space for 16 years, I also have a good understanding of the internet and technology. I've seen, first hand, how the online florist industry has been dominated by early adopters and how independent florists have literally be left out in the cold when the main player decided to centralise and "in-house" their operations in 2011. This left a number of florists with a big hole in their balance sheets, but also presented an opportunity to provide them with an alternative. By focussing on what we're good at (technology) and letting the florists do what they do best, we can offer the customer the best of both worlds. Customers like to know that their orders are being made up by a real florist with a real investment in the industry and not some faceless factory worker, clocking up hours until their next pay-cheque. It's a feel-good story and one that obviously hit a note with the Dragons.

Chris Tredger: What is it about the business that appeals to investors?

Nicholas Wallander: Marketplace technology is taking the world by storm and, being one of the first and one of very few true marketplaces in SA also makes for a sound investment opportunity. I guess that's why all five dragons chose to invest in us.

Chris Tredger: You've mentioned that modern businesses need to think 'out of the box' when it comes to distribution, what do you mean?

Nicholas Wallander: The internet is dominated by a few key players, so when you decide to take one of them on, you can't do it head on. You need to focus on their weaknesses and play to your strengths. In our case, decentralised distribution offers a number of key advantages. Top of the list is our ability to execute orders both flexibly and quickly. We've said goodbye to the midday cut off for same day deliveries. By integrating our system to 'Uber-style' delivery services, not only can we offer same day delivery ALL day, but we can also guarantee a 2-hour turnaround from payment to delivery in certain major centres.

Chris Tredger: In your brief, you mentioned that with the correct business models, traditional smaller operators and entrepreneurs "could be the greatest beneficiaries from the internet's empowering influence" – please explain?

Nicholas Wallander: Humans, by nature, favour the underdog. We like to support the small guy wherever we can. We feel good, knowing that our hard earned money is being spent consciously. Flowers are the perfect example. Often being bought for a special occasion, customers like to know that they they are being made by a career florist who puts pride and passion into every bouquet, and not by some minimum-waged production-line worker, churning out boilerplate products. The challenge has always been in connecting these artisans with internet shoppers. Our marketplace does exactly that by offering shoppers a world-class experience, but the promise of heart and soul that independent florists bring. The same can be said of most industries, so, being able to connect small businesses with online shoppers presents great opportunities.

Chris Tredger: If you had to quantify the amount of smaller businesses that have yet to fully embrace the internet, what would your 'guesstimate' be?

Nicholas Wallander: I would say that well over 90% of small and independent businesses have an ineffective or underdeveloped internet strategy.

Chris Tredger: Why do you think that is the case?

Nicholas Wallander: Technology is perceived to be a costly task and, therefore, often neglected or even ignore entirely.

Chris Tredger: When one considers the developments and innovation in software, it is hard to understand why a smaller operator wouldn't automatically embrace technology?

Nicholas Wallander: It's a generational mindset in South Africa. Besides the perceived costs, 'technology' is seen as a daunting task for business owners that didn't grow up around computers and the internet. The fear of the unknown is very real in SA.

Chris Tredger: What is the situation like in terms of the Internet of Things (IoT) and South Africa?

Nicholas Wallander: IoT, for us, points to the maturity of an online shopper. The more exposure that people have to the internet, the more demanding they become as consumers. They won't settle for online experiences that are anything less than world class. There is so much competition that, if you're not leading technologically, you're losing.

Chris Tredger: What should businesses be doing to truly leverage the IoT?

Nicholas Wallander: Businesses need to have sound e-Commerce strategies in place. If they are not already trading online, they are probably going to have tough times ahead. If businesses are not in a position to pursue their own strategies, then markeplaces like SA Florist are the perfect solution.

Chris Tredger: Is it possible to have an entirely online venture in South Africa today?

Nicholas Wallander: The market is certainly there, with research to back it up. So, yes, we believe that there is definitely opportunity in empowering small, artisanal businesses and providing customers with the promise of products with heart and soul.

Chris Tredger: What advice do you have for startups?

Nicholas Wallander: Be very clear on what problem your business (or idea) solves. Will it disrupt and is it difficult to emulate? Most importantly, does it have a realistic (one can never be 100% sure) chance of success and what will it take to get it to profitability? If you're answers to these questions are positive, based on thorough analysis and understanding of the industry, you won't have trouble sniffing out investors. We have actually been pleasantly surprised by the number of angel and seed investors that are willing to take a considered risk on a good idea. Just be sure to stay laser-focussed on what you pitched to them and execute like your life depends on it which, hopefully it does. Entrepreneurs who are totally invested in their business are much more likely to succeed than those who spread their risk across multiple ventures.

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