The privilege of going bankrupt is that you realise you are not going to die, Pepe Marais, co-founder of South African advertising agency Joe Public United, said.
In an interview on personal finance show Geldhelde on VIA (DStv channel 147), Marais shared how he rebuilt Joe Public in 2009 after the agency went bankrupt.
Today, Joe Public is one of Africa’s most successful independent advertising agencies, boasting a turnover of R700 million in 2018 alone, with gross profits in excess of R218 million.
“Well, it is bad [to go bankrupt]. It’s terrible,” Marais said. “For a few years I was extremely insecure because suddenly I didn’t have money. But it was actually a privilege because it gave us the insight that we can try again.”
Marais and his business partner, Gareth Leck, started Joe Public United in Cape Town in 1998 with the dream of making advertising more transparent and accessible to ordinary people.
With a unique business model where clients were given the choice of ordering concepts in “rare”, “medium” or “well done”, depending on the time the agency spent on it, their services quickly came in high demand.
But, in 2001 Marais said he made the biggest mistake of his life selling Joe Public to IPG, a multinational marketing network.
Shortly thereafter IPG was sold to an American holding company and Joe Public was reduced to a subsidiary of a massive conglomerate.
Marais said Joe Public United was increasingly pushed to chase the bottom line, instead of producing high-quality work.
“It’s interesting: [Companies] put the bottom line right at the top of the list of priorities. When you walk into any boardroom or board meeting everyone looks at the bottom line,” he said.
“In our business now, the bottom line is at the bottom of the line and our number-one priority is purposefulness and everything that goes with it.”
In 2006, Joe Public United lost a client responsible for 40% of their business which forced Marais and Leck to retrench half their staff.
This sparked a three-year negotiation process to regain ownership of their company.
When they finally bought back their business in 2009, it was completely bankrupt.
“The interesting thing that happened is that before everything was about making money – and I ended up with nothing,” Marais said.
“And after that happened it was all about whether or not we can help people. Can we help people grow? Can we help our clients grow? Can we help our country grow? And can we do things that are in service of people?”
“And suddenly we started making money 100 times more. So I found it interesting that when you do things to make money you end up bankrupt and when you do things to help people you end up being rich.”
Geldhelde airs every Tuesday at 20:30 on VIA (DStv channel 147), with repeats on Wednesdays at 08:30 and Sundays at 19:30.
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