'We learn more from failing than we do from success'

Clayton Hayward, Ukeshe

With tough times driving many people to look at starting their own businesses, successful serial entrepreneur Clayton Hayward offers valuable insights, and some bad news.

For companies accustomed to live networking events for partner and customer engagement, the lockdown came as a shock. The usual mingling and demo format that once brought scores of important contacts together under one roof was no longer possible, so most organisations that had already scheduled events switched them to online gatherings. Not surprisingly, these early efforts involved little more than talking heads and a lot of reminders to speakers to unmute themselves.

Ukheshe Technologies CEO Clayton Hayward has launched over 26 businesses since the early 1990s, with his first foray – a software company – listing on the German DAX when he was barely 27. Ukheshe is a fintech company developing digital wallets, banking and payment solutions.

In the past 30 years, he has launched several software startups, owned a Lego store and even expanded into areas such as courier services. But not all of his businesses were successful.

“I was young and arrogant after my first success, and my next business was liquidated. So you have to learn from your failures,” he says.

“I think around five of the 26 businesses were truly successful in terms of profit. You have to know when to let go. Sometimes, you just have to accept that it’s a terrible business idea, or that you have a great team, but it’s basically an NGO if it’s not making money,” he says.

Hayward says entrepreneurs shouldn’t ‘fall in love’ with their business idea to the point that they ignore the fact that it is simply not working. “In the startup phase, it’s always good to back more than one horse, and when you do find something that works, focus on that. Ukheshe was founded when I had five or six other business interests, but I immediately exited all the others when this business started getting traction and scaling,” he says.

Learn from failures

Failure is not a bad thing – if you learn from it, says Hayward. “We learn more from failing than we do from success. Take notes and try again, knowing that you have learnt a valuable lesson and won’t make the same mistake twice. Failure teaches us not to be arrogant or overconfident, and to listen to advice.”

Stick with what you know

It’s important to start businesses that align with your skills, and to have partners who compliment those skills. “But if you’re not a natural entrepreneur, don’t become one. You often see people taking their retrenchment package or pension payout and buying a restaurant franchise, even though they don’t fundamentally understand restaurants. This is a mistake.”

Test the idea

A good way to test the potential success of a new business is to seek investment, Hayward says.

“Don’t use your own money to open a new business. Test the idea on investors: if you can’t get other people to invest in it, why would you invest your own money? It’s a test of both the business’ viability and your ability, and one of the best business tools can be rejection. This helps you improve the business plan.”

When trying to raise money, many would be entrepreneurs make the mistake of building their own salary into the business plan, Hayward says. “Many people don’t understand this. I have never been paid a salary. You need to know what an investor wants to see – and it’s not paying you a salary. If you put your own salary into the business plan you’re presenting to an investor, you are basically asking to become their employee. You need to say you’re investing time and skills, and when the business is profitable, you’ll start drawing some money,” he says.

He adds that competitions are another good way to assess the business’ viability. “I enter every challenge and competition there is, because it hones your business skills and presentation skills, and you learn from the competition.”

Hold that thought

Would-be entrepreneurs should probably not go all out to start a business at the moment, says Hayward. “The market is unstable, and investors are holding on to their cash. They know that in a money market account, they will have a guaranteed return with no risk.”

That said, Hayward believes a great business idea will still be able to raise money in this environment. “But don’t part with your own money to start a business. This is not a good time to be speculative – rather do what you can to make money to cover your own overheads and hold on the new business.”
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