Tech company, Skynamo, recently secured R431m after Five Elms, a leading software investment firm from the US, read positive online reviews of its products on third-party websites. finweek spoke to Sam Clarke, the founder and CEO of Skynamo, about the company.
Where did your desire to start your own business come from?
I grew up in a household where money was tight, so have always been looking for ways of making money and using resources to their full potential. My first entrepreneurial venture was at age five, selling pinecones in the church parking lot. I later applied my problem-solving skills to more technical fields.
When did you start Skynamo?
Skynamo is actually my second business, the first was Antenna Magus, which is a software system that supports antenna design. Skynamo and Antenna Magus was started with the help of EMSS, now known as Alphawave. Skynamo was launched in 2012 with a lot of financial and technical support from Alphawave.
How does the Skynamo sales solution work?
Skynamo is a mobile app that eliminates admin and streamlines the sales process for field salespeople, so they can focus more time and effort on selling. It integrates different technologies to eliminate paperwork and mistakes, and give them access to all the information they need in the palm of their hands so they can act as consultants to customers.
Accurate information is key to making smart sales decisions and providing a great customer experience. For example, global positioning (GPS) is used to provide managers with a real-time view of sales activities and travelling activities so they can coach their sales team, while resource planning and accounting software allow sales people to only see products and pricing relevant to a specific customer, as well as stock or product availability and log sales in real time.
Can you quantify the value of the solution?
Users, generally, spend less time doing paperwork in the office and have about 20% more time to spend with customers and grow their market base. Users are typically able to double the number of customers they are able to visit thanks to time saved on admin and paperwork, resulting in an increase of 20% or more in sales revenue for some.
How did you build a customer base and get your first customers?
Skynamo started with me and four other developers on Alphawave’s payroll, responding to requests for proposals. It was difficult to break into the market, because we had no track record.
We wrote a proof of concept to get credibility. A friend in the wine industry managed to convince one managing director to buy the solution for four users, after which sales started branching out, first to other wineries and then also to other sectors, such as food and beverage, agriculture, cosmetics, and hardware. Our customers primarily deal with manufacturing or redistribution in these sectors.
What was your first big break?
It was when Namaqua Wines bought into the idea in late 2012 after seeing how it was helping some of the smaller wineries. Getting Namaqua on board showed that we were able to service larger customers.
Besides breaking into the market, what other major challenge did you face?
I knew nothing about field sales when we started out. However, instead of imposing my ideas onto the industry, like so many other competitors, we listened and learned the jargon and industry lingo to fully understand the requirements of our customers. This, over time, has become one of our greatest competitive advantages.
How does your business model work?
Payments are based on per user, per month, or per year. Companies can download the application from app stores. The solution is cloud-based, so there is no need for any additional IT infrastructure.
How has the business grown since Skynamo was started?
Our target growth rate has been constrained by the fact that the company has largely been self-funded up until now. Even so, Skynamo has been growing at a compound rate of 60% to 70% per year, for the past five years.
Where we were roughly five people working on the solution when the company started out, Skynamo now employs 78 people, who either work in software development, IT and finances or sales and marketing.
How has your marketing strategy changed over time?
When we started, we invested in print advertising, which yielded highly unsatisfactory results, and also attended conferences and made use of digital marketing to create awareness. Today most of our advertising is digital, including third party reviews, social media or paid adverts.
In spite of this, about 30% of our new business leads still come via word of mouth. Also, we now have a partner channel programme in which we work with IT integrators who resell and implement the systems we integrate with to generate new business for us.
How has the market for sales apps grown over the past few years?
The market has not grown that much, but the accessible market has grown tremendously. This is largely to do with the availability of the internet, with almost everybody owning and knowing how to use a smartphone these days.
Where is your sales base?
Up until this year, most of our business has been generated here in SA. We have offices in Stellenbosch, Johannesburg and Durban, and have regular meetings with customers in Port Elizabeth, East London and Bloemfontein to ensure good customer relationships.
What will you do with the funding secured from Five Elms?
We will use it to expand into the US and UK, while scaling up our operations and team in SA to improve service to our existing customers.
We’re focusing on growing in the UK and the US simply because of the market potential. The US, for example, has a market potential of $14tr in business transactions, with more than half of these transactions still being done with pen, paper, and fax machines.
Are you planning on leaving the country and moving to Silicon Valley, now that you are expanding into the States?
Not at all. We will obviously need to establish a presence in the UK and the US, but SA will remain my home base, due to the low cost of doing business here and because we have a rich talent pool to choose from. We’ll hire local staff in the UK and the US, because we believe that local people will have local networks that will help them to grow the offshore businesses faster.
Besides expanding the market, what are your plans for the future?
I would like to see Skynamo turn into the leading field sales solution provider in the world. To achieve this goal, we will grow our market presence and scale, to leverage more funding for research and development which in turn will help us to constantly improve our value offering.
This article was written exclusively for finweek’s 17 April newsletter. You can subscribe to the newsletter here: bit.ly/finweeknews