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20 November 2017 17:07 (South Africa)
Opinionista Mike Abel

Fortune still favours the bold: Why brave is the new safe

  • Mike Abel
    mikeabel.jpg
    Mike Abel

    Mike Abel is regarded as one of South Africa's leading marketing and advertising practitioners. He is the Founder & Chief Executive of M&Saatchi Abel and the M&C Saatchi Group of companies operating in Africa. He is the former CEO of M&C Saatchi Group, Australia and before that, co-led the Ogilvy South Africa Group as COO and Group Managing Director, Cape Town. Mike has been awarded Advertising Leader in South Africa by both the Financial Mail and Finweek : and his company was named Best Agency in SA in 2015. Married to Sara and with 3 young sons, Mike is a regular speaker, writer and is passionate about politics and contemporary African art.

    His company is proudly also the home of the phenomenon called The Street Store, the open-source, pop-up clothing store for the homeless. It has gone on to become a global movement providing a free shopping experience for hundreds of thousands of homeless people around the world.

Why there’s never been a better time to invest in South Africa than right now.

The famed stockbroker and philanthropist Bernard Baruch was quoted as saying something like “I made my money by buying low, and selling too soon”.

I’m not remotely amazed by the stockpiles of money corporates and individuals are sitting on because they are currently too scared to invest in South Africa. It’s human nature.

Most buy shares high – and sell them low. We are programmed to avoid risk. That is why so few deliberately choose an entrepreneurial journey for themselves. And for many, in big, fancy corporate jobs, why would they?

Many CEO’s and their C-suite compatriots can take home staggering annual packages by simply being in the job, mitigating risk, and by losing market share slowly, year-by-year. These are often not the people who started nor built the company, but those now presiding over it.

Were they the original founders, they’d be doing things very differently in South Africa today.

A number of years ago, I wrote a piece called Brave is the new safe where I proffered the thought that those wanting to adhere to the tried and trusted were putting their businesses into reverse gear and those who were prepared to innovate and take chances, would be the likely winners. Looking across many industries, this holds true.

Look at a company like Naspers, with an entrepreneurial, innovative and maverick CEO at the time, Koos Bekker, taking a punt on a fledgling e-tailer like Tencent in China – which now equates for the total valuation of the company and has made it the darling of the JSE.

If Koos sat on his hands and continued to tinker in print and pay-TV, their historic stronghold, Naspers, would be worth a fraction of the value it is today – and so an opportunity like this unlocks massive growth, and leads on to more and more.

There are a number companies in South Africa that have started since our economic nemesis, Jacob Zuma and his cronies got a python-like grip on our country. Some have already been sold for billions of rands.

As always, where some see threats, others see opportunity. It’s the same view, just perceived differently.

When I launched our company in February 2010 from Cape Town, with a decent start-up investment from our plc in London, people thought I was mad. An over-traded market, significant opposition, and no clients on the horizon. Today, we have eight companies in our group, all profitable. Two of them are significant acquisitions in terms of what we paid, and all started post 2010. And all were profitable within their first 24 months.

So, what made my partners and I embark on what most considered to be a foolish journey?

The way we see the world is often based on our history – both personal and family. My paternal grandmother, great-uncles and aunts, arrived in South Africa in the 1920’s from Lomza, Poland. They arrived, travelling at the bottom of a ship, with nothing and unable to speak the local language. They knew no-one. Much like the immigrants arriving at Ellis Island, New York.

But they made a go of it. They had to.

It’s like applying the mindset of the Spanish conquistadors, who, the moment they arrived in a new place, burnt their ships, so they were forced to make a success of things, as there was simply no option of turning back. (Now, just so there in no misinterpretation here, I use this last example purely to talk to their mindset of making a go of things, and not as praise in any form of what they subsequently did, as I deplore every aspect of colonialism, which I covered in a previous piece for Daily Maverick.)

This bravery of my grandparents was passed on to my parents, and when, much to my mother Hermione’s exasperation, she realised that academia wouldn’t quite help pay the family bills, she opened a real-estate business, having just completed her Masters Degree in the French, on the Narrative techniques of Jean Giono – not exactly the required reading for selling homes.

This was in 1986. Not boom time for the city of Port Elizabeth, nor its property market. But I recall her saying “if I can make a go if it during a downturned economy, imagine when things change” and for someone who loathed apartheid as she did, she could sense the winds of change finally blowing – and believed deeply in the future of our country. And she was right. And it worked.

Just yesterday we announced our latest significant acquisition of a terrific company started in only 2012, by three young guys, all who believe deeply in this country and their offering, and want our investment to help them take their business to the next level.

My view, is this current stasis will pass. I don’t believe we are on the path to becoming Zimbabwe, nor a dictatorship. Am I naïve? Most certainly not. I know we have unbridled looting and thieving across the board and am fully aware of the concerted effort and indeed, successes in undermining our prosecution arms, our SOE’s and our ministries.

So, why do I believe?

I believe in the people of South Africa. I believe in opposition parties, where even with diametrically opposed ideologies, they can come together to fight corruption, and try to rebuild cities and municipalities. I believe our electorate is waking up and smelling the proverbial dung (it can’t unfortunately be coffee in this instance).

South Africa is rich in talent. We will get nowhere by simply sitting, waiting and observing. By hedging. By fat-cats waiting for others to build a good company, whilst sitting on their backsides – and then planning to use their swelling war chests, at some safe point, to snap them up, formularise them and drive them into ordinariness.

Those big corporates, with money to invest, should back themselves and back this country. You build a company by investing. You build a country by investing. And by fighting inequity simultaneously.

I’m full of respect for a man like a Wayne Duvenage, who leaves the comfort of being CEO of Avis to fight unneeded and iniquitous toll-roads (and wins) and takes on other all-important fights through Outta.

It’s an insult to him, and others like him, such as Sipho Pityana and Lawson Naidoo at places like SaveSA and all the other good and decent business people, big and small, who believe in this country, to just sit back and watch.

The only way to build an economy is through investment. Investment creates jobs, which builds spend, which grows industries, creates more employment, builds education – builds lives. It’s a positive virtuous circle.

Closing the taps, simply creates a self-fulfilling prophecy of implosion. You need to invest and spend your way out of a recession – while fighting the good fight at the same time. It’s not either or.

My challenge to these corporates, to the CEO’s, to wealthy South African’s with money to invest – is to put more chips on the table right now.

Believe in yourself and your ability to create opportunity, not only for yourself, but for others. Give those people skin in the game, let them create success for you, and in doing so, success for themselves.

This is the birthplace of an Elon Musk, Richard Maponya, Patrick Soon-Shiong (now allegedly the wealthiest man in LA), Mark Shuttleworth, Herman Mashaba – and many, many more who have created significant magic, out of absolutely nothing. Look at how even a Christo Wiese, in his 70s, has significantly invested and grown his empire over the past seven years, all under the Zuma Presidency.

South Africa needs to invest and spend its way out of this mess.

By the end of this year, our group will have opened another two companies locally. Not because we believe in Zuma, his Zupta cronies, this new “Public Protector” or the ANC – but because we back our countrymen.

We back and believe in the wealth of talent in this place and the value system of our people. I subscribe to the ethos of ubuntu – and fervently believe, that if we hold hands, and commit as business in South Africa, we can absolutely turn this ship around in-spite of this government which we are unfortunately stuck with until 2019.

If you have a war chest, get off your ass, back yourself – and back the good citizens of our beautiful land. And who knows, it may be the best business decision you ever make. DM

  • Mike Abel
    mikeabel.jpg
    Mike Abel

    Mike Abel is regarded as one of South Africa's leading marketing and advertising practitioners. He is the Founder & Chief Executive of M&Saatchi Abel and the M&C Saatchi Group of companies operating in Africa. He is the former CEO of M&C Saatchi Group, Australia and before that, co-led the Ogilvy South Africa Group as COO and Group Managing Director, Cape Town. Mike has been awarded Advertising Leader in South Africa by both the Financial Mail and Finweek : and his company was named Best Agency in SA in 2015. Married to Sara and with 3 young sons, Mike is a regular speaker, writer and is passionate about politics and contemporary African art.

    His company is proudly also the home of the phenomenon called The Street Store, the open-source, pop-up clothing store for the homeless. It has gone on to become a global movement providing a free shopping experience for hundreds of thousands of homeless people around the world.

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