Interview with an Entrepreneur – Errol Damelin, Founder & CEO at Wonga.com
This week we get the great opportunity to interview Errol Damelin, the founder and CEO of short-term money lending website Wonga.com.
Errol grew up in South Africa and then spent 8 years in Israel. He attended the University of Cape Town and Boston University. After university he worked as an investment banker and while helping entrepreneurs develop their businesses he found his passion in life and switched roles. Before founding Wonga.com Errol had founded another company, Supply Chain Connect Ltd which was acquired by another company in 2005.
What does your average workday consist of?
Meetings, calls, emails and texts – and then some more meetings and calls : ) I travel a lot too but, whether I’m on the road or in the office, I’m a big believer in meeting people, building relationships and networking in general. I often run into the office and make calls on the move, or from a cab. I keep meetings as short and productive as possible, but it’s rare I have any significant time at my desk during the day. I therefore do a lot of my thinking and catching up with the day’s events late at night. Life’s too short for sleep and I’m one of those lucky people who can get by on a few hours.
How will you deal with increasing competition in your industry?
By being the best and continuing to innovate. You have to be honest with yourself every day. Ask whether you’re bringing anything new, different or appealing to your chosen market and, if the answer’s no, ask yourself why. Is your idea or the execution as good as you hoped it would be, or are you kidding yourself? Entrepreneurship involves both challenging and pushing yourself, yet also being real. Only by solving people’s problems in a great way and by offering your customers something they can’t get elsewhere will you thrive. We have an advantage in that the high street banks are so big and they’re facing such gigantic issues of their own that we can focus on innovative technology and putting customers first. That’s meant 75% of our customers have never used anything like Wonga (short-term loan) before and they are choosing us over traditional bank products.
Do you believe your target market has changed?
It’s become more mainstream if anything. I mean in terms of volume of transactions as much as who our target market is, which has always been mainstream consumers. We’ve now provided more than five million loans in less than five years. Any new company, technology or product is likely to attract early adopters, or those who find it most naturally appealing, to begin with. Smart marketing, word of mouth and making sure we have a strong product to begin with have seen us grow faster and bigger than even we expected.
Do you believe that all young people who wish to start a business should go through the traditional route of attending university?
Starting businesses has nothing to do with tradition. So the answer’s no, but a good education can open doors and give you a head-start of course. If nothing else, it demonstrates your hunger to learn, plus that you have the commitment and focus required to gain a degree, masters or PHD for example. There are other ways to learn and other things to learn outside of academia, however, so it’s absolutely not a pre-requisite. Some of the world’s best-known entrepreneurs, such as Richard Branson, aren’t university educated and you should never see it as a barrier if you aren’t. There are many people who like the idea of being an entrepreneur, but you ultimately about do something about it.
Did you grow up in an entrepreneurial environment?
Not in a business sense, but my parents always supported and encouraged me to do what I wanted and not be constrained by traditional ways of thinking or doing things. Entrepreneurship is as much an attitude to life as anything. If you like a steady pace, security, structure and organisation in the workplace, they’re perfectly valid things to seek out and there are plenty of companies who can offer that.
How do you see your industry developing in the next 3-5 years?
Financial services need shaking up and we need to encourage more innovation, which we’re now seeing happen around the edges. Data, web and mobile technologies are the way forward for most sectors, just as we’ve already seen in retail, marketing and communications.
What three pieces of advice would you give to a young entrepreneur starting out today?
First of all, think hard about your motivations and be honest about your level of ambition. Money should never be your sole motivation and you should be realistic about how much time you can commit to any project. Secondly, make sure you have a solid business plan with clear and realistic rationale for why potential investors should provide an initial cash injection. Think of how many ill-thought through ideas you see on Dragons Den, for example, where the presenter has the seed of a good idea, but they’re clearly plucking numbers out of thin air, or being way too optimistic about the scale of what they’re proposing. Potential investors will see through unrealistic, shallow or short-term plans quickly and you need to understand your proposed market and any existing competitor offerings. Finally, don’t be afraid to take calculated risks and think differently. It’s very easy to adapt existing ideas or try to take on incumbents with a slight twist to what they do, but the real success stories are always based on people who have reinvented the way we do something in a significant way. This country needs lots of bright minds to come through with the next business success stories and small, innovative companies are our best hope of growth.
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