Sunday World’s Shwashwi is one of the most recognized media brands in South Africa, but few know as much about the man behind this popular gossip sensation, not to mention the countless successes in both the media, entertainment and hospitality industries. Lebo Gunguluza is an influential innovator and the ultimate “breakthrough entrepreneur”. He has overcome the odds that were stacked against him from the start and broke the boundaries by starting a multi-million rand empire without funding and by creating a revolutionary organization with a group of successful entrepreneurs to help aspiring township and rural entrepreneurs start and grow successful businesses.
Having set clear goals of financial success for himself at the tender age that: by the age of 25, he must have been a millionaire; by the age of 35, he must have been a multi-millionaire; and by the age of 45, he must be a billionaire, Lebo Gunguluza achieved his first goal, at the age of 27, when he made his first million rand through a series of entertainment events and activities that redefined the possibilities of success.
Lebo Gunguluza was born in Port Elizabeth were he matriculated with flying colours. Armed only with R60, he got on a bus to study at the University of Natal in Durban. This is where he worked part-time at a retail store to fund his full time studies. After acquiring his degree in record time, he then decided to move to Johannesburg to get a job to help support his family.
Getting Started: Lebo Gunguluza’s first experience in the world of media and business was with SABC, selling advertising space on black radio stations. This is where he developed a passion for the media industry. Before long he was promoted as Brand Communications Executive and spent most of his time designing programme packages that the advertisers bought into. He then moved through to Metro FM, ending up as Marketing & Sales Manager, and was sent to USA to attend a broadcast and media-training course. On his return, he joined Herdbuoys as Accounts Manager, where he managed key accounts like SA Breweries, Metro FM and the return of Hush Puppies to South Africa.
Gunguluza’s upward-bound career came to a screeching halt in 1997 when he embarked upon a process of self-discovery that resulted in his resignation from Herdbuoys. “I knew I was going to be an entrepreneur”, he says. “I had made the decision to take responsibility for myself and had decided that I was not be surviving from hand to mouth in a new democracy with great opportunities, when I also needed to support my family in Port Elizabeth who were going through a rough patch.”
Lebo Gunguluza’s entrepreneurial drive secured his first business deal with the owner of a night club called Insomnia, where he put together entertainment attractions and marketed them in exchange for a percentage at the door. The success of this deal made him a well-known promoter in entertainment circles with a reputation for organizing the best parties in Johannesburg. He used this opportunity to partner with YFM, a new youth radio station at that time, conceptualized major events that made him a big player and helped him reach a peak on his financial success through his sold-out youth events at Newtown’s Electric Workshop. The news of Gunguluza's success spread through the entertainment industry like wildfire and sparked an army of young budding entrepreneurs all wanting to start similar businesses. He responded to the imitators by establishing Gunguluza Entertainment, where he diversified his business interest by starting an independent record label and artist management unit which led him to form strategic partnerships with key promoters.
He invested most of his resources on these new initiatives but the return on investment was never realized. The market was also very fickle and unreliable, and the promoters were not helping either with their dodgy operational ethics. This was not enough to sustain his business. By early 1999 his income had slowly petered out and he was left burdened by debt. He was forced to sell his car and close all his account and had to bear the humiliation of being blacklisted with the credit bureau. Things got so bad that for a while he had to rely on his family to pay his rent. He lost weight simply because he could not afford to buy food. It was in this, the darkest time of his life, that Gunguluza learnt three priceless lessons in business by which he has lived ever since. These were the importance of working with a good paying market, managing cash flow and the value of planning in business. “This was a light bulb moment in my life,” says Gunguluza. “As strange as it may sound, it had never occurred to me that I should carefully manage my cash flow or even plan my business.”
It was also during this time of poverty that he asked himself a critical question “Why is he so broke, and yet famous figures such as Richard Branson, Donald Trump and the the Onassis of this world were so rich.” He made a decision that day to go read about these guys. He spent endless hours at the CNA, reading biographies of these billionaires, and from time to time being chased away by staff members for not buying the books.
This learning phase inspired him to continue his entrepreneurial journey, with two great lessons on hand, the first one being that “Whatever business you go into, you must love it and know it like the back of your hand” and the second lesson being that “You must be its number one salesperson and that all companies are always looking for the best salesperson to improve their bottom-line”. Instead of allowing depression over his failure to engulf him, Gunguluza decided to start again from scratch and look for a new business opportunity that avoided the pitfalls of his last business. “This time I was looking for sustainability in a business,” he says. “I wanted to target a more stable clientele than before (a good paying market)”.
THE BIRTH OF GEM GROUP
Lebo Gunguluza recognized his business sustainability was in the private sector, and that this market segment is broader and diverse. He secured himself a position in a corporate communication company to learn more about the business of selling media space in publishing and corporate events. Nine-months later, to showcase a clear change in focus he established Corporate Fusion, a corporate communication and events management company. Within 18 months, this company that was run from a townshouse with a single telephone line was generating over R2 Million. Gunguluza rewarded himself by buying himself amongst other things his first Porsche that he always wanted. Building on the success of Corporate Fusion, Gunguluza formed GIDE, a youth development and career guidance development company in partnership with his brother who also joined the growing group of companies. A year later the turnover had doubled, and Gunguluza decided to move into proper offices and register Gunguluza Enterprises and media, known today as the GEM Group, which was established to overlook the new divisions and growing group of companies.
The GEM (Gunguluza Enterprises & Media) Group of Companies was born as a multimedia and communication company with seven business channels namely: a television production company; a training and development company; a publishing company which produced amongst other publications a country-wide student newspaper called Campus Times; an events company that launched the Eastern Cape Awards, the South African Education Awards, the Soweto Awards and a number of major conferences.
THE RISE AND FALL OF GEM GROUP
The company started turning over millions and Gunguluza had no experience in managing such high turnovers, and had no knowledge about investment markets. He then decided to acquire a million-rand building that the Gem Group was operating from and the rest of his new found wealth was spent acquiring more cars. He employed more than 40 people who were randomly recruited based on looks, friendship and family ties. He also travelled extensively overseas and started losing sight of his business operations. While overseas, one of his key projects took a big knock that affected his major account that used to succesfully sustain his busness. He came back early from his overseas trip to rescue the project, but it was too late. He lost that client and two other major clients all in the month of August 2004. This was the worst time of his life, as his company was fast going into debt. Within six month (mid 2005), Gunguluza was in debt of over R2-miliion and had to make some key decisions going forward. He fired most of his staff, sold some of his cars and businesses, but that did not help much. He finally closed the company for a while to settle his debts. Some the staff members took him to the CCMA, and had creditors houding him everyday for the next couple of months. The pressure became so much that he decided to close his cellphone line for a period of three months, and used that time to figure his next move.
New Business Opportunities: As the company collapsed, Gunguluza learnt his next crucial lesson in business. “I realized that if you don’t have the right people in your organisation, you don't have the right support, especially in times of crisis. A big part of one’s success is the fact that he or she is surrounded by competent and qualified individuals who excel in their duties and are able to offer good advice at all times.
”An opportunity then existed to take over Primi Piatti in Rosebank, while he was negotiating payment terms with the creditors from the Gem Group of companies. The restaurant became a sustainable operation which provided a stable income for his household and gave Gunguluza a chance to refresh and look for new business opportunities. It took three years to settle the outstanding debt from the Gem Group. The restaurant became very popular and helped further profile Gunguluza as a sustainable and celebrated black entrepreneur in South Africa. The restaurant received the most coveted Tenant's Award for the Highest Growth in Turnover in their second year of operation.
Unfortunately at this time that he was starting to re-build his empire, Gunguluza and his wife went through a divorce, where she continued by herself with the restaurant business.
REBUILD THE GEM GROUP
Gunguluza then continued re-building GEM Group of Companies by establishing new companies in the media and hospitality space and forming further partnerships.He further partnered with Uhuru Communications, the publishers of SAA’s Sawubona magazine, who also publish an arts & recreation magazine called Rootz and a campus publication Student Choice. He solidified his partnership by successfully launching a new publication called Municipal Focus, which covers the business of Local Government with a nationwide distribution to municipalities and government departments. He also took on an active role as a Commercial Director and had to set up the Johannesburg office to extend the publishing footprint in South Africa and Africa. He further secured the ultimate government publication that targets top government officials called Public Sector Manager to strengthen Uhuru’s portfolio of power magazines. He further initiated the publishing of the Metro FM publication called Metro Live, Joy of Jazz and Loocha under the Uhuru stable amongst other initiatives. To strengthen his publishing interest, he partnered with Realm Digital to drive his publishing interest into digital publishing. Mr. Gunguluza further acquired an interest in Ezweni to form the first 100% black owned magazine distribution agency in South Africa. Mr. Gunguluza is due to launch 3 new publications in the next 6 months, which includes Destinations, a publication that will extend our footprint beyond SAWUBONA magazine, as a travel publication. Other upcoming publications are SOE Review, a publication that looks at the progress of SOEs in South Africa and PLATINUM, which will be the first men’s magazine in South Africa to compete directly with FHM and GQ.
Gunguluza also partnered in a R6,2-billion development deal in Gauteng, which is 10 minutes away from the OR Tambo International Airport. The first phase of this development kicks off in November 2017 with a R330 Million Hotel. His hotel development and operations management hospitality interests are activated and marketed under Gem Hotels, a wholly owned division of the GEM Group. In 2011, he further partnered with the Singer Hotel Group, to invest in more hotel developments and launch a travel agency operating in Cape Town and Johannesburg called Izani Travel, found on www.izanitravel.co.za
His interest in Events and Communications remains strong, with the Launch of Intouch Africa Events and Intouch Consulting, a specialist events and communications agency which has given him the ultimate position of being one of the most powerful 100% black owned events production houses in South Africa, hosting over 42 corporate and government related events a year. As a result of this, he acquired an interest in furniture hire and decor company, which houses over 7000 units of decor and furniture, with a manufacturing facility for customised requests.
As part of his vision to empower young entrepreneurs, Mr. Gunguluza introduced the 12-12-12 Campaign, which he launched to recruit 12 young Entrepreneurs every 12 Months to run 12 new Enterprises, supported by the GEM Group of companies and his network of business associates. Mr. Gunguluza launched this campaign on 12 December 2012 (12-12-12), after two years of planning.
Mr. Gunguluza launched Izani due to an overwhelming number of requests from young entrepreneurs requesting mentorship from him, he decided to start Izani 12-12-12, which translates to a calling that says “I have heeded your call, Come! (Izani), let us work together”. As a result he embarked on shortlisting young entrepreneurs with the most potential.
The entrepreneurs started working in the Sandton office, and has to date recruited 30 entrepreneurs through this programme. He dedicated his salary and any other forms of support to fund this campaign and the entrepreneurs, their office infrastructure as well as their resources as they run these enterprises. For more information on these enterprises.
In 2014, he also launched Izani Capital, the group's venture capital and investment arm, which is already involved in a number of deals including a R230 Million infrastructure venture in the Northern Cape and R4.2 billion rand retail project in Ballito next to the King Shaka International Airport. Izani Capital has since changed its focus to fintech, working with Yiedi to accelerate Fintech Tech Startups and through a special fund, invest in the most promising fintech startups. To date Gunguluza has learnt a great deal about partnerships, and believes one should not reinvent the wheel, but also learn and build on opportunities that already exist.
Contributions: Gunguluza has been honoured with Africa Heritage Youth Entrepreneur Award for his dedication and contributions to the South African society. He is the co-founder and President of the South African Black Entrepreneurs Forum (SABEF), a section 21 organisation established to promote, inspire and grow entrepreneurship in the black communities as the source of poverty alleviation, job creation and economic growth in South Africa. He is also the co-founder and Chairman of the Public Sector Growth Initiative (PSGI), a membership organization established to accelerate government projects through innovation and sustainable partnerships with the private sector.
Today Gunguluza heads up the GEM Group of Companies, an integrated media, hospitality and communications group that offers holistic media, hospitality and technology solutions to their clients. He continues to share his entrepreneurial successes and failures through radio and television interviews and special sessions that are meant to empower and motivate entrepreneurs and employees of big corporations . This has further assisted the South African Black Entrepreneurs Forum (SABEF) reach a breakthrough membership, made up of aspiring entrepreneurs, emerging and established entrepreneurs.
Mr Gunguluza is considered one of South Africa’s most celebrated media entrepreneurs, a strategist and a motivational speaker – the ultimate breakthrough Entrepreneur
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