Chris BishopBy Chris Bishop|April 27, 2022|19 Minutes|In Billionaire Today

Billionaire Today

“How I survived was a miracle. God only knows”

Herman Mashaba is one of the elder statesmen of African entrepreneurship. He grew up in poverty, was blocked by a regime based on race, but he rose to write an unlikely chapter in the book of making millions through fire and outrageous fortune.

July 2021 will go down in history as one of the worst months for South African entrepreneurs. Political unrest, provoked by the imprisonment of former president Jacob Zuma for contempt of court, spilled over into a frenzy of looting and bloodshed. Unprecedented destruction that cost hundreds of millions of dollars to an economy that can ill afford it.

The fire, fury and violence killed hundreds and left many dreams of entrepreneurs in ashes. It was cruel. Many had held on through the COVID-19 pandemic only to see their businesses despatched amid the howl of the mob.

Herman Mashaba – the entrepreneur’s entrepreneur – looked over the smoking ruins, shaking his head. It was not the first time he had seen dreams of a better future go up in smoke. A mystery fire shattered one of his entrepreneurial hopes, nearly 30 years ago. To this day, he doesn’t know who lit the match.

At least, this time, he has an idea of what could be responsible. Speaking as an opposition politician for Action SA – as well as an entrepreneur – he says: “South Africa has been a difficult country to do business for at least the last 10 years or so, mainly due to the following underlying factors: economic policy uncertainty; focus on BBBEE (black empowerment) to benefit the politically connected and the capture of our criminal justice system, to serve and protect corrupt politicians.”

You could have bet money against Mashaba – once the Mayor of Johannesburg – becoming a politician. He spent his life amassing millions as a self-made entrepreneur – with a money-spinning hair care product Black Like Me that became a household name in southern Africa; he always said he would make a poor politician.

Besides why would he? He had a fairly prosperous investment company and was proud to call himself a name I actually coined as a magazine editor: The Capitalist Crusader.  Now he is also a sometime political crusader.

“We’ve got an economy that sits at junk status. A country as rich as South Africa, it’s for me tragic. It very, it’s a very sad state of affairs. I challenge anyone go and study, look at where entrepreneurs have flourished and succeeded. They succeed in environments where government stays away from them. You need to really have the government that is fair that creates a conducive environment for the private sector to be the player not the government,” he says.

“But the rate at which my country was collapsing and tired of going into the boardroom or having going to dinner parties and so forth, and I said, guys we’re not going to solve this country’s problems at this environment. I looked at our constitution and I looked at myself, and I said if not me who?”

Mashaba thought about it and decided to go out on his own. He approached Joseph Molwantwa  a fellow salesman  and an Afrikaner by the name of Johan Kriel, a production manager who knew how to make hair products. He borrowed R30,000  a fortune in those days when money was costly to borrow from township businessman Walter Dube; it was paid back in seven months.

Photo © Herman Mashaba

Politics is a dirty game and a quick way for a rich man to make enemies. Yet, Mashaba picked up the gauntlet, in 2016, claiming he wanted to save South Africa from ruin, even though years ago he would have thought it a mad idea.

Another factor is that Mashaba loves taking a chance and turned some of his first pennies risking a bottle around the head, or a knife in the stomach.

The risk the young Mashaba ran was that of being a knocksman – the organiser of backstreet dice games – a dangerous occupation to say the least. He grew up penniless in Hammanskraal north of Pretoria – the son of a domestic worker where most of his friends earned a meagre pay packet from tending the gardens of rich white people in the city – a lowly job Mashaba refused.

As a schoolboy knocksman Mashaba waited for his friends to bring their pay packets home at the end of the week, so he could pay his way through high school.

“The people used to earn weekly in those days so Friday was a big day to gamble. We left school about two three; run, go and set up; wait for those guys to knock off and we’ll gamble until early hours of Saturday,” he recalled.

It is a telling sign of Mashaba’s nature – and his penury – that he would hide the first two Rand he won in the night so he would have enough money to pay his way in the coming week.

This was a hazardous trade. Knocksmen can lose heavily, on the roll of the dice – even when they win it can be costly. Losers in dice games, in the boisterous drinking holes of South Africa, can be angry and violent when you are walking away with their hard-earned cash. Yet is it another insight into Mashaba’s personality how he handled this.

“If you are strong and fair as a knocksman and run a disciplined game, they will respect you and you won’t get hurt,” he once told me with a smile.

University didn’t work out for Mashaba. Politics closed down his college and he had to turn a penny on the streets in the days of apartheid when the white suburbs were a hostile place for a black man to walk alone.

For this reason, Mashaba deserves a medal for bravery for his first venture as an entrepreneur selling everything from crockery to linen to fire detection devices door-to-door in the suburbs. It was far from easy in the days when residents would let their dogs loose as soon as look at you.

“I think we have been in environment where entrepreneurship and self-reliance were the order of the day. Because we grew up under apartheid government that was against us. It made everything impossible. Black advancement was like treason! But we survived because we knew we had no government for us,” he says.

But tempting fate at the gate led to another break as a travelling salesman for a hair products company, as black South Africans went through a craze of wearing Michael Jackson-style permed hair. He bought a car – even though he didn’t know how to drive – booked driving lessons and decided to marry his sweetheart, Connie, so that the two could set up a stable family.

“I’ve come across entrepreneurs that does well, they don’t take care of their family and personal life, stability. You know they create the things that will disrupt them, you know family is, stability is, very crucial, because you work hard as an entrepreneur. You want when you get home there is someone to talk to,” he says of his marriage that was sealed along with his new sales job.

Herman Mashaba Wedding to Connie.

Photo © Herman Mashaba

“Nineteen months down the line, I was their top sales guy, but I felt vulnerable. One thing that my grandfather taught me was always to be proactive in life. Don’t allow other people to decide your fate.”

As all born entrepreneurs do, Mashaba spotted a gap where he could make money. He saw that most of the salons were always short of hair products. Mashaba thought about it and decided to go out on his own. He approached Joseph Molwantwa – a fellow salesman – and an Afrikaner by the name of Johan Kriel, a production manager who knew how to make hair products. He borrowed R30,000 – a fortune in those days when money was costly to borrow– from township businessman Walter Dube; it was paid back in seven months.

Black Like Me was born on February 14 1985 and sold like hot cakes among black South Africans who wanted, hot, perfect curls, in the manner of Michael Jackson. Soon the company was exporting throughout Southern Africa and making a fortune. Mashaba stayed on the road at the birth of his new venture.

“I had a client base all over the country, I went out to prepare, to work hard, to establish distributors all over the country. It’s not something that happened by chance. You know I used to travel roughly 10, 000 kilometres every single month, creating the market for my distributors, establishing distribution network and so forth and over many years it actually created demand where I started getting calls from national chains. I didn’t really want to wake up and think I can produce and go out and supply my products to national chains- that would be a recipe for disaster; because it’s not a question of people are going to buy your products, because it’s on shelf, people are going to buy your product on if it is on shelf when they need it,” says Mashaba.

As the money flooded in, Mashaba bought out Molwantwa and Kriel. He cashed in, in 1997, when he sold 75% of his operation to Colgate-Palmolive. The multi-national failed to make a fist of it and Mashaba bought it back for a lot less.

“I made another profit,” smiles Mashaba.

Disaster bit back at Black Like Me on November 17 1993. The business set to make a fortune that Christmas with Mashaba planning 24-hour shifts to keep up with demand at his 6,000 square-metre, factory in Mabopane, north of Pretoria. Unfortunately, someone threw a match and a fire tore through the $750,000, factory destroying a mountain of stock and wiping out seven years of hard work. By the time 150 workers arrived for the morning shift, their jobs were in ashes.

“The incident was horrific, how I survived was a miracle. God only knows,” recalls Mashaba.

It took two years to get back to full production, in which time Mashaba lost market share. Police said it was arson, but no one was ever charged with starting the fire.

Yet he recovered and prospered – dipped his toe into black economic empowerment with a deal in ferrochrome – and invested in scores of businesses through his operation Lephatsi Investments.

Nearly 30 years after Mashaba started out as an entrepreneur and he urges other Africans to think before they follow.

“Life is not easy today and I can assure you, life in few hundred years down the life is going to be tougher than what it is today. So, people must accept life for what it is. Life is a tough place to be. Don’t ever take things for granted and want easy things in life. Easy things in life, they don’t exist. If they exist, they will be short lived. And you’ve got to really be prepared to work hard because, unfortunately, entrepreneurship requires hard work.”

At least, this time, he has an idea of what could be responsible. Speaking as an opposition politician for Action SA - as well as an entrepreneur  he says: South Africa has been a difficult country to do business for at least the last 10 years or so, mainly due to the following underlying factors: economic policy uncertainty; focus on BBBEE (black empowerment) to benefit the politically connected and the capture of our criminal justice system, to serve and protect corrupt politicians.

Even before the unrest seen in South Africa, in 2021, Mashaba was downcast.

“I cannot see how an entrepreneur can really make it in an environment like currently what we’ve got here in South Africa. High levels high levels of crime and so forth,” says Mashaba.

“You can’t live in an environment where you have criminal syndicates breaking into your business every second night. Or being robbed and so forth. So, you need a conducive environment and that role of government to play in ensuring that you create that conducive environment. If you just really create a conducive environment, this government, you will see the explosion of entrepreneurship.”

Mashaba sees brighter prospects elsewhere in Africa.

“I think for me, I am highly impressed with what I see happening at the moment in Rwanda. Really it, it’s really a shining example of what is possible. I see Ethiopia its coming along, quite nicely. And Kenya has got lots of potential but they have got to deal with a level of corruption because once you have politicians involved in blatant corruption unfortunately you disturb the entrepreneurial ecosystem.”

Where does he think the billionaires of tomorrow will spring from?

“You can make money by really starting small, trade from a shop, a few years down the line, it’s a supermarket. Few years down the line, you’re a wholesaler. Few years down the line, you sell it to a bigger group. You know there is so many ways for people to really make money. You can be in IT. Honestly to make you money it’s up to your own personal talent.”

Finally, the unrest story and the wanton looting and destruction depressed many South Africans, including myself.

There were few crumbs of comfort. One of them was the image of honest, decent, hard-working South Africans singing the national anthem as they cleaned up and defended their neighbourhood stores from gangs of looters; it warmed the cockles of many a sore heart; including that of Mashaba.

“This has given some hope to the possibility that South Africa can still be saved.”

In these difficult times hope is priceless and hopefully springs eternal.

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