As part of the Young Minds Programme, Joshua Fillmore is hosting a series of conversations with some of South Africa’s most successful young entrepreneurs.

Undoubtedly one of the best entrepreneurs in South Africa, Thando Hlongwane is the founder and CEO of Lipa Payments as well as the founding member of Zaio and Nisa Finance. He has been tackling education and financial inclusion for many years already, despite the fact he’s only in his early twenties. He is a wealth of knowledge on all things, startup tech, and funding.

Can you give us a short overview of what Lipa Payments does and why it’s important?

At Lipa, we build contactless payment technology. This is something that is all around these days, and enables people to make payments without the need to input a password or pin. These enable a super frictionless payment experience, and a good example that you may be more familiar with is Apple Pay. But even something as simple as tapping your card against a point-of-sale machine is a contactless payment method.

But what makes us quite unique and special is that we enable contactless payments directly on smartphones, removing the need for additional hardware. Traditionally, merchants would have to buy a point-of-sale machine – you know those clunky terminals that you see everywhere. But we enable contactless payments directly from your phone, so a consumer can tap their bank card against a merchant’s smartphone and we can do a contactless payment. We’ve also enabled low-end contactless payments using Bluetooth for the lowest-end smartphones. We enable simple payments for the mass market.

Has entrepreneurship become easier over time, or is your third company just as much of a hustle as the first?

I definitely feel as though it’s gotten easier, interestingly enough. The first version of my startup world was super manual – I ran a tuck shop at res. And there, the market is pretty well-defined, but you need to figure out what’s what. You need to figure out what the right products are for your target market, you need to figure out how to get the word out to them and you need to set your pricing. Given the fact that you’re dealing with students, they will only have a certain budget available to them. 

From that time, all the way through to the startups that I’ve built now, there are a lot of core pieces that have remained consistent. In that regard, it has become easier, but each of those businesses have had some form of a ceiling to their ability to grow. As you break through some of those ceilings, you discover new challenges and complexities, so the problems just get more interesting. So, while the starting points have become easier each time, I’ve started learning new things that weren’t necessarily applicable to my previous startups.

There are many different components at play that need to come together for a startup to succeed. Which of these would you say are the most important, and why?

There are many things that can make or break a business. At the end of the day, the market is the most important thing. If you don’t have a market you’re selling to, if you don’t have a customer that’s actually going to buy your product or service, you don’t exist as a business. The most important thing you need to solve first is to truly understand who your early adopter is. You need to know where your market is, who the people that will pay for your product or service are – or at the very least know who will use your solution first.

There is a progression to this.  You can start by finding someone who’s just willing to use your product or service, but it’s a whole other thing to figure out who will pay for it within that pool of people – because ultimately, you need it to be sustainable. From there, you can build a good team around you, you can focus on improving your product to serve that market better. And I mention Michael Sibos here, as he says,

You can have a really great team with a really great product and the market will still kill it, because they won’t accept it and won’t pay for it.

The other side to this is that you can have a horrible team with a really bad product, and a super scrappy Minimal Viable Product (MVP). But if the market really wants it, they’ll pay for it, and you can fix the other stuff later. That’s not to say you shouldn’t prioritise your team and everything else, but the single most important thing is the market.

What role do you believe entrepreneurship plays in shaping the future of our country and our continent?

Government has pushed a narrative of entrepreneurship being the key to unlocking employment and solving our major unemployment issues. That’s definitely one component, but the other is just human progress.

When I was younger, I told my mom that I wanted to be a scientist. And I remember her telling me, “I’m not sure if scientists make money, you should consider becoming an accountant.” That was her way of saying that there are a whole lot of people who’ve invented things, but they’re not necessarily wealthy because of them. But I think we live in a world now where the people who create things have actually been able to monetise them. They’re the ones who have been able to build a legacy of their inventions. There was a time when this wasn’t the case, the inventor wasn’t necessarily the person who could commercialise or monetise it. Nowadays, ​​you can benefit from the legacy that you create, which means that more people are incentivised to actually push us forward as a society. Human progress requires people to sit down and solve problems, and the entrepreneur ecosystem has developed to make it more incentivising for people to solve problems – because you can benefit and build your own wealth and benefit the world at large. A few years ago, you wouldn’t have thought of entrepreneurship being the vehicle for us to pursue things like interspace travel, for instance.

What are the first few steps you’d advise someone who has a game-changing idea to take if they’re not quite sure how to go about starting and building a company around it?

The first thing is to just Google it. You’ll be super surprised about how many people may have already thought about an idea you’ve come up with and who’ve tried them out. That’s not to discourage anyone, but it is to say that you can immediately learn a whole lot from those who have already made some headway. You can look at their business models and then apply them to the context that you were thinking about or the market you had in mind. Even if they’ve failed, there’s something to learn from them. So you figure out how you would do it differently and what makes you special.

The next thing is to go and speak to your ideal customers, ask them a few questions, understand their motivations, their driving factors, how they are solving the problem you want to solve currently, and what their substitutes are. And then, you can ask them if you brought them your solution, would they be willing to pay you for it, maybe even pre-order it, because then you’re really in the money.

Through such conversations, you’ll find a common thread. You’ll discover what you need to address first and that becomes your MVP. Sometimes our idea of what our MVP is, is completely off. The thing we actually think creates value, is sometimes not that thing. And from there, you have a good basis off which to work further or change your route.

Do you find that your age plays for or against you in the business world and why?

I do think age plays a role, specifically on the B2B side, especially when you’re dealing with corporations. There’s initially that question of, “Hmm, does this guy really know what he’s talking about?” But what ultimately becomes a defining point on whether or not you’re gonna close the deal is whether you know what you’re talking about, if you’re actually solving a real problem, and whether you have the solution to the problem. What I’ve typically found is that, in my first engagement with someone, they’re a bit hesitant. In the second engagement, they realised that I know what I’m talking about and actually understand their problem. By the third, they realise that my solution seems like it could solve it. And then there is really no need for age to be a question.

But with that said, I recognise my weaknesses. My team is significantly older than me. And that’s part of understanding that, as an entrepreneur, you have your limitations, your weaknesses. Then, you build a team around that. You build a team that supplements your weaknesses and compliments your strengths.

To watch the full interview, click here.

The Young Minds Programme, certified by Stellenbosch University, is a 9-month career-focused gap year programme that helps school-leavers and young adults prepare for the next steps in their life and career. The programme focuses on, among other core themes, business management, entrepreneurial thinking and personal mastery – the key ingredients necessary to explore the real world of work and help participants discover who they are, as well as what they want to achieve in life. 

To find out more about the Young Minds Programme, click here.