Daniel Nel | How Failing His First Business Helped Daniel Launch 6 Businesses with a Team of 100

Daniel Nel is the Founder and Chairman of Nebula Group of Companies. He is an entrepreneur who gets his inspiration from leading people, continuous learning, and new technologies which changes the way we work. He always strives to learn, contribute, inspire, and lead others to discover their full potential. As a mentor and entrepreneur, he is passionate about talent and in sharing his knowledge to help others achieve their goals. His entrepreneurial history spans over two decades during which he founded four companies, and he consistently seeks opportunities to assist potential entrepreneurs in establishing businesses that are viable and sustainable. 

Daniel is a past board member of the Cape Town chapter of the global business-owners’ network, Entrepreneurs’ Organisation (EO). During his tenure as a board member, he held the positions of president and mentorship chair. With almost thirty years’ worth of specialized experience in telecoms and information technology and a decade managing large business divisions and companies,  he provides insight and vision on a variety of topics from business trends to effective business strategies. 

In this episode of the Smart Business Revolution Podcast, John Corcoran is joined by Daniel Nel, Founder and Chairman of Nebula Group of Companies, to discuss what a failed business taught him about starting and managing a successful business. Daniel also talks about the benefits of being a member of accelerator groups, how to build strong leaders, and how to manage a business during an economic crisis.

Subscribe: Apple Podcasts | Google Podcasts | Subscribe on Android | RSS

Here’s a Glimpse of What You’ll Hear:

  • What Daniel Nel learned from a failed business.
  • Daniel’s approach to running multiple businesses successfully.
  • Daniel talks about being an EO Accelerator Program trainer and the value he sees behind the program.
  • The importance of transparency between business owners and their team members when it comes to company growth and expenses.
  • Daniel talks about his company’s partnership with Microsoft and how he manages risks.
  • How Daniel manages his business during the COVID-19 pandemic.
  • What Daniel is most excited about for the new year and his advice to someone thinking of starting a new business.
  • The people Daniel acknowledges for his achievements and success.

Resources Mentioned:

Sponsor: Rise25

Today’s episode is sponsored by Rise25 Media, where our mission is to connect you with your best referral partners, clients, and strategic partners. We do this through our done for you business podcast solution and content marketing. 

Along with my business partner Dr. Jeremy Weisz, we have over 18 years of experience with B2B podcasting, which is one of the best things you can do for your business and you personally. 

If you do it right, a podcast is like a “Swiss Army Knife” – it is a tool that accomplishes many things at once. It can and will lead to great ROI, great clients, referrals, strategic partnerships, and more. It is networking and business development; and it is personal and professional development which doubles as content marketing

A podcast is the highest and best use of your time and will save you time by connecting you to higher caliber people to uplevel your network. 

To learn more, go to Rise25.com or email us at [email protected]

To learn more, book a call with us here

Check out Rise25 to learn more about our done-for-you lead generation and done-for-you podcast services. 

Right Click here to download the MP3

Click here to subscribe via iTunes

Advertise on the Smart Business Revolution Podcast

Episode Transcript

Intro  0:14  

Welcome to the revolution, the Smart Business Revolution Podcast, where we ask today’s most successful entrepreneurs to share the tools and strategies they use to build relationships and connections to grow their revenue. Now, your host for the revolution, John Corcoran.

John Corcoran  0:40  

All right. Welcome, everyone. John Corcoran here, I’m the host of this show. I’m also a recovering political hack and a recovering lawyer having spent years working in politics, including as a speechwriter in the Clinton White House, and for a California Governor. And you know, after spending many years practicing law in Silicon Valley in San Francisco, about 10 years ago, in 2010, I discovered the medium of podcasting, and I’ve been doing it ever since. And I love it. You know, over 10 years of hosting this show, I’ve had the privilege to talk with top CEOs, founders, entrepreneurs, companies and organizations ranging from YPO to EO, Activision Blizzard, Lending tree, Opentable many more. I’m also the co-founder of RIse25 where we help b2b businesses with the strategy and production execution they need to create a podcast and do content marketing that produces tremendous ROI for them. So first, before we get into this, I’m gonna give a shout out to Cory Levenberg of 42 Inc. and Dave Richmond of Comcate, go check them out. 42-inc.com is the URL and comcate.com. They are mentors for me through the EO San Francisco program. And they introduced me to today’s guest who I’ll tell you about in a moment, I’m really excited about his name is Daniel Nel, he’s also been a mentor for me. And he’s an entrepreneur who really is inspired by leading people continuously educating himself and also new technologies that help the way that we work. And he has got about six different companies that he’s started. But we’re going to start with a story of the first company that started, which actually failed and how that influences the way that he organizes his businesses today and runs his businesses today. So we’re gonna get into that. And he’s also very active in Entrepreneurs’ Organizations, which I’m active in as well through their accelerator program. 

But first before we get into that, this episode is brought to you by Rise25 Media, which helps b2b businesses to get clients referrals and strategic partnerships with done-for-you podcasts and content marketing. You’re listening to one right now. So we know you like podcasts, at least a little bit. So if you ever thought about doing a podcast, I say it’s one of the best things I’ve ever done. And we specialize in helping b2b businesses with a high client lifetime value. So to learn more, go to rise25media.com or you can email us at [email protected] All right, Daniel, I’m super excited to interview you here. Today’s been a long time coming, because we talked about this for a long time, when we finally got it scheduled. And Daniel lives in Cape Town, South Africa, near the beach, there, I’ve seen pictures of your home, it’s a beautiful place to live. And you’ve got interesting challenges, running your businesses out of South Africa, we’re going to talk about the differences between running a business and you know, the first world United States versus in a developing country, like South Africa. But let’s flash back to 1990. You’re graduating with your MBA, and use it to just decide to start your first business, which unfortunately didn’t work out, it failed. And that really has influenced your career and the way you run your businesses today. So let’s start with that.

Daniel Nel  3:45  

Yes, yes. Thank you. Thank you, john. Thanks for having me really appreciate this. So an interesting story for me. So in 1990 R was, I think 28. And the biggest dream for me at that time was Yeah, I would like to have been the founder of a business. I would like to experience that. At that time. Also, at the dream of finishing doing an MBA everybody’s 28 you want to have a real smart career. And at this time, we did an interesting project at the end of our studies about starting a business for printed circuit boards. And we did a good dissertation and a story and a thesis about it and the professor said for one too, this is a good idea what we start a business and a venture five I started this business, we wrote the business plan, because this is what they tell you MBA, you have to write the business plan, show the numbers, the forecast, whatever. And then we went into a funding business and they gave us the money. And six months down the line, we had to close the business because we knew nothing about really running a business. And the reason for that was that one of the key people in the business got him taken out, his father got sick. And he had to leave the business. And that brought the business to grinding sandstone, so, and we didn’t know how to handle it. So eventually we had to liquidate the business. So the biggest lesson for me out of that was that there for four years of my life, I had to go every month with my payslip, what I earn every month to the company, or the people that we borrow the money from? And then I had to ask him, please, will you be lenient to me for this month, I can only pay so much Don’t take my car or my house. So that was a very interesting part for me. And that’s sort of crafted my psychology of how I think about business. That actually becomes my philosophy, how I think about how I do things right now,

John Corcoran  5:43  

Did you become more cautious as a result of that? Because you said it took you four years to repay it. So if I’m doing my math correctly, then you worked in the corporate world for another three more years after that, and you end up starting a new company three years later?

Daniel Nel  5:57  

Yes, exactly. So. So you. Yeah. So it mentally, really struck you. Because now you got to think of pletely different. And when I started my new business, again, that was really focused very much it only started on my own. So then I created this whole mantra about how I will start businesses. And about that, I will start it on my own. I get it going through bootstrapping self funded business, and then they’re not bringing partners when it’s running properly. And at that time, the reason why we also failed, but because you’re not equal, in terms of, of who does funding and how you how your assets get accounted for, so that people with most assets, they belong with only the one that gets hit hardest. And so you really have to make sure when you go into something like this, that you know what she informed me that that crafted a way forward for me where I am right now.

John Corcoran  6:57  

And so you have six businesses now you have a little bit shy of 100 people working for you. Are you saying that? No, when you start a new business now you still start it yourself?

Daniel Nel  7:09  

Yeah, so I would, I would, I would. So I would look at it, almost like a space shuttle. So my big business that I started many years ago is sort of the space shuttle for me, it’s an orbit already. So the biggest part of any business is when you leave Earth, and I just use it as a metaphor, a kind of example of gravity, that’s the most difficult part to get a business going. So that’s what I use the existing verses as my space shuttle, and I launched new businesses from that. So I’ve done all the grunt work. So what I do when I get new business going, I give them clients, I give them some of the funding and, and the infrastructure of the business. And I give leaders in my company, the opportunity to get big ownership pieces in business, so that they flourish. So this is how we created the additional six businesses spun out of this and out of this top two of the people that were with me, as has become accelerate this and one person whose business that we started through my space shuttle story is actually now an EU member.

John Corcoran  8:09  

Huh? Wow. And would you say so you’ve got your you’ve call it your main business? One Nebula, right? That’s the original business, which you started in 1990, technology innovation services firm, you enable high performance technology for large enterprises? And would you say that it makes it easier once you have that larger company, makes it easier, you’ve got talent you can bring in, you got maybe other clients that you can bring into the new business? Is it easier to start other businesses or as you just pointed out a second ago, you have to be careful because you have assets. So does it make it so you still find that you have kind of the same challenges or distractions having to run multiple businesses, when you start a new business?

Daniel Nel  8:55  

Yes, you still have distractions, and you still have challenges. But the fundamental piece about this is really to make sure that your foundation is solid, the foundation will be about your core values, how you run your finances, I hire people, you make sure that you have to make sure that all of that are stable, and that and that your revenue that’s filling up that dam is consistent. And you have to have a business model that generates automatic revenue. So it’s so important for you to have a business model that makes money for you while you sleep. So it has to be a subscription subscription on YouTube kind of based business through the peer long period of time as we started the company, just with 70 hours consulting hours eventually now to convert it to a fully automated subscription kind of business we are right now, which is completely so much more scalable. And you have to have something that makes money while you sleep.

John Corcoran  9:56  

Got it. Okay. And now you’re you’re It’s funny listening to you talk about it, I can hear you, you know, talking about some of the same things that you teach when you are an ER accelerator program trainer. So first of all, so for those who don’t know, what the accelerator program is, explain what your what it is and your involvement.

Daniel Nel  10:18  

So, you squat to a conscious incubation program, but it’s sort of a give back to the companies that’s between $250,000. And they’re not a million yet, million dollars. And we use the philosophy and the teachings of valiant ani scaliger. And we put this program together, and we use entrepreneurs of EO that they’ve become strangers, in taking them through the scaling up process. And why I like this, for me, for me, it’s really inspiring for me to listen to myself, and share experiences of what I’ve learned. And, and through this process, it actually helps me again, to become better and what I do. So so. So this has been quite a successful part for EO as they have a success rate of at least 16% of this, whereas the normal people won’t know what companies that actually scale to a million dollars about 4%. In the US,

John Corcoran  11:23  

hmm. And why, you know, you devote, I don’t know, how many hours of your time per year to iOS accelerator. And I think other things as well, at one point I know, you were doing multiple different cities, before COVID hit you were flying around the globe, times a month. And, you know, why do you do it? Why, you know, why do you volunteer such a substantial amount of your time? And do you ever? Do you ever feel like that if you devoted that time to your business, that it would help the business additionally? Or do you feel like, you know, your involvement through accelerator, your, your, your time that you spend on that actually brings back more to the business?

Daniel Nel  12:08  

Now, there’s a very good question, john. So yes, yes, my philosophy about it. So before, some of the more that the more you do, the more you can do. So one of the things for me was that the more I volunteered to do things, it forced me really to invest in my leadership team, your business cannot grow without strong leaders. Now, when does a leader really grow when you let him grow? And how, what what, when does it happen, you have to let him go, you need to trust him to do things, and let him fail, and pick them up. But if you’re always available, consistently there, they’re never going to learn. So from either the bottom, I mean, volved, with Eon accelerator, taught me have gotta let go some areas, and I’d have to have a different way of leading that sort of forced me to do that, which I regret. The other part for me about getting involved in, throughout the world with other accelerator groups, was the learnings of it. And for me, the biggest part of but my higher purpose is about challenging other people really to accelerate, to get to their full potential, and upload it back into my business. And that’s why the leadership team in my company is developed so much, that it’s just freed me up to do these things. And that inspired them to do more, because they see what I can achieve. So that gave them more meaning. So it’s like a chain reaction that this has created for us in scale scalability in terms of people starting a business.

John Corcoran  13:45  

Yeah. Have you ever felt like that? You know, you spent so much time away that you kind of lose touch with the business? Or how do you remain in touch when you’re traveling the way that you have? Or that you’re when you’re away from the business? How do you remain in touch and on top of the business?

Daniel Nel  14:04  

Yeah, so so that’s the rhythm that we put in place the checks and balances. So that is part of your your, your fundamentals are what you put in place in your business. So so one of the key parts for us is really to have a strong what we call corporate support, that runs your finances, that runs your HR that runs all your compliance side. So so you have checks and balances in place so that you can union you know, the heartbeat of the business, and you know, the data that comes out of your business that tells you if it’s healthy or not healthy, so help you as a leader to sort of predict the future or see around corners before that happens. So so so so, and we have a rhythm of checking into the business now. COVID has been I’m gonna say it was tough for us some years, but it’s been fantastic for us. So this is just expediting our rhythm in the business now. So we would have checked in once or twice a week now though, our whole company, you know, checks in every day, from seven to eight, everybody alight?

John Corcoran  15:07  

And if a company is the whole company, like on a zoom call every day for an hour,

Daniel Nel  15:12  

no, don’t worry. But all the various teams are various teams, all the various all diverse teams in the country check in between seven and eight every day. Okay. And then on a Wednesday, nine till 10, I have a town hall meeting every week where I used to have only three months, every three months now it’s like, we just zoom all the time, speed up the process. Wow.

John Corcoran  15:35  

And what do you do during the weekly town hall meeting?

Daniel Nel  15:39  

So very much focused on talking about the company values, talk about learnings, talk about good news, we have to celebrate good news. And, and show progress. So progress, Trump’s perfection. So that’s what we always like to say, we’ve moved two inches closer, with one millimeter there. And when this bad news comes, we tell it, and one of the key parts of our values is saying, Listen, we want high touch stuff. If we please go back with us, we will tell you, and when we lost a client, we told people listen, we not we can there’s going to be no increases happening for a period of time. And everybody was okay with it. Because everybody knows the story every week, how do we communicate?

John Corcoran  16:25  

Yeah. And how do you, you know, one thing that companies struggle with is sharing the successes and getting the team to understand the costs and the expenses associated with the business. So they don’t just, you know, so your team doesn’t just see dollar signs, like, Oh, we got all these new clients? Can I have a race? You know, that sort of thing? So as a business owner, how do you balance those two? How do you make sure that, you know, everyone in the company sees that just because you get some big new windfall new client doesn’t mean that it’s all profit, and we’re gonna spread all the money out?

Daniel Nel  17:01  

Yeah. So in numbers, open universal is the only part that we don’t share with the client or with our staff, a service. But everything in a business is our profit, our cash flow, I share, I see guys, this is the cash, our focus is really to have the company sustain itself for 12 months. So this is one of the big parts of our company, we are still a self funded business after 24 years, we don’t have an overdraft, we’ve done a date. And we’ve done a great formula, we do this and we share that with the people that say this, this is what it is, this is what we’re going to lose. This is the potential impact of this. And then when we have to take a cut from the directors and the leaders, they have to go first. So incur would happen, I took a 20% cut. But now after everything is done, and the directors took with me, so we switch it back on, first of all, because we say right, we back to normal, we switch on, then everybody’s saying, so in this process, we haven’t had anybody really coming to say, Oh, you got a new client or one or whatever. So it’s because it’s transparent. everybody’s on the same page with the winners and losers. And we are transparent about what is real. So that is a story that jack wells always shared about when you tell us share something, tell the world is don’t hide to go check. It’s bad or good. The real story,

John Corcoran  18:23  

huh? Now, I want to ask you about your big partner for Microsoft. And one of the training, one of the lessons in scaling up and an EO accelerator program is to diversify your risk. Do you? Are you ever fearful of having all your eggs in one basket, so to speak, by being partnered with one company that’s putting a lot of risk on you? Like, you know, what, if that company goes away, not that microphone is gonna go away? But what if they change the rules of the road? You know, if that’s your partnership, and you have no other options? Does that limit you? Yeah,

Daniel Nel  19:02  

good question. So, our partnership is not totally dependent on them. So we own all our IP. So one of the key decisions we made is that we are a technology business and, and that we built all our software, but it’s built on the Microsoft stack. And so it runs in Microsoft Azure, if that something happens to that, we will convert it into an on prem solution, or we always move the server to some somewhere else. But the fundamental piece from where we are, we are independent software vendors. So we own the IP. So we’re not a reseller of Microsoft. But we got our own products that Microsoft is, which are today partners. So we’ve created a lot of great IP. So we built three software service platforms, one is called one view. Another one’s called search identity, and another one’s called stack I said all of that to sort of accelerate out of innovation of learning from one product. And then we say, but what if this becomes reusable, and that sort of gave birth to some new products out of this, which is, which is great, great acceleration, very similar, the way that we actually launch kind of businesses as well.

John Corcoran  20:23  

You’ve mentioned it a few times, but I want to circle back to COVID. Because it’s been such a significant impact on the business world. We’re recording this in the beginning of October 2020. And so just to give people kind of a timeframe, that we certainly are not in the clear. Yeah, it sounds like in terms of the impact on your business, it, it had a big impact. Initially, after a few months, it sounds like you kind of recovered from it. Do you feel like you were prepared going into it? Or now having gone through it? Do you feel like you would do things differently? Or you’re making decisions now, to better prepare you for something like this in the future? 

Daniel Nel  21:03  

No, thank you, John, for that. So I think we are pretty, pretty, pretty strong at this point in time. So we lost a lot of us when the lockdown happened. Immediately we looked at scenarios, we forecast that we are going to lose within 60 days 10% of our revenue, and then after another 90 days, another 15%. So we’ve sort of in our mind says this could happen and we check that the trends of some of the companies that we service it might happen. So the first 30 days, nothing happened in terms of we continued, but everything was completely locked down. And then the first client came and said, Oh, we need to talk about this. And fortunately for us, is that we built a lot of our services are automated. So that we had a strong gross profit margin, so we could take a knock. But the beauty for us, because we are technology driven, it was very easy for us to immediately work remotely. So the big part for us, it happened at COVID. Because we had a plan for about 18 months to have offices elsewhere in the world, that COVID is for us fast forward, our expansion internationally with two formats. So because now everybody can work remotely, but we don’t need to have physical offices, and the rhythms that we’ve got so this has been a good part for us. So what my key executive now that’s running the SAS business is immigrating in 10 guys to the Netherlands, where he’s gonna run our company from

John Corcoran  22:49  

so, that did have a big impact. It sounds like business. Yeah. What do you do? We’re running a little short on time. What are you excited about heading into the new year, which is kind of right around the corner. Hopefully, we’ll get past this gold pandemic, and businesses will start to recover. What are you excited about?

Daniel Nel  23:11  

So, I’m excited that we started an interesting project. In late 2019, something called the future workforce. And really start looking forward and predicting how will our workforce change now, with the digitization? How do the skills need to change? How would you and all of sudden, this is not just come true. So I’m very excited about all the work that we’ve done in debt, and how we’ve segmented and created this great storyline of meaningful work in this new world of selecting talent. So our future workforce will probably not just be based in the middle of South Africa, Middle in a southern point here in Cape Town, it will be that anybody in the world can work with us now, the way we think and the way we put things together. So that’s exciting for me, the challenge for that will be always to have to maintain your culture. Now we’re going to move into something called a virtual culture. And I’m excited about finding out and seeing how we can overcome that and make it still very strong.

John Corcoran  24:19  

Hmm. So kind of a related question to that. But if someone’s listening to this, and they’re thinking about starting a business these days, in the context of a global pandemic, things changing, you know, and at all also just submit that, you know, some of the biggest and most impressive global brands that exist today, were started in a downturn. So what would you say to someone who’s thinking about starting a business today?

Daniel Nel  24:49  

I would say, Don’t be afraid. Just do it. But go and think about what somebody needs during this period of time, there’s always a new For something, there’s always a bottleneck some way that you can solve. So interesting, I just looked at the story about the potato chip to potato crisp that we all love, and we all addicted to that was sort of founded in 1853, or in that area, but accident, somebody had the normal fat chips, or french fries, and someone is unhappy and took it back to the ship. And he decided, I’m just going to drop a finer and deep fried fruit and it came back and so on. So that is sort of the pivot, something that you didn’t want becomes an inflection point. That just happens. So you just have to be open about that and to say, how can you make a change in the world by solving something that this audience has the opportunity to do? I think

John Corcoran  25:48  

it’s great. This has been great. I want to wrap things up. But the question I always ask Daniel, which is, let’s pretend we’re at an awards banquet, much like the Oscars of the Emmys, and you’re receiving an award for lifetime achievement for everything you’ve done up until this point. And what we all want to know is, who do you think were the mentors with the friends? Were the business partners? Who are the coaches, were the people that you would acknowledge in your remarks?

Daniel Nel  26:11  

You know, thank you for the question, john as well. So the big part for me will be my parents are still alive, you know, they 86 and 84. So for me will be very much acknowledging them. For their role that I played in my life. My uncle’s been one of my inspirations for being an entrepreneur, and then my team through the years, so it’s very difficult to single out one person, but for me, it was the team that followed me, and the people have been part of it. They’ve been a great success for us, leading up to this, but now if the team for me, right will be caught right now the nebula team, the 48 team, the cyber team, the zubik team, the telecoms team, all of them really amazing. And then, for me, the opportunities that I’ve got through Yo, yo, this, just that opportunity of going to the Leadership Academy, that in 2015 made a big change for me about how I think, and I met people like Warren Rustin and, and a lot of those people and then also accelerated. The other big part of me says it’s just too many people to probably remember but for me, that is actually so much just for me, it’s about having the opportunity of just being where I am. And just learn and give back.

John Corcoran  27:38  

That’s great. One Nebula, 48 Software, Nebula telecoms and 48 x holdings. Am I missing any of them?

Daniel Nel  27:47  

Yeah, and Xebec Human Capital.

John Corcoran  27:49  

human capital. Okay. All right, where? Where can people go to learn more about you or connect with you or learn more about your different companies.

Daniel Nel  27:56  

So this, I can just google me on LinkedIn, Daniel Nel, you can find me there or www.onenebula.com. That’s our global brand. So they’re most welcome just to make contact with us. So really great, John, to spend time with you.

John Corcoran  28:14  

Absolutely. Daniel. And, you know, one of the great things about the EO community is meeting such great people like you who spend their time giving back to the greater community. So thank you for everything you do. And pleasure talking to you today.

Daniel Nel  28:28  

Thank you so much.

Outro  28:30  

Thank you for listening to the Smart Business Revolution Podcast with John Corcoran. Find out more at smartbusinessrevolution.com. And while you’re there, sign up for our email list and join the revolution. And be listening for the next episode of the Smart Business Revolution Podcast.