Early Black Friday? Online retailer Zando announced that they are pulling out of South Africa. The upshot of this, though, is they’re selling all their stock at like 50-85% discount with free delivery.

In this Open Letter:

• Vital charge: The startup that helps save South African lives.

• Local EVs, deepfake Elon & AI drones to save your potatoes.

• Lonely building your business? Join the Collab’s Chat Roulette.

• Our fave traffic light behaviours: The results are in.

• Short on ideas? Share this and get 100+ SA startup ideas.

Together with:

TRENDING NOW

The New Tech Saving SA Lives Every Day

It’s no secret that it’s hard to get a hold of the cops in SA…

Around 26% of calls to 10111 are dropped. And if your call does get answered (anywhere between 8 and 35 minutes), our guys in blue are stretched pretty thin, with around 145’200 cops to keep 62 million of us in check. 

For context: The police-to-population ratio in SA is 1:427 – the United Nations recommends a ratio of 1:220, so we are barely halfway there…

Can technology help improve the situation?

Technology can be highly effective in crime detection and prevention. Just think:

• Surveillance, monitoring, and behavioural analysis: AI-powered surveillance systems can analyse footage in real time, identifying suspicious activities or behaviour that might need police intervention.

• Gunshot detection: AI-based acoustic sensors can detect gunshots, pinpoint their location, and alert law enforcement instantly.

• Predictive policing: AI algorithms can analyse historical crime data, identify patterns, and predict potential crime hotspots.

But ultimately, no matter how cool the tech is (or how powerful), for now its going to require human intervention to respond to emergencies.

A local platform with your nearest first responder at your fingertips…

AURA is a B2B platform that allows anyone to access a vetted, first responder (be it security or medical) that’s closest to their location in the event of an emergency.

They’ve built a response tech platform that sits behind their API which companies (like insurers, couriers, and even government) can bolt onto their existing applications in order to create panic buttons for their users – suddenly giving them access to AURA’s network of 3’500 response vehicles. 

And, from the looks of it, it works: They’re able to deliver an 8-minute response time nationally with 3’500 vehicles, and internal data shows they save up to 5 lives per day in South Africa.

But here’s the thing…

We actually spoke about AURA at the beginning of this year in our post on security tech opportunities in SA, but simply had to bring them back, because…

AURA launched in the UK earlier this year, and that brought with it an interesting new set of challenges. Over there, private security companies usually act as intermediaries that only monitor alarms, it’s the police that are actually dispatched when an alarm goes off – hmmm, must be nice…

Yeah, and that must be why many folks over there didn’t even bother getting a security company – why pay when the police show up anyway?

But, all that recently changed: The UK police have stopped responding directly to alarms, requiring that alarm activations be confirmed before they come over. In other words, the UK became a lot less like the UK and a lot more like SA – ideal for some innovative SA brand to swoop in and…

And you guessed it: AURA quickly spun up a gig economy for private security and medical personnel, with their solution cutting down the archaic traditional process (which requires multiple human interventions) in half with its smart technology and auto dispatch to the nearest emergency responder in the UK. They initially created synthetic demand to seed the marketplace until there was enough action on the platform to ensure supply and demand met each other in a win-win-win way.

But don’t let us spoil the story for you. We had Warren Myers, the Co-Founder and CEO of AURA, on the most recent episode of our “How Would You Build It” pod, so check it out for even more juicy details, including:

• Innovation, handbrakes, and working with SAPS.

• How emergency responses differ in the UK.

• How to generate demand when building a marketplace.

• The future of emergency detection (and apps).

IN SHORT

Grab a knowledge nugget for the braai…

⛴️ Going places. Fleet management company GoMetro has secured a R3.2 million grant from the UK Freight Innovation Fund for a 6-month trial of GoMetro’s EV-FIT solution and its Bridge fleet management software platform with UK’s Maritime Transport and Welch’s Transport companies.

🥔 Spud drones. SA potato farmers are getting a helping hand with autonomous drones that can detect potato leaf disease using AI. A partnership between local digital business consultancy Moyo, and Dell Technologies is bringing Dell AI Factory with Nvidia and Precision AI-ready workstations to a potato farm near you for advanced crop health monitoring.

💼 Business crypto. Yellow Card, an African crypto startup, has raised $33 million in Series C funding led by Blockchain Capital (they’ve already invested in Worldcoin, Coinbase, and OpenSea), to support its pivot towards its business customers in 20 African countries.

🔒 Own Goal. Local trading platform Banxso’s licence to operate has been provisionally withdrawn by the Financial Sector Conduct Authority (FSCA) and several of its bank accounts placed on hold by the Financial Intelligence Centre (FIC). The platform has been accused of “benefiting” from deepfake AI ads featuring among others Elon Musk promising profits of up to R300k per month.

⚡️ Tax-Free EV? SA President Cyril Ramaphosa is apparently considering incentives for local electric vehicle manufacturers, as well as tax rebates or subsidies for those purchasing and using them. Speaking at the South African Auto Week conference, Pres. Ramaphosa said it was about ensuring South Africa remains competitive in global markets.

🏦 No Crypto. Earlier in the week, Capitec blocked all transactions to local crypto exchange Valr, citing fraud concerns. Capitec still allows transactions to Valr via Capitec Pay but at a premium to EFT transactions.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy local and international payment processing with WigWag, expert offshoring, company structure and legal advice from Dommisse Attorneys and 11 more vital startup tools & services.

CHECK THIS OUT

Empower Your Team To Scale Fast

Let’s not mince words here…

The only thing harder than starting up and proving your product/idea is worth the time and effort is achieving Market Fit and scaling up. Because scaling often means moving founder-led sales to a team of sales personnel.

Their challenge? Well, they often don’t have the trust and authority in the marketplace that a founder does — which makes closing sales a tough gig. But when the brand or product they represent has trust and authority, it really greases the sales wheels….

In fact, 81% of customers only buy from brands they trust. 46% of those are willing to pay more for products from brands they recognise.

The Fastest Way to Build Authority

The truth is: there are no shortcuts to trust, it’s earned.

But how do you earn it? Content marketing is by far the fastest, simplest and most effective way to do that – delivering 3X higher brand engagement at a fraction of the cost.

If you are a tech scale-up, you need to content to:

• Empower your salespeople

• Create high-quality touchpoints that add value

• Attract the right type of audience

• Differentiate yourself in a competitive market

• Position yourself and your brand as a thought leader

• Lower your cost of customer acquisition

• Improve your conversions

That’s why we created Stream:

• We marry engineering expertise

• With award-winning copywriting

• And a super-flexible pause-and-cancel subscription model

To give your tech scale-up the ability to build trust with authoritative content that empowers your sales team, and helps you say the right things to the right audience at the right time.

Get in touch today for a free consultation on what content can do for you.

HAPPENING SOON

Upcoming Events

Today at 12:00 — Digital Chat Roulette: It’s like startup speed dating, but you don’t have to leave the house/office — The Open Collab community exclusive.

25 October 2024 — Product Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Sales Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

18 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Gave Chris a warm intro to the COO of the company he’s been trying to secure a meet with for months 🤗

• Hooked Elijah up with a contact for building a WhatsApp CRM.

• Discussed both internal and outreach comms: email VS WhatsApp VS in-person.

• Celebrated Garth’s successful custom GPT pilot.

• Helped “hook” Gustav up with the Boardroom founders.

• Got super-sweet connections to get into Africa Tech Festival for free, but with access to more of the event than the normal pass.

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all Open Collab members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

Sustainable fashion for way less…

We meet a lot of cool SA founders and started doing quickfire pitches where they tell us what their startups are all about.

This is Nick and Michaela from sustainably sourced fashion platform Thrif, where conscious buyers get quality goods at a great price…

WHAT YOU SAID

Don’t stop believing…

We asked what you do during peak traffic at a robot🚦, and air-drumming the wheel’s the game…

🟨⬜️⬜️⬜️⬜️⬜️ 🥪 Take the next bite of a meal. (8%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💅 Fix makeup/hair/beard. (5%)

🟨🟨⬜️⬜️⬜️⬜️ ✋ Ward off window washers/pamphlet handers/car trash collectors. (18%)

🟨🟨🟨⬜️⬜️⬜️ 🔊 Send voicenotes (including rhythmic indicator sound). (23%)

🟩🟩🟩🟩🟩🟩 🤘 Steering wheel/air drum. (46%)

Your 2 cents…

Nice one, Phillip. Ja you can’t beat that for mid-city traffic. 🛵

Haha love the honesty… ☝️

Nice, Andersen, keeping it clean and green. 🔋

Good catch? If you enjoyed SpaceX’s history-making rocket launch-and-catch manoeuvre this weekend, why not try it yourself? Test your skills at their official land your starship game.

In this Open Letter:

• Game changer: The startup that’s ending traffic jams, for good.

• Starlink Kenya turns 1, Google power & SA gaming on the map.

• Technical precision: 5 Steps to increase chances of success.

• The future of electric vehicles in SA: The results are in.

• This lonely startup game: Join The Open Collab and get support.

Together with:

TRENDING NOW

Saving SA’s 11 Million Drivers’ Daily Sanity

There are a few things as frustrating as being stuck in traffic…

Aside from the usual peak morning and afternoon slow-moving traffic, and getting caught up behind an accident or bumper bashing – thanks, rubberneckers – another leading cause for traffic is the good old faulty South African “robot” (traffic lights/signals for our international readers).

Look, Robots everywhere…

South Africa has a pretty extensive road network that requires a lot of robots to keep traffic flowing — about 1’500 and 2’000-plus in larger metropoles like JHB, Durban and Cape Town. And maintaining them isn't easy:

• First, the municipality relies on responsible citizens to report it – either via call centre or e-portal.

• Then, a technician must be allocated and head over to the intersection to assess and determine the fault type.

• Then plug into the robot to turn it off and on again to see if that works.  

Getting stuck in traffic is costly business…

According to TomTom’s 2023 Traffic Index, it takes South Africans between 13.5 and 16 minutes to travel 10km at an average speed of just over 30km/h during rush hour. 

Living in Pretoria, Cape Town, Bloemfontein, Durban, or Johannesburg, that means you’ll lose between 43 and 49 hours to rush hour this year… 

Considering the 11 million+ cars on the road, think about the stress, economic impact, and CO2 emissions for each vehicle – and the relief shaving off even a handful of minutes each way, per day could bring…

Unjamming SA’s roads

Local AI R&D company Bytefuse is tackling SA’s traffic jams head-on with an AI system to optimise a robot’s timing, reduce congestion, and improve traffic management called Quebit.

Quebit takes sensor data from a specific intersection’s robot using edge computing modules installed at intersections, to process real-time data and adjust signal timing optimising traffic flow through the intersection. Think cameras and other smart sensors detecting traffic from different directions, feeding the data into AI models to adjust the timing of lights in real time. It’s basically a robot, a robot.

Quebit also allows traffic engineers to receive the data from the module, pick up if there is an issue, troubleshoot and even reboot the traffic light remotely – without leaving the office or breaking a sweat.

Finally, it also allows traffic departments to remotely adjust timings during events with high traffic volumes, such as funerals, sports matches, or music concerts at stadiums. Replacing the current expensive mode of going out to reprogram the light for a specific date and time which is both costly and labour-intensive.

Quebit is currently piloting in Stellenbosch and early indications show double-digit improvements in traffic flow. And with case studies like these, it could start rolling out to more municipalities in the future, and become your favourite solution you’ve never even heard of (unless you read The Open Letter).

We’re watching this space… 

IN SHORT

Have Something Fun to Say at the Staff Social…

🛰️ Kenya believe it? 12 months after launching in Kenya, Starlink has more than 8’000 subscribers, making it the 10th biggest internet service provider in Kenya. And while the numbers might still seem small the satellite internet services provider is poised for growth, with the last year considered as one of the fastest expansions for an ISP in Kenya.

🎮 Game face. SA’s gaming industry is set to receive a boost with the establishment of the AfriGames Consortium. Funded through the National Treasury’s Jobs Fund, EOH, and ABSA, the consortium has already secured R25.8 million to put SA gaming on the map.

🚀 Gear up with Google. Applications are now open for the next cohort of the Google for Startups Accelerator: Africa,  Google’s three-month hybrid accelerator program specifically aimed at Black-led technology startups in South Africa who are between the Seed and Series A stages.

💰 Funding Growth. Endeavor SA's Harvest Fund III has achieved its first close at R190 million, aiming to boost tech-related companies across Africa. Major investors include Standard Bank, Allan Gray, and the SA SME Fund, with plans to invest in a select pipeline of 135 companies, focusing mainly on southern Africa.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy local and international payment processing with WigWag, expert offshoring, company structure and legal advice from Dommisse Attorneys and 11 more vital startup tools & services.

BUILDER’S CORNER

5 Steps to Greatly Increase Your Product’s Chances of Success

By reversing what you think you know about building products

Written in conjunction with Heinrich De Lange of Octoco.

This past weekend, SpaceX made history (again)...

After 67 years of everyone “knowing for a fact” that the only way to get to space is to sacrifice your ($millions) booster rockets and let them burn up in the atmosphere, SpaceX challenged that notion…

And basically detached a booster and caught it again back on Earth to refuel and blast the next one within 60 minutes – an important requirement in the mission to occupy Mars.

It’s more than cool viewing, though. This simple feat of engineering will save hundreds of millions of dollars in wasted booster rockets by making them reusable in the future.

And this level of ingenuity is not reserved for space engineering or billionaires with R&D teams – you can use the same publicly available principles Elon and the SpaceX team use right now for software, hardware or any venture you can think of, with the Octoco interpretation.

It all comes down to 5 steps…

See, when most builders start engaging with an idea, we tend to develop a rough requirements list for how this thing could maybe work and then start building out on those initial assumptions.

The wrong way: Stop us when this starts to sound familiar:

1. You start looking for ways to automate most of the processes in your initial idea.

2. Then, you realise how taxing it is, so you try to speed up parts of it.

3. But it’s not enough, so you go back and try to simplify it a bit.

4. Still too long/slow/difficult? Try delete some parts of the process.

5. You realise that 90% of the things you thought you had to do were unnecessary – you were wasting time and money all along. And, by this time, your company’s probably failing.

Psst… it’s because you’re doing it the wrong way around…

The Right 5 Steps (in the Right Order)

1. Assume All Your Requirements Are Wrong

Musk uses the word “dumb” instead of wrong. And the lesson comes from the Tesla factory…

After a lot of wasted time and resources trying to solve a problem with fire insulation between specific components, Musk discovered that the insulation wasn’t even necessary – it had been “dreamt up” as a requirement early on by someone and accidentally included in the formal process.

The core of this step is to include info such as Who added a requirement (name of person) and their Why (reasoning) for it so that you can think critically about every product requirement. Use the ABC model to interrogate every requirement: Assume nothing, Be curious and Confirm the important (make sure you understand why it’s there).

This lets you interrogate each product requirement and try to see if it is really necessary. By eliminating as much wastage early on, you make your requirements “less dumb” and much lighter.

2. Delete Parts of the Process

Be ruthless and remove as many parts of your process as possible that let it still work.

See, our brains are naturally cautious; we try to be smart and pre-empt things. But that’s how you end up with overly complex systems (see point 1).

The rule of thumb is: If you’re not spending at least 10% of your time adding deleted parts back into the system (because it turns out they were actually needed), you’re not deleting enough parts.

3. Simplify and Optimise Design

If you’ve done steps 1 and 2 well, you will have removed as many non-critical parts as possible.

A vital move, because most people trip themselves up by wasting time optimising things that shouldn’t even be there. So if you’ve nailed 1 and 2, you should be able to laser-focus on stuff that matters by now.

4. Speed Up Cycle Time

Notice how we haven’t iterated on anything yet until now? Yeah, that’s the point: If you speed up things that shouldn’t be there, you just dig your grave faster.

Speed is important, though. Musk found bureaucracy can account for 35% of production delays – you’ll want to focus on eliminating those.

If you’ve done 1–3 well, the things you speed up will be only what’s necessary.

5. Go Ahead & Automate

Same here. If you’ve done them all well, and they work as expected, then (and only then) start automating for scale.

Crucially, though, automation comes last.

This process can often feel uncomfortable at first as it forces you to venture into the unknown, but after executing it successfully a few times, it starts to feel natural (which, in part, could explain Elon’s companies’ exponential success). 

If you want to avoid some of the pain and pitfalls when taking this approach, speak to the guys at Octoco about getting it done right. They have applied these principles to building technology for Henlo Coffee, LeaseSurrance, Intelligent Safe and more.

HAPPENING SOON

Upcoming Events

18 October 2024 — Digital Chat Roulette: It’s like startup speed dating, but you don’t have to leave the house/office — The Open Collab community exclusive.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Online Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

18 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Got our Chat Roulette invites 👯.

• Enjoyed last week’s Alan Knott-Craig interview so much, we voted unanimously to invite him back for a members-only live AMA session.

• Discovered that Riverside recording tech is 💩.

• Laughed/cringed/cried at former FTX co-CEO’s going to prison LinkedIn update.

• Enjoyed SpaceX’s historical 5th Starship flight test, courtesy of Enrico.

• Welcomed some new members! (It’s a vibe).

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all Open Collab members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

We Bring-a da Spice

Got some startup memes? Send them our way or tag us on socials.

WHAT YOU SAID

Better Electric

We asked about the future of SA’s EV industry, and e-taxis are the way…

🟨🟨🟨🟨⬜️⬜️ e-Scooters ⁠🛵 (27%)

🟩🟩🟩🟩🟩🟩 ⁠⁠e-Taxis 🚐 (39%)

🟨🟨⬜️⬜️⬜️⬜️ ⁠e-Trucks 🚚 (17%)

🟨🟨⬜️⬜️⬜️⬜️ E-Lon’s passenger cars 🚗 (15%)

⬜️⬜️⬜️⬜️⬜️⬜️ e-Ships 🚢 (2%)

⬜️⬜️⬜️⬜️⬜️⬜️ e-Planes ✈️ (0)

Your 2 cents…

Oh definitely, Jason. You think oh it’s just another transport guy and then Justin comes in and 🤯

Indeed, William, it’ll be incredible to see what we can do in that space. 🚀

Time to whine? To celebrate 30 years of Green Day’s Dookie album, you can now purchase DE-mastered low-fi versions of all 15 songs on 15 different mediums they were never meant to be heard on.

Jip, that means stuff like “Basket Case” on a Big-Mouth Billie Bass, “Welcome to Paradise” on a GameBoy and “When I Come Around” on a wax cylinder (phonograph). 🤘

In this Open Letter:

• Driving change: The green side of SA’s minibus taxi revolution.

• Safety drones, Peachy WhatsApp commerce & SARS in your crypto.

• Good medicine: All the hard-hitting startup truths you need to hear.

• How you prefer your customer support: The results are in.

• Lonely building your startup? Join The Open Collab and get support.

Together with — Innovation City Cape Town

TRENDING NOW

The Future of SA's Taxis

15M Daily commuters & cutting SA’s carbon by 3.5M tonnes

If you’ve been a reader of The Open Letter for a while, you’ll know we’re quite bullish on SA’s Taxi Industry…

This R90 billion industry keeps the wheels of SA turning, with SA’s 250’000-strong minibus taxi fleet getting 15 million South Africans from their homes and back every single day.

But it’s hard work operating a taxi

Check out some back-of-the-napkin maths we shared in a previous Open Letter.

Nearly 40% goes towards petrol, the lifeblood of keeping any (well most) vehicles moving…

And, yeah, the fuel price might be coming down now, but it’s been fluctuating the last few years, making it hard for taxi owners to price daily expenses – and drivers know: you either adjust your fares and risk losing passengers or suck it up and live off already razor-thin margins.

It gets scary when you have price jumps like when the petrol jumped R3 per litre between Jan & May this year – that alone adds around R6k in extra costs each month. Eek!

Not to mention the cost of maintaining your taxi… with the daily mileage these guys rack up, it can get costly, quickly.

The local solution putting more cash in drivers’ pockets

Last week, a consortium led by GoMetro, launched SA’s first electric taxi, the eKamva.

We spoke to the founder on the latest “How Would You Build It” podcast and, in 2 years of research, they concluded that while pedestrian/private EV vehicles might be sexy, cool and all hyped up, it’s not necessarily where Africa’s EV future lies. 

The 15-seater eKamva (isiXhosa for “into the future”) sports a 60kW battery and has a 200km range, with 2 charging options: a 75-minute fast charge (ideal for the 3-hour window between peak hours), and a 10-hour slow charge for overnight charges.

eKamva is supported by flx EV, an early-stage, charging solution taking an Afro-centric view by seeing how SA taxis operate and using fast charging services. They have also partnered with various municipalities to develop charging facilities in close proximity to existing taxi ranks.

GoMetro pegs the operational cost saving at between 40% and 70%, and since there are fewer (check out the pod, it’s like 8) moving components than on a combustion engine that can get damaged – think filters, spark plugs and oil – operators can avoid costly repairs.

And if something does go wrong, the vehicle is under warranty and the motor gets sent off for repairs, with a replacement motor provided to get them back on the road asap.

The eKamva will set you back between R1.1 and R1.2 million, (thanks to the 40% import duties on “luxury” EVs). But if the government can be convinced to remove this tax, it could bring the price down to between R650 and R750k – on par with the Toyota Quantum.

The green to care about

Replacing taxis with eKamvas could reduce carbon dioxide emissions by 13.7 tonnes, per vehicle, per year (at 250k taxis, that’s 3.425 million tonnes of CO₂ per year). And that type of green might not be a big motivator for operators. But they might fancy the green cash that initiatives like this can put back in their pockets. We’re watching this space.

We had Justin Coetzee, the CEO and founder of GoMetro tell us more about the journey to eKamva, the challenges, opportunities and work that still needs to be done to green SA’s taxi industry – check it out or catch some highlights:

• At the intersection of tech & transport – how to spot a contrarian opportunity

• Why SA is perfectly positioned to formalise the informal transport sector

• Championing change – how to onboard people when disrupting

• Easier said than done – the ins and outs of taking it global

• Innovating outside of product line – bringing EVs to SA

• Measuring up – the nuts and bolts of eKamva busses

IN SHORT

Say something interesting…

👀 Tracking Takealot. A new analytics platform called Takealytics has launched to help sellers on Takealot make decisions on what products to sell on the e-commerce platform. Using Takealot’s public API, it pulls product data like reviews, competitors, descriptions and imaging of each day to inform sellers of what products could do well on Takealot.

🍑 Life is Peachy. Local digital payment provider, Peach Payments, is bringing a new sales channel and WhatsApp-based sales to its SA merchants through a partnership with Kenyan CRM and conversational commerce platform, Sukhiba.

🕹️ Sky Lens. SA is seeing a surge in drones in the surveillance and security industries as security industry players look to tackle crime. Local SOE Passenger Rail Agency of SA (PRASA) has reportedly seen a 75% decrease in infrastructure vandalism since it started using drones. So if you’re into security and drones, could be a lekker opportunity for you.

🎯 Taking Aim. SARS has set its sights on the nearly 6 million South Africans holding crypto assets. It’s partnering with the Financial Sector Conduct Authority (FSCA) to ensure tax declaration compliance by crypto holders.

🎓 Busy Body. Old Mutual’s had a busy week this week. Not only has it launched its own Mobile Virtual Network Operator (MVNO) service, Old Mutual Connect (complete with a R5 sim card), but the insurer also introduced its updated financial literacy platform, Moneyvarsity with added resources and some AI-based capabilities.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with your own fractional CFO for less with OCFO, easy-apply R5M business funding with Lula and 11 more vital startup tools & services.

CHECK THIS OUT

The Fastest Way to Meet Potential Investors & Partners in CT

Building ventures is not all about hard work & determination.

The Economist Intelligence Unit found that 8 out of 10 successful founders attribute a big part of their success to networking. And most VCs end up investing in founders they met in person.

Great! But how do you lure enough of the right people to a place where you can meet them?

Answer: You don’t. You simply go to Innovation City’s Business Speed Dating Event on 7 November, instead.

With tailored matchmaking and a super-sharp format of 5-minute rounds, you’ll meet all the investors, founders and potential partners you can handle in just 2 hours.

But there’s a catch: Seats are limited (and going fast), so it’s best to secure your spot early.

Submit your application here.

HAPPENING SOON

Upcoming Events

Today — Linkedin Live: We chat with author and serial entrepreneur Alan Knott-Craig about his new book, Life Lessons — Join here.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Online Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

14 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Helped Enrico find the No 1 🔥 note-taking app for meetings.

• Helped John find some of the best AI Pro packages out there.

• Marvelled at GPT4’s South African accent.

• Helped Jaco find some rad local providers for airtime via API.

• Discovered the world’s raddest tea thread.

• Spent an hour working together: From Blouberg to Durban, Pretoria to Düsseldorf and everywhere in between — we all logged in and it’s a vibe.

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all Open Collab members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

MEET THE STARTUP

The LinkTree upgrade every solo needs

Every day we meet local founders doing amazing things, and we bring them straight to you.

Trevor’s Savvy Sites lets solos and SMBs get online in just a few minutes… and soon accept and process easy payments via WhatsApp too..

Got some startup memes? Send them our way or tag us on socials.

WHAT YOU SAID

A little bit of customer success

We asked how you talk to customer support, and WhatsApp gets the all-green…

🟨🟨🟨⬜️⬜️⬜️ Anything but automated robot calls! 🤖 (24%)

🟨⬜️⬜️⬜️⬜️⬜️ I actually like talking on the phone ☎️ (11%)

🟨🟨⬜️⬜️⬜️⬜️ Nope, it’s email or nothing 📧 (16%)

🟩🟩🟩🟩🟩🟩 I like engaging on WhatsApp ✅ (44%)

⬜️⬜️⬜️⬜️⬜️⬜️ Can’t we just go back to good old face-to-face? 🤗 (5%)

Your 2 cents…

Yeh, Joanne, if it adds to the experience or gets you helped faster, great. 🥳

Eina, sorry William, yeh tech only helps when it actually HELPS, hey? 🤔

Guess it comes down to call volumes and query times, eh Jason? 🤙

Pure wisdom, Trichardt! We always say find your ultimate five-star user experience. 👌

A bit of privacy? Two Harvard students hacked Meta’s smart Ray-Ban glasses to identify people they’re looking at. But, like in the Watchdogs games, it goes a step further and sends insanely in-depth private info about you straight to their phones. Eeek!

Here’s a doc by the creators on how to protect yourself from this type of tech.

In this Open Letter:

• Customer X: Tech that makes sales while you sleep.

• Beer money, scaling local startups & Superbalist’s restructure.

• Shortcut: Get 20 years of hard-earned startup lessons in 40 mins.

• How startup founders approach sales: The results are in.

• Short on ideas? Share this and get 100+ SA startup ideas.

Together with WigWag:

TRENDING NOW

Future-Proofing this R54bn SA Industry

Back in the 1980s, the primary way to buy insurance in South Africa was through brokers. That’s when South African entrepreneur Douw Steyn identified an opportunity to sell insurance to more price-sensitive consumers via telephones — it was a massive success both locally and abroad, giving birth to the telesales industry in South Africa.

Today, the total call centre industry in South Africa employs over 270k South Africans and is estimated to generate somewhere between R35 billion and R54 billion for the SA economy (about 0.4–0.7% of GDP).

And it’ll grow: the government has committed R569M to grow SA’s BPO (Business Process Outsourcing) sector, which is the fancy name for call centres, with an eye on growing it to a R62 billion per year industry by 2027.

Especially the Western Cape, which houses about 60% of SA’s call centres, netting about R21 billion and 10k new jobs per year for Cape Town’s economy… it’s big business.

But how is this game-changing with AI? Well, AI calling bots are here; just check this demo of a close-to-perfect South African accent that could easily act as an insurance salesperson.

And, you guessed it…

Call Centres Need to Evolve or Die

According to McKinsey’s Customer Care Report 2024, voice calls are surprisingly still alive and kicking but facing their gravest challenge yet:

• rising call volumes

• high levels of employee attrition

• and persistent talent shortages

And with AI and automation as an answer, the biggest and best customer-facing organisations are investing heavily in digitally-enabled customer care (like omnichannel, but for call centres) and McKinsey notes that it’s lifting all customers’ expectations from interactions.

Being able to combine live voice with simultaneous chat, video and image-sharing is boosting customer experience through the roof — especially when interaction can be done asynchronously — in, say, an instant messaging format.

Now, throwing Large Language Models into the mix is no doubt lowering costs and doing the same job in a fraction of the time.

So, just how are SA organisations engaging customers in new and creative ways?

The Local Player Redefining Customer Care

Local scaleup, rather.chat helps companies connect with customers in a new and engaging way via WhatsApp – probably the only channel with equivalent penetration to phone.

Originally built as a tool for selling policies on the popular platform, rather.chat has now been spun out as a full-service solution for businesses to:

• Market to potential customers and generate leads

• Perform and close actual sales virtually

• Handle customer care and customer service

• And take over some customer feedback functions

And the proof’s in the pudding: rather.chat has facilitated over 15 million connections between customers and companies and concluded over 150k actual sales (85% of which were entirely automated, and required no human intervention whatsoever).

In fact, they’ve partnered with a host of local companies, from Ackermans to Clicks, Discovery to Cars.co.za, and on average, manage to lift low engagement levels of around 1.5% through traditional branded app channels to over 40% through WhatsApp. What’s more, research has shown that customers are 47 times more likely to engage via WhatsApp than download your fancy app to chat that way.

Customer engagement is changing faster than ever and rather.chat is offering a way for consumers to engage that prefer to rather chat. We’re watching this space…

IN SHORT

Great Openers for Your Next Meeting.

🍻 Scaling with because of Beer. The SAB Foundation’s Social Innovation Accelerator and Fund has awarded a combined R3 million in funding to 3 local startups. They are Respo, an affordable private ambulance service app for low-income South Africans, Syked, an online wellness platform providing secure video counselling sessions, and Word of Mouth, an end-to-end e-commerce platform for informal entrepreneurs.

🐟 Scales and Fins. Local FinTech startup LittleFish has successfully closed its seed investment round, with TLcom Capital leading the financing — marking TLcom’s first venture into South Africa — and Flourish Ventures also participating as a co-investor.

💳 Card Scaling. VCs 54, First Circle Capital and Sunny Side Venture Partners have led a pre-seed funding round for Scale, a South African card-issuing orchestration startup. The  R12 million round will help Scale in its mission to connect FinTech platforms with banks, issuer processors, KYC and payment networks so that they can launch cards faster.

😢 Scaling Back. Local e-commerce Superbalist is expected to retrench around 28% of its staff as it restructures its business after recently being sold off by Takealot. Hopefully, those impacted are able to bounce back quickly.

🪙 Crypto Pay Scale. Thanks to a partnership between Luno and Zapper, you can now use crypto to pay for a bunch of stuff like medicine, petrol, flight tickets, parking and more at more than 30k Zapper merchants - hopefully as quickly as using a credit card.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with sustainable scaling and growth strategy help through Metavolve, your own CTO and tech team at a fraction of the cost with Octoco and 11 more vital startup tools & services.

CHECK THIS OUT

Sell It Now and Let Them Pay Later

When it comes to online payments, it’s become super easy to get up and running to receive payments with WigWag.

Even if you are a small or solo business selling on social or via WhatsApp, WigWag is one of the fastest ways to set up and get paid.

But what if your customers can’t pay right now? 

Let’s face it, some bigger ticket items are just sold better in instalments – but as a small business, you don’t have the option of selling it that way… until now.

From tomorrow, if you are registered on WigWag to receive payments, you can switch to Happy Pay’s Buy Now Pay Later (BNPL) solution to allow your customers to pay for your products or services in two convenient, interest-free payments. 

So, if you are collecting payments using Wigwag, you now get:

• Automatic access to Happy Pay through the WigWag platform.

• Seamless integration of BNPL at checkout, increasing customer satisfaction and conversion rates.

• Guaranteed weekly payments, ensuring you can start fulfilling orders immediately after checkout.

• A simple and user-friendly dashboard, showing all payment types — including Happy Pay transactions — in one place.

Keen to get the simplest online payment solution now with the convenience of Happy Pay’s BNPL solution?

Sign up for a WigWag account now.

HAPPENING SOON

Upcoming Events

11 October 2024 @ 12:00 — LinkedIn Live: We chat with author and serial entrepreneur Alan Knott-Craig on his new book, Life Lessons. Join here.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Online Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

14 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Got our recordings of legal pros teaching us how to start companies overseas.

• Introduced Chris to the COO of the startup he’s been looking to collab with.

• Helped Trevor get his job spec looking 100% fly.

• Tried out a bit of the new ChatGPT with Canvas ability.

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• Friday 12-1: Masterclasses, where we either LinkedIn Live chats with startup legends or get masterclasses in practical building skills from industry pros.

• New: Free monthly startup strategy calls for all Open Collab members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

MEET THE STARTUP

Didn’t know we were looking for love…

We meet a lot of cool SA founders and started doing quickfire pitches where they tell us what their startups are all about.

This is Serisha, sharing how the Boardroom App helps busy professionals find love in a fast, fast world…

WHAT YOU SAID

Show Me the Money

We asked how you make sales for your startup, and it’s DIY for most…

🟩🟩🟩🟩🟩🟩 🎯 I do it myself (cos then I know I can eat) (62%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📢 Influencers, ads – anything but selling myself (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚀 I hire and train the best salespeople in the world (6%)

⬜️⬜️⬜️⬜️⬜️⬜️ 👔 I get like 90% of my leads via my LinkedIn (9%)

🟨⬜️⬜️⬜️⬜️⬜️ 😎 Very easily since I found Apollo on The Open Letter’s Founder’s Stack (20%)

Great! And remember to check out the sales tools in the Founder Stack:

You can find and contact leads with Apollo via your LinkedIn, build drip campaigns via email with Beehiiv, collect payments with WigWag and automate workflows between them all with Make so it all runs automatically 24/7.

You don’t even have to write any copy yourself, just get Stream to do it for you. 😉

Deeper meaning? Some joker asked Google’s NotebookLM to generate an entire podcast from a document with only the words “poop” and “fart” written on it, 1’000 times. And the AI did it — behold 10 minutes of poop-fart deep-dive.

Should we be worried about how good AI is at making stuff up?

In this Open Letter:

• Sales optimised: How to claw back 30% of your company revenue.

• Africa startup acceleration, Elon’s SA investments & 300 million seeds.

• Offshore savvy: Join us to learn about housing your startup overseas.

• What most of us are saving up for: The results are in.

• Short on ideas? Share this with one friend and get 100+ startup ideas.

Together with:

TRENDING NOW

Clawing Back 30% of Your Revenue

Let’s face it, when it comes to buying something from someone, nothing beats face-to-face. 

In fact, research has found that face-to-face is 36 times more successful than digital channels. But that doesn’t always mean it's best for the business. 

Face-to-face sales are pricey! Travel time, travel cost, and aligning calendars (think travelling salesman problem) all add up to make it likely the most expensive of sales processes.

Traditionally salespeople spend as much as 70% of their time on “non-selling” tasks – i.e. stuff they have to do but that aren’t bringing in revenue, like:

• Administrative work,

• team meetings,

• reporting and documenting, etc.

And that’s why many organisations have become adept at doing sales remotely. Sure, it’s less effective, but at a fraction of the cost and complexity, in some cases, it does make sense. 

Taking it a step further, the advent of AI has seen people building AI callers that do sales calls for you. Old Mutual is piloting such a tool in SA right now – robocalling insurance armies.

Whilst certainly effective in certain market segments, it will be completely ineffective in others – that’s where instead of using tech to replace humans, one should use tech to make humans more effective at sales, all while reducing costs.

But running human sales teams in a post-covid, remote first world is complicated. 67% of sales managers say that overseeing a remote sales team is more challenging than they expected and 77% of B2B companies said they had faced challenges with their field reps working from home. 

Bringing the Human Back

Smart devices have done a lot for field sales. 

Being connected back to the office, easy calendar bookings and navigation using on-device navigation have all made the process of field sales force more streamlined. 

But add reporting, intelligence and sales capturing intuitively and all of a sudden you have a field sales team that turns into a field sales force.

That’s what local scale-up Skynamo started doing back in 2012. After building a field sales force solution for themselves in a company called EMSS (which later became Alphawave), they realised that there might be opportunities to build solutions like that for other companies, pitching on an array of tenders (including a field installation app for SA’s Digital TV rollouts, that due to politics never ended up happening). 

But they soon realised that while many people need a solution like this, most don’t have the budgets to build and maintain their own solutions. 

And right there, the SaaS opportunity was born with a 6-in-1 Field Sales Software platform catered towards:

• Sales Reps — give your sales reps access to live stock checks and instant reports, execute assigned tasks/visits and access relevant info on the fly.

• Sales Managers — watch sales unfold live and respond to customer queries or escalations.

• Sales Intelligence — smart analytics and insights help you make decisions that can lead to better results.

• Customer Intelligence — predict customer needs accurately.

• Strategic Forecasting — using past data, simplify your future forecasting and planning.

• Revenue Intelligence — figure out which deals/customers are most profitable.

Initially called Honeybee, they were renamed to Skynamo in 2018 and were able to raise $30 million right before COVID. Good for cash flow, not so great for international expansion plans. 

Once the lockdowns eased, they hit international markets, particularly the US hard with on-the-ground teams. Since then they have scaled back their on-the-ground US operations — a decision founder Sam Clarke explains on the latest ep of our “How Would You Build It” podcast. 

Skynamo is however still one of SA’s greatest SaaS success stories and continues to grow its customer base both in SA and beyond. 

And with the Robocallers going into overdrive, we think in-person sales will be more effective than ever and tools like this will have a major role to play. We are watching this space…

We recently chatted with Sam Clarke, CEO of Skynamo, on the “How Would You Build It” podcast. Check out the latest episode, or dive into some highlights:

• What is Skynamo (and building apps around 2010)?

• Getting Skynamo’s first customer, without paperwork or even pricing.

• Liquor licenses, tyre customers and conceptual debt — understanding your customers’ industry.

• Skynamo’s funding journey - at the time, local VCs just couldn’t write big enough cheques.

• Expanding overseas when the pandemic hit.

IN SHORT

Drop some nuggets at the weekend braai

🔘 Hit the Start Button. The SA SME Fund, the Department of Science and Innovation (DSI), the Technology Innovation Agency (TIA) and impact investor E Squared Investments, have launched a R300 million Seed Fund of Funds. Aimed at early stage, tech startups, the fund will provide a much-needed boost for local startups starting out.

🚢 All Aboard. Local shipping platform for e-commerce exports TUNL has raised a seed round, after closing a $1 million pre-seed round in December 2023. Great news as it expands its local growth and dives into international payments & marketing support for local SMEs (to sell their stuff abroad).

✨ Investments in the Stars? Elon Musk has expressed his desire to “invest in and otherwise support South Africa” should South Africa relook the telecoms regulations tripping up digital inclusion in the sector and SA at large. This comes off the back of our Communications minister Solly Malatsi’s meeting with Starlink reps to talk about potential SA investments.

🚄 African Acceleration. Fifteen African startups, including 10 from South Africa have progressed to the second phase of the UCT Graduate School of Business’ Solution Space and ayoba’s e-Track programme. The 12-week programme is aimed at accelerating the development of validated ventures (from the first phase) and will culminate in a demo day on the 28th of November.

🚀 Boosting Benefits. Employee benefits tech platform Bento has just concluded a R5.2 million pre-seed funding round, led by NEXT176. With employee benefits playing a larger part in helping SMEs land top talent, that’ll help Bento’s mission of helping more SMEs offer competitive, flexible, and affordable employee benefits.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with easy cloud-based accounting with Xero, superior quality tech content to build brand trust from Stream and 11 more vital startup tools & services.

CHECK THIS OUT

Wish you learnt about money sooner?

You're not alone, over two-thirds of the world is considered financially illiterate!

But what if we could change that?

Remember playing Monopoly as a kid: The flipping the board in a heated game?

FinMaster is here to replace that with something better — a game that’s fun, fast-paced, and teaches real-world financial skills to children 13 and up.

Seems like an ideal solution for educational family game nights…

In FinMaster, you’re not just collecting assets, you’re controlling the market!

Will you build your wealth or cause the next financial meltdown? It’s your choice.

From creating booms to surviving crashes, FinMaster turns learning about money into a thrilling experience.

Here’s what some of our playtesters are saying:

• What a fun game!

• A lot more realistic than Monopoly.

• Engaging, educational, with an element of competition.

• Interactive and great for a group of friends.

Pre-order your FinMaster today and make it part of your next friends and family games night. It’s the modern-day money game South Africa’s been waiting for!

Events that rock

Stellenbosch, you beauty

Oh man, were we underestimating Africa’s AI and Machine Learning capability — our latest event guests gave everyone an entirely new perspective on SA’s AI and ML capability earlier this week. We heard stories about:

• how they are using it to help small companies beat their giant incumbents

• as well as how to use it to intelligently deploy traffic department staff to reduce road fatalities by up to 50%

Was great meeting so many of you there, see you at our next event!

Upcoming Events

4 October 2024 — Online Masterclass: All about offshoring with Andea du Toit from Dommisse Attorneys — The Open Collab community exclusive.

11 October 2024 — Linkedin Live: We chat with author and serial entrepreneur Alan Knott-Craig on his new book, Life Lessons.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Celebrated Erhard’s startup Hoom going live!

• Debated the whole Elon-Starlink-coming-to-SA thing…

• Helped Pieter get square on his next startup steps.

• Celebrated with Richard making great progress, with some help from Collab members.

• Debated whether it’s best to focus on 1 thing or spread your luck/risk.

• Welcomed 5 new members!

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all Open Collab members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

It’s a jungle out there…

Got some startup memes? Send them our way or tag us on socials.

WHAT YOU SAID

Priorities, priorities

We asked what you need to save for, and investing in getting to market or PMF’s the big one…

🟩🟩🟩🟩🟩🟩 Cash for my startup or MVP 🚀 (32%)

🟨⬜️⬜️⬜️⬜️⬜️ Home improvements – need that new pool, baby 👙 (11%)

🟨🟨🟨⬜️⬜️⬜️ A car or house – gotta keep moving up 💸 (17%)

🟨🟨🟨🟨⬜️⬜️ Purchase an investment property – esp. if interest rates keep dropping 🏘️ (21%)

🟨🟨🟨⬜️⬜️⬜️ A lekker holiday! It's time 🏖️ (19%)

Your 2 cents…

Nice one, Michelle! Do you know FinMeUp? Local guys that help you get your risk profile and manage investment goals in a fun and engaging way. 😎 💸

Oh, by the way, Jason, please remember to fix the cupboard door. 🤣

Pearly whites? Researchers used toothpaste to make edible transistors, opening up the possibility of microchips you can safely swallow to help track and manage your body’s health from the inside.

In this Open Letter:

• Uniquely SA: Helping 19 million save better, more securely.

• Uber safaris, Eskom’s magic coal dust & solar-powered home bots.

• See you tonight: Our Stellenbosch event is tonight — book your spot.

• How often you eat out: And the latest poll results are in.

• Startup fuel: Share this 10 times and get Pro membership.

Together with:

TRENDING NOW

Helping SA Manage R50bn in Savings

SA has the most mature and robust banking industry in Africa (and right up there with the best in the world, mind you), but despite that, late last year, we learned that a staggering 19 million South Africans remain underbanked. 

And while most still get paid in cash and use that cash to spend, many remain in the cash world, so it made sense that saving also happened in the world of cash: Hence the Stokvel.

Ah, the Stokvel 

For those who don’t know: A Stokvel is a member-only group savings system where 12 or more people contribute a set amount of money to a shared fund regularly (weekly, bi-weekly, or monthly) with different members receiving the entire collected amount in a lump sum on a rotational basis.

Let’s say you’re 12 people, each contributing R1’000 per month. In a classic rotational stokvel, each member chooses a month out of the year, and for that one month, you get R12’000 to use for yourself.

It’s a uniquely South African savings mechanism.

Now, stokvels are guided by a constitution that outlines all the rules: contributions, payouts, and member roles. And by law groups must be registered with the National Stokvel Association of South Africa (NASASA), the only association approved by the Registrar of Banks in terms of the Banks Act 1990 (Act No. 94 of 1990).

And, as one can imagine, you can use this mechanism in various ways. That’s why there are different types of Stokvels: from grocery stokvels to investment clubs.

The Stokvel game is no small thing…

According to NASASA, there are more than 800k Stokvel groups in South Africa with more than 11 million individuals. 

And the industry manages around R50 billion each year, essentially creating a massive network of “human banks” in the local economy.

Now, up until very recently, we would not have thought that a digital stokvel is viable. It faces adoption challenges and “money-in” friction. Basically, if someone has to take cash to a bank to join a stokvel, it's costing them way too much in terms of time and taxi fare. It’s a non-starter.

But things have started changing fast in the financial infrastructure for townships space.

Earlier in the year, we covered how Kazang has a presence in more than 85’000 spaza shops across SA and how their tech is enabling merchants to take cash deposits, allow withdrawals from cards (and make payments with cards), sell bus tickets and a host of other interesting offerings.

With this footprint, it could finally make sense to do the digital stokvel and it looks like it’s happening…

The local player bringing the Stokvel into the future

StokFella is a digital stokvel app designed to make running a stokvel more efficient and secure by offering tools for record-keeping, financial tracking, and communication – all in a user-friendly, secure platform.

They’ve got a pretty flexible subscription-based pricing, starting with a free plan for up to 15 members, which covers the basics of running a stokvel. 

But if you wanna go pro for R500 per month, stokvels get meeting resources, detailed reports, executive coaching discounts, and higher interest rates on savings. They are also integrating innovative solutions to offer members such as a link into Troygold to allow stokvels to effortlessly invest in gold via API.

With over 42’000 members and more than R220 million transacted, StokFella is bringing an innovative solution that modernises old-school, traditional savings and investment schemes like stokvels. We’re watching this space…

IN SHORT

Sound smart at the watercooler

🤖 Power Bot. Local home energy management company Plentify has joined forces with one of SA’s largest solar and electrical distributors Herholdts to launch SolarBot. This intelligent controller analyses weather patterns, load-shedding schedules and customer demand to make smarter decisions on when to charge and discharge the battery.

🦁 All Hail Safari. Uber has just launched Uber Safari in South Africa. And just like the name suggests, users will be able to book a full-day “Wildlife Adventure” from Cape Town to the Aquila Private Game Reserve which includes a 3-hour game drive to see Africa’s Big 5. The round trip will set you back around R3’400 for 4 peeps and runs on Fridays and Saturdays.

🏠 Home affairs at Home. South African home affairs is notorious for long queues, confusing processes and frustrations. However, given that their budget has been cut by as much as 40%, perhaps that’s part of the reason. The new Home Affairs minister is planning to build Home Affairs @ home, taking everything online and making it digital. If it works, no more queues…hooraay!

🛣️ Recycled Roads. Eskom’s Research, Testing, and Development (RT&D) initiative is trialling the use of recycled coal ash instead of traditional cement for road construction. It’s starting its trial with a new access road at its Kusile Power Station and is expecting to use around 2’904 tonnes of coal ash per km of road.

🏦 Take it to the Bank. Africa's largest financial institution by market capitalisation, FirstRand, is set to acquire all of HSBC Bank plc’s South African operations including clients, banking assets, liabilities, and staff with the deal set to close at the end of 2025.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy local and international payment processing with WigWag, expert offshoring, company structure and legal advice from Dommisse Attorneys and 11 more vital startup tools & services.

CHECK THIS OUT

Do banks even know what startups are?

One recent Open Letter user poll revealed that South Africans are tired of their banks.

• High fees

• Horrible service, and

• A general sense that their bank just doesn’t get their needs.

But there is hope. Introducing Lula’s ZERO fee bank accounts.

That’s right, zero monthly fees to set up and use a Lula business bank account.

What’s more, when you have a Lula bank account, you can:

• Stay on top of finances with their free, powerful cashflow manager called Lulaflow

• Earn 1.5% annual interest on positive balances

• Get dedicated support from real humans in real time

Finally, with a Lula business bank account, it’s never been easier to get access to up to R5 million in business finance.

Trusted by SMEs for more than a decade – get a bank that understands small business.

Get a Lula bank account today.

HAPPENING SOON

Upcoming Events

1 October 2024 — Stellenbosch: How to Build an AI Startup with Dries Cronje and Retief Gerber — tickets here.

4 October 2024 — Online Masterclass: All about offshoring with Andea du Toit from Dommisse Attorneys — The Open Collab community exclusive.

11 October 2024 — Linkedin Live: We chat with author and serial entrepreneur Alan Knott-Craig on his new book, Life Lessons.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Learned that in 3-or-so weeks, TJ Strydom is releasing a new book on how the Capitec founders turned their tiny little startup into a Big 5 contender.

• Shared what business books everyone is reading — got 7-odd awesome recommendations.

• Discovered an awesome new spreadsheet and data presentation tool.

• Learnt where to get Padel gear for a good price.

• Discussed how similar the CIA’s description of activist groups is to meetings in academia.

• Welcomed a host of new members! (It’s starting to buzz in here).

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all Open Collab members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

Always keeping it spicy

Got some startup memes? Send them our way or tag us on socials.

WHAT YOU SAID

A Bite to Eat

We asked how often you eat out, and once a week’s the way…

🟨⬜️⬜️⬜️⬜️⬜️ 🍜 Daily – lunches at the office (13%)

🟩🟩🟩🟩🟩🟩 🍔 Once a week (38%)

🟨🟨⬜️⬜️⬜️⬜️ 🍕 Monthly as a payday treat (17%)

🟨🟨🟨⬜️⬜️⬜️ 🥞 Special occasions only like birthdays or anniversaries (23%)

🟨⬜️⬜️⬜️⬜️⬜️ 👨‍🍳 I don't eat out – I make better food at home for a fraction of the price (9%)

Your 2 cents…

Nice one for cooking, Spatzendreck. Guess it also depends where you live — in Cape Town, we have some good-looking vegan options (our favourites are always vegan desserts, ‘cos everyone can enjoy them together). 🤗

Oh wow, Chris. Yes, we’ve been noticing lately a lot more reports on extortion networks in SA than we seem to have had before — hope it doesn’t become an issue in the future. 😥

We hope initiatives like HeadsUp help ensure you always get value, Princess! 🌯

Eish, ja, Marius. We’re hoping for cost savings and better Rand making things a little more affordable again. 💸

Ready to launch? Behold the most amazing exploding rocket video yet! This beauty comes to you courtesy of China’s Deep Blue Aerospace as the Hollywood-movie quality vid of their failed launch-and-land attempt.

In this Open Letter:

• Game changer: Using AI for better food prices.

• OpenExodus, Cape Town’s salty water plans & Meta’s AR specs.

• Drinks on us: Grab your event ticket + check out our drinks sponsors.

• What you like most about the Collab: The results are in.

• Last chance: 24 Hours left to get 50% off The Open Collab.

• Meet the Startup: The latest startup we bumped into at our event.

In partnership with

TRENDING NOW

Putting More Meat on This R100bn Industry’s Plate

It’s hard to imagine an industry more cut-throat than a restaurant. Complexities of managing staff and customers aside, restaurants operate on tiny margins of around 4.4% in South Africa.

It goes without saying then that planning leads to large amounts of food waste or something as simple as overpaying for some of the 700+ items they order and use can destroy profits, if not sink the operation.

Not to mention, most restaurants are likely still recovering from those nasty hard lockdowns, where more than 770 restaurants shut their doors.

Margins like carpaccio…

This nearly R100 billion per annum industry operates through ±16’000 restaurants nationally. Half of these are quick-service restaurants, typically part of a franchise where central ordering and price negotiation take that burden off the franchise owner.

However, non-franchise restaurants typically order all of their stock themselves, buying from a large array of suppliers. On average, they spend about R500k on suppliers per month and, because of their lack of data, are often at the mercy of suppliers not overcharging.

This is a major risk for restauranteurs… overpaying by 10% could be the difference between making a profit or making a loss.

Wouldn’t it be nice to know you’re paying a fair price?

Local startup HeadsUp built an AI-powered app that gives restaurants price transparency by comparing ingredient prices to market data from others’ invoice histories.

How it works is: restaurants send HeadsUp their supplier invoices via WhatsApp or email, and the AI organises and analyses the restaurant’s data, compares it with their other users’ invoice data, supplier info, products, and prices (they have thousands of data points to work with), and lets users know if they’re over-paying for specific products based on current market prices – and what this would cost you over the space of a year.

Restaurants can then decide to switch to another supplier (if they’re getting ripped off and there’s better value to be found elsewhere) or equip the restaurant with solid info to negotiate better prices.

HeadsUp charges a SaaS fee to restaurants, which they say is easily offset by the amount they save. They regularly find products being marked up by as much as 80%! And that’s likely why more than 200 customers are using the product.

We had Sven Tietz the CEO & Co-Founder of HeadsUp on this week’s episode of our “How Would You Build It” podcast. His passion for helping restaurants double their margins using HeadsUp is palpable, and he shares candidly about how they’re building HeadsUp. Check out the full episode, or catch these highlights:

• Just how much product is HeadsUp tracking?

• A photocopy paper box, a stack of printed invoices and how it all started.

• Getting their first (non-familial) customer, and how they settled on pricing.

• Getting your customer to “fire” their current solution and “hire” yours…

IN SHORT

Nuggets for the Weekend Braai

👋 Bye Bye OpenAI. Three top leaders from OpenAI have announced their departure from the company including CTO Mira Murati, VP of Research Barret Zoph and Chief Research Officer Bob McGrew. This comes after a string of OpenAI executive departures in May and August this year, amidst the company’s planned restructure to a for-profit benefit corporation where Sam Altman is said to receive 7% equity.

🚚 Special Delivery. The SA leg of the Last Mile Innovation Nexus held in Jozi on the 17th of October will see local logistics startups get the chance to pitch to and connect with over 100 supply chain leaders, including Woolworths, Pick n Pay, Massmart, Homechoice, Clicks Group, and more.

🤓 Orion’s Specs. Meta just launched Orion, (previously known as Project Nazare) to Meta employees and select external audiences. The AR glasses combine the look and feel of a regular pair of glasses with the immersive capabilities of augmented reality, with Meta calling Orion “the most advanced pair of AR glasses ever made”.

⚡️Blast from the Past. Longing for the late 90s listening to MP3s on your computer via Winamp? Well, they’ve just released Winamp’s complete source code on GitHub, inviting developers to help make some improvements to it.

🚰 Don’t be Salty. Remember Cape Town’s Day Zero in 2018 and talk about a desalination plant? Turns out the City of Cape Town (CoCT) has commenced its feasibility study on the proposed R5 billion, 22’000 m2 sea-water, reverse-osmosis desalination plant set to be ready by 2030.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with expert growth strategy help from Metavolve, fractional CTO for hardware & software from Octoco and 11 more vital startup tools & services.

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HAPPENING SOON

This Tuesday in Stellenbosch

Want to learn how Vodacom saves billions per year using AI?

Or how The Daily Maverick uses AI to uncover corruption and fraud?

Then you don’t wanna miss our upcoming event on 1 October in Stellenbosch.

Only a few more tickets left — it’s R150 or free if you’re an Open Collab member.

If you aren’t in Stellenbosch, don’t despair; check out these cool events coming up, including taking your business offshore, why Mxit failed and mastering Sales.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Thoroughly unpacked Meta’s Orion glasses play — taking no prisoners, dragging Apple and Epic Games into the ring too.

• Got our tickets to the sweet-sweet next startup event in Stellenbosch.

• Celebrated Gustav’s app launch on Apple!

• Celebrated Danei’s pre-orders rolling in!

• Discovered a ton of helpful payment gateway info.

• Got the lowdown on startup showcase.

• And had the entire community gang up to convince us to do pitch events, with pitch deck workshops beforehand… hmmm…

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all Open Collab members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

MEET THE STARTUP

Justin from Rainchekk

We meet a lot of startups and love learning about all the crazy and cool things people build.

Here’s Justin Coomber telling us all about his startup that’s like an “operating system” for local businesses…

WHAT YOU SAID

The Open Collab Favs

We asked what you look forward to in The Open Collab, and it’s the events, of course…

🟩🟩🟩🟩🟩🟩 🥂 Free entry to all startup events, of course! (34%)

🟨🟨🟨🟨⬜️⬜️ 🤩 Being able to ask successful founders questions (25%)

🟨🟨🟨⬜️⬜️⬜️ 🥹 Connecting with other founders (in this lonely game) (17%)

🟨⬜️⬜️⬜️⬜️⬜️ ✅ 24/7 support, introductions and free consults on the chat (8%)

🟨⬜️⬜️⬜️⬜️⬜️ 💡 The deep-dive content & opportunities (looking to expand my biz) (8%)

🟨⬜️⬜️⬜️⬜️⬜️ 📚 I’d actually like to see what the upcoming courses are (8%)

⬜️⬜️⬜️⬜️⬜️⬜️ 😎 I’m hoping to get sweet partner discounts (0)

Well, in that case, good news! 

If you join The Open Collab, you get free entry to all 10 of these startup events in the next 2 months — that’s like almost an event a week!

PS: Today is the last day to get 50% off the annual plan… use the code HERITAGE to claim your discount.

Celebrating SA? Don’t forget this Heritage Week you get free entry to Cape Nature parks for some swimming, hiking, mountain biking — whatever you fancy.

And more good news: the price of braaibroodjies is stabilising — see Johann Biermann’s braaibroodjie index. It’s a South African food inflation indicator, showing that, while the cost of braaibroodjies has increased year on year, we are at least in better space than January! If you needed more reason to light a fire, there you go… you’re welcome.

All in all, a good time to be living and building in SA…

In this Open Letter:

• Heritage special: The best place to build a startup.

• Kenya’s solar road trip, SA’s investment boom & SA goods on Amazon.

• Where people buy their clothing: And the results are in.

• Startup fuel: Share this once and get 100+ startup ideas!

• Save: Get 50% off The Open Collab this week!

TRENDING NOW

Happy Heritage Day!

We’re doing things a little differently today since it’s a Public Holiday, and many of us might be taking it easy – especially if you were strategic and took yesterday off as well.

So let’s just take a minute to celebrate…

The Best Place to Build a Startup

Building a Startup in SA is special…

We’re exposed to some unique challenges and limitations – but that also means we’re perfectly poised to build really powerful, solutions that solve these uniquely South African challenges.

And, naturally, we at The Open Letter have developed a pretty in-depth overview of the SA startup scene over the years. We have

• Interviewed hundreds of founders and builders over the last 2 years.

• Shared 160+ deep-dives into SA ventures, industries and opportunities.

• Published 129+ podcasts featuring SA founders, investors and PMs.

• Collected/curated preferential services, deals and tools for SA founders.

• Built an engaged community of SA founders, investors, developers and startup pros.

The best part of what we do? Seeing South Africans come up with really unique solutions to some of our most complex problems. So, to celebrate, here are some of our favourites…

1. The last-mile play that’s keeping SA rolling

Local Rent-to-Own bike startup Bike2Own have more than 400 riders earning between R2’600 and R6’000 per week, renting their delivery bikes from Bike2Own for anything between R650 to R850 per week. And after 18 months, the bike becomes theirs. 

(Pssst… something pretty cool happens to about 60% of the riders once they’ve paid off their bikes – read the full Open Letter on SA’s rent-to-own bikes).

2. Connecting more SA townships for cheaper and faster

Many people in townships have two mobile devices – 1 cheaper, lower-spec phone for travelling and a 2nd higher-end device that stays at home because it’s mainly used for entertainment.

Unfortunately, the internet speeds available in townships haven't kept up with the demand for streaming. 

Until now. fibertime, a Stellenbosch-based township internet provider, financed and installed Wi-Fi devices in 880 homes in Kayamandi, Stellenbosch, at no charge to the occupants, giving residents the ability to purchase Wi-Fi connectivity at R5 per day with speeds of up to 100Mbps. Learn more about it in this edition of The Open Letter.

3. Helping 15m+ South Africans combat the debt trap

Debt is a massive issue in South Africa, with some 62% of people’s incomes going towards servicing their debt. Local HRTech Jem is leveraging WhatsApp to provide a powerful Earned Wage Access (EWA) product that helps employees access the part of their wages/salary they’ve already earned so far that month. Check out the Jem feature in this Open Letter on financial inclusion tech.

4. The future of learning built right here in SA.

Local EdTech Lessonspace is building a virtual classroom, online tutoring & collaborative learning platform with a collaborative digital whiteboard which teachers and tutors can use to make notes, draw drawings, and explain concepts.

A key differentiator is Lessonspace’s set of education-specific tools built specifically for a wide range of subject matter - find out which subjects in this previous edition of The Open Letter on digital classrooms in SA.

5. Curing 2.5 million people with AI

Tuberculosis (TB) kills 153 people in South Africa every day, partly because it’s so hard to detect. 

Local MedTech AI Diagnostics are revolutionising TB screening with their AI-enabled digital stethoscope that captures and analyses a patient’s lung sounds to help diagnose if that patient has TB. (Find out how it works in this Open Letter.)

These are just a few of the local startups we’ve recently featured building powerful solutions for South African problems – there are 160 more right here. 

But founders: you don’t have to go it alone…

Of course, building in a special place requires special people… And developing a new business is as tough and lonely as it is rewarding. And right here in SA, we are changing that.

The Open Collab (previously known as The Open Letter PRO) is a thriving startup community of more than 50 South African founders and operators building together. In The Open Collab, founders get to…

• Connect with other local founders.

• Access a broader network in order to make progress faster.

• Learn nuanced skills like B2B Sales and Product in a South African context.

• Get access to experts who have done it before and be able to ask them questions and engage with them.

• Book 1-on-1 coaching sessions with startup specialists.

• Get deep dives into the business models and workings of all the startups we feature.

• Find up to 3 auxiliary opportunities to work with every startup we feature in every newsletter (twice per week — that 6+ real SA business ideas, every week).

We have some fantastic workshops lined up (did someone say B2B sales?!) exclusive to members of the community and we would like to make our circle bigger by offering 50% off this week.

Join For 12 Months, Get 50% Off

We’re doing a special Heritage Day Sale where you can join The Open Letter Collab for R2’500 for 12 months (our normal price is R5’000). Head over to The Open Collab page, choose the annual plan and use promo code HERITAGE (valid until Friday)

We’re bullish on startups and bullish on South Africa. It’s why we’re building The Open Letter to be the leading startup publication and hub in South Africa with all of you. We’re watching this space…

IN SHORT

🪴 Growing Startups. The British High Commission’s UK-SA Tech Hub has awarded an undisclosed amount in its third round of funding (with previous rounds reaching R2 millie) to assist high-growth start-ups in South Africa by propelling the SA Start-up Act Movement’s efforts.

🇿🇦 Proudly Mzansi. Amazon.co.za has launched the ‘Shop Mzansi’ storefront which houses more than 160 brands from new, emerging, and established South African businesses to make it easier for South African customers to find products from these local small businesses.

🛵 Sun Scooting. A solar-powered electric motorbike designed and built by Roam, a Kenyan electric mobility company will travel around 6’000kms from Nairobi to Stellenbosch in South Africa, in October. The partnership between Roam and Researchers from the Faculty of Engineering at Stellenbosch University (SU) will see the Roam Air arrive at SU on October 18 for its Electric Mobility Day.

🤑 Local Investing. South Africa is seeing an investment boom in the 100+ days after the formation of its business-friendly coalition government. ArcelorMittal decided against closing two steel plants, Qatar Airways bought a stake in SA Airlink, Toyota opened a $70 million auto parts facility, and Anglo American announced a $625 million iron-ore investment.

🛏️ Fancy Staying. Two South African hotels (and the only ones from Sub-Saharan Africa) have cracked the nod for the 2nd edition of the World’s 50 Best Hotels. The Mount Nelson in Cape Town came in at 28 (and was also crowned Best Hotel in Africa), while Singita Kruger National Park took the 44th place.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with zero-monthly-fee bank accounts and business loans with Lula and specialist small- and medium-sized business accounting software for less with Xero.

What You Said…

We asked where you buy your clothing, and it’s the usual suspects…

🟨🟨🟨🟨🟨⬜️ 🇿🇦 Local Proudly South African brands (26%)

🟩🟩🟩🟩🟩🟩 🛍️ SA’s usual fashion retailers (Mr Price, Ackermans etc) (29%)

🟨🟨🟨⬜️⬜️⬜️ 👠 International chains (H&M, Zara etc) (17%)

🟨⬜️⬜️⬜️⬜️⬜️ 👜 High-end fashion labels (9%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🤩 Novelty tees with funny illustrations (2%)

🟨🟨🟨⬜️⬜️⬜️ 🧵 In this economy, I’ve taken up sewing to make my own clothes (17%)

Your 2 cents…

Nice, healthy balance, Joanne. 🤸

Hey, way to go local, Herman. 🧭

Money-smart, Michelle. Hope you don’t get impacted by extra tax… 👠

He he, nice one Bzaar, keeping and maintaining your clothes is an art form. 🪡

Bright future? Scientists have found a way to store an entire human genome in 5D memory crystals for billions of years. The material is one of the most chemically and thermally stable substances on Earth and could be the next way for today’s billionaires to attain immortality (kind of).

In this Open Letter:

• Data unwrapped: Levelling up SA’s R193bn fashion game.

• SA’s coolest champ, Happy funding & the last of your Tupperware.

• Taking the leap: How to set up an offshore entity for your startup.

• Your biggest gripes with big banks: The results are in.

• Startup fuel: Share this 10 times and get Pro membership.

TRENDING NOW

A Shoo-In for SA’s R193bn Fashion Sector

There are a handful of things humans need to survive…

Food, water, maybe a shelter of some kind – and, of course, clothing.

Early humans started wearing adapted animal skins and vegetation around 170k years ago to protect them from cold, heat and rain, particularly as they migrated to newer climates.

With the advent of newer technologies like sewing needles (50k years ago), dyed fibres (36k years ago), and later on looms, and high-tech machinery to produce the type of modern textiles we use to manufacture clothes today, clothing form an integral part of human history. 

The big bucks in global fashion…

And with more than 8 billion people on the planet, it’s no wonder the global fashion/clothing/apparel market is huge.

Despite taking a knock in 2020 during Covid, the global clothing market is set to be $1.79 trillion this year, employing 1 in every 8 workers (~12%) around the world in the fashion and textiles industry.

There are more than 100 billion items of clothing made each year — equating to about 12 items of clothing per person per year.

Closer to home, South Africa has the largest apparel and footwear industry in sub-Saharan Africa – worth over $11 billion or R193 billion+.

Big bucks also mean big headaches…

The fashion industry is highly cyclical… Warm clothing for autumn and winter, cooler for spring and summer. Not to mention different colours or colour schemes, different styles and cuts, different patterns and textures – all dependant on current trends (or what’s about to become trendy).

Then, retailers are often sourcing stock from multiple suppliers. Plus they’ve got to get that fine stock balance just right – too little stock and you suffer from stockouts. Too much, and you’re overstocked.

So imagine a large retailer with multiple stores across the country (sometimes with quite a broad range of socio-economic customer base) having to source and place a variety of items, in different sizes, all in a way to maximise sales and minimise leftover stock that needs to go on the profit-eroding sale rack at the end of the season. It’s complicated….

The local player helping local fashion retailers 

But this is exactly the kind of problem where machine learning shines.

Local startup Pattern has built a business intelligence platform tailored to solve this problem for fashion retailers. 

It uses big data and AI to automate typical resource-heavy activities like merchandise planning and buying, stock allocation and replenishment to ensure that fashion retail teams can focus on getting the right mix of stock into the relevant stores to ensure their customers’ needs are met. 

It integrates with a fashion retailer’s existing systems, where it takes the data from those systems to track in-season trends, optimise stock, and analyse historical customer purchasing patterns.

With greater granularity on single stock items, users are able to see how each item is specifically driving revenue. They can also see how each item performs at a store level, and assess the size curve accuracy (did they have enough of the item in the various sizes to ensure optimal stock levels?), which helps them understand future stock levels.

Pattern consolidates a ton of merchandising intelligence available in real-time and at their fingertips, to help teams make critical buying and planning decisions on the fly.

In the fast-paced world of fashion, companies like Pattern are bringing old-school industries into the future. Through data-driven insights and automation, they're helping fashion retailers thrive in a highly competitive environment. We’re watching this space…

On the Pod…

We had James Townsend the Co-founder and CEO of Pattern on the latest episode of our How Would You Build It podcast. Check out some highlights below:

• What is Pattern (The Elevator Pitch), and how James started out in the fashion industry?

• How hard is founder mode?

• Getting that first client and convincing notable retailers to invest in local tech.

• Shein and Temu and its impact on the local retail landscape.

IN SHORT

🛍️ Syfting to Xero. Syft, a local cloud-based reporting and analytics platform will be acquired by global accounting software firm Xero for a cool $70 million. Having started in 2016, Syft’s AI financial reporting platform provides small and medium businesses with access to reporting tools.

🚀 Happy Funding. SA BNPL player Happy Pay has raised R32 million in pre-seed funding to accelerate the FinTech’s growth and product offering expansion. It’s also just hit the 150k active user mark after launching in 2023.

🥽 I can (almost) see clearly now. Neuralink’s experimental Blindsight implant has been designated as a "breakthrough device" by America’s Food and Drug Administration (FDA). The Blindsight implant is being touted as being able to potentially restore blind people’s sight.

🥶 World Champions of Staying Cool. Philippus Saayman was the sole winner from South Africa at the 2024 WorldSkills Competition where he was awarded the 'Best of Nation' medal for being the top competitor in the Refrigeration and Air Conditioning skill category.

💨 Disappearing kitchen supplies. After nearly 80 years as a staple in kitchens around the world, Tupperware has filed for Chapter 11 bankruptcy in the US. Perhaps they should start a lid/container swapping marketplace for people to complete their Tupperware sets.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy social payment collection by WigWag and your own CTO (for less) with OCTOCO.

BUILDER’S CORNER

How to Set Up an Offshore Entity from South Africa

Written in conjunction with Jacques Stemmet of Dommisse Attorneys Inc.

Setting up an offshore entity can seem daunting, but, if done right, it can open new doors for your business. We asked the experts at Dommisse Attorneys Inc. to break down the four key steps to establishing your company offshore:

Step 1: Understand Why You Want to Offshore

Before you leap, make sure you know why. Do you have an international market or investors? Or perhaps you’re planning to sell offshore one day…

Whatever the case, it’s about more than just wanting to earn foreign currency – there are legal and tax implications, including South Africa’s exchange control regulations, to navigate. 

Offshore entities must meet criteria like “place of effective management” and “a foreign business establishment”. I.e. OffshoreCo needs real people conducting real business to maintain compliance and avoid hefty profit taxes. 

Additionally, exchange control requires you to get approval to license IP to a related offshore party and outright forbids selling the IP. It’s not impossible to offshore IP, but following the right process is paramount. 

Step 2: Choose the Right Structure

There are two primary ways to structure your offshore company in relation to your South African company (SACo):

• Mirror Structure: OffshoreCo mirrors the shareholding of SACo, forming a synthetic group structure where both entities operate in parallel. This is achieved by a stapling agreement, which ensures that any movement of shares in SACo must be replicated in OffshoreCo (and vice versa). In effect, an investor will subscribe for equal shares in both entities. On exit, the investor will sell their shares in both entities and benefit from growth from the respective entities.  

• Holding Company Structure: OffshoreCo acts as SACo’s holding company, which is often preferred by international investors because of its simplicity and industry-standard approach. It’s complicated, though: it creates a loop structure, requiring strict conditions to be met and additional reporting obligations.

Your structure impacts present and future tax, investor relations, and operational setup. And your circumstances can impact structure choice: shareholder limitations, numbers and company valuation may be so high that a mirror structure is more cost-effective than the legal and tax implications of restructuring to a holding company. 

Step 3: Pick the Right Destination

Where you establish OffshoreCo matters. The destination should align with your business goals, target market, and investor preferences. Although popular jurisdictions offer tax benefits, business-friendly environments and reduced administrative burdens, you still need to do your homework, as some jurisdictions may offer more beneficial grants or tax breaks for your specific industry, or may be the most appropriate jurisdiction to leverage investment and your business growth. 

It’s crucial to assess the long-term advantages, maintenance costs and risks before making a decision.

Step 4: Build the Right Team

The success of your offshore expansion hinges on having the right team to support you through legal and financial challenges. You’ll need advisors who are experienced in international structuring and can guide you through compliance, exchange controls, transfer pricing and ongoing obligations.

If you’re ready to take the next step and explore international structuring, contact Dommisse Attorneys Inc. 

“Our team is here to help you achieve your global ambitions with ease”, says Dommisse’s Jacques Stemmet.

ENGAGE

Upcoming Event

On Tuesday, 1 October, you’re gonna want to report to LaunchLab in Stellenbosch by 6pm — we are hosting two South African AI pioneers, to give us the skinny on where AI is realistically going in the next decade, and what it means for business in South Africa.

Tickets are R150 right here, but Pro members can get in for free.

THE OPEN LETTER PRO

Come Build Your Startup With Us

Our community has grown to more than 50 members, and when you join, you get:

• Access to exclusive AMA’s with industry experts where you can ask them anything and learn.

• Weekly office hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• Need an intro? After 20 years in the industry, we are super connected and can likely get you where you need to go.

• Free tickets are available for all our in-person events.

• Join the conversation with 50+ founders and operators and get the support you need to take your startup to the next level.

What You Said…

We asked about your biggest gripe with banks, and the fees are a problem…

🟩🟩🟩🟩🟩🟩 😭 High fees (32%)

🟨🟨🟨🟨⬜️⬜️ 👎 Horrible service (24%)

🟨⬜️⬜️⬜️⬜️⬜️ 💩 Products don’t suit my needs (9%)

🟨🟨🟨🟨⬜️⬜️ 😔 They don’t really care about me/my business (27%)

🟨⬜️⬜️⬜️⬜️⬜️ 🥰 Nothing, I love my bank (8%)

Your 2 cents…

Ai, Xpress, now at least you know you can get up to 5 mil with Lula. 🤑

Wonderful, Sir! We love seeing you succeed. 🚀

Ha ha, ja Erika would be great if they could try to get customer success right. 🤗

Eish, sure everyone can feel that one, Nikhil. 🛎️

Sounds like you got it good, Alana. Nice one. 💳

Ready to play? Not that he isn’t always in the news, but if you noticed even more MrBeast hype than usual, it’s because someone leaked an internal MrBeast production document (hope it’s now been taken down yet) and it’s basically a playbook for how to become successful on YouTube. Enjoy!

In this Open Letter:

• Banking on innovation: Enabling 25M SA enterprises.

• Clear glass solar panels, Cyril X Elon & Bezos’ SA grid hook up.

• AI fireside in Stellies: Come join us in learning about AI from SA’s OGs.

• Where you’d invest R100M right now: The results are in.

• Startup fuel: Share this 10 times and get Pro membership.

In partnership with

TRENDING NOW

A Play for SA’s R400bn Banking Space

In Friday’s Open Letter on Africa FinTech investment, we featured a stat about the Big 4 banks having combined revenue of close to R400 billion per annum. 

Banks are big business. But with the five banks well established (if you add the largest bank by customer account numbers, Capitec) are there still any opportunities for new banks? 

Let’s dive in…

The first shakeup in traditional banking

Perhaps one of the most noteworthy success stories in South African banking is Capitec. 

Founded in 2001, Capitec quickly differentiated itself by targeting underserved markets with simplified, low-cost banking. It provided easy-to-understand accounts, minimal fees, and an accessible approach to savings and loans.

In terms of market capitalisation, Capitec has seen exponential growth. In 2006, Capitec’s market cap was around R3 billion. By 2010, it had surged to R18 billion, and today, it boasts a market cap of over R350 billion, serving 22 million active clients (11.2 million of those on the Capitec App).

And just like that, there it was… A South African case study that proves focussing on niches is the way to take on the big banks.

The riches in niches…

Discovery Bank, which labels itself as the world's first behavioural bank, is another example of how niching down can bring great gains. 

They recently announced that their one-millionth customer was ahead of plan. They offer a completely digital product (no branches) to target higher-income earners and use behavioural incentives to better quantify and manage risk.

Other players in the consumer banking space include TymeBank (whose deposits recently grew by 59% to R6.5 billion), Former FNB CEO-backed Bank Zero, as well as Old Mutual, which is planning to launch their bank by the end of the year after recently appointing a CEO.

But there is a sector which has been largely overlooked when it comes to banking… small and medium-sized businesses.

The business of business banking

South Africa has roughly 2.6 million small and medium-sized businesses, contributing up to an estimated 34% of GDP. That being said, it's estimated that less than 20% (or 520k) of these businesses are formalised. 

That means roughly 2 million small businesses still need to be formalised, start paying taxes, and get bank accounts. Talk about banking the unbanked…

Local FinTech, Lula, started out in 2014 by offering funding to small businesses, where banks would either not help their clients or were simply too slow or rigid in their credit scoring processes to meet the demands of small businesses. 

But after seeing how inefficient traditional banks were when it came to serving small business customers, solving their problems, and just how much these banks charged them, Lula launched its small business banking offering. 

Not only can businesses get a free bank account with 1.5% annual interest on their balance, but they can also get access to as much as R5 million in funding within hours – a game-changer for SMEs that often struggle to get the support they need from traditional banks.

With more than 2 million customers up for grabs and an economy set for growth, what the big bank play people might be missing is small and medium-sized banks. We are watching this space…

IN SHORT

👨‍🌾 AgriTech Growth. NEXT176 is investing more than R7 million in local AgriTech startup, Pumpkn to help scale its lending operations that bridge the financing gap for more than 100’000 local small- and medium-sized agricultural businesses (Agri-SMEs) to access much-needed finance.

🪟 I can see clearly now... SA is getting a transparent glass solar panel technology through a partnership between Aussie glass solar technology developer ClearVue and local distributor Concept Business Solutions. The insulated glass unit (IGU) window can generate up to 30 W of electricity per square metre — without impacting window transparency or building aesthetics.

📞 Making the call. Affordable international calling app Talk360 has raised R25 million in pre-series A funding. The round led by Havaic will help Talk360 deliver on its next phase of growth, reaching 7 million users and achieving profitability across its global operations.

🛰️ Star(link)s aligning? SA’s President Ramaphosa has apparently spoken to Elon Musk to help kickstart the conversation for South Africa to become one of the next African countries to receive Starlink services, as well as other local investments for the SA-born Billionaire.

⚙️ Gearing up SA’s Grid. The Global Energy Alliance for People and Planet (or Geapp), a global organisation backed by Amazon Founder Jeff Bezos’ climate and biodiversity fund, is gearing up to attract R319 billion in investment into South African municipal power grids to prepare for the introduction of more renewable energy.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with next-level project management like Notion and your own startup CFO without the hefty price tag with OCFO.

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Engage SA’s Most Vibrant Startup Community

Did you miss our last event?

We have some good news… Tickets for our second Stellenbosch event are available!

And it’s a special one…

On Tuesday, 1 October, we are hosting two South African AI pioneers — the “crazy” guys we met who were talking and building LLMs 10 years ago — to give us their take on where AI is realistically going in the next 10, and what it means for business in South Africa.

Tickets are R150 right here, but Pro members can get in for free.

Want to unlock valuable opportunities on tap?

In the last 48 hours alone, in our online community, we…

• Connected Trevor with insider insights into selling tech products into UAE schools.

• Got some gold market-fit journey insights from Paul — that sparked a nice discussion about what it really takes to succeed in SA startup.

• Received a 🔥 pitch deck from Ben Shaw in preparation for Friday’s exclusive high-growth AMA.

• Got our free tickets to the lekker-est Stellenbosch event in 2 weeks’ time.

• Welcomed a whole bunch of new members!

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• Friday 12-1: A Pro member-exclusive AMA session on maintaining focus in a high-growth venture with EXCEO co-founder, Ben Shaw.

• New: Free monthly startup strategy calls for all Pro members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

Meet the Startup

We meet so many awesome founders that we decided to start featuring them on our socials. Check out this quickfire interview with Tim from Yazi.

What You Said…

We asked where you’d invest R100m, and FinTech’s the way…

🟩🟩🟩🟩🟩🟩 👨‍💻 FinTech startups (37%)

🟨🟨🟨🟨⬜️⬜️ 🌾 AgriTech startups (29%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💎 MinigTech startups (4%)

🟨⬜️⬜️⬜️⬜️⬜️ 🪙 Bitcoin (7%)

🟨⬜️⬜️⬜️⬜️⬜️ 💵 Money market (7%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💳 Gold – as in Troygold (6%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🛏️ Under my mattress (1%)

🟨⬜️⬜️⬜️⬜️⬜️ 💭 Somewhere else (9%)

Your 2 cents…

Hear, hear, Mia! We carbon-based life forms will always need to eat. 🌽

That’s right, Chris. And they’ll support the most innovative, for sure. 💳

With interest rates coming down and US election excitement, John, you’re probably right on the money re Bitcoin. 🚀

Right you are, Tom. When it gets right down to it, those with food and water will always thrive. 🌱

Indeed, Vakele, there’s big movement in the space. Just be sure not to be around when the balloon pops. 🤖

Clearing up? Believe it or not, researchers have found a way to turn mice transparent using Doritos. You know, so they don’t have to hurt them when they do tests on them. Apparently, a dye in the chips changes how living tissue reacts to light. (Wait, does that mean our stomachs turn transparent when we eat Doritos?)

In this Open Letter:

• FinTech funding: Financing R213bn in transaction innovations.

• Tri-fold phones, another space billionaire & your Stellies connection.

• Unlocking hyper-growth: How to keep your focus when it matters.

• The best and worst kind of beer: The results are in.

• Startup fuel: Share this 10 times and get Pro membership.

TRENDING NOW

This week, we had a SA FinTech OG on our Podcast. Anton Gaylard’s family business was selling credit card machines to retailers in the 90s long before credit cards were mainstream. Today, he is the co-founder & CXO of Crossfin Holdings. He shared some incredible secrets to building FinTech in Africa. 

But first, let’s set the scene…

R213bn FinTech Plays

These days, it feels a lot better to be in business in South Africa…

We haven’t had loadshedding in 171 days, our GNU seems to be working hard at getting along and, more importantly, getting work done. 

The rand has seen its best run in years, staying steady at around the R17–R18 mark for 12 weeks.

In fact, The Bureau for Economic Research (BER) estimated that South Africa’s GDP would increase by 2.2% in 2025. To put that in perspective, we haven't seen that kind of growth since 2013 (excluding the Covid rebound).

Most importantly, our current population growth rate is 1.33%, meaning economic growth of 2.2% should drive up our GDP per capita (i.e. we’re getting wealthier – congrats!).

And with predictions showing that interest rates are coming down in the next few months (a collective sigh of relief for everyone with debt), it will free up money to go into the economy and boost growth.

Good news for all, but especially when investing in businesses

The venture capital and private equity scene in SA has heated up in the last few years. 

The Southern African Venture Capital and Private Equity Association (SAVCA), which represents over 200 firms in the region that manage more than R213 billion in assets, brings out annual reports on the industry, which has revealed a substantial rise in capital flow, with R10.73 billion ($586 million) invested across 1’106 deals since 2010. 

Although deal activity saw a slight decline in 2023, dropping to 184 deals from 195 in 2022, the overall volume remained well above pre-pandemic levels.

But just where lies the opportunity?

If you have been reading The Open Letter for some time, you’d know there are countless opportunities. But most of them lie where the money flows fastest. And these three sectors are :

1. Trade, catering and accommodation make up almost 12% of GDP or ± R875bn per year. This includes retail (shopping), restaurants, travel and tourism, events, catering etc.

2. Personal service makes up almost 16% of GDP or ± R1.17 trillion per year. This includes Health and Wellness Services (Medtech, Healthtech), household and Domestic Services, Personal Care Services, Educational and Instructional Services, Leisure and Lifestyle Services, Repair and Maintenance Services

3. Finance, real estate and business services make up 24% of GDP or R1.75 trillion per year. This includes Banking, Insurance, Investment Services, consulting, Legal services, Real estate, Tax consulting, IT and business consulting among others.

And within the biggest sector, none are likely as big as banking. For perspective, the combined revenue and headline earnings of the 5 biggest banks in SA in 2023 were R399 billion and R120.9 billion, respectively. 

The key? Overly simplified, these companies are distributed to execute transactions (which generate data and fees) and then have the ability to offer financial services using the data as a way to mitigate risk. 

This brings us to the strategy of the local investment holding group, Crossfin. It invests in Fintech solutions to enable growth for economies in emerging markets, particularly Africa, and beyond

When it comes to their investment thesis, two parts excite them: 

1. Transactions – these generate data while also generating revenue.

2. Financial services – with the capabilities that digital brings, the capability to understand risk better using machine learning together with data at a transactional level, one can offer very exciting and more affordable financial services.

And they have had some great success with this model. With portfolio companies like Ikhoka, Troygold, and Momint, as well as past exits of Retail Capital to TymeBank and Adumo to Lesaka Technologies (sold for $85m).

There has likely never been a better time to invest in SA businesses, and what better place than the biggest industry of them all? We are watching this space with great excitement!

Listen to Anton’s secrets to building FinTech in Africa in this week’s episode of How Would You Build It podcast.

Podcast Highlights:

• How Crossfin helps startups from early stage (even pre-customer), to growth and scale stages.

• Tales from the trenches of the early days of payments in SA.

• The long road of buying and selling businesses.

• The startup founder superpowers investors look for. 

• The value is not in the hype (around new technologies), the value is in the problem you’re solving for a consumer (and if they’re willing to pay for it).

IN SHORT

🤝 Founder Connections. Join us at Stellenbosch Connect for a shark tank and mixer with our very own Renier Kriel as a guest speaker hosted by Octoco. Connect with other entrepreneurs, investors, and thought leaders and let’s build lekker stuff together. Get your tickets.

👨‍🚀 Walking on Space Dust. The first private spacewalk was just completed when an American Tech Billionaire climbed out of a SpaceX Dragon capsule on Thursday. The Polaris Dawn mission was to test a new line of slimline space suits designed by SpaceX.

📂 Oh Wow Hey. The world’s first tri-fold smartphone the Mate XT Ultimate Design was launched by Huawei this week. It unfolds into a full-size tablet and folds into a traditional phone with a 10.2-inch screen that can also be used as a 6.4-inch or 7.9-inch screen.

🤖 Thinking Bots. OpenAI just dropped o1, also known as Project Strawberry/Q. This is a new level of AI that can "think" and "reason" before responding to you.

🍯Two-pot rush. SARS reported that within the first week, they received more than 18’000 applications to withdraw from retirement annuities under the new two-pot retirement system. These applications total R4.1bn in withdrawals thus far.

🚧 Beat the Q. South African drivers are turning to the Road Traffic Management Corporation (RTMC) online platform online.natis, in droves to renew their vehicle licenses. In 2022 the monthly average of users to the platform was 44’802 with that number hitting 222’606 last month.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with outbound sales tools like Apollo and business strategy development with Metavolve.

CHECK THIS OUT

Actually Get Your Product off the Ground

According to Standish Group’s Annual CHAOS report, which analysed 50k tech projects, 66% of technology projects end in partial or total failure.

And some of the main reasons include: 

• Poor Requirements Gathering

• Inadequate Risk Management

• Ineffective Tech Leadership and Communication

So it should go without saying that, if you’re serious about succeeding, then you’ll want the highest quality and most experienced team on your side.

But how do you know who’s really the best in the tech biz? Look at the track record….

Whether you are building complicated hardware projects like Henlo Coffee or Gap Draught or FinTech solutions like LeaseSurrance, the partner you need when technical excellence is not negotiable is Octoco.

Get in touch today to book an exploratory session with their team of top-tier technical experts.

Engage SA’s Most Vibrant Startup Community

On Friday 20 September, Ben Shaw, founder of SA’s would-be unicorn HouseMe (killed by Covid), now founder of EXEO and author of The First Kudu, is coming to share his insights into what it takes to build a unicorn-level startup in Africa. This is a TOL Pro community exclusive.

Want to unlock valuable opportunities on tap?

In the last 48 hours alone, in our online community, we…

• Ran an internal poll and discovered the No 1 thing SA founders covet.

• Got a sneak peek at some awesome fin education games for kiddos.

• Discovered loads of school contacts for running EduTech trials.

• Met a sleek-looking AI virtual assistant and delegation tool.

• Laughed at Renier’s “add” in a poll… (guess YHTBT).

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all pro members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

What You Said…

We asked what the worst type of draught is, and nobody wants a stale one…

🟩🟩🟩🟩🟩🟩 🥴 A stale one (39%)

🟨🟨🟨⬜️⬜️⬜️ 🥵 Not cold enough (25%)

🟨🟨⬜️⬜️⬜️⬜️ 🚦 One you have to queue for (16%)

🟨⬜️⬜️⬜️⬜️⬜️ 🍺 One with too much foam (9%)

🟨⬜️⬜️⬜️⬜️⬜️ 🚣 One you have to make small talk with a moustachioed hipster for (11%)

Your 2 cents…

Yeh, Zwane, when it comes to foam, you want just enough. 🫧

Nogal, Enrico. What’s the world coming to? 🍺

Ja, probably not the best sign, eh, Stan? 🕖

Oof, yes exactly, Vakele. No more kicks here, please! ⚽

Definitely, Christiaan. Come meet us in Stellenbosch 1 Oct, Cape Town just before keDezemba, and then we’ll launch JHB next year! 🎫

Orbiting Factories? Humankind has 3D-printed a metal part in space. This is a significant step since many manufacturing processes are set to be a LOT cheaper and more efficient in zero-G.

In this Open Letter:

• Cold ones: Getting SA bars fresher brews & 30% more revenue.

• Startup suppers, AI’s service & A peek at the latest iPhone.

• Keeping the pace: How to keep your focus in a hyper-growth startup.

• What’s wrong with our mobile contracts: The results are in.

• Startup fuel: Share this 10 times and get Pro membership.

TRENDING NOW

Fresher Brews + 30% More Revenue

Still buzzing from the Boks’ historic Freedom Cup-earning (first time since 2009) win over New Zealand over the weekend, we’re celebrating champagne rugby like most South Africans, with an ice-cold beer…

It’s not only South Africa’s preferred beverage but a major contributor to the local economy – employing 250’000+ people (1 in 66 jobs in SA is a beer job) and adding around R71bn to the country’s GDP (1.3%).

And the can or bottle’s good at home, but when you’re out on the town for dinner or going to a bar, people tend to opt for draught beer for a few reasons:

• it’s fresher

• has better flavour

• served at the ideal temperature

• produces a better head and carbonation

• and it’s socially more fun – a wider variety of craft and speciality beers make draughts a vibe. 

Not all that glitters is Gold…

Every beer drinker’s had the experience before though, where you get your draught at the bar, maybe take a sip or two and something’s just not right – it’s not cold enough, tastes stale, or upsets your stomach later that night or the next day.

Quality lapses happen, because, let’s face it, working in a bar can get crazy.

The barman battles to keep track of when last they poured from which tap, when exactly the keg was tapped, or even when last the hose was cleaned and sanitised.

Not to mention missing that the cooler’s malfunctioning.

But what you don’t always consider is how this leads to losses for the bar – anywhere between 10 and 30% of draught beer losses come from overpouring, incorrectly pouring, spillage, theft, and spoilage from beer sitting in a keg for too long. 

And it compounds: Busy outlets serve as many as a thousand draughts per weekend (especially if the Bokke win), and at around R70 a draught (R70’000 in revenue) 10-30% can lead to losses of up to R20’000… big numbers.

The local player putting better beer in your glass… 

Gap Draught is a smart draught monitoring system that provides everyone from beer brewers to bars and restaurants with a desktop and mobile reporting platform that gives real-time data to help eliminate theft, minimise wastage and reduce over-pouring of draught beer.

And it’s not a massive hardware investment: Their system plugs in directly with existing draught taps, offering instant answers to questions like:

• Does the establishment sell as many draughts as it’s pouring (are the draughts being paid for)?

• Are bartenders overpouring or pouring outside of operating hours?

• How efficiently are they pouring – using data from the platform’s precise variance calculator.

• Which draught brands are popular, (or not)?

• When was the last time a draught was poured from a specific tap?

• How fresh is the draught?

• Is it being poured at the right temperature?

You can build in preset alerts to notify you if the cooler gets switched off; when the beer temp rises; or if a draught has not been poured in either 48 or 96 hours (typically when it starts to lose its fresh flavour).

The platform can also establish if a draught line has been cleaned and sanitised (every 21 days according to SA’s big beer players) – this is a pretty important one: Remember that lady who went viral on TikTok after the soda fountain water she got from her local Wendy’s started forming spores after she left the container in the car?

You can also integrate Gap Draught into your bar or restaurant’s POS system to match pours with sales and better manage your stock levels since you can determine when a keg has reached a minimum threshold (so you don't have to weigh kegs after closing time).

You also have access to benchmarking reports from other places using their system, to help you compare bars & beer brands; locally, regionally and nationally.

For brewers, the system helps them troubleshoot potential issues with a particular draught, using specific data around temperature, freshness, etc. 

Ultimately, everyone, including the end-consumer wins with the perfect, ice-cold pour to enjoy with friends watching the game. We’re watching this space…

IN SHORT

🍽️ What’s for dinner? Metavolve has created The Supper Club to bring entrepreneurs together to connect outside the business context. It’s a fine-dining experience by The Test Kitchen’s Chef Luke Dale-Roberts and The Potluck Club, with tables being rotated between courses to maximise the number of founders you can meet.

🍏 How you like them Apples? Last night Apple announced a bunch of new products and upgrades, including the full iPhone 16 line-up, iOS18’s AI-related updates, Apple’s thinnest watch to date (plus an update to detect sleep apnea), and also an interesting mention that Apple Intelligence will be able to understand “South African English” — great now we can finally ask it to make that “braai shopping list”.

🔫 Shots fired. Gunfire detection technology ShotSpotter recorded 7’400 rounders fired in 10 km2 outside Cape Town in 8 months. That amounts to one gun fired every 47 minutes. However, authorities say only 1 in 13 of these incidents are reported to the police.

🤖 AI-Powered Customer Service. Local customer service software startup Cue has launched AI Agents, which help clients automate routine inquiries, personalise customer interactions, and deliver better services at scale. AI Agents are trained on content from websites and company documents provided by businesses.

🛒 Going with the cash flow. Shoprite is planning on doubling down on SA’s informal economy with the expansion of its Usave store footprint over the next 5 years. This comes off the back of the group's lower-income segment’s revenue results increasing by 10.7% in the most recent financial year to hit R90 billion in sales.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with newsletter and automation tools like Beehiiv and sound startup legal advice from Dommisse Attorneys.

CHECK THIS OUT

Never Make a Co-Payment Again

A definite pain point in SA healthcare is having to make additional out-of-pocket payments when you’re already paying a monthly medical aid contribution.

Sure, you don’t mind paying a bit extra for better service or products, if you can afford it…

But studies show that most people are confused by co-payments; people feel it’s unclear why exactly medical aids don’t just cover the full amount, and it’s a huge reason why people in lower-income brackets either don’t adopt medical aid or simply forego care.

SA medical aid prices range from around R1’000 to R10’000+ per month, yet there's always a chance you have to pay extra when visiting the doc — why?

It’s tech to the rescue…

Since Udok has such a vast (and growing) national network of doctors and patients and the preferred online doctor solution of Clicks, they’ve used their clout to negotiate better terms with many SA medical aids.

To the point where you can now do a virtual doctor’s consult via Udok and charge it to your medical aid with no co-payments whatsoever.

Don’t have medical aid or not covered for GP visits? No problem. Udok online consults are 40% cheaper than normal doctor consultations. Plus, you save time by being able to see a doctor right now.

All you do is register with Udok, ask to see a doctor and select “medical aid” as your payment option. Then, the system will confirm your scheme’s “no co-payment” status.

Don’t delay, the doctor will see you now, only on Udok.

Engage SA’s Most Vibrant Startup Community

On Friday 20 September, we’re getting a lesson in startup growth from Ben Shaw, founder of SA’s would-be unicorn HouseMe (killed by Covid) and author of The First Kudu. This is a Pro community exclusive.

Want to unlock valuable opportunities on tap?

Last week in our online community, we…

• Learnt some insane startup scaling from the strategy pros at Metavolve.

• Had some honest discussions on the value of peer-to-peer networking.

• Discovered a go-to-market & sales accelerator solution.

• Kicked off weekly accountability check-ins for pro builders.

• Helped Justin discover some contacts for setting up an offshore entity.

Coming Up This Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all pro members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

What You Said…

We asked what you dislike most about your current cellphone situation, and costs are a problem…

🟩🟩🟩🟩🟩🟩 💸 The high costs (41%)

🟨🟨🟨⬜️⬜️⬜️ 💀 Long contract duration (21%)

🟨⬜️⬜️⬜️⬜️⬜️ 🙉 Spotty reception (11%)

🟨⬜️⬜️⬜️⬜️⬜️ ⛰️ That I even have one (11%)

🟨🟨⬜️⬜️⬜️⬜️ 😡 Poor customer service (16%)

Your 2 cents…

Ja, gotta keep on keeping on. 💪

Preach, brother. 🙌

Ha ha, fire FJ! ❤️‍🔥

Well, that’s what the MVNOs’ll get started we hope, Renaldo. 🤞

Hmm, maybe we also need a bit of a phone package structure innovation, hey Rene? 💡

Got game? Watch these researchers run the 1993 Doom game in real-time AI. So it’s not perfect (yet), but there’s no game engine, just a neural network simulating the game in real-time, based on user inputs. This is basically the first step towards really complex text/voice-to-game gen.

In this Open Letter:

• Make’em machines work: Using AI to make SA companies Rmillions.

• Helper bots, pulsating aliens & the 1M user-strong MySpace clone.

• Learn to scale: Your business growth strategy, sorted.

• How you prefer to enjoy a book: The results are in.

• Startup fuel: Share this 10 times and get Pro membership.

TRENDING NOW

Making Sense of Data and Machines

Before the launch of ChatGPT in November 2022, most people’s understanding of Artificial Intelligence was that it was the thing that empowered Skynet to take over the world…

Within 5 days of its launch, ChatGPT hit 1 million users (for context, Instagram took 2.5 months and Netflix 3.5 YEARS to hit 1 million users).

Suddenly everyone knew something about AI. And pretty soon, it became the buzzword getting thrown around boardrooms like: “Well, how do we integrate our product/service/offering with AI?”

And it’s not surprising everyone wants a slice of the AI Pie…

There’s big money at play for AI. As more and more AI tools hit the market, their use cases get bigger and bigger, with some estimating that AI could contribute as much as $15.7 trillion to the global economy in 2030.

But not everyone is ready for the AI boom

There have already been a bunch of now-famous AI blunders…

Air Canada had to fork out over CA$800 to a grieving passenger after its AI chatbot gave them the wrong info about the airline's bereavement fares.

AI-generated sports articles came under fire after it was found that Sports Illustrated published articles by fake authors (including their AI-generated headshots), while another publication was forced to pause its AI tool covering high school sports after it missed out on key information (like, you know, the teams’ names).

Or the use of AI recruiting tools that reject applicants based on their (older) age, or Amazon’s AI recruiting tool that only recommends men.  

Not to mention deep fakes, AI’s use in scams and a bunch of other not so lekker stuff.

A local AI Agency making big plays

The above scenarios could be attributed to a variety of reasons, from newly launched AI companies to top management not fully grasping how their businesses could benefit (or not benefit) from AI. 

But where the power of AI really shines is where there is a large amount of data, if processed, that could show areas of improvement or optimisation.

That’s exactly what local data and applied AI startup Spatialedge is helping many of Africa’s largest multinational enterprises develop bespoke AI solutions that solve some of their biggest business headaches.

The team has built over 170 bespoke solutions, including:

• A Markdown Tool to help Pepkor achieve a 92.7% sell-off rate (meaning they do not have stock left at the end of the season, and the discounts offered didn’t sink them)

• A proactive model to forecast accident hotspots to bring a 30% decrease in road fatalities over a major long weekend. 

• A predictive maintenance solution for a mining client to determine when tyres needed replacing, resulting in a decrease in income loss due to operational halts to the tune of $500’000 per month.  

They’ve been around since 2017, working closely with big retail clients like Vodacom, Pepkor, and Ackermans. They recently surpassed R300 mil in revenue which helped them secure R60 million in funding in April this year. 

Something we found interesting is that their preferred hire is someone with an industrial engineering degree. Why? They are often technical enough to understand the tech part, but it's the operational design thinking that helps them identify where in a business machine learning can best add value.

With the race to the top in AI still going and local players like Spatialedge making a big impact for their clients, we’re watching this space…

IN SHORT

👚 Super”bye”list. Takealot announced on Monday that it has sold its struggling online fashion retailer, Superbalist, to a private equity consortium led by Black Canvas Capital.

🤖 Robots pretending to be Human. 1X Robotics has unveiled a beta version of its humanoid robot Neo. Back by OpenAI, Neo has advanced movement and agility due to its bioinspired actuators and advanced vision systems.

👽 Contact. Over the weekend an Astronaut rang up NASA’s ground crew to report a repeating “almost like a sonar ping” coming from a speaker onboard the Boeing Starliner craft. Listen to the call and the sound in the article.

💰Life Tyme. Sanlam Life is set to acquire a 25% stake in African Rainbow Capital Financial Services Holdings Proprietary Limited (ARC FSH). ARC FSH has existing investments in Tyme Bank, AI Fund, CrossFin and Ooba.

💼 Die Kantoor. SA is getting its very own version of ”The Office”. Local streamer Showmax has secured the rights to adapt the show, making it the 14th international adaptation of the hit show. Filming will be done primarily in Afrikaans and will kick off in 2025.

🚀 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with project management tools like Notion and super-easy social payment collection with WigWag.

Builder’s Corner

When (and How) to Get Serious about Strategy

Written in conjunction with Metavolve.

We have all heard how important strategy is, but, man, oh man, can people make it fluffy. So today, we asked scale strategy specialists Metavolve to share their framework for developing a scaling strategy.

Here are the four key pillars of developing a world-class scaling strategy :

Pillar 1: Market positioning

Understanding your market positioning is all about understanding who you compete with, what makes you different and why it matters.

Who you compete with could be someone with a similar product, but for most SaaS companies, they simply go up against MS Excel (or Google Sheets). This means that instead of using your product, they rely on a tool which is currently free (albeit clunky).

There are big differences in how we position and sell when our main competitor is Google Sheets as opposed to some other great product.

Pillar 2: Competitive advantages

Ask the question, “Mr customer, how can I serve you better?” and that means being able to solve the need better than anyone or anything else.

This includes:

• The customer experience through your product and engagement

• Addressing their actual pains as opposed to perceived pains

What is less obvious is that it sometimes means cutting down on your offering or actually doing nothing. That’s right. Finding your competitive advantage is about doubling down on that which matters most and where you can win.

Pillar 3: Customer Experience

The customer experience is crucial in retaining existing customers and landing new ones. 

In fact, nearly 90% of customers value the customer experience a company provides just as much as the product or service it’s offering.

So key questions to have the answers for include:

• How stress-free is it to work with your company?

• Does your value proposition align with your customer’s needs?

• Does it leave anything up to chance?

• Does the experience set, meet and exceed your customers’ expectations?

• Is it an emotionally positive experience?

• Does the experience provide positive benefits and make your customer feel good?

It’s also important to remember that customer experience is not the same as user experience! It’s the qualitative experience they have at each and every touchpoint with your business. It’s how they feel about it.

Pillar 4: Growth strategy

There are many different ways to grow your business. Anywhere from vertical or horizontal integration, diversification, Geo-expansion, or even good old organic growth from selling the same thing to more customers, proving your organisation’s ability to retain and add new customers.

But sometimes, the shinest looking thing might not be the right fit. You’ve got to be growing in the way that makes the most appropriate choices, given the unique circumstances your company is in, to help maximise your chances of achieving the best possible results.

If you want to get stuck into strategy, we have two amazing offers for you:

1. Come join our free LinkedIn Live session with Metavolve this coming Friday (6 Sept ‘24) between 12:00 and 13:00, where we will practically unpack each of these pillars further. Book your spot here.

2. Or… Exclusive for Open Letter readers, book a 45-minute call to get going with your strategy.

Engage SA’s Most Vibrant Startup Community

Recently, in our online community, we…

• Learnt about a host of absolutely 🔥 podcast guests coming up in the next few weeks.

• Tested some seriously cool WhatsApp-based AI polling and interviewing tech.

• Welcomed so many new members, it’s starting to hum in here…

Coming Up This Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all pro members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

All for only R250 a month. Go Open Letter Pro today, and let’s build together…

What You Said…

We asked what you read most, and paper books’re the way…

🟩🟩🟩🟩🟩🟩 📚 Physical books – I influence Exclusive Books’ Top 10 shelf (42%)

🟨⬜️⬜️⬜️⬜️⬜️ 📱Reading apps like Bookt (7%)

🟨🟨🟨🟨⬜️⬜️ ✉️ Emails and other work-related documents (29%)

🟨⬜️⬜️⬜️⬜️⬜️ 🗞️ The news (7%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📺 The subtitles on Netflix count as reading, right? (3%)

🟨⬜️⬜️⬜️⬜️⬜️ 🔥 Startup, tech and business trends in The Open Letter (12%)

Your 2 cents…

Sounds like you just enjoy a healthy reading habit. Nice one, Herman 📚☕

Hmm, good insights, Muller, sure Bookt is enjoying and learning from your engagement here 💯

Wonderful, Lauren, sounds like you know where the get all the good reads (and the best deals) 💌📖

He he, love it GJ! Always on the move… 👟🎧📕

Thinking big? Scientists have found a new use for AI: helping us figure out how reality works. In a new study, astrophysicists explain how they trained a specially-built AI on 2’000 simulated universes (to learn subtle differences in galaxy arrangement) and then used it to analyse 110 thousand real galaxies.

They claim to have found a clue to the parameters or “settings” of our universe — the Matrix or whatever — through AI’s sheer computational power.

In this Open Letter:

• Big gains: The world’s business knowledge in 10 mins a day.

• Durex’s data fumble, SA’s new unis & Discovery’s 1M users.

• Next-level business growth: Learn from the strategy masters.

• Strategies for running out of money: The results are in.

• Startup fuel: Share this 10 times and get Pro membership.

TRENDING NOW

All the World’s Business Knowledge in 10 Minutes Per Day

More people can read than ever before…

Since 1820, when only 1 in 10 people could read, reading has become by and large accessible to most people around the world – at around the 87% mark.

Now, while there are certainly some serious outliers scoring very low – Mali at 31% and South Sudan at 35% – most developed countries have a 99% literacy rate today. (South Africa’s literacy rate is around 90% these days, on track with global.)

And it’s a good thing, too, because whilst billionaires don’t often agree on anything, one thing likes of Warren Buffet, Bill Gates, Elon Musk, Mark Zuckerberg and Jeff Bezos all agree on is in business, reading as many books as possible is the key to success.

So, the more we can read (and actually do it), the better it will be for the economy.

Business Books are Big Bucks

While it’s hard to pin down an exact market size for business-related books specifically, the global non-fiction book category’s market size is growing steadily. It’s expected to reach $15.1 billion this year – up from $14.62 billion in 2023 and is estimated to reach $16.94 billion in 2028.

Some estimate the global business/finance category could be around 25% of that, so perhaps around $3.75bn per year? (Around 80M+ or so books.)

And the information in there is good – publishers tend to take way more care in ensuring quality than what you see on podcasts, blogs and social media.

But who’s reading them?

The thing is, once you start looking into it, it’s not clear who is buying all these business books and whether people actually read them.

Studies show that roughly a third of books are bought as gifts, and it’s mainly older people buying and reading them.

In fact, if you look at the media consumption habits of most C-suite, you’ll see about 74% read on their phone in the mornings – and it’s mainly e-blasts, newsletters and web articles or podcasts.

The 6% that say they consume media at night (when most people read a book) say they predominantly watch pre-recorded TV news reports.

So how can we help more people in business access the deep knowledge in books?

Well, it’s long been known that social reading works wonders in educational settings, and a number of professionals have argued that book clubs could be a prime motivational tool for learning in business – with some suggesting every company should start a book club.

And that’s just what one local startup is trying to do, on a much larger scale…

Making reading social again…

Social reading app, Bookt is aimed at entrepreneurs to make reading simple, social and fun.

Bookt takes non-fiction business-related books and divides them into 10-minute daily reading segments called steps to help folks (like entrepreneurs, and those with full schedules) develop a regular reading habit. 

Plus, you’re able to connect with a global reading community to share notes and insights (just like the old-school book club), as they work through specific books together.

While starting as a B2C, they recently pivoted to B2B, which allows teams to create book clubs in their organisations, reading and discussing the content with each other. Using micro-prompts and discussion points, it gets readers to read the book 10 minutes a day on their phones— resulting in reading an entire book in under a month.

Its AI integration can know what book you’re reading, respond to the notes you’re making in specific sections of the book, pull in real-life examples, and even bring in YouTube videos like Ted Talks etc.

We had Bookt founder Louis-Neil Korsten on the pod this week. Check it out, it’s a real page-turner…

As our attention spans dwindle, and more and more solutions are built to counteract that, leveraging smarter ways to help people learn in shorter, sharper bursts, we’re on the cusp of a new era of learning and development. We’re watching this space… 

Podcast Highlights:

• Wanna know why they’ve limited their catalogue to individuals? Listen to Bookt’s GTM strategy.

• Get insights on tearing down a big corporate wall one book at a time… 

• Don’t be a closed book: How to handle competition in the startup ecosystem.

• Recruiting the champion within – get people inside corporates to sell your product for you.

• When to launch your product, and how some corporates working with small startups can see the bigger picture.

IN SHORT

💰 Securing the Bag. Local FinTech startup Omnisient has just raised US$7.5 million in Series A funding. The privacy-preserving data collaboration and insights platform will use the funding to expand across Africa and beyond.

🪴 Banking 1 Million. Discovery Bank has reached the 1 million user mark two years earlier than initially planned. Launched in 2019, it has grown into a completely digital, comprehensive retail banking offering, attracting over 1’000 new clients per day.

🛰️ More African Starlinks. Following the telecommunications regulator in Botswana’s approval for an operating license in May, Bots has just become SA’s THIRD bordering neighbour to launch Starlink, with Zimbabwe, Lesotho and Namibia all expected to launch by the end of this year.

🎓 Houses of learned Drs. South Africa is set to get 5 brand-spanking-new tertiary institutions including 2 new government universities (the University of Policing and Crime Detection and the University of Science and Innovation) and 3 private tertiary education hubs: Akedemia by Solidriteit, Stadio, and AdvTech.

🎈 Durex Data Dribble. Durex in India has leaked hundreds of its customers’ personal data including names, contact details, and order information due to a lack of proper authentication on its order confirmation page. Honestly, the jokes write themselves.

😎 Get Accelerated. One of our partners, OCFO, is launching the third season of Founders Foundation in partnership with Investec. Get your startup financed and market-ready with this 8-month accelerator program. Apply here

CHECK THIS OUT

Getting Paid Faster, from Anywhere

With the number of online transactions set to double between 2022 and 2027 in SA, streamlining your card payments will become vital.

That’s why you need trusted payment technology, that’s easy to set up, with 24/7 instant payouts from anywhere in the world, with human support and all at a good price.

WigWag uses Stitch’s world-class technology to offer:

• E-commerce plugins: Integrate your Shopify, WooCommerce, Webflow or Squarespace site with WigWag to seamlessly accept card payments.

• Embedded payments: Check out WigWag’s API docs if you are building a tech solution and want to embed payments.

• Global receiving: WigWag processes any Visa and MasterCard, globally, getting you paid, from anywhere in the world.

• Instant payouts: Real-time withdrawals for smooth business operations.

• Human support: WigWag is always available to help.

• Ad hoc payments: Use checkout links or add card payments to Xero invoices for payments outside of your store.

New to card payments? Check out this simple payments directory to easily guide you step by step.

Ready to simplify your payment processes? Check out WigWag today.

Engage SA’s Most Vibrant Startup Community

On Friday 6 September, we’re hosting the startup strategy pros from Metavolve on LinkedIn Live for a session on what it takes to scale like a legend. And, guess what? This one’s free and open to anyone — sign up here.

Want to unlock valuable opportunities on tap?

In the last 48 hours alone, in our online community, we…

• Discovered Nick Grey, who is a master at teaching you to host events that don’t get stale or boring.

• Tyler shared a nifty WhatsApp bot his team built that listens to your voice notes and writes the transcript for you — with notes, to-dos and availability checking coming soon.

• Learnt about a Bitcoin community empowering local businesses along the Garden Route.

And had our first awesome event in Cape Town…

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all pro members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

What You Said…

We asked if you’d use early wage access, and most here have some windfall funds…

🟩🟩🟩🟩🟩🟩 💰 No, I use my emergency fund (46%)

🟨🟨🟨⬜️⬜️⬜️ 💳 I use credit cards and overdrafts for emergencies (29%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🪙 I use other financial services (2%)

🟨⬜️⬜️⬜️⬜️⬜️ 🏡 I use friends or family (11%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📲 Yes, I use an EWA product (0)

🟨⬜️⬜️⬜️⬜️⬜️ ✅ I would love to use EWA! (13%)

Your 2 cents…

Thanks for the intro, Jennifer! 🔥

Hi Xola, yes, so many people really want a job at a company that has EWA, for that reason. And did you know that Jem’s stats show that 70-80% of people who use EWA, use it for important things like transport and groceries? 🙌