In 2008, a customer buying electronics from Digital Planet could receive a parcel wrapped in blue bubble wrap, sealed with yellow tape and finished with a sticker reading “To Me From Me.” The buyer had supplied the money, selected the present and arranged the surprise. All that remained was to enjoy being such a thoughtful friend to oneself.
Neil Watson, then the company’s managing director, wanted people to feel excited when a package arrived. It was a modest ambition with considerable work attached. Someone had to make the website function, locate the product, take the payment and get the right thing to the right door. A cheerful sticker could finish that sequence. It could hardly rescue it.
That parcel offers a useful way into Watson’s career. He co-founded Digital Planet with Mark Levy in 1999, helped turn an online computer retailer into an ecommerce services business, and exited in 2019. Today, he is a partner at E4E Africa, investing and mentoring. Between the initial idea and that later role lies a long apprenticeship in what people expect after they click.
An expensive education in being early
The partnership preceded Digital Planet. Watson and Levy were school friends. Around his university years, Watson started a business with Levy that they eventually sold to its management. His recollection of that period is practical: little money, little experience, and lessons in cash flow, selling, people and operations. He described himself as an engineer learning how a balance sheet worked. The accounting department, in other words, had not arrived fully assembled.
Then came the internet. During trips to the United States in 1998, the pair saw the first boom taking shape. Selling computers online looked like a sensible response. Digital Planet followed in 1999. With hindsight, Watson supplied a rather less flattering assessment of the timing: “It was probably 12 years too early.” In its first years, one person could handle operations and service, with time to spare.
In his account of serial entrepreneurship, Watson recalled three initial years of losses while the business struggled to find its model. Starting a new kind of business carried a different burden from opening a shop whose basic workings were already understood. There was plenty to discover, and discovery sent invoices.
By November 2003, his public outlook had become more cheerful. Digital Planet reported a 30% sales increase in October and anticipated a busy Christmas. Its catalogue included cameras, DVDs, MP3 players, computers and laptops. For products a shopper could not see online, the call centre could help with sourcing. The internet shop still had a human voice.
Watson was already putting trust near the centre of the transaction. Competitive prices mattered, but so did confidence in the seller. He argued that shoppers placed relationships and trust ahead of the price tag. Digital Planet was also preparing to supply the machinery behind other virtual stores, including payments, product management, technology and delivery. A second business was becoming visible inside the first.
“Price follows relationship and trust when buying online.”
Neil Watson, 2003
The promise meets the stock list
Trust has an awkward administrative side. In 2007, a customer complained to South Africa’s Advertising Standards Authority about a product advertised on Digital Planet’s website that the company could not supply. The supplier had discontinued it. Digital Planet removed the listing; the authority required the advertisement to be withdrawn and not used again.
Watson acknowledged that the customer’s complaint was justified. He also explained the work involved in keeping the catalogue accurate: about 10,000 products on the site and approximately 300 supplier price lists uploaded each month. Supplier stock information fed the system. When an item became unavailable, the company tried alternatives; where substitution could not work, it issued credit.
There is a distance between saying that customers matter and dealing with someone whose order has gone wrong. Watson’s explanation occupied that distance. He described work on backorders and communication, along with the need to update supplier information and alert customers quickly. The product page was a promise assembled from other people’s data. The customer still expected Digital Planet to keep it.
A snapshot from 2007: the maintenance behind a seemingly simple purchase.
A shop with a Guru Bar
By early 2008, the numbers suggested more people were willing to try the proposition. Digital Planet reported sales in January and February 65% higher than in the same months of 2007. Watson connected the increase to convenience: customers could avoid traffic, queues and disappointing service in physical shops. Buying online had to compete with the whole shopping trip.
Digital Planet was also working on speed. It piloted a 24-hour delivery option late in 2007 and launched it more widely the following year. General manager Karyn Lovesay said the service accounted for a 25% sales increase. Popular lines were ordered in advance to make that delivery promise possible. The company was considering trimming less popular products, too. Choice created maintenance work; speed required preparation.
At roughly the same time, Watson’s ecommerce company took on a conspicuously physical venture. Digital Planet owned and operated the HP Experience store in Sandton City. The store offered personal computing, printing and imaging products, with areas designed around how people used the technology. Its Guru Bar provided expert advice and assistance. Even a digital lifestyle sometimes needed someone standing beside it, explaining which cable went where.
The store gave shoppers a place to interact with products before buying. It also complicated any tidy description of Watson as simply an online retailer. A screen, a shop floor, a call centre and a delivery operation could all take part in one customer relationship. The package wrapped as a present belonged to the same effort: giving people reasons to feel pleased about the purchase.
The customer behind the customer
The larger commercial change came through serving other businesses. Digital Planet had learned how to run an online store because it needed one itself. Those capabilities could be sold. HP became an early major client, with Digital Planet building and operating its online shop. Eventually, running clients’ stores became a bigger business than operating the company’s own consumer storefront. Watson and his colleagues chose to concentrate on services.
- 01Sell computersLearn the customer’s journey.
- 02Run the machineryOperate ecommerce for other businesses.
- 03Back the buildersTake operating experience into investing.
In 2015, Watson offered a particularly revealing comparison: Digital Planet had one business customer bigger than all its consumer customers combined. Business-to-business ecommerce could be hard to measure from the outside, but its consequences inside a company were tangible. Online ordering could help reach additional markets and make smaller transactions economical, while sales representatives concentrated on larger accounts.
His advice to businesses considering the move was patient. Understand the customers and competitors. Decide what the investment should achieve. Give the business time to learn how customers behave. A company asking for a website without clear objectives could struggle to judge how much it should spend. A browser window did not settle the commercial questions.
Watson also took those questions into public discussion. In May 2015, he was scheduled as a telephone guest on the Biz Takeouts radio programme to discuss business-to-business ecommerce and online sales. The subject suits the career: how an organisation actually puts a new channel to work, with the surrounding operations included.
A different seat at the table
There was another table along the way. In November 2007, Watson finished third in an online-media charity poker tournament. The field included Bidorbuy’s Andy Higgins, NetFlorist’s Ryan Bacher and PayFast’s Jonathan Smit. Independent Online’s Chris Wilson won, directing the R10,000 prize to Cape Town Child Welfare. For an evening, competitors could compare their judgement without comparing delivery charges.
The poker result makes a pleasant footnote because it puts several people from the early industry in the same room. The group included a florist, a payments business, a marketplace and an internet service provider. Each worked on a different part of buying or doing business online. Their companies could meet through a transaction; on this occasion, the connection was a tournament with money going to charity. Watson left with third place, a result that needs neither a business metaphor nor a victory speech.
The more lasting change of seat came in 2019. Watson exited Digital Planet and began investing and mentoring full time. That September, he joined investors backing Yebo Fresh, a Cape Town online grocery business. The round also involved E4E Africa and WooThemes co-founder Mark Forrester. The familiar questions of ordering and delivery now appeared in another founder’s venture.
When E4E Africa launched in 2020, Watson was identified among its founders. His current title is partner. The team includes entrepreneurs such as SweepSouth co-founder Aisha Pandor, Asilia Africa co-founder Bas Hochstenbach and Ampelmann co-founder Frederik Gerner. Building companies is part of the group’s shared experience. Watson’s contribution comes with years spent making a business model work in practice.
His interest in helping entrepreneurs solve hard problems has a concrete background. He has worked through a slow beginning, an expanding catalogue, a physical retail venture and a change in the company’s main customer. Investing gives that experience another use. A founder trying to decide what to keep, change or stop can speak to someone who has had to make those decisions himself.
The blue bubble wrap belongs to an earlier chapter. The responsibility it represented has travelled rather well. Someone places an order, commits capital or accepts advice, and expects something useful to follow. Watson’s career has kept returning to the work between that expectation and its arrival.