At his humble business headquarters, I see there is no room for ego in entrepreneurship. As the CEO, financial adviser, strategist, marketing specialist and occasionally the delivery guy for his company, he has no boss to turn to for guidance when he needs to navigate unchartered territory. Any mistake he makes can harm his business, and his savings.
At 32, Hassen Kajee is a family man in the startup phase of launching three digital platforms. He shares why he became an entrepreneur, the opportunities he has identified, and some of the difficulties he has had to overcome in the process of getting his business off the ground.
Hassen used to head the International Division of Imports and Exports for a leading FMCG company. He was leading a team of 15 people and earned a good salary. However, even during this time, he always had entrepreneurial spirit. He would share ideas with friends and complain about the “jobber life.” The courage to leap into entrepreneurship came 18 months ago. Hassen woke up one Sunday morning, and drew the user interface design for Shopbook on a piece of paper.
Identification of opportunities
Hassen was not always particularly interested in internet business. However, with the growing popularity of online retail, he saw a pain and felt he could solve it. He explains that currently South Africa has many large online stores which stock various brands, but customers cannot buy from more than one store and pay only once. Hassen feels South Africa needs an online mall where shoppers can access the content from any store, anywhere in the country, pay in one place, and have it delivered to their door. This is the original concept of Shopbook.
He explains that currently about 1.2% of South Africa’s total retail is online. This percentage is very small, but its total value is already close to about R10 billion. In first world countries, online shopping is already a trend.
The UK and US have close to 20, 30% retail online, so eventually South Africa will catch up.
Shopbook has recently begun trading. Hassen argues that launching his online mall at this stage may gain it little traction initially; but, by the time South Africa catches on to the online shopping trend, he hopes Shopbook will be the first choice for skeptical consumers who are more likely to trust a brand that has been around for a while.
The Shopbook idea also spawned two other internet platform ideas: Iamcooking and Designerbook (launching mid 2017). Iamcooking is an online food marketplace which allows home cooks (and restaurants) to sell their products from one convenient online platform. Hassen’s delivery staff takes the food to customers. Designerbook follows the exact same concept but with clothing designers.
The problem with getting hold of the right technology
Developing the online platform for Shopbook was the hardest part. According to Hassen, no other website had this sort of design. He describes getting “burnt” in the process of looking for developers in Cape Town. He wanted a custom-built product but was repeatedly offered bolt-on technology, where developers attach existing products to one another to serve a new function. The bolt technology also came at sky-high prices (R1.2 million).
He started looking internationally. It took a long time to find the developer who was happy to build him a custom platform at the right price, which was half of what he’d been quoted locally. The development process took about eight months of continual testing and reworking.
Costs increased again when the platform had to be reworked to serve not only Shopbook, but also Iamcooking and Designerbook.
The problem with cash flow
Hassen tells me that the “burn rate” for starting your own business is quite high and explains that all the money being poured into the business platforms at this stage, is his own. He saved aggressively to fund the operation. He explains that he owns 100% of the businesses, as no investor will finance a business in idea stage. Only when his platforms reach validation point, will he approach investors.
The problem with time
Money is not the only thing Hassen has had to spread thin in his quest to become a successful entrepreneur. He quit his job at Tiger Brands mid-2016, because between studying and getting his business off the ground, there were not enough hours in the day. He credits his wife for keeping their family together in a time when he is largely absent from home.
I have a very strong wife, she then took over everything, literally everything. She was the father and the mother to the children.
A lesson learned along the way
Everything you’ve paid in development is nothing compared to marketing costs… I sat down with various stations… Got massive bills. To a large extent it worked. It positioned the brand as a trusting brand because of association with KFM.
Entrepreneurs taking on multiple projects mustn’t fall into the trap of treating them all the same way. Hassen used radio advertising to make his Shopbook platform appear bigger and stronger than it initially was. The strategy of appearing successful helped him secure a number of big retail clients. However, the same strategy did not work for the other two platforms Iamcooking and Designerbook. Hassen explains that these platforms want to attract everyday people as vendors. They won’t be part of big operations; they will be designing and cooking from home. In these cases, the association with commercial radio made the platform seem “out of reach” or “too fancy” for the very people it was meant to attract.
Vision for the future
Where Shopbook will grow the commercial online shopping market, Iamcooking and Designerbook are designed to uplift communities. By signing up with his platforms and using his marketing and delivery tools, the “undiscovered gems” of design and cuisine are empowered to become business people. Hassen sees all three of his business platforms becoming major online marketplaces in South Africa.