INFOTECH: Online Business Is Twangoo-d
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TWO local entrepreneurs who branched out on their own and established a collective-buying company, called Twangoo, went on to become a large success. So much so that they have now sold the company to the US collective-buying giant Groupon, whose South African division they will run as joint CEOs.
Wayne Gosling and Daniel Guasco, studying their MBA at the UCT Graduate School of Business, hit on the idea behind Twangoo. The company negotiates huge discounts on popular local goods, services and cultural events and then offers these deals to thousands of subscribers in a free daily email. The deals are activated only when the minimum number of people agree to buy; if the threshold isn’t reached the deal falls away, ensuring security for both client and consumer. Twangoo then takes a small percentage of the deal.
“We based our business plan entirely on American company Groupon’s, who offer the same service, but have no local representative. Even with that basis, it was incredibly hard going. We started on a shoestring budget, using our lounge as our office, with basically no capital and no investors. Luckily the business plan means that as soon as the first deal goes through it’s cash positive; but it took a lot of effort, perseverance and many sleepless nights to reach even that point,” says Guasco.
“Doing an MBA gives one the confidence to undertake such a challenge with all the risks it involves. Besides the technical skills, having a well-renowned business school behind our names gave us a credibility that we desperately needed at that stage,” he says.
Guasco is an innovator and business development specialist, with over 12 years of business experience gained within an African, European and Eastern European context. He has worked in various consultative sales and marketing roles for leading international companies such as Vodacom, Nestle, Cadbury and Sony Ericsson.
“Before studying my MBA I’d been working for a corporation in the UK and I hated every minute of it; my background was originally of an entrepreneurial nature, and I wanted to get back into that. It was the same for Wayne, which is a big part of why we decided to study our MBAs.”
Although Wayne Gosling originally made his mark in the marketing and sales world, the latter part of his career had seen him involved in consulting to a variety of banks, as well as ICT and FMCG players. Gosling’s business education, coupled with his valuable experience, was integral in developing the strategies and programmes that positioned Twangoo in today’s ever-evolving consumer market.
Starting Twangoo together provided a chance for the two of them to focus on their shared entrepreneurial aspirations. Gosling handled tech and development, while Guasco investigated the possibilities of investors, or even a buyer.
By June 2010 the company started to see rapidly escalated revenue come in, and as soon as they felt they were well established, Guasco approached Groupon about the sale of Twangoo. After four months of persistence, Twangoo got the call from Groupon. The company bought Twangoo for an undisclosed amount in January 2011, and Gosling and Guasco have stayed on as joint chief executive officers.
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