Startups

How SA venture builder Specno has grown from university startup to … – Disrupt Africa


South African venture builder Specno began life as a two-founder business out of Stellenbosch University but is now an international agency that works with more than 100 clients across the world.

Specno is a venture builder that helps startups, businesses and large enterprises validate, design and build digital solutions to everyday problems.

“We are passionate about building high-performance tech teams. With our experience in helping startups validate, design and build world-class applications we have cultivated a team of entrepreneurial thinkers. Being able to ideate, create and iterate in a fast-paced manner has allowed us to help startups, businesses and large enterprises innovate successfully,” managing director and co-founder Daniel Novitzkas told Disrupt Africa.

Jacques Jordaan, co-founder and director, said Specno focused on bridging the technological gap between innovators and tech teams. 

“With our refined lean processes and effective communication, we guide our clients through the journey of building out their ideas,” he said.

Specno was founded in 2018 when Novitzkas and Jordaan first met while studying towards their postgraduate degrees at the University of Stellenbosch. Not long after, it approached its first anchor client, agri-tech startup Skudu, to design a reporting module. 

“Despite having almost no experience in product development, our diligence and ‘can-do’ attitude prevailed and the client was so impressed with our efforts, that we were awarded a three-year contract and enough capital to start a profitable business,” Novitzkas said.

In the four years since Novitzkas and Jordaan left university, Specno has grown from a team of two, operating from a two-bedroom apartment in Central Stellenbosch, to one of the top-rated app-development and user-experience agencies in South Africa. 

Now with a head office in Century City, Cape Town, the company employs more than 40 full-time staff, and has serviced more than 100 clients from across South Africa, the Netherlands, United States, and United Kingdom. It has achieved a consistent annual growth rate of 230 per cent year-on-year. So what is the secret sauce?

“We realised that there was a big disconnect between tech founders and business owners trying to implement new technologies within their businesses and the realities of validating, designing and building software solutions,” Jordaan said.

“The general market lacks the experience and skills it takes to build new software solutions effectively and we stepped in to provide the guidance and technical support these founders and businesses need to better execute new tech products.”

In the beginning, the company started out slowly, mainly focusing on the anchor client, Skudu. During the second year of business, the team started to market the company and focused on getting more clients – securing four more. 

“Things really picked up in the third year of business when the company took on 40 new clients in a year. This was when the traction really started to pick up. The company is still growing and new clients are streaming in each week,” said Novitzkas.

To serve this growing demand, the team has grown from two people to 45 in four years, and is looking to double in size over the next 14 months. All this while being self-funded.

“When we started the company, Skudu took a 20 per cent stake in the business in return for a three-year contract which allowed us to run the company profitably from the start,” Jordaan said. “However, during the pandemic, Skudu had some cashflow issues and we managed to buy back the 20 per cent stake that Skudu held.”

Novitzkas and Jordaan, then, are now once again the sole owners of the company, which having cemented its reputation locally is now looking to international markets for its next phase of growth. In 2022, it opened its first office in Amsterdam, the Netherlands. 

“This was a major milestone for  us, with foreign markets being an important wealth-creator for South Africa’s tech-innovation ecosystem,” said Novitzkas.

“The Dutch startup ecosystem is booming and on track to become one of the largest and most important globally. From a business development point of view, the market provides Specno with a gateway to attract bigger and more capital-intensive projects, while also affording the company an opportunity to bring work from Europe back to South Africa. Beyond this, Amsterdam is also home to much larger startups who can give local scale-ups like Specno and its clients insight into how to better plan for the future.”

To support its recent expansion, Specno is in the early stages of implementing a ‘Viking’ system, where team members are given equity in the company for expanding its footprint in key markets overseas. Before emigrating, staff undergo training to help them setup and run autonomous Specno offices while ensuring consistency with the Specno brand.

Specno makes money by selling out the time of its staff. This is basically a consulting model where clients’ needs are assessed and a dedicated team is placed on a project. Over the last four years, the company’s revenue has grown over 235 per cent year-on-year, and profitability has risen with it. 

“The company has been profitable since its origin and is looking to have a great 2023,” said Jordaan.



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