How did you close the deal?
Basically by not charging them for the ideas in the beginning and proactively pitching concepts to them. The event we targeted had already signed sponsorship deals with these three brands.
I approached the organisers and pitched that we would add value to their already committed brands if they were open to creative experiential suggestions.
Brands tended to have a stand and hand out flyers or basic merchandise, which was a far cry from true experiential marketing. I was happy to work for incredibly low margins to grow the business.
The campaigns were a huge success and helped the brands stand out from the clutter, and I got the case study I needed, as well as our first clients – adidas and Pernod Ricard (Olmeca Tequila and Malibu brand owners) which are both still with us today.
How were you able to do business without charging or invoicing properly?
By keeping things as lean as possible. That I had money saved up helped, but it would only last so long, and I was already learning that launching a business takes longer than you think it will, so I had to find a few other tricks.
We worked out of a tiny room with no windows on second-hand furniture I’d bought through Gumtree – and we relied on interns.
We had one full-time employee who did everything, from book-keeping to office management, accounts and even creative work. He’s probably the only reason we ever got paid at all.
I’ve learnt that the better the admin people I employ, the better the business’s growth and margins do. My dad’s advice was that great admin and finance people pay themselves back in the money they save you, and I didn’t listen. I wish I had as it was one of my biggest mistakes.
When did you start employing people to cope with the increased workload?
This is a bit of a chicken and egg situation, and it comes down to economies of scale. If you employ a team too early, you don’t have the cash flow to pay their salaries, but if you don’t deliver well on jobs because you don’t have support staff, you’ll lose repeat business.
My solution was to find affordable talent. We did this in two ways. First, we found an international company that places volunteer interns in your business for a few months.
They’re here to discover South Africa and get some work experience, but because they’re on holiday visas they can’t be paid, so your only expense is to the agency they’re sourced through. It was a mixed bag of talent and complete hit and miss.
We’ve had about 30 students working over a five year period with some being incredible, others barely speaking English. But it meant we had employees that could run the front end of events.
For my permanent employees, we targeted kids who were looking for their first jobs and didn’t have high expenses and responsibilities.
We’d ask them the absolute minimum they could accept, and in exchange they’d receive what we call ‘glamour tax,’ which is basically a cool working environment where they’d have fun, meet people, spend time at events and be exposed to great brands.
Next Page: How the Stretch team kept enough business in the pipeline
Related: The Real Reason Customers Buy From You