Luvuyo Rani - Silulo Ulutho Technologies  Assessment

Luvuyo Rani - Silulo Ulutho Technologies 

The eldest of four boys, Luvuyo Rani (41) was born in the Eastern Cape and educated at Kwa-Komani  High School in Queenstown. After a short career in teaching, he went into business with his brother  to create Silulo Ulutho Technologies, a company servicing the burgeoning internet needs of  township communities. From humble beginnings, the business has grown exponentially, garnering  Luvuyo numerous local and international awards. In 2014, he was named one of the Top 10  Outstanding Young Persons of the World by the prestigious NGO Junior Chamber International, and  recently picked up a coveted award for social entrepreneurship from the World Economic Forum.  Luvuyo, who lives with his wife Zanele in Cape Town, tells Bronwyn Bowmer his story. 

‘Business is exciting,’ says internet whizz Luvuyo, who worked his way out of poverty. ’My father  worked as a nurse, but his passion was rugby. He was one of the best, people said. Much to his  dismay, I was much more into Latin American dancing. My mother was a domestic worker who also  ran a shebeen from our sitting room. I now realise my journey of entrepreneurship began with her.  More than anything, I learnt resilience. We came from poverty, but our foundation was strong so  we were able to survive. I was a good boy, disciplined and well dressed. As the first-born, I was  involved with family affairs and soon realised that I could combat poverty through education. So in  1994 I passed grade 12 very well, with a university exemption. 

My father didn’t have much, but gave me R500 for my bus ticket to go and study in Cape Town. I  wanted to study political science, but the University of the Western Cape was so busy with protests  that I couldn’t get into that department. Instead, I completed a bridging course in commerce,  accounting and economics at Cape Tech that led to a BTech in Education. My teachers saw I was  smart and offered me assistant jobs that helped pay for my studies. This was incredibly helpful as  my father tragically died in an accident around this time. I studied by day and worked at night,  including a job at the V&A Waterfront providing information. I had to wear this long shirt, shorts  and takkies [sports shoes], and girls used to come up and laugh at me! 

Not long after graduating, I applied for a teaching post in Khayelitsha township and went there to  teach accounting, business economics and entrepreneurship. I taught for three years and it was one  of the best times of my life. Then a cousin of mine started selling vetkoek [fried buns] outside the  school gates and at break time, I would go and help her. I got into trouble with the principal, but  the entrepreneurial bug had bitten. After work, my youngest brother Lonwabo and I had long 

discussions about what we could do to make more money. We considered all sorts of options, from  township tours to phone services and even sold diapers at one stage, but our stock was stolen so  we gave that up. 

In 2004, I resigned as a teacher to sell refurbished computers with Lonwabo. He had a paid job fixing  phones, so he borrowed R10 000 from the bank and bought four refurbished computers. We sold  these out of the boot of my Corsa Lite to Khayelitsha teachers who needed them for the admin  generated by the new outcome-based education. People thought I was crazy to quit my job, but we  persisted, getting groups of six teachers together in stokvels [savings clubs] to buy a computer a  month. Our profit was R400 per computer. But it cost us to have the computers repaired or serviced,  so we invited our friend Sigqibo Phangabantu to take care of that side of things. 

The name of our company, Silulo, comes from the first syllables of each of our three names. Soon  we saw the computers standing unused in the teachers’ homes! We realised that if the teachers  came to us, we could teach them to use them. In 2006 we opened an internet café, convincing a  tenant at Khayelitsha Mall to rent out part of his phone shop to us. Our supplier loaned us 10  computers and we planned to repay R10 000 monthly until we had paid off the computers. The first  month, we made R250 and our expenses were R12 000! Our cheques were bouncing and people  were angry with us, but we knew this was a great opportunity and refused to give up. People were  coming into the shop, asking for assistance with their CVs and other simple computer issues: in  those days, many didn’t know the difference between fax and email. We realised the need for  training in the ICT sector was great, and started courses for the whole community. 

I was under pressure. The bank wanted to take back the car and the house, my mother needed  support, my girlfriend left me. But I was always convinced that my business was a calling from God  and prayed for him to help me. Things were tough, but I kept going. In 2006, I got a bursary to study  for a postgraduate diploma in associated management at the University of Cape Town (UCT). The  same year, a loan from UCT’s Bertha Centre for Social Innovation enabled us to buy computers, get  our own venue and improve our training programmes. We worked very hard, and the next year  received a further loan and bought a bakkie. Finally, with money coming in from the courses and  internet cafés, we paid back our loans in full. From there, we went from strength to strength,  expanding to the Eastern Cape. We now have 36 stores, 12 franchises and 178 employees. More  than 25 000 students have graduated from our training courses!

All our graduates have the opportunity to become consultants and ultimately franchise owners. In  2013, Cadiz Asset Management approached me with potential funding, but instead we asked them  to fund three staff members to buy their own franchises. We believe in empowering people from  the community. We plan to expand to Gauteng, and in the next 10 years want to have at least 200  stores in South Africa! For me this is not just about success and making bucks. I see opening up the  world of technology to disadvantaged communities as my calling. We need more success stories,  more positive role models for young entrepreneurs. This year I’ll be travelling to Kigali, China,  Columbia and Singapore, as well as attending a leadership programme at Harvard. It’s the absolute  highest point of my business career! I’m content, I’m happy, and know I need to be grateful for  everything

Question 1 : Explain through the use of examples from the case study, the five entrepreneurial characteristics  that Luvuyo Rani possesses that helped him make a success of his business.

Question 2 : Determine the economic system within which Silulo Ulutho Technologies operate and provide  support for your answer.

Question 3 : Silulo Ulutho Technologies operates their business as a partnership which they then Franchise out. Differentiate between a partnership and a private company and advise Luvuyo and his partners on  which is the better option.

Question 4 : There are many challenges facing young entrepreneurs wanting to start their own businesses in  South Africa.

Q.4.1 : Identify three challenges that Luvuyo Rani had to overcome in his  entrepreneurship journey.

Q.4.2 : Discuss how he overcame these challenges to make a success of his business. 

Q.4.3 : Explain the role of entrepreneurship and small businesses in the economy as  a whole.

Question 5 : The umbrella concept of Corporate Social Responsibility recognises three points. Describe the  three points and give practical examples of what Silulo Ulutho Technologies could do to make sure  that they comply with all three points.

Question 6 : Discuss reasons why it is so important for Silulo Ulutho Technologies to engage with their  stakeholders.

Question 7 : Luvuyo Rani had to apply for a bank loan to purchase stock and a vehicle. Using the four C’s to  evaluate a loan application, evaluate whether the bank should have given Luvuyo the loan.

Question 8 : Marco-environment factors have an effect not only on the market environment and on decision  making by management, but also on one another, and this constantly causes change in the  business environment.  

Write an essay of 300 – 500 words, analysing four macro-environment factors that have, or could  have, an impact on Silulo Ulutho Technologies.

Question 9 : Management is defined, quite simply as the process followed by managers to accomplish a  business’ goals and objectives. Luvuyo and his partners are new to the whole idea of management.  

Describe the fundamental concepts of management to Luvuyo and his partners for them to  effectively manage their partnership. 

Question 10 : The management of Silulo Ulutho Technologies have set the following goal for their organisation: 

“Increase market share by 2021 by introducing a new internet and telecommunication device that  assists in the process of educating previous disadvantaged communities on the use of technology  enabled devices.” 

Analyse the set goal in terms of the ‘SMART’ criteria for effective goals. If necessary, recommend  amendments to the goal.  

Should you recommend any amendments to the goal, rewrite the goal with your recommended  amendments included.