It’s a gloomy summer’s day in Cape Town. A blanket of never-ending dreariness fills the skies. Bleakness has played a big part in Peter Allerstorfer’s journey to entrepreneurship. On this day, he is dressed in blue much like how he felt three years ago when he – and his partners – went into business.
This is a long way from Austria. He is overseeing the remodeling of their offices in the heart of the mother city, just as he remodeled his life when he travelled 13,500 kilometers to Africa. He swapped his well-paid job at McKinsey & Company for building companies around the continent.
“I was missing something. I felt like doing something hands-on and creating something and seeing the results. I got an opportunity from Rocket Internet to build African operations and I took it,” says Allerstorfer.
He moved to Cape Town to start Zando, one of South Africa’s largest e-commerce fashion stores, and later Jumia, Nigeria’s largest e-commerce shop. He did the jobs well.
“It was a difficult thing to do because I had a promising career ahead of me. I wanted to start something entrepreneurial. We got funding and we just had to deliver the work and run the company. The company was running and we were a fully-fledged retailer.”
It was far from enough.
“I stood there and saw all these things and realized I have put so much work on something that isn’t really mine. That’s when I realized it was time to build something on my own,” says Allerstorfer.
He co-founded Silvertree Capital, an investment company that builds businesses in Africa by bringing together new and old economy business models, with Paul Cook and Manuel Koser.
Starting his own business was hard. It also ushered in his worst day.
“We just left Zando and we didn’t know exactly what we were doing. We knew we are good in tech and e-commerce so we stuck to that… By the end of 2013, things were looking good. We launched our businesses, found an investor we were making progress,” says Allerstorfer.
They launched HealthCart, an online pharmacy, in 2013, launched an online marketing agency to service it and also launched a price comparison site.
Then trouble started.
“The investor in our e-commerce online pharmacy service business wasn’t delivering what they said they would. Also they had more control in the business and we didn’t, even though they knew less about the ecommerce industry and didn’t understand technology,” says Allerstorfer.
Over time, friction developed. To make matters worse, the investor in the price comparison company disappeared.
“He said he would put more money over time but we couldn’t get hold of him anymore. He just disappeared and didn’t fulfil his promise.”
In about six months, they reached a breaking point. July 23, 2014 was his worst day. He found out the investor in the online pharmacy business had taken over the business completely. He didn’t want to work with them anymore.
“This company was our very first baby. We had worked so hard on it and then it was just taken from us. The investor had the controlling hand in the company and there wasn’t much we could do,” he says.
To make matters more catastrophic, the investor in the price comparison business never got back to them and they were left with nothing but mounting bills.
It took them a year to figure out what to do and wasted money they didn’t have. It was these hard knocks that crafted the company’s approach to investment.
Their whole world was crumbling in front of them, so they decided to take a walk down the road for a burger and cold beer.
“We stopped chatting about what we were going to do. Paul and his wife were expecting a baby and we were wondering if we made mistakes by leaving the company we were at for this. We were stressed. If things continued like that we weren’t going to survive. We had invested a year and a half into this and so much hard work,” says Allerstorfer.
Trying to survive wasn’t easy. But they soldiered on so they could pay their 20 employees and make sure their dream didn’t go down the drain.
“We knew we understood technology, we knew how e-commerce works, but the business was just not working. We just decided to stay calm and focus on the business and keep doing what we are good at.”
Fundraising presentations saved them.
“Our first fundraising PowerPoint went out and within seven days we found investors. Things started turning around. It reassured us in terms of what we do,” says Allerstorfer.
They worked day and night to make sure it stayed that way.
“From that day ‘til now, our revenue grew 10 times. We are happy we had these things happen so we could learn. The biggest thing was learning that, in whatever we do, we should have complete control over the business so we can make decisions and not be thrown out of projects we have worked hard on. ”
The company has now invested in 15 companies across four countries, reaching three million consumers a month. To garnish sweet victory, they managed to gain back control of the online pharmacy business, HealthCart.
“We later found out that the reason they initially pulled out is because they were going through financial troubles and tried to do fundraising but failed. They said they were closing down the business and we said no don’t and we got the company back,” he says.
Through its business-to-consumer e-commerce platforms, which include Click n Compare, Faithful to Nature, Cybercellar and the recently-acquired PriceCheck, Silvertree Capital reached 25 million unique consumers in Africa in 2015, a 50% increase on the previous year.
Not bad for an entrepreneur whose business was crumbling before his eyes on his worst day.
My Worst Day with Ghana’s Waste Management Mogul
Ghana’s waste management mogul, Joseph Siaw Agyapong has built one of the most innovative enterprises in the country providing employment for over 250,000 employees in Ghana.
Everything was going well until an accounting error led to the worst day in his business life.
Watch the full interview with Forbes Africa’s Peace Hyde
My Worst Day With Atedo Peterside, Founder Of Stanbic IBTC
Atedo Peterside is one of the most respected bankers in Nigeria.
At 33 he built a billion dollar business and became founder of Stanbic IBTC Bank Plc.
But it has not all been smooth sailing.
Just at the apex of his success, his organisation was hit with a scandal that threatened to not only upend his impeccable reputation but that of the bank he had spent his whole life building.
Catch this exciting episode in an all new season of My Worst Day with Peace Hyde.
Watch the full video below.
Burned But Not Broken; The Tale Of Fiery fashion
Don’t be fooled by his infectious smile and designer clothes; beneath his tough exterior is a layered story of depression and despair.
On a rainy autumn morning in Johannesburg in March, we meet Adrian Furstenburg in the small affluent suburb of Parkhurst.
Ironically, he is dressed in black – a symbol of grief – to recount the day when his design studio, including stock and equipment worth R70,000 ($5,800), burned and was razed to the ground.
“The damage was so painfully clear in the bright, winter morning light,” says Furstenburg.
To get to this story, it is important to start from the beginning.
Furstenburg was only four years old when he first said he wanted to become a fashion designer.
“I was at my granny’s house and we were watching a fashion show on television, and as we were watching, that is when I decided that this was what I wanted to do with my life,” says Furstenburg.
However, his father, a farmer, had, other plans – he wanted him to pursue law.
Somehow, Furstenburg found a way to persuade his father to allow him to enter a career not so distant from the fashion industry.
“It was the early 2000s and it was pretty cool to study graphic designing, so he said ‘that’s okay, I will pay for you to study graphic designing’,” he says.
In his last year at college, he specialized in textile design, which led to him crafting a career as a handbag designer.
“I think that is one of the wisest decisions that I have ever made, there are definitely no regrets,” says Furstenburg today.
As part of a college assignment, he was required to do a practical project.
“I weaved this beautiful piece of fabric and then I actually made a handbag. This project is where my passion for handbags started,” he says.
After he graduated, he started freelancing as a designer and stylist, set on his journey of one day being a fashion mogul selling swanky handbags.
But his worst day was lurking around the corner, ready to throw him into a state of melancholy.
It was June 6, 2012.
“The day isn’t etched into my memory. I recall it from a much deeper, more visceral part than that,” he says.
He and his business partner at the time, Nkululeko Msibi, of 2souls clothing, had recently set up a small studio just off Gandhi Square in central Johannesburg, where they produced every kind of clothing and accessory to keep their bank balances and ambitions afloat.
“We landed one of our biggest projects producing costumes for a major dance production. We spent hours planning, designing, sourcing, selecting, sewing, stitching. Their budget was strict and the schedule was even tighter with virtually no room for error,” says Furstenburg.
But a disaster that would discredit him and Msibi was about to blaze through their studio.
Furstenburg was picking up materials from a supplier before heading to the studio that Wednesday morning when he received a frantic phone call from Msibi.
“Fire was really the only word I got from the conversation,” says Furstenburg.
He describes how surreal everything felt in the bright, winter morning light when he arrived at the studio.
“The thick smell of smoke hung throughout the building. Inside the studio, sooty black licks ran up the walls where the fire had devoured our machines, stock and the rails of costumes for the production,” says Furstenburg.
This was just three days before they had to deliver the costumes to their client. They were also not business savvy-enough at the time to have insurance.
“We sat sobbing on the ashy floor. The nausea swam in my stomach as the reality of the situation gained momentum in my head.”
“I called the client, trembling. The shouting started on the telephone and didn’t stop until they left our charcoal pile with a few pieces that had escaped the flames while stored in another studio,” Furstenburg recounts.
They were livid – understandably so.
“They were so outraged, because I was dealing with their dream as well. It was a costume production. They had a look of utter hatred and disgust on their faces,” he says.
They lost the clients.
“I spent two weeks in a blur of fear and guilt… Almost no one trusted us with their work and the landlord suspected that we were to blame for negligence,” says Furstenburg.
He went home, depressed for weeks, not knowing what his next move would be.
“I don’t have children but my business is my child. I have fought very hard for it. Seeing it die was the worst day of my life. I took about two weeks where I didn’t know if I was going to be able to do this anymore,” he says.
Fortunately, it was soon established that the fire was caused by old wiring. They salvaged what they could and Furstenburg decided to change his focus from production to styling – that is how he slowly managed to recover from what was his worst day.
He started from scratch, working on freelance projects making very little money.
“It was far from ideal and barely sustainable but somehow my resolve strengthened not to allow this incident to raze me permanently,” says Furstenburg.
The passion for designing handbags ignited within, in 2013, he equipped himself with business training at the Branson Centre of Entrepreneurship.
When he completed the three-month training, the center placed an order with him for 70 small, original-design messenger bags to be given as gifts to guests at an event held during one of FORBES AFRICA cover stars Richard Branson’s visit to South Africa.
“It could be said that someone else spotted what I had to offer before I had known exactly, and acting perhaps more in response to a veiled instruction than personal confidence at the time, I started making bags,” he says.
“Amusingly, whatever I might have lacked in self-belief was effectively offset by a desire to wow anyone and everyone and so I almost simultaneously entered the Independent Handbag Designer Awards of that year [in New York],” says Furstenburg.
It took four years of applications before he was accepted in 2016 into the All About the Logo by Guess Handbags category. He was the first South African applicant accepted – and the first to win. This opened doors for him locally and internationally.
Furstenburg is currently working on a procurement deal with an international airline. If successful, it will be the golden game changer that takes his business to the goal of netting an annual profit of $1 million by 2019.
Six years after his worst day, Furstenburg is not without challenges. But he is continuously taking it one step at a time, ensuring that the fire he has for designing world-class handbags never burns out.
“I must admit that I get a little breathless reflecting on the trajectory that the business has followed in the last 15 months, not least because of the risks we’ve survived and the gratitude I feel to those who’ve guided and supported me,” he says.
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