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Here’s what SA’s top student entrepreneurs are planning for their startups in 2020

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By Daniel Mpala

As 2019 races to an end, most of us have started scheming what we want to do next year.

A 2015 study by Brian McCann and Govert Vroom, which was published in the International Small Business Journal, found that planning helps entrepreneurs build self-confidence as well as better gauge their chances of success more accurately.

Planning for the future is even more important and a crucial skill for entrepreneurs.

More so for student entrepreneurs as University of Cape Town’s Mvelo Hlophe points out.

“We have to plan more than other startups in the ecosystem as we have school to worry about as well,” he says.

Hlophe is one of four top South African university student entrepreneurs who emerged winners at the inaugural edition of the Department of Higher Education’s inaugural EDHE National Entrepreneurship Intervarsity competition.

Here’s what he and another student entrepreneur had to say about the plans they have for their startups next year.

Expansion to new regions

Hlophe (pictured above) is the founder and CEO of coding platform Zaio which he started in 2017 at the age of 20.

Hlophe says he plans to expand the business to Johannesburg in March and to Durban in September.

“We will work with University of Johannesburg and Wits University as well as Durban University of Technology and University of KwaZulu-Natal to help increase our community of developers,” he says.

The platform helps businesses to source junior developers that can help these firms in building their respective prototypes and help those firms that want to recruit full-time staff.

The startup also equips developers with industry-relevant coding skills through a gamified learning curriculum which has a strong emphasis on providing developers with practical experience.

Currently over 470 developers utilise the platform to develop coding skills.

Hlophe says Zaio has generated part-time jobs for 73 people, who have been hired by clients who have utilised the platform since its launch.

In addition, the startup has hired five people itself.

The company’s clients to date include the Allan Gray Orbis Foundation, E Squared, Standard Bank and Youth Employment Service (YES).

Zaio has raised R700 000 from an undisclosed angel investor and a total of R218 000 in grants from edtech incubator Injini and the SAB Foundation through the UCT’s Graduate School of Business.

Hlophe says the startup is also looking to raise a further round of seed funding, most of which he explains will be used to launch two more services.

These include a service that will enable companies to rent a team of junior developers for a few months as well as another which will enable businesses to recruit teams of developers that have worked with each other before on Zaio projects.

So, how does Hlophe and his team go about planning for the future?

He says that generally, the startup sets goals for three-month intervals, then reviews its progress every four weeks, making changes when needed

Zaio also holds one-on-one strategy sessions with every member of its advisory board as well as quarterly meetings with the entire board.

“We then report our strategy to our board so planning is a huge part of what we do,” he adds.

Increase production capacity

For another UCT student, Denislav Marinov (pictured above), next year’s focus is on increasing the production capacity of his 3D printer company DVM Designs.

The three-year old company produces a range of 3D printers locally for use in the education sector and industry. The startup also helps its clients bring their ideas to life through rapid prototyping and end user part production.

DVM Designs’ clients over the years include a researcher from the University of Oxford, Thinkroom, Innovation Hub and the Allan Gray Foundation.

Marinov, who has run the company as a “one-man operation” since inception, says to date he has generated around R100 000 from client projects and product prototypes — growing revenue by over 200% in the last year.

“In 2020 I plan to increase our current production capacity by over 500% and assemble a team of skilled and experienced engineers and innovators who will take this technology to the next level.

“I hope to begin distributing my industrial printers by the third quarter and am also planning both a seed funding round early 2020 followed by a Series-A investment round,” he says.

Marinov also plans to pilot an educational programme which will use his company’s 3D printers.

He says he generates his plans with the help of books and readings. In addition, he also gets feedback from a mentor at the Allan Gray Foundation.

” I also engage with other industry professionals part of my network to get advice. Participating in competitions has resulted in sounding boards for my future plans.

“Critical feedback from judges has helped me adjust my business direction. Planning is incredibly important for a startup,” he says.

He points out that even with plans in place, he’s faced numerous unexpected developments.

These he says come in the form of an unexpected new client or new competitors entering the market.

He points out that oft times it is difficult to plan for these opportunities and challenges.

“You’ll find that you might have to pivot your business or put more focus on a particular service you provide. But all this has to take place in a very short window of time.

“Thus, in addition to planning, which is paramount, it is equally important to have an agile business that can readily adapt to change. The tech space is moving incredibly fast,” says Marinov.

“What is needed today may be completely replaced by tomorrow. So you as a startup have to be at the forefront of your industry and be ready to change and compete.

“As a startup, it is easier to pivot and adapt than it is for large established companies, thus you have an advantage, but for a very short time,” he adds.

Marinov says he’s largely bootstrapped the business since launch, having raised over R50 000 through crowdfunding and with the rest of DVM Designs coming from client projects and part production.

He’s also received financial support from the Klaus-Jurgen Bathe Leadership Programme and from his parents.

He is now looking for grants of between R100 000 and R250 000 to enable research and development (R&D) as well as production optimisation.

Raising about R50-million in funding, he adds, will be a priority in 2020 as the startup enters the industrial sector and begins scale production.

“It will primarily be used to set up our production facilities and factory workspace. This requires acquiring production equipment and skilled engineers to refine our tech, not to mention our sales force and marketing team.

“However, our focus is on developing quality tech so we will not compromise when it comes to producing the best machinery in Africa. A significant portion of our funding will be dedicated to ongoing R&D,” he says.

Marinov says in the short term, he’ll look to hire a team of around 10 software, electrical and mechanical engineers who will work on perfecting the startup’s technology.

In the long run, he hopes to employ 300 staff who will assist in the production of client products and the distribution of DVM Design’s tech.

“There is potential to add on even more employees should the market respond well to our technology,” he adds.

Featured image: Zaio co-founder and CEO Mvelo Hlophe (Twitter)

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