Back in 2014, running a cellphone store was a dangerous business to be in. Robberies were a daily occurrence, with heavily armed robbers striking almost with impunity. Barge in. Hold the staff at gunpoint. Open the safe. Grab the goods, and bingo. For serial entrepreneur Michael Gewer, who was managing a division at a large cellular dealer at the time, there had to be a better way.
Then, driving home one day, Gewer had his ‘Eureka moment’. What if he were to build a secure locker with separate compartments, each with its own time delay? No robber would wait around to get one phone every five minutes.
“If you think about a robbery, the thieves have everything on their side: inside information, the fear factor, the element of surprise. The one thing they don’t have is time. So we set out to create a product that builds time into the process,” says Gewer.
It was a revolutionary idea. There was just one problem: the product didn’t exist anywhere in the world, and would have to be conceptualised and created from scratch. Gewer needed an engineer to help design and build the kit – and his lifelong friend, technology entrepreneur Lance Baum, was just the person for the job.
SA solutions for SA problems
And so, one of South Africa’s emerging security technology success stories, VaultGroup, was born. Gewer and Baum patented the idea, and started working on various designs and technologies. After several months, they had built their first working product, aptly named CellVault™. It was a huge step for the young company: a home-grown solution, for a uniquely South African business problem.
Even so, getting mobile phone retailers to buy into a brand-new, untested concept proved challenging at first. Just to get their foot in the door, Gewer and Baum persuaded 10 stores to try CellVault as a proof of concept. Their breakthrough came when one of the pilot retail stores was hit by robbers. The store lost around R1-million in high-end cellphones from its standard safe; zero from its Cellvault. The credentials were established.
Today, the CellVault product can be found in more than 1 500 high-end stores. In barely six years, VaultGroup has grown from a start-up to a 40+ person business that has prevented or minimised loss in its clients stores more than 600 times.
But while CellVault was the product that launched the VaultGroup’s entrepreneurial journey, the company has barely scratched the surface of the growing demand for secure storage solutions in the country from retailers, banks, commercial and residential property owners, and courier and logistics companies.
Using technology to meet business needs
In fact, Gewer believes the company’s new PackVault product is ideally placed to capitalise on the ‘next big thing’ in retail, Click & Collect. Consumers order and pay for their goods online, then collect them from a secure locker using a one-time pin or a QR code.
“Retailers are in a tough place right now. The cost of acquisitions and getting product into clients’ hands is too high. Covid-19 is keeping people out of the malls. Most of all, consumers want a different experience. Click & Collect gives consumers the convenience they want, while still offering mall owners and retailers the opportunity to get people into the malls, and do a potential upsell,” says Gewer.
For Baum, it’s all about the power of using technology to drive real innovation and real-world solutions for the problems facing businesses and consumers alike – and the sky’s the limit, with numerous potential applications for secure storage across a range of industry verticals.
“How do retailers get goods to their customers in a time of social distancing, when they have no robust e-commerce platform, and last mile delivery costs can be 50% of the total logistic costs?
“How do banks get new debit and credit cards to their customers without forcing them to come into a branch? How do couriers ensure valuable deliveries end up in the right hands, without the headache of wrong addresses and multiple delivery attempts? How do jewellers operate in a world where armed gangs break display cases and flee with their high-value items? These are the pain points facing businesses today – and we can help them solve their problems, using fully home-grown technology,” says Baum.
An entrepreneurial journey
While VaultGroup is rapidly emerging as the latest South African success story, it certainly isn’t Gewer or Baum’s first rodeo. Gewer’s lifelong dream was to start and own his own business. From the start, his career reflected that, from creating online trading platforms where none had existed to running divisions of larger companies as his own business.
Baum started his career managing one of the first mobile retail stores in South Africa, and helped build the country’s first VoIP network before founding and heading a digital signage company. The allure of taking an entirely new product to market took him to VaultGroup.
As both will tell you, starting a business in South Africa isn’t the easiest task. Raising capital to start and sustain the business is a perennial challenge, and the regulatory environment is tough. Many entrepreneurs battle to make the shift from running start-ups to managing people as their businesses grow.
And, of course, cash flow is probably the number one issue facing small businesses. “Everything takes longer than you think,” says Gewer. “Our first couple of years were extremely tough, but we believed in our product and knew it would do well. We were lucky to have great support from our families and investors, but you have to be prepared to knuckle down and stay the course.”
What makes VaultGroup unique, says Baum, is the fact that it understands the South African environment and specific challenges better than anyone else, and meets those challenges with home-grown solutions.
“You can buy lockers from anywhere in the world. But ours are adapted to local needs and users. We have our own proprietary technology, with a growing tech and dev team. Most of all, though, we build our products exactly to the clients’ specification: they tell us what they need, and we build it. We also understand that servicing our clients is of the upmost importance and we are very proud of our state-of-the-art support team,” he says.
“What our clients buy from us is a range of high-tech storage solutions that are customised to their exact needs. What they get is peace of mind. And that makes all the difference,” concludes Gewer.