Venture capitalist Michael Jordaan shares insights on what drew him to invest in Purple Group, the traits of successful innovators, how to foster innovation within teams, and key lessons from his own investment journey.
There are two reasons why I'm a proud shareholder of Purple. The one is the leadership team. I mean, Charles is a very compelling individual, and the way that he interacts with his team is the first thing you look for, particularly in my game, which is more making venture capital investments.
So Purple's the only listed company that I hold, and in all the unlisted companies, it really is either the entrepreneur or the entrepreneurial team. Without that, you know, you can have the best idea, best business model, and so on, but people have to implement it. The second one is that I really like the mission, if I can use that word, of democratizing finance and focusing on saving.
I think there far too many people in South Africa that borrow, that live from month to month, and people don't fully realize how incredibly empowering it is to be a saver and to have a nest egg, you know, something goes wrong or to save for that dream that you have. So I completely identify with the goal of what Purple and EasyEquities is trying to achieve in South Africa.
So innovation is obviously part of EasyEquities DNA. It's no small feat to make investing this big thing accessible, simplified everyone. Anyone can do it. And because you back so much innovation, I wanted to know what. What makes a good innovator? Can anyone do it? Is it a skill that you have to learn? What are those magical elements that have to come together to truly call oneself an innovator?
Yes, I do believe anyone can do it, because innovation isn't some esoteric thing. It really is about solving problems. And you can solve problems in kind of very grand ways. I don't know, send satellites into space so that people in rural areas have connectivity. That would be one form of innovation. Or if you're a doctor and you find a cure for a disease. But it can be how you set up your household or, you know, stop a leak in your roof or, you know, get to school in a shortcut.
It's essentially about solving problems and at looking at things in a different way and doing things in a new way. I think the personal characteristic that it requires is I'm somewhat of a risk taker because innovation by definition means you're doing something new that hasn't been done before, that you haven't done before. So you need to take some risks and have that capacity to take risks, fail, stand up and, you know, try something else again.
So it's probably attitudinally the most important thing is to know that you're going to make some mistakes, but knowing that if you don't make any mistakes in life, if you don't take any risks, your life's going to be worse off than if you are willing to take some.
Wow, those are really great words. I love that. And so how would you apply that in a team? I mean, especially at EasyEquities? We work in the finance space despite little bit more traditional, little bit more, you know, there's a lot of regulations governing it. So how would you apply that, that innovation within a team space?
Well, one of the things that makes innovation not only possible, but actually it's the reason for a lot of innovation is to have constraints. So if you just had, for example, a lot of capital and you say, you know, solve the problem, some people would just spin their way out of the problem. But sometimes if you say, listen, we need to do something, let's say there's some user experience we want to improve, but we just don't have the budget right now.
Start from scratch and think of new ways of doing it. So constraints are good then challenging a team, is there a way of doing it? Sometimes being unreasonable, even in your challenges, because that makes you really think deep about why do we need to do something in the first place? Is there not a better way of doing it? So most of these things happen in your mind when you think of new ways of solving it. And they often don't happen during office hours.
Newton said he discovered the laws of gravity sitting under a tree when an apple fell. A lot of people will tell you good ideas come when they're in the shower or having a run. So you pose the problem, pose the challenge, and then give it time to ferment in an unconventional way. Yeah. And often the people who come up with the solutions are surprised in themselves. And people in a team surprise their team members when they come up with a new way of doing things that is better and hasn't been done that way before.
Amazing. I'm definitely, I'm going to take that back, back to our team when I get back to Joburg. Okay. So our ethos is grow and protect your wealth, but It's. It's not something that is yet passed down from parent to child all the time. If I look at my situation, my parents, they never learned about money from their parents. And that lack of knowledge is what shaped my relationship with money for many years, up until, I would say, 2020, when my life kind of changed. I'm sure there are many listeners who are also in that same situation.
They're struggling to break that cycle. They want to get out of it. So how can we, either as individuals or companies, how can we help them to break that cycle where they can first, you know, start growing their wealth, but then get them to that point where they can get out of survival and into actually, you know, building a future for themselves?
It's your point about the knowledge or the wisdom not being passed from generation to generation is very true and has been with us for ages. When people come to me for financial tips, I like to tell them to read a book called the Richest man in Babylon, which actually exposes how money really follows rules.
And if you know the rules, that money can flow towards you. And if you don't know the rules, you know you can win a million in a lotto, that money is going to flow away from you. So there's definitely wisdom that can be taught. I actually wish we did more financial education in schools. You know, we do a lot of other things, but I don't know how relevant Pythagoras is if you don't. If you can't run a basic budget to a household. In the second part of that question, what I try and do with my kids, they all have accounts with EasyEquities and they can play the games that, you know, you can play without real money.
I'm lucky to be in a position to actually lend them money. So I advance them a small amount of money and then I sit with them and talk them through investments. I'm actually doing that later today with my one daughter, and I think that's a great way to kind of get them into the discipline of saving, of investing, talk to them about diversification. You need to have a portfolio, and then you need to take some risks. And you have to understand sometimes these things are going to go down and how you handle it emotionally. So there's a lot to be said, not just in teaching it in theory, but actually to do it in practice with your kids. And it's actually also a great way of bonding, by the way.
Yes. Oh, that's beautiful. I'm going to. My son is 12, so I haven't quite gotten into the discussions yet. But he also has his EasyEquities account. No age too early. You can start at 12. Well, I believe, I think I'm already too late with what he's with his investments. Okay. But that segues nicely into this question because I'm sure you're children will make mistakes as they're learning and I'm sure you've made many mistakes as well. We all have. What would you say is one of the biggest lessons you've learned through your investing journey? Either from a big win, those are always fun. Or, you know, one of those losses. So, yeah, what is, what is your kind of mindset? What did you learn and what are you hoping to impart on your children?
Look, it really is the losses. You learn relatively little from the wins, even though those are the things people brag about. The big one you read about losses is like the emotional fortitude to handle it. Equity markets in the long run go up, but in the short term, anything can happen. You need to be ready for that. And it's a very easy thing to say in theory, but hard in practice.
Warren Buffett says this thing about be greedy when others are fearful and be fearful when others are greedy. That makes complete sense until you see a bubble happening, let's say right now. Some people would say what's happening Crypto could be a bubble. The meme coins based on the new U.S. presidency. I mean, it really seems crazy that they are worth these billions and billions, but they draw people in. And, you know, that's when you need to have the discipline where I've made my biggest mistakes, I would say again to the one would be not diversifying enough. Probably the most important instrument any investor can have. Just don't put all your eggs in one basket. Make sure you are diversified so that when something goes wrong, you know, at least you have some safety diversification.
And then interestingly in venture capital finance, I'd say by far my biggest mistakes were the times I didn't invest, the times I said no. And my biggest one would be bitcoin. I was an investor early on. I think my first purchase was in 2014. And what I should have done is just. I should have just hung in there, you know. But I mean the kind of returns were so big that like everything in this conservative being said, like cut it all out. So it's the nos that sometimes are the worst things. The savings you didn't make and the investments you didn't do.
Jeez, that reminds me of, I think my Biggest oomph we had the, we've got the EC10 bundle which I bought when bitcoin was low and then it started that first crash and I sold out of it and now I look at it and I'm going, oh, that was such a, that was not a great move.
Investing should be for the long run. You really should invest in things that if the market were to close for X years that you would still be happy to hold on to it because of substance, fundamental value and then you'll be okay. And sometimes it's good to, to just not look at the share price every single day.
Yes, yes, I do. I do find a little, when you get that little flutter and you're like, yeah, I'm just going to leave it for today. We'll come back, we'll come back later. Definitely in it for the long game. This has been amazing. Thank you so much. Before we end off, I just want to have a little bit of fun and get some of your must must recommendations. So first up, what is your must read book?
Look, I love reading. I'm a nerd. I mean there's so many books, it's really difficult to just choose one. But I'm going to say Sapiens by Yuval Harari, which is the history of mankind going kind of straight back to the beginning. And it is just such an eye opener. I mean it's not boring history like, you know, Napoleon beat this other general in some battle. It really is conceptually how we started as mankind and how we've come up to what, you know, today we call civilization. How many of the things around us are actually myths. We've come up with myths like money and institutions and corporations, etc. Which are all very useful myths that we've just created to make make the world work. So that's an interesting eye opener. Read Sapiens.
Okay. Okay, I'll check it out. Your must watch. Whether it's a series or a movie or documentary,
I love a really good TV series. I think it's in a sense the art form of our time. You know, centuries ago emperors would have people make compositions for them and people like Mozart and Beethoven would get an orchestra and they would sit there for an hour and just listen to music. I find a good series, the characters can develop over time and the plot can become more and more intense. So the one I would recommend is Breaking Bad. It's about drugs and about a teacher who gets pulled into the drug trade and it just gets progressively worse and it's got an underlying message A very, very clear message, which is that actions have consequences. So there's a life lesson in it, but it's masterfully done. It's a great story and once you've watched a couple of episodes, you will be completely mesmerized and sucked in.
Interesting take. Okay, I'll check that one out. Your must drink. What do you enjoy imbibing after a long day or. Yeah, what's your. What's your tipple?
So I live on a wine farm called Bartonnay. Small, humble, but makes, you know, great wine. So I'm a wine drinker, both red and white. I'd like to believe that red wine has health properties. But in any event, just having a glass a day with mates and laughing and, you know, having community, I actually believe is very healthy and makes you live longer. And it's one of the joys in life. So you've got to have some joy. And for me it's wine, but preferably with food, with mates, in a great environment. Oh, that sounds amazing. Ah, okay, last one.
Your must visit. Like where. Where do people have to. To go visit before the end?
So I'm going to give you a broad answer, if I may. I think you have to visit the world. What I mean with that. It's not like you're just going to have one visit to, I don't know, the Taj Mahal or the Eiffel Tower or see the Northern lights. You just have to be a traveler. You have to continue journeying. The one is just to escape the local view that, you know, everything around us is, is the world. And, and as much as you can read, sometimes you just need to step into the streets of another city to realize how big and how wonderful the world actually is. And it really, really makes you think about your own existence. What's good, what's bad, you know, compare it to the rest of the world. So be a traveler. The place to visit is always the next one.
Ah, that is a beautiful, beautiful way to end. Thank you so much for your time, Michael. I've loved our conversation. Thank you and wishing you all the best.
And to you and EasyEquities. Love what you do.
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