The Hello Group’s story reads much like that of David and Goliath.
Established more than 10 years ago with his brother Shaazim, the siblings set out to find a solution that would make international voice calling for migrants cheaper, after they’d noticed how much cheaper it is to make a call from the UK to SA than from SA to the UK – which is 10 times more expensive.
“The initial aspiration was to leverage Voice Over IP (VoIP) technology to lower the cost of international calls, and it was driven purely by a profit motive,” Khamissa says. “Our growth vision and aspirations have evolved radically over the years. The concept of leveraging emerging technologies to benefit migrant and low-income communities remains the same. What has changed is that we focus on multiple industries and are now more focused on integrating with the communities we serve.”
The brothers faced their first major challenge before they’d even launched the business, one that could have spelt the end for them. But Khamissa says they were determined persevere.
Having placed all their life savings (millions) into starting the business, almost of it was wiped out the day before launch date when they discovered that Telkom had changed the way its public phones worked, killing their product in the process.
“We’ve had to fight off attacks by the giants in the industry,” he says. “Many of these attacks were extremely aggressive and anti-competitive. One of these attacks almost shut us down – we lost 90% of our start-up capital overnight, my entire life savings. The game wasn’t fair and we were losing badly; we needed to either quit or change the game.”
It was a valuable lesson in entrepreneurship learnt early on, and it taught him that being adaptable and innovative is key to survival. The brothers had to sell their cars and put every remaining cent into the business to keep it afloat initially.
“It was then that we created a simple innovation that changed the face of international calling in South Africa forever,” Khamissa explains. “We combined GSM, WASP services and VoIP, and went from zero to doing more business than we could handle.”
The brothers later teamed up with Cell C to launch Hello Mobile, which gives subscribers access to Cell C’s local call rates as well as the Hello Group’s low-cost international call rates in one package.
Last year, Khamissa was the recipient of the EY Southern Africa World Entrepreneur Award in the Exceptional category as well as the Sanlam/Business Partners Medium Business Entrepreneur of the Year and Innovator of the Year awards in recognition of his achievements in growing the business to employing just under 400 people, with 1,5 million subscribers and 45 000 street vendors and spaza shop owners who earn commission for distributing their product – a move that’s saved the company hugely in distribution costs.
Besides providing voice calling services, the Hello Group has also branched out into the financial services sector, having established an international money transfer service that caters to the unbanked population at half the price its competitors charge.
Khamissa, an actuary who is currently studying entrepreneurship at Harvard University in America, says the key lessons he’s learnt along his entrepreneurial journey is to focus on the customer and how to create value for them, and to keep experimenting.
“Create unique value for your customers. Think differently, reimagine the problem and find a unique solution that solves a real customer problem. Life is too short to do what everyone else is doing.
“Take calculated risks and make each experiment small. This is the best way to learn. You miss 100% of the shots you don’t take.”