Picture this. It’s 1995, and a colleague calls you to his office to show you a new thing he he thinks you might find interesting. It’s called ‘the Internet’. You fall in love with it. And the rest is history. Ruda Landman caught up with Internet entrepreneur Alec Hogg, the founder and publisher of BizNews, to reflect on the high- and lowlights of his career, life, and everything else.
Ruda: And our guest today, Alec Hogg – welcome
Alec: Thanks, Ruda.
Ruda: How did you get into financial journalism, specifically?
Alec: I got lucky during my national service, which we had to all do as white boys back in those days…
R: That’s a previous life, hey…
A: Just about, it feels like it. And I got lucky by ending up working in Oratus, the army magazine, in fact Sean Johnson was there during the time I was there. Tony Leon was just before me, so I followed in some pretty famous footsteps. And I was at a following covering a hockey tournament of all things and the big journalists that come down from tha major newspapers, including a guy called John Swift, who is still around today, and he was the sports editor of the Sunday Times. And I said to him I’m dying to be a sports journalist and he said, don’t be a sports journalist, be a financial journalist. And actually it was far better for me to go into that field anyway. The reason, John said, was that you would one day be able to own a car and a house, whereas a Sports journalist – he said – was most than likely… and I think he’s living proof of that.
R: But I’m sure you then had to qualify? I mean, one doesn’t just sommer do financial journalism? You need to understand what you’re doing?
A: It was an interesting route. I finished my national service, went to Maritzburg University to do a BCom, because that was the background that I needed, I thought, for financial journalism. The alternative route was to go through cadet course after you got a degree at Rhodes, in journalism. And I, after my first year at BCom… and I finished, passed all my exams… I was working as a operator in my home town of Newcastle in what was then Iscor, it’s not Mittalsteel, and it was a 12 hour a day, 7 days a week job to get the money to go back to university the next year. And there was an advert in the Citizen newspaper for a trainee financial journalist, and I, on a, I took a chance, got the job and never looked back, never went back to university, never finished my degree, and learned every day.
R: How? Because financial journalism is not… you need background, you need to understand?
A: Ja. I have an affinity for numbers, I’m very numerate. I love logic, rationality, and that’s all about financial journalism. In fact, I read annual reports, I READ annual reports… that’s my night time reading – literally. And I’m one of those very, very lucky people who found what he loves, what he was brought to this earth to do, and it’s all my sweet spots brought together. I like writing, I also love numbers. So there aren’t too many other jobs where you would be as happy as doing as what I’m doing. And of course learning things, curious.
R: But you’ve almost become a kind of serial entrepreneur, starting things. What makes you do that? Because you step into insecurity every time?
A: Ja. I… again I have had quite a few change moments in my life. And it started off by looking at what was in the industry and I think this happens for every entrepreneur, and not being satisfied with what I saw. Believing I could do better. So I went off in the… after being around in newspapers and magazines for about ten years, and started on my own. Tried to do the publishing thing. At that time, it was absolutely impossible. That was at the end of the 1980s, because printing and distribution costs were just exorbitant, unless you had lots of money and the media industry is full of barriers to entry – either legislated or financial. I battled along for a couple of years, but learned a lot. Learned an enormous amount. Then went back into the main stream. Worked at the SABC at the time of the transition, if you recall, before the transition it wasn’t really a place to go and work. This was between 1991 and 1994, that was an amazing place. Absolutely amazing. And had a wonderful experience.
R: It was also an amazing time.
A: It was!
R: For any journalist, yes.
A: It was incredible. And at a national broadcaster that was a national broadcaster, rather than a political broadcaster. It was just magnificent. But I learned that – the broadcasting side. And then was made an offer that I couldn’t refuse, by Absa, literally – it was on to the exco as a young in my early 30s. They paid me more than the boss at the SABC was being paid at the time. So… and as a journalist, again. As you well know – it’s financial insecurity and journalism are kind of pretty good bedfellows.
R: Especially print.
A: Especially. And especially at that time, as well, where things were so uncertain. And I spent two and a half years at Absa, learning again an enormous amount from the other side of the fence. During my time there, a gent called Alwyn Burger, who was the head of tech, took me into his office one day and said ‘Come and look at this, the call it the internet’. It was 1995. And I was smitten. It took me another year and a half to finish my job really at Absa, left there and went into internet publishing – simply because I had the experience of understanding that the distribution and printing costs were what killed you in traditional publishing. And here was this thing, where you didn’t have printing and distribution costs. So it was an obvious for me.
R: But no-one is making money in digital publishing, yet. So how did you do it in – when was it? 1997? 1999?
A: We just… 1997 I started. We listed the company on the stock market in 1999. It was an incredible time for internet businesses. The ratings that you got on shares were just ridiculous. We were – we sold shares and we could have sold a multiple of what we did sell – prelisting at a forward PE ratio of a 100. Which means that the people buying the shares, were looking at next year’s profits and would take them 100 years of next year’s profits to get their money back. It was just a crazy time. That’s when Mark Shuttleworth made his money. He was very lucky – got paid in shares, at one point – VeriSign shares – he got went through the roof. He then cashed in right at the very top. And what was worth 20 million dollars became 700 million dollars, in his case. It was crazy, crazy times. When of course the dot com boom ended, many of the internet businesses went bust. The difference was this was all I had. It wasn’t like I was running it for some big corporate. This was all I had. And we had to make a go of it. And so the way we made a go of it, was going into business broadcasting on radio. I started a first radio program in South Africa with SAFM back then and then moved it across from there.
R: Can I just pause… press pause for a moment there. You say the difference was that this was all you had. Do you think for an entrepreneur that is the key? That you have to just give it your all? Throw yourself into it?
A: I think it’s life. If you are making a go of a marriage, it’s all you have, actually. And no human being is perfect, so there’s lots of imperfections in that and you’ve got to work at it. And similarly, in a business, if you don’t have difficulties, how are you going to grow? How are you going to develop? And that’s what happened to us. We had this new promised land, that was promised to us and then was ripped away. Because it was. It was a fantasy, the internet, remember, was going to change media overnight. Of course it didn’t! Today we look back and it’s made a massive difference, and the early estimates have all been fulfilled, but it took a lot longer. So I looked at this, we had a very small team – maybe 8 or 9 people. A lot of friends who bought shares in our company, and I couldn’t now say ‘oops, our advertising revenues were a fraction of what we expected them to be’. So we had to find alternatives. And that’s where entrepreneurs are different to people who work in government or in corporates. Entrepreneurs have got to make a plan, they’ve got to get the creative juices going. And if you apply those, you’ll be amazed at what comes out.
R: And you cannot keep doing what you’re doing and trust the boss to make the next decision. It is just you.
A: Ja, the biggest problem for an entrepreneur, I think, is to know how to delegate rather than allocate, because often in entrepreneurship you’re building a business and now it’s yours and you know to get further you’ve got to teach someone else to do what you’re doing, but what’s the difference between delegation and abdication?
R: And that’s also that founders syndrome of ‘this is my baby’.
A: Ja, that I think people get over, because you read enough about founders trap and you realise well I’m not going to get any bigger or better or develop the people that I work with, or myself, if I hold on to this. But it’s to me – the much, much more difficult decision is abdication, which I had a massive problem with. That I would give people too much responsibility and get on with it and kind of be blinded to their mistakes, or delegation where you in a way are coaching someone to do it better.
R: Talk to me about the culture of a place. Because when you left or lost Moneyweb, you said that there was a clash of values. How does that work? How does one, as the boss, manage the culture? And as an employee maybe, when do you have to walk away and say these people are not – in Afrikaans we say ‘hulle is nie my dam se eende nie’ – they’re not the fowl of my dam and I have to go and find a different place?
A: Culture’s everything. When I started Moneyweb, remember, it was above my garage at home. And literally when we had enough money, I could ask someone to come and share my dream with me. So it wasn’t a question of having a big brother. This was before we listed – of course – when we listed, we had money in the bank, but we still then had a squeeze on our profitability. So there was never really lots of money to go and hire the best. So I had an internship program, for instance, and we worked very hard on that. Many, many of the top financial journalists in South Africa – Bruce Whitfield was with me for the first three months – I said to him after three months ‘Bruce, you’re not going to make it. Sorry’ and he said ‘Give me another month’. And thank goodness we did! For the country, because he’s turned out to be a very good journalist. And there are many like Bruce – David McKay, there are whole – Felicity Duncan – there are many of the top financial journalists who came through the internship program, were given their chance through MoneyWeb – because that’s the way we looked at it. We said – if you go and hire people who got bad habits from print, they are never going to get this digital space. Some of them did, some of them – the late David (inaudable) made an amazing transformation. But there were many things that we did differently. All of our numbers were known to everybody. We’d have a weekly staff meeting, but every month we would share all the numbers. One quarter of – sorry – 20% of pre-tax profit was distributed quarterly. So everybody knew these are our numbers, this is how profitable we are, what is my share of the bonus going to be. So you were always going to work in a different way. The way we hired people was very different. You didn’t arrive one day and find that Ruda was now your colleague. Ruda was part – or rather – all your colleagues, everybody at the company did part of the hiring process. I learned that from Alan Gray and Investec, who I had watched develop up. So we had lots of different things. Mostly we’d tap dance…
R: Binding people in…
A: Tap dance to work. We loved working with people we liked, and people who didn’t churn our stomach. When I went to the farm and took two years and there was a lot of reasons for that, and then was forced, literally, to come back to Johannesburg, I realised that there were people I was working with who churned my stomach. There were people who, I was being forced to work with who didn’t get the culture of what I tried to start with. Now that doesn’t make it right, or wrong, because certain cultures worked. If you’re a materialistic person, then the profitability is all important. If you are driven by different things, and I think journalists by and large are driven by different things, we’re idealistic, we want to change the world, we want to make a difference. That’s what gets me up in the morning. This is the most honourable profession on earth. Because without a functioning court of public opinion, and thankfully we have one in South Africa, you cannot have a democracy. If you have – like in China, sometimes it stuns me that people think ‘Oh, we must become more like China’. My businesses would never have worked in China, because you would have someone in your office who would check everything that you publish. And if you have a sensor in your office, can you imagine what the output is? And that’s the reality of the Chinese situation. But we’re in a democracy, we’re in a vibrant media with a very vibrant voice. I’m very proud of other people in this industry, and I hope that we can keep making a contribution to this very, very critical part.
R: But the other half of the question that I asked was ‘when do you walk away?’ When do you say no, can’t be with these people. They’re toxic.
A: Toxicity comes in many forms. You can eat it, but mostly it’s in your state of mind, it’s in the relationships that you have, and that increases the stress. My hero, Warren Buffet, is now 83. He eats hamburgers all day, he has a terrible diet, but he is healthy because he has very little stress in his life. And you have to try and reduce the frictional cost of living. So that’s why many people – he lives in Omaha – many people live in remote areas. I loved living in Mooirivier, on our farm, because the frictional cost of life there was very low. When you get yourself into a situation where that frictional cost has escalated, where you’re working with people that you would never have worked with otherwise and you’re just on different pages, and your value sets are so completely different. You have to either say ‘oh well, now, what was I then, 52, I’ve built this business over the last 15 years and I must stick with it and swallow hard when I have to’ or you say ‘no, I can’t’. Because in my instance I wouldn’t have been happy. I wasn’t happy and I certainly would not have been able to be a healthy person in mind and body, and that’s also critically important.
R: But when you left, you didn’t know what you were going to. It sounds, from what I read, that it was quite ‘okay well, I have a restraint of trade for a year, so in the next year I can’t do this’. What was it like, really stepping into an uncharted unknown?
A: Again I have been lucky, I have done it a few times in my life, in the Sunday Times I was 24 and I was the deputy editor of Business Times – big, big job at a very young age – and I went off to run my own magazine, or a magazine that I was that someone else had that lasted 8 months and that was the end of that. There was a huge difference between Alec Hogg at Sunday Times and Alec Hogg at Management Magazine. Similarly when I left Absa, to start on my own again, there was a big difference between one of the exco members at Absa and the guy who was trying to make his way in the world. So I’m pretty used to change, and in this case I was going to work with CNBC, and go back into telvision – lots of fun – I enjoyed doing that. I was going to write a book, and I was probably going to just write the odd freelance – I freelanced for Business Day and Financial Mail for a while – that was what I was going to do. And then a few things happened, and I thought ‘Bugger you! No.’ I can do it better.
R: But now you’ve decided that there is something you would want to do.
A: Ja. And it took me eight months of gardening leave, it took me a visit to Ariana Huffington’s place in 77 Broadway, Huffington Post. I met Ariana, chatted to her and said let’s bring Huff Post to South Africa, she said wow, she loves that idea. And until she went back to her bosses at AOL and we stacked very low on her list of priorities. So she’s done Japan, Spain, pretty much everywhere else… one day she might come here, but probably not with me. Then… but I learnt a lot from her. I learnt a lot from her organisation. And then I got to meet Clay Christensen, the father of ‘Disruption’. And read all of his work, studied his stuff. And said ‘Hang on, there’s an opportunity here’. And that’s when I started BizNews. In August last year. The development has been beyond my wildest dreams, we had huge support from advertisers and we’ve got a mote, and our mote is costs. We’ve done things differently. My costs is now one eighth of what they were at MoneyWeb, I think we’re producing better content than we were producing at MoneyWeb because we’ve got a different type of motivation…
R: How do you keep the costs down?
A: You make partners with people. What we did at MoneyWeb – it’s almost like when I was in traditional media that’s where I was. Then, MoneyWeb was here. HuffPost is probably there. But that’s still long term not really sustainable – you have to find a model over here somewhere. With the way that our industry is changing, and media is… you’re going from analogue dollars to digital pennies in your income streams. So it’s not good enough just to stick around here, you have to do something different. And the model we’ve got is a very, very different model and it’s one where we engage with partners who produce content and then they pay, and they get paid for what they’re producing, which was something I could never get right at MoneyWeb. I just couldn’t find the right formula. But if you think of content in media, you start off with a fulltime employee who costs you about R3000 a story, then a freelancer costs you about R2000 a story, and then you’ve got Sapa that costs you R30 a story, and you’ve got people who are prepared to write for free. So somewhere along that continuum there’s the happy medium, and we’ve moved more this way, whereas at MoneyWeb I was still more in the traditional mindset.
R: But good content must be key, and people must be paid for that?
A: And they are paid, because they’re paid as a percentage of what that content is generating. And they are taking a long term bet on themselves, rather than some other product. So we’ve got really, really good writers who work with us, who start off getting nothing, then they get a few hundred rand and then a few thousand rand and then tens of thousands of rands and hey, presto, it’s better than working for somebody else. You can do it at the time that you are in a better state of mind to write, produce content and also – again – get back to that entrepreneurial thing. If you’re an entrepreneur, you look for better ways of serving your market. And in our industry we’ve never served our market in media. It’s been a case of I work at a newspaper, I wrote a story, it appeared in the newspaper, we never knew if anyone ever, ever actually read it. Online, you know every instant how many people are reading it, why they are reading it, how long they are spending on it, and you can shape your product according to your market’s needs. And that’s been kind of a big eye opener for me.
R: Thoughts about retirement?
A: I’m of the Warren Buffet view…
R: Persuasion. [laughs]
A: Ja, he… the retirement age at Birkshire Hathaway, the company, which is now the fifth biggest company, most valuable company in the United States, is 104. And the reason for that is he had a lady called Rose Blumkin, who worked for him, and she retired at 103. And she died the next year. So he said if you retire, you die. He’s 83, he’s going to carry on for at least the next 20 years, and I can’t see myself retiring. I love what I do so much, I tapdance to work every day. I don’t work with people who churn my stomach and as long as I can keep those things in line, I don’t think I need to retire.
R: Talk to me about homes. About living different places. You said that the friction factor…
A: The friction cost of life.
R: The friction cost of live was much lower in KZN.
A: Yes.
R: What does that mean?
A: Well you don’t get in your car in the morning and have people cutting you off in traffic and it’s easier to be more centered. In… where we lived, there, it was the most spectacularly beautiful area. It was a fairly small farm – 70 acres, which was the same size as the greatest horse breeder of all time. So I didn’t worry about that – what I was doing. We looked out to Giants Castle, we had… Mooirivier is a spectacular place. It’s very high, so the weather is temperate. You get snow quite often in winter. The horses thrive there, which was what we were producing, the soil is good. And we were going through a whole process of trying to breed the perfect racehorse – that was what I was after. So I spent time with horses, as you know Winston Churchhill had a lovely saying – he said ‘there’s nothing better for the inside of a man than the outside of a horse’. And I really feel that. That as journalism is the most noble profession, the thoroughbred is the most noble of animals. And they are – if you like dogs, and you know how much personality a dog can have, get a horse.
Ruda: [laughs] And what makes a house a home? Your houses must have been very different? What did you take with which made it yours?
A: I think that’s probably the critical thing, that I’m very lucky to be married to an artist. My wife does, she can make a hokkie into a palace. She really can. She’s extremely good at not only selecting the home, which she did, although I must admit that this was one I liked as well, but in the district I’m sure there are better homes, better looking, more expensive homes than the one we lived in. But for us it was perfect. It had a view, it had… and it had been built by someone who really cared. You could see that. It was a… it wasn’t a construction that had been done for sale. She lived there, Glynis lived there – the lady who had built it – we got to know her pretty well, and she had done an extremely good job. Coming back to Johannesburg, of course, that was the big difficulty, because living on a farm with a lot of space and then… and five dogs and coming back to Joburg where five dogs don’t really work that well. And finding a home that had the space – we very, very lucky after six months of looking to find our home now. And it’s one of those – you know Joburg’s got some very special gems. You just have to look for them, sometimes. So we live in Houghton, which is fantastic. Four houses down from the deputy president, the ex deputy president Kgalema, so the security, you must know, is excellent.
R: [laughs]
A: I mean, the… and now that he’s retired you don’t have the blue light brigades going up and down your road every day. But it’s… to me you need a sanctuary, in this extremely speeded up, very high living world, or fast living world…
R: What makes a sanctuary?
A: A sanctuary is a place of peace, a place where there isn’t noise. A place where you can close the door and be at home. Be with the people you love and around the things that you love. Animals are really important to us, you can obviously see and we have three of our dogs now with us. For me, another big advantage is that I walk to the Gautrain every morning, so I get a little bit of exercise, walking to the Gautrain, minutes from my home. And our offices are at the Johannesburg Stock Exchange, so I walk from the Gautrain at Sandton there. So I can go for weeks on end without ever using my car. Now that, in a city, is a [inaudible]…
R: And especially in Johannesburg. Because our public transport is so notoriously bad.
A: Ja, the Gautrain’s great.
R: Ja, it is. But so your home is about space, it’s about a feeling of warmth and being held, it sounds like.
A: It’s about love.
R: And it’s not precious, it’s children and dogs and everything are welcome?
A: For us, yes. I… we don’t… we’re not precious people. We realise that we’re spirits who have a human experience, and whatever comes, thank God, he’s decided this time around that that’s the path I will follow. And that’s really… so it’s at the cornerstone. You need cornerstones in your life. Mine is my faith, mine and my wife’s. We have a very strong faith in being in the right… We’re here, we’re in South Africa because we’re meant to be in South Africa. Like most people I look at what’s going on around and you scratch your head and you say ‘my goodness, what is the plan here’. ‘Why are we doing what we’re doing?’ But I’m meant to be here. And as long as I’m meant to be here, I will be here and continue to make a contribution in the way that I can and I can do that if the frictional cost of life is low and having a fantastic home where you can relax and you can kick off your shoes and you can be yourself, does play a very big part in that.
R: While you were building your career, and doing all these different things, you had children growing up. How did that impact, I mean, women are forever talking about the balance between work and the rest of your life. Work and family. Men, seem to just get out there and do their thing. What was it like for you?
A: Well I did work from home for a long time and I always kept an office at home. So there was always a chance to be around. I used to take the kids to school every day – that was the thing I missed… well my kids were not really… my daughters were sporty. My late son was not really that sporty. He was more into computers. It was always a difficulty with Travis, not to get sucked into his world, which was the gaming world and… because I know once I get into those games, that’s tickets. So that’s the more difficult thing. But I always made a point, my kids and I went on holiday every year. We went to somewhere special, somewhere different. And they… It’s Kahlil Gibran the wonderful writer of The Prophet and he says your children are just lent to you. And I looked at it that way. What I did believe, with my children, was to put them into public schools, so that they could mix and assimilate into society rather than into private schools. But we did give them as much advantage as possible by investing heavily in internet at home. It was good for us as… from a business’s perspective, because it’s a business imperative. But the children had good computers, always had internet access, and now my two girls are doing well, sadly, in Ireland, but that’s the reality is that they were brought up as global citizens. They were brought up in an environment where they got to meet lots of people and they got to see the difference between different cultural groups and different strata of society, and they were also given the same kind of advantages as though they went to school in London or somewhere else, with the internet. So we were lucky, we kind of got the internet early before most other people did. And then we could shape the children’s upbringing accordingly. I did take them abroad and show them – because I think that’s a great education for children as well. Expensive, but it’s worth it.
R: So what I’m hearing you say, is be interested. Be there.
A: Be curious.
R: But also be interested in your children. You can’t just let them go. You have to invest.
A: Ja, you know, kids are… my children anyway, are three… well… two very different little people, and they have… they’re now 25 and 23. So they have their own lives and I’m very proud of them. They think differently. My late son was also… he was a… this was his world, today, it’s a shame that he passed away when he did, because he was 21 years old when that happened, and that was a big learning for me as well. Because it also taught me that if I could say one thing to other people who’ve got children it’s don’t get cross with them. Just remember you never know how long you’ve got them for. Just invest a little bit more time with them, because it benefits both of you. But then again, if you come back to your cornerstone and your beliefs and where your faith rests, you will, and you believe, you really believe that we’re spirits having a human experience, I have no doubt I will see him again. So it’s sad and I wish Trevvy was here, but you know, that’s the way it was meant to be in the grand scheme of things. And life is so complex, we know so little – I think our biggest problem is we don’t know what we don’t know, and that’s mainly there. There’s a whole lot I don’t know, but inside, I know I will see my son again.
R: Thank you. I think that’s a very good note to end.
A: It’s a pleasure, Ruda. Nice talking with you.
R: Thank you.
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