From humble beginnings to a multi-million rand fortune, Lebo Gunguluza is the definition of an entrepreneur – the quintessential selfmade man and one of South Africa’s most well-known success stories. The charismatic businessman splits his time between his investments in media, hospitality, technology and property and building a legacy which can provide a blueprint for the next generation of African entrepreneurs and this month we were lucky enough to divert some of his attention away from this to answer a few questions for the August issue of IndustrySA.
Q: Yours is a real story of determination and resilience, tell us more about your background and also what gave you the drive to succeed?
I was born in a shack. My father passed away when I was six years old and after that it was difficult for my mother to look after us so she sent us to a boarding school in a rural area. When I was there we used to boycott all the time because it was not a good school, so I had to repeat classes two times because of that. But my mother used the money from my father’s passing to send us to a private school and when I got there, because I didn’t know English well from the rural school, I had to repeat class again. I had a very difficult early experience in life, it was not straightforward at all but when I was at the good school, my opportunities opened up a little bit more. One of those opportunities was to write an essay for a competition run by one of the television channels in South Africa. They were going to introduce a new channel so they asked schools around the country to write a one page essay on how you might go about it. I wrote a one page essay amongst 10,000 other young people and became number one after only learning English in two years. That told me that I’m very talented creatively and when I grew up I made sure that whatever business I got into, it would be in the communication or creative space.
Q: How did you get your start in entertainment and media and how was it making your first million at such a young age?
Because I know that I am creative and a good communicator, I made sure that when I went to university I chose things surrounding this. I eventually chose to work for SABC and worked very hard until I became the Marketing Manager there – one of the most popular radio stations in the country. I made great connections there but saw that I was not making as much money as I was supposed to – putting in a lot of effort and getting very little.
It was then that I decided to go on my own, and because of my connections with the SABC and my experience, I approached a new radio station that was launching to promote them and because I did not have money at that time they gave me airtime. From then I was creating the capital – I had chosen a space where I can offer services, I bartered and then sold lots more, and that’s how I made my first one million at the age of 27.
Q: You experienced some big setbacks after making that first million, what are some of the key lessons you learned from that time?
The first would be that I was too quick at investing. Now when it comes to laying out cash, I’m very
careful and take my time. Whether you’ve made the right move or the wrong move, once that money is gone, it’s gone and cash is always king. What I did when I was young, when I made that one million, I invested in a studio to record artists and lost lots of money. The second setback where I had a terrible time is that one time I lost a single key client, which lost me a lot of money. I had asked one of my friends to manage a project for my client and ended up losing that client, so the second thing that I learnt that customer is king. You must do what the customer wants and you must look at the customer like they are your last breath, because they are the ones who continuously pay you. If you lose them you are not going to be sustainable. The next thing I learnt is the importance of having the right people. I’d rather have someone who is very expensive but who will do the right thing than have a cheaper employee who will not, because if you employ the wrong people they can cost you a lot more than it would have costed if you had had the right person in the first place. The last thing is that planning is critical – good planning makes you more sustainable.
Q: Your company, GEM Group, has done well and grown quite quickly, what developments have there been over the past few years?
When I started with the company, I started in areas where I didn’t have to outlay cash in order to make money. I started in the media and hospitality space and then later on I started investing in other companies that are already running that have got potential, and those companies helped me to generate even more cash. Now I am investing in technology, especially software development and I am able to hire high-end engineers and software developers to come and develop solutions that are very sustainable. I have invested in property and have focused a lot of energy in Angel investing. I have a very stable cash base – cash is king.
Q: How important is it for you to help the next generation of african entrepreneurs? What are you doing in this area?
It is very important for us to mentor young entrepreneurs so that they can succeed faster than us. You have to invest in the future, and the person that will be that future is the younger talent. For me it’s very important that Africa becomes economically liberated, especially South Africa, that there’s a strong middle-class for the continent. Whether it happens in my life time or it does not, I’m going to make a serious contribution towards this. Our people are very poor, there’s poverty all over Africa and I see that if you can strengthen entrepreneurship then those who have got that entrepreneurial talent can rise up and then help others who don’t have it. I launched a project called 12-12-12, where on the 12th December 2012 I committed to recruiting 12 entrepreneurs over 12 months to start 12 enterprises. In 2013 and 2014, they had only made 334,000 rand which was very little because I expected lots more from them. So, I decided to keep them and mentor them more and in the following year, which was 2014-2015, they jumped from 334,000 to over 10 million rand, all in one year. It just shows that if you guide people the right way you can create a change.
Q: Where do you see yourself in 10 years’ time?
10 years is too far! In the next two years I want to finish mentoring these guys – I’m hoping that they’ll be up and running by themselves, and then in the next five years I want to focus more on the technology and the property side of my business and also the investor side. After that I want to become a philanthropist, because half of my life I want to have been working and the other half I want to spend giving back.