2019’s sure been a year. For South Africa, that means extreme highs and depressing lows, but one things for sure, the country didn’t stop…
Former Naspers executive Kim Reid is the man behind Takealot. This South African online retail site is looking to gain significant market share in a sector where Naspers-backed Kalahari.net is the country’s predominant force.
Memeburn sat down for an exclusive interview with Reid, tackling his views on emerging markets, entrepreneurship and the shift from corporate — alongside his perspective on the future of eCommerce and what his latest venture seeks to achieve.
Emerging Markets to Watch
When it comes to BRICS (Brazil, Russia, China, India and South Africa), Reid feels that Brazil is flying: “There are many fantastic entrepreneurs in Brazil. They definitely appreciate opportunity.” Reid’s bullishness on Brazil as a hotbed of opportunity echoes rising interest in the country’s success.
According to data gathered by Endeavor Brazil, a group working to promote high-growth entrepreneurship, young enterprises play a critical role in Brazil’s economic future in the BRICS. At present, small and medium size-enterprises (SMEs) are responsible for 96 percent of the jobs in Brazil and comprise 98 percent of all companies in the country.
Reid believes that Russia is in a similar situation: “If you look at the likes of mail.ru, it and other companies, it has been great. China has so many fantastic tech companies. The government is less appreciative and takes less advantage of conditions. India is still lagging in some respects, but is a fantastic market. Still it is not anywhere close to where China is.”
“Tech is rising in most major emerging markets. It is an opportunity they see to better themselves. Those who have grown in difficult circumstances see opportunity. If you take a look at penetration of the markets and how much room there is -when you compare scope for emerging markets, that drives a lot of people due to the possibility they still have.”
Corporate life versus entrepreneurship
“I think I managed to not be too tied down with the corporate hooha that some of the other guys were,” explains Reid when asked about his experience in the corporate world. “No matter how free thinking or how entrepreneurial any corporate is, there is a limit to what it can and cannot do — and rightly so. It’s not as though it’s something that should be there. There are no people with many ideas. True ownership lies with collective in corporate — and that brings frustration.”
Reid says he never really thought about where his career was going, focussing instead on succeeding at what he put his mind too.
He explains, “I was never a good corporate player. Politically I did not believe I was very good — and you need to be to stay a in a corporate. While I never pre-played my career, I always had a wish to be at that place where I made my own decisions.”
He adds that he believes he served his time in a win-win relationship with Naspers.
Looking at his own context in South Africa, Reid believes South Africans are quite innovative, but says the internet has lagged: “It’s unfortunate and owes to broadband penetration and the monopolies that have created problems around broadband,”
“The essence of innovation of entrepreneurship comes from hardship: the actual desire to improve oneself. And I think whenever you find any nation going through that you find good entrepreneurs and people focused on trying to better themselves.” He points out that Europe has been soft on entrepreneurship in this regard.
Having stated in the past that traditional media take their time before latching onto “new media”, we checked if Reid believes any companies have been ahead of the curve? His view is a standard no. “I don’t think there have been any true success stories in traditional media. New media has leapfrogged all the time,” added Reid.
Reid does point out that, while Naspers has been successful in transitioning into an internet business, success has not come out of its traditional side. Rupert Murdoch’s recent sale of MySpace is another example of traditional media not faring well with the reality of new media.
When Reid first made headlines on Memeburn, it surrounded an exclusive on the possibility that he may be taking on his old colleagues at Naspers. Reid dismisses the idea saying, “it’s really nothing more than healthy competition”.
“We are building a business here — the fact that we are competing with people is something we are not focussed on. We are building a sustainable business. We think the internet is the place to be. We focus on building.”
Reid is particularly positive about the relationship he has with his investment partners at Tiger Global Management.
He approached me when I left Naspers and said let’s do something together. And there is definitely friendship. People trust Tiger. No matter what, if you trust your partner, that makes for a very easy deal. They trust their partners.”
“The one thing I can say about Tiger is they are a partner of choice,” he adds.
Reid is deflective when asked what he believes has contributed to his successful career as an executive and entrepreneur. “I don’t believe I’m successful as an entrepreneur. The proof of the pudding will be in the eating,” he notes.
So looking at the world, what has Reid learnt from the corporate environment?
“I’ve learnt fantastic lessons in corporate strategy, but if one thing is important, it’s that fast beats slow. We try apply that to most things. Start it and then refine.”
“If you don’t get that right, you don’t survive. You can’t measure and plan and sit back and think and wait.”
Reid adds that a new venture is not all about the business plan. “It’s about the idea, the vision and the actual capacity to get something done. You will make mistakes and mistakes are good. And you learn from mistakes and as long as you learn, you keep on growing. There are a multitude of things you learn in the corporate environment — based on what they allow you to learn.”
He says entrepreneurs in emerging markets should look at introducing existing online goods and services in the developed world, which have not yet reached their markets.
“One mistake in South Africa is we try creating new things when we are sitting behind other markets and we could just copy existing things. So take someone else’s idea and innovate, but don’t do new things. I hate being classified an entrepreneur. I am a business person – that is what I am.”
Behind many an entrepreneur are the investors. Having moved in the industry for some time, Reid’s view on the mistakes investors make centres on team dynamics:
“I can’t speak for angel investors or even investors in this industry. I think the one thing it is all about is the team that is running that investment. You are investing in people at end of day — investing in their knowledge and expertise. I think one mistake that can be made is to suffocate that.”
Reid says the biggest growth potential in terms of consumer power in the tech space as a whole, includes components like online shopping, mobile TV and the like.
“The South African retail market is sitting at R560-billion per year in retail, holding enormous potential for online. The penetration of online retail in the US is 8 percent and in UK it’s higher. We are 0.3 percent of online,” he adds, noting that though he does not like the term, online retail can be classified as “recession proof.”