Nick Bell: In Search of A

Billion-Rand Business
Model
By recognizing the limitations of his business model, a young entrepreneur
developed
an innovative new solution to scale his business. Here’s how Nick Bell, founder
of Decision Inc, took a R30 million business that had reached its growth ceiling,
and scaled it into a R100 million business and counting.

Vital
stats
• Player: Nicholas Bell
• Company: Decision Inc
• Est: 2006
• Turnover: Projected R100 million for 2015
• Visit: decisioninc.co.za

Nick Bell started young. Odd jobs, side businesses, even a company placing music bands at high
school. Entrepreneurship seemed to be his thing.

From a young age he dreamed of one day building a billion rand business. Fueling his
entrepreneurship ambitions by reading Branson biographies he decided to study accounting at the
University of Johannesburg.

During his degree, he started building a merchandising database application for SAB. As the
business gained traction, instead of continuing to finish his CA, he decided to go into the business
full-time.

BusinessIntelligent was founded in 2006. Partnering with QlikView, a business intelligence (BI)
software company, he quickly grew the business from nothing to 32 employees and R28 million in
revenues with mostly large listed clients, such as SAB, Harmony Gold and Sibanye Gold
A search for a billion rand business model
While most of his colleagues were dealing with the challenges of their first jobs, Bell was dealing with
the challenges of a fast growing technology consulting business.

Having few friends he could turn to for help, Bell sought help outside his social circle. Coaches, investors
and entrepreneurship development organizations were all consulted about taking the business to the
next level.

Bell was searching for a scalable business and wanted to know, “Can this business scale to a billion
rand business?” He realized that BusinessIntelligent could never scale to a billion-rand company with its
current business model.

Key challenges with the business model

Through a number of engagements and discussions with investors and coaches, such as Pat Roberts,
a coach from Change Partners, Bell came to realize that BusinessIntelligent had three key challenges.

• Key partner risk: The business in its current form had one huge risk and that was the
partnership with a single technology vendor. The business was reliant on the partnership to
execute on its business model. If the technology vendor was sold or changed distribution
strategy it could severely impact the business.
• Value proposition: Selling a single product meant that they were tied into a single
offering, whether that offering was the best fit for the customer or not. This meant that their
value proposition was only strong for customers that were best fit for the technology.
• Staff retention: The problem with running a smaller consulting company is that the most
ambitious staff tend to leave when they arrive at a position below the boss. There is a
natural glass ceiling. Smaller companies have the innate problem of limited growth
opportunities for talented team members.

Searching for a solution

Having consulted widely, Bell decided that the business model needed to change. The business had
two key assets to be leveraged: Client relationships and the know-how of running a successful
consulting company.

He decided to move the business away from a single technology and instead seek out partnerships with
a number of larger players, such as Microsoft and SAP. This resulted in the merger of three business
intelligence organizations: BusinessIntelligent, ASYST Intelligence and the Microsoft Productivity division
of Digiquill, a Cyest company.

This provided access to new technologies and a team that is skilled in other technologies. The
three companies were merged into a single business called Decision Inc, with the mission of
helping organizations make better decisions using information technologies.

The new strategy has achieved excellent results. With the team growing from 32 to 82 staff and over
230 large organizations as clients, turnover grew to R78 million in 2014, and the business is on track to
generate over R100 million this year.

Furthermore, Bell is confident the new business model will enable the business to scale to a billion-
rand business in a few years.
An overview of the new business model
• Improved value proposition: By deciding to be technology agnostic the business developed
a stronger value proposition for the client. Rather than selling a specific product they could
ask: What is the best solution for this client? What solution best solves their problem? And
focus on delivering great value to solve the client’s problems.
• Strategic acquisitions: The next part of the strategy was to focus on strategic acquisitions
of small technology consulting companies. Growing through acquisition has a number of key
advantages.
• Leverage current client relationships: Bringing new technologies on board enabled the
business to sell new technologies to its current clients, and offer its current services to the
clients of the newly acquired businesses.
Also, strategic acquisitions allowed them to achieve scale, size and efficiencies that smaller
consulting businesses don’t have, as well as specialist marketing, finance and HR teams that provide
support services smaller consulting companies could not afford.

• Increase staff retention: Growth by acquisition enabled them to quickly add new members to
the team. A fast growing organization offers greater opportunity for staff members. The ability
to manage different teams, learn new skills and keep growing while staying at the organization
enables longer staff tenure and lower HR costs.

Key lesson: Finding a scalable business model

What key lessons apply when developing a scalable business model?

• Seek outside help

Bell was willing to seek outside advice and feedback. The first key is to be able to unemotionally critique
your business model. Advice from the likes of Endeavor, Elton Bondi, an investor in the newly formed
venture and Tony Bell, the company’s sales director, provided Bell with outside opinions on his
business
model.

A comprehensive research study done by Keith McFarland on nine

entrepreneurial companies that were able to scale business from $100
million to a billion dollars were compared to nine companies in the same
industry that weren’t able to make the jump.

One of the key differences between the companies that were able to scale and those that didn’t was that
the successful companies sought outside help.

They set up advisory boards, boards of directors, brought in investors, consulted with industry
experts, and often used consultants and advisors. In comparison, the less successful companies were
more insular and less eager to work with people outside the organization.

Similarly, a large body of small business research shows that advice seeking as a behavior is a
predictor of business success. Using outside expertise has a number of advantages.

First, if offers support and motivation to the founder. Second, it brings fresh insight and ideas into the
organization. Finally, it enables the founder to benchmark their organization against other
organizations. In short, it pays to build a number of relationships with outside experts to help evaluate
your business model.
Business model innovation
The second lesson is that many business models that are great for profitable SMEs will never be able
to scale to larger organizations. If you plan on building a larger organization you need a repeatable and
scalable business model. Bell had a profitable business model, but it was unlikely to scale to a large
organization.

The great insight that enabled the exceptional growth of Decision Inc was business model
innovation rather than product innovation.

Bell and his team looked at the value proposition, operating model, key risks and current assets
and combined them in a new business model that would enable them to scale. But what does a
scalable business look like for your business?

The venture capital industry over the last three decades has built up a strong track record in finding
and funding some of the most scalable and repeatable business models globally.

In fact, 20% of listed companies in the US have been funded by venture capitalists (VCs). Research has
been done over the years looking at how successful venture capitalists look at business models. Here,
in table 1, are a few of the key elements leading VCs look for.

New stage. New skills

A dirty secret of the private equity and venture capital industry is that founders whose businesses are
invested in are often removed as CEO of their own organization. The reason is that the skills needed
to start an organization are very different from those needed to manage a 20, 50 or 100 person
organization.

It is well understood that organizations go through different stages in their lifecycles. In the early
stages, an entrepreneur’s time is primarily spent selling and delivering the product. They are largely
involved in doing the work themselves and are often involved in every detail of the organization.

As the size of the organization grows, the entrepreneur needs to

develop management and delegation skills. For the first time the
entrepreneur’s primary focus becomes managing people.

Bell knew that he had to develop new skills when he started dropping balls for the first time. An avid
reader, he developed his management skills mostly through Internet articles, books and magazines,
such as, Entrepreneur magazine and Harvard Business Review.

As the organization grows, the founder needs to start managing managers. The focus moves
from checkers to chess. A greater focus needs to be placed on how to strengthen your managers.
Bell introduced an internal leadership development program that helped aspiring managers
become commercially-minded.

Every two weeks he would spend three hours coaching the managers. The curriculum was developed
from a combination of articles, books and personal experience dealing with industry and business-
specific problems.

Entrepreneurs need to understand the different stages of organizational growth, how these stages
impact management style, and what new skills are needed in order to remain effective leaders.
Questions:
• How does evaluating your current business model can deliver the returns you’re looking for?
• How did the Nick Bell (CEO) knew what changes were required to achieve his high-
growth aspirations?
• What would you have done differently than Nick?