Agility

What about the small company?
Well if you are a small company you have to look at your relative advantage and disadvantage. The reason big companies can get away with sustaining themselves without being master innovators is because they are a going concern when you get too big to fail. Momentum is one of the few fundamentals of a business’s success, momentum is a very powerful thing that when it’s going for you it is an unstoppable force. The converse is when momentum is going against you it is difficult to turn it around, the point about big businesses is that they have momentum and it comes in the form of a brand, growing systems, stuff, revenues, profits, reputation so it is quite a lot of things that momentum entails that a small business does not have necessarily.
So as a small business you have to look at your core capability. What is the one thing that you can do? What is your relative advantage, for me that advantage is agility. Agile to change course, to innovate, I find unacceptable companies to be companies that are small companies but behave like big companies where everything is slow. Small companies should be in limbo, agile, fail fast, make quick decisions, assess quickly if you are wrong, be open to change because you don’t have to be married to the idea, if you try something and it does not work go to the next thing.

Vision

Entrepreneurship is celebrated these days, but as you mentioned you fell twice. In your failures what did you get out of it besides you learning certain lessons from what you had failed in? What did people around you say, what did your immediate environment say when you failed?
That’s such a great question because the truth is that the success bias causes us not to talk a lot about failures. There are thousands of guys who dropped out of varsity to start the thing that didn’t end up being Steve jobs or Bill gates and all those start-ups that started and failed because you open up Tribe Magazine or Fortune Magazine people start thinking it’s easy.
The problem with entrepreneurship is what are these in the beginning, ‘It is just imagination’ that’s all you are imagining, a future different from your current reality, the imagination of a product, service , business is nero pathways firing sparks and it might be real to you but to everyone around you it’s not even a figment of reality. You have to work very hard to convince people around you be it your family, potential stuff, investors you have to convince them as convinced as you are that you have a clearer vision of how it will become a reality. People generally find it hard to imagine a reality different from their current and that’s what makes real entrepreneurs so unique and special.
A simple example is the ipad, when I got it people were like what is that thing and what are you going to use it for and now there are tablets everywhere, even when electricity was invented people knew it was going to change the world but there was no use for it because when it first came out it was not built into homes so distribution was very limited, 150years later who can imagine life without electricity? Everyone can dream and fantasies but to take that and say I’m going to make my dream a reality but to do this I have to convince everyone around me to see this thing that does not yet exist.
What motivated you to start LLH Capital which is the big boy in the room?
It’s quite funny because when I sold TCC I had this romantic view, a vision that I was going to retire. TCC was over 15years in the making and it was very tough, before that I had two previous businesses which were also very tough. I thought I’m at an age and level where I want to take it easy. I was ready to do passive investing; I had this view that maybe I will go somewhere exotic perhaps an island for a year or New York and maybe read the newspaper every morning. That dream lasted about two weeks and there I was thinking what’s next, I have to be true to who I am and whether I like it or not my view of the world is as follows; ‘I love life and want to suck the marrow out of life, I want it all, everything, I am greedy for life’, and if that is your perspective about life you want to maximise the experiences that you have and do things that have meaning with purpose.
For me other than those two weeks of fantasy the reality was I knew that I want to do something that’s going to make a difference in my life and in the world. I had to look at the things that attract me, firstly I love technology, investments, entrepreneurs, this continent, this country and that’s the combination of LLH it is a combination of things I’m passionate about. Efficient deployment of capital you can achieve great risk adjustment returns in the space of technology. I had to look at myself in the mirror and say so who are you, what are your passions and how do you translate those passions into something you can do every day?

From a philosophical point of view how did you conceptualise forming LLH Capital?
Philosophically I knew the direction, but specifically LLH was born out of a partnership between me and Romeo (Kumhalo). Romeo is a guy that I have known for over two decades and it’s amazing how lives intertwine, the first time I met Romeo I interviewed him for a TV show that I was producing and presenting for and he was a radio metro DJ and that was the first time I met him. I got to work with him at Vodacom, we had always had incredible energy and when he went into entrepreneurship around the same time I realised we had shared vision and we liked each other and that’s how LLH was born.

Digital Economy

How do you see digital transformation paving a new era in Africa?
Firstly when you talk about the concept of transformation you talk about something that starts you look at the beginning and you look at the end. The difference between the beginning and the end is the transformation so if that is the definition of transformation there is no place that can be transformed more by the digital era more than Africa. This is because there is so little infrastructure in Africa relative to the rest of the world that really Africa has the opportunity to leapfrog its challenges because not having infrastructure is considered a bad thing but there is a very thick silver lining to it and it’s that it is not filled up by old infrastructure and architecture.
There is potential for an open clean pallet, it is starting from a base where anything is possible, anything can happen. Practically there are three fundamental silos that interact with each other when it comes to digital transformation, the first one is the actual infrastructure “ C cables, cell phone towers, underground fibre and everything else connected to the connectivity aspect” they are massive opportunities to develop, invest and grow but the first thing is creating the connectivity.
The second thing is devices in the form of smart phones, pause systems, tablets and chips. When you have connectivity and devices on a mass scale it encourages entrepreneurs to come up with solutions for problems that are unique to the immediate environment and that is the exciting part for me. This is the first time in the world where access to information is at a relative equilibrium on a global scale, access to information has always been the great divider, democratisation of data is a great leveler that will all of a sudden create opportunities for Africa to digitalise. The digitisation of Africa for me is creating solutions for African problems that could be exported to other emerging markets.

In one line what would you say LLH Capital is?
It is a private equity, investment holding company focused on the TMT space in South Africa and on the continent looking to invest in entrepreneurs who are digitising the economy.

What is your investment philosophy?
It is about making great risk adjusted returns, it’s about deploying capital in areas where we are able to add value. We believe very much in smart capital, we look for businesses where we can get involved, supporting great entrepreneurs who have created businesses that have great management teams, that have fundamentally solved real issues for people on the continent, that have reached a certain level where they are creating cash flow and great return and are ready to take it to the next level and sell on a wider exponential scale.

What would you say is the biggest misconception about digital transformation in Africa at the moment?
It’s very simple; that it is easy and that you could have an idea and go spend twenty thousand dollars on an app and then have a business. Entrepreneurs very often misunderstand how hard it is to start a business, run it and execute it. Businesses have massive logistical behind the scenes processes which are then represented and articulated in the form of an app so from the beginning you need to understand the language of investors, your market, competitive landscape and often need a very big balance sheet to help you scale and grow and you need mentorship. These things very often are misconceived as unnecessary thinking.

Do you believe education is going to shift because of digital transformation? In terms of thinking, it has been argued that the way we present education from a young age for children is wrong because it is restrictive and stifles creativity?
Whether I believe it’s going to change or not, I actually don’t know because I fear that many things should change that don’t. What I can answer is that I feel very strongly and passionately about completing the overall education system globally. South Africa is worse than average but globally I have an issue that education is not tailored to keep up with the demands that we as a society have.

When you think that you spent 12years in school and you think about how much you learnt that was completely irrelevant, the curriculum itself is irrelevant and it would be wonderful to learn about money, investments, how to save, economics. The way to look at it is not knowing a little bit about geography and biology, the question is what are the most urgent and pertinent things to create a successful society especially in South Africa and Africa as a whole.
We have so many challenges we have to leap from and we cannot go at the same pace as developed economies, they always have an advantage over us because of their momentum and scale. We need to see ourselves as the start-up relative to the developed corporate big start-up which is the rest of the world. Education plays a massive role, the first thing is the curriculum, then the culture of education should be about encouraging kids to seek out their passion and to be exposed as much as possible. Success comes from people who do what they are passionate about not what they have learnt necessarily. We need to teach our kids to challenge convention, to get them to think outside the box.

Risk and return

What is your biggest risk as an investment company?
The obvious thing is investing as a simple concept is about risk and return, getting the balance because the thing about risk by definition a risk can be realised. The probability attached to the realisation of that risk, it’s so tempting to never take risks but you will never get returns. Riskless profits are rare, you cannot be an investor without assuming risks so finding a balance where you can assume risks and still achieve returns that are good and have been risk adjusted is the hardest thing. What you need to do in order to mitigate risk is where the challenge lies, how you get involved in a business, the way you structure your business, the diligent homework you do in terms of investing in a business and ultimately what leap of faith you take all those are considerations that if you get wrong you can lose it all. Worst part for me is I very much believe that the only thing in life that you have at the end of the day is your reputation, the rest comes and goes but you have to live with your reputation till the day you die. The problem with being an investment holding company is that you are structured in investing other people’s money. When you take a risk on behalf of others it becomes an obligation and you never want to lose someone else’s money, being an investment company you will lose money and hopefully you make more than you lose. That is what keeps me up at night and challenges me, ways to avert that risk.

Love, light and happiness

What’s the highlight of your career to date?
That’s a great question; I’ve had a few highlights. Certainly one of them was selling the Creative Counsel, because it was the combination of 15 years of hard work and many challenges. Selling it and putting a value to the business that is not my own but someone else’s value. Part of that highlight is the business gets a life beyond its years, the equivalents to seeing your child go to university somewhere else and you are saying goodbye.
Another highlight was the day we established LLH, there is something very cool about establishing a business in your forties in that it is a business that has got heart, as a matter of fact it is quite interesting, just the name itself. We wanted a name that sounds serious being an investment holding company. LLH sounds serious but what the name really means is “Love, Light and Happiness” we don’t go and tell investors that the name means when we get there, we tell them after they have given us their money.
The point I want to highlight here is being able to start a business with partners that I love means happiness, Gil means happiness, Romeo means love so love light and happiness has got our names in it so it is our DNA and what we love. When you get to my age you focus more on doing things with purpose and the right intentions, it is not about each man for himself. I want to succeed, make money and make a difference in people’s lives because I believe you can do it all.

What do you consider scary about the future?
I’ve spoken about this before and it is something that is really on my mind, I think that the way our modern culture around the world exists attaches someone’s life value to the work that they do. Very often we talk about finding meaning in the work that we do. My concern for the future is that technology will render many jobs absolute, while technology will create jobs, in absolute terms there will be a lot fewer jobs available to humans which means that there are a lot of philosophical questions that we need to start thinking about, things like universal minimum wage, the fact that many people will be unemployed and will need to be looked after in some way or form.

Family

You are a new father! Congratulations on your new child, how has the experience changed you?
This is the first time I am speaking formally about fatherhood. Because I’m a new dad, who is quite old because I had a child when I’m 43, it is interesting to be this new dad and a massive life change in terms of the realisation that your life when you are a dad. I thought of myself as a rather selfish individual and now you become a lot more selfless, your future is not as important as your kid’s future because they will outlive you so it is almost like the highest I’ve come to a life calling and learning a lot of things about myself. The concept of patience, compromise, sleep, the idea that there is beauty and naivety, there is wonder in simple things in life.

How have you coped with the lack of control? As an entrepreneur you are someone who is strong willed, with a child you quickly realise you have no control.
When you learn to work around and accept that you are not in control and you find inner strength to deal with it and you have this patience. You give yourself credit and it is an awesome sensation, that’s what’s inspiring and that is what you learn about yourself more than you learn about others

What has kept you going during the hard times as an entrepreneur? Even when you are running a strong business things still get tough.
Of course things get tough; it has been different things at different times. When you’ve got a big business, you have people who work for you that are like your children and you have to be strong for your children. The one percent CEO if you look at what most CEO’s do 99 percent of the time they are probably in meetings and they could probably hire someone below them to do the same thing. A lot of the time you are being overpaid for what you actually do I believe, 1percent of the time the business faces situations that only they could solve, only they would have the temperament, strength of will and accumulation of experience and wisdom to make the right call. That’s what they get paid for, not the 99 percent. So ultimately the motivation and strength of will also comes from those around you.

 

Agility

What about the small company?
Well if you are a small company you have to look at your relative advantage and disadvantage. The reason big companies can get away with sustaining themselves without being master innovators is because they are a going concern when you get too big to fail. Momentum is one of the few fundamentals of a business’s success, momentum is a very powerful thing that when it’s going for you it is an unstoppable force. The converse is when momentum is going against you it is difficult to turn it around, the point about big businesses is that they have momentum and it comes in the form of a brand, growing systems, stuff, revenues, profits, reputation so it is quite a lot of things that momentum entails that a small business does not have necessarily.
So as a small business you have to look at your core capability. What is the one thing that you can do? What is your relative advantage, for me that advantage is agility. Agile to change course, to innovate, I find unacceptable companies to be companies that are small companies but behave like big companies where everything is slow. Small companies should be in limbo, agile, fail fast, make quick decisions, assess quickly if you are wrong, be open to change because you don’t have to be married to the idea, if you try something and it does not work go to the next thing.

Vision

Entrepreneurship is celebrated these days, but as you mentioned you fell twice. In your failures what did you get out of it besides you learning certain lessons from what you had failed in? What did people around you say, what did your immediate environment say when you failed?
That’s such a great question because the truth is that the success bias causes us not to talk a lot about failures. There are thousands of guys who dropped out of varsity to start the thing that didn’t end up being Steve jobs or Bill gates and all those start-ups that started and failed because you open up Tribe Magazine or Fortune Magazine people start thinking it’s easy.
The problem with entrepreneurship is what are these in the beginning, ‘It is just imagination’ that’s all you are imagining, a future different from your current reality, the imagination of a product, service , business is nero pathways firing sparks and it might be real to you but to everyone around you it’s not even a figment of reality. You have to work very hard to convince people around you be it your family, potential stuff, investors you have to convince them as convinced as you are that you have a clearer vision of how it will become a reality. People generally find it hard to imagine a reality different from their current and that’s what makes real entrepreneurs so unique and special.
A simple example is the ipad, when I got it people were like what is that thing and what are you going to use it for and now there are tablets everywhere, even when electricity was invented people knew it was going to change the world but there was no use for it because when it first came out it was not built into homes so distribution was very limited, 150years later who can imagine life without electricity? Everyone can dream and fantasies but to take that and say I’m going to make my dream a reality but to do this I have to convince everyone around me to see this thing that does not yet exist.
What motivated you to start LLH Capital which is the big boy in the room?
It’s quite funny because when I sold TCC I had this romantic view, a vision that I was going to retire. TCC was over 15years in the making and it was very tough, before that I had two previous businesses which were also very tough. I thought I’m at an age and level where I want to take it easy. I was ready to do passive investing; I had this view that maybe I will go somewhere exotic perhaps an island for a year or New York and maybe read the newspaper every morning. That dream lasted about two weeks and there I was thinking what’s next, I have to be true to who I am and whether I like it or not my view of the world is as follows; ‘I love life and want to suck the marrow out of life, I want it all, everything, I am greedy for life’, and if that is your perspective about life you want to maximise the experiences that you have and do things that have meaning with purpose.
For me other than those two weeks of fantasy the reality was I knew that I want to do something that’s going to make a difference in my life and in the world. I had to look at the things that attract me, firstly I love technology, investments, entrepreneurs, this continent, this country and that’s the combination of LLH it is a combination of things I’m passionate about. Efficient deployment of capital you can achieve great risk adjustment returns in the space of technology. I had to look at myself in the mirror and say so who are you, what are your passions and how do you translate those passions into something you can do every day?

From a philosophical point of view how did you conceptualise forming LLH Capital?
Philosophically I knew the direction, but specifically LLH was born out of a partnership between me and Romeo (Kumhalo). Romeo is a guy that I have known for over two decades and it’s amazing how lives intertwine, the first time I met Romeo I interviewed him for a TV show that I was producing and presenting for and he was a radio metro DJ and that was the first time I met him. I got to work with him at Vodacom, we had always had incredible energy and when he went into entrepreneurship around the same time I realised we had shared vision and we liked each other and that’s how LLH was born.