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.

Learn AI-led Business & startup strategies, tools, & hacks worth a Million Dollars (free AI Masterclass) 🚀

This incredible 3-hour Crash Course on AI & ChatGPT (worth $399) designed for founders & entrepreneurs will help you 10x your business, revenue, team management & more.

It has been taken by 1 Million+ founders & entrepreneurs across the globe, who have been able to:

• Automate 50% of their workflow & scale your business

• Make quick & smarter decisions for their company using AI-led data insights

• Write emails, content & more in seconds using AI

• Solve complex problems, research 10x faster & save 16 hours every week

Register & save your seat now (100 free seats only)

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? 🙌

Need a medkit? America’s FDA has approved a real-life medi-gel treatment, so you can patch up like in video games. The algae-based innovation that’s been on the cards for 10 years now (here’s the original video) will finally be available in real life.

In this Open Letter:

• Fleet deals: Moving R66bn’s worth of vehicles, fast.

• Spaza shop solar, flying our FinTech flag & MTN’s mixed bag.

• Ready Cape Town? Tickets for our first CT event are flying.

• The hardest part of hiring new people: The results are in.

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

TRENDING NOW

Moving a Quick R66bn’s Worth of Cars

About a quarter of the 12 million-odd vehicles on SA roads are commercial ones. And it is estimated that more than 184k new commercial vehicles hit the SA roads every year.

But many (if not most) of these vehicles aren’t owned by the companies that operate them. Rather, they are leased from a bank or another company. 

The reasons for this differ from company to company, but generally, it’s due to:

• Cashflow: Reducing high upfront costs and better cash flow management.

• Mitigating risks: By not owning the vehicles, companies can transfer certain risks (like maintenance issues, depreciation, and resale challenges) to the leasing or fleet management company. This can be particularly valuable for businesses that do not specialise in vehicle management.

• Outsourcing non-core functions: For many companies, managing a vehicle fleet is not a core function of their business. Outsourcing this through leasing or fleet management allows them to focus on what they do best, while still having access to the vehicles they need.

• Tax benefits: Leasing a vehicle typically results in it being classified as an expense as opposed to a depreciating asset on the balance sheet. Sometimes, you pay less company tax when you are profitable.

So, an entire industry developed around the financing and leasing of commercial vehicles. 

These companies put together packages for their clients based on the capital required to purchase those vehicles, all other costs associated with leasing the vehicle and the money they estimate they will make from selling the second-hand vehicles once the contract expires. 

“De-fleeting”

On the flip side, the leasing and de-fleeting business itself and, in fact, most car rental companies, have two major risks when offloading cars:

1. Understanding the residual value (the price you’ll be able to sell that second-hand car for once the lease agreement ends).

2. Having a buyer ready at an acceptable price (to make the whole deal profitable) as soon as the agreement finishes.

A few years back, all of that had to be done manually, making it a very tricky business – the de-fleeter had to know a bunch of second-hand dealers they could move stock onto. 

Not very efficient, not very scalable, and very risky.

An SA online marketplace that works!

Online marketplaces are notoriously hard to build in SA, largely due to the lack of market size that impedes reaching critical mass.

However, the local B2B marketplace, DealersOnline, managed to do just that in the de-fleeter space. Think rental car companies, banks and other fleet solutions companies on the supply side, and second-hard card dealers on the demand side.

Their bidding platform, which now operates in several countries across Africa and the Middle East, helped large banks increase the sales value of their vehicles by up to 12%, and reduced the time to sell a vehicle from 45 days down to under 5. 

And when you increase revenue and reduce time to sale, there is a margin to be made (to learn how much and how the business works, sign up for The Open Letter Pro and get the exclusive deep-dive info).

Good volume 

They currently sell between 4’500 and 5’500 vehicles per month in SA alone, where they operate the platform (as well as their vehicle inspection and storage offering), so they have one of the most accurate predictions of what second-hand vehicles sell for in SA. This neatly solves the fleet owner’s other problem of calculating that residual value.

Whilst no longer a startup (Barloworld did own a majority stake at one point, which the founders bought back again later), it’s impressive what they managed to build in a short space of time.

With a local used car market still going strong, innovative ways to get used cars into the hands of South Africans are a good bet. We’re watching this space…

IN SHORT

🔋Powering spaza shops. Local solar-as-a-service provider Wetility is partnering with informal retailer FinTech A2Pay to provide affordable solar solutions to A2Pay’s merchant network of more than 6’000 spaza shops.

💰 Securing the bag. The annual Ecobank Fintech Challenge has announced its 12 startup finalists including SA’s very own EasyEquities, with the winner set to walk away with a cool US$50’000 in prize money.

🚘 GM’s AI play. General Motors is cutting nearly 1’000 software jobs globally to focus on higher priority initiatives like improving its driver assistance system Super Cruise, improving its infotainment platform and exploring the use of AI.

🥴 Mixed Bag. MTN has announced that it’s grown its user base for its super app Ayoba by 28.6% YoY to 36 million monthly active users. In stark contrast, its interim financial results for the first half of 2024 reveal a 20.8% drop in revenue for the group.

🏦 Stokvel stacked. Lesaka Technologies has invested R3.2m into local stokvel FinTech StokFella as part of their enterprise development initiatives.

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

Engage SA’s Most Vibrant Startup Community

Want to unlock valuable opportunities on tap?

Last week, in our online community, we…

• We learned a whack load of hardcore founder truths about hiring, firing, and building the kind of team that’ll get you there with special AMA guest Philip Joubert last Friday.

• We discovered that if you don’t record online sessions, pros feel free to open up and give you the cold, hard truths you need to build big and not fool yourself.

And we’re only just getting started.

This time next week, we’re meeting in person to learn what tech approaches work and what doesn’t in Africa…

See you on 27 August at Stitch’s offices in Solan Road, Cape Town, to learn from successful African innovators and meet the extended Open Letter community — grab your ticket here for only R150 or go for free if you are part of The Open Letter Pro (only R250).

Coming Up This Week

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

• New: Free uncapped 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 hiring, and it’s the resumes…

🟩🟩🟩🟩🟩🟩 😴 Going through countless CVs (40%)

🟨🟨🟨🟨⬜️⬜️ 👥 Interviewing people (30%)

🟨⬜️⬜️⬜️⬜️⬜️ 🧟‍♂️ The candidates (10%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📝 The recruitment company (0)

🟨🟨🟨⬜️⬜️⬜️ 🥺 Letting someone go that stuffed up in probation (20%)

Your 2 cents…

Ha ha, ja that’s just ‘cos we want you to have as much fun with this as we do. 🤓

Back atcha? Did you see… when the head of the EU sent Elon Musk a written warning ahead of him hosting Trump on Spaces (X streaming) on Monday, Musk responded with this Tropic Thunder meme… Oh, behave.

In this Open Letter:

• Dire need: Streamlining the hiring process in SA.

• Dricus’s bomb squad, dirty air hotspots & Google AI phone embed.

• See you later: Ask the Snapscan co-founder anything.

• Who has and hasn’t lied to their boss: The results are in.

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

TRENDING NOW

Shorten that Hiring Cycle

Hiring people is hard… 

It’s time-consuming, resource-heavy, and not to mention costly.

In applications alone, some roles receive over 200 applications per role that you or your recruiting team have to sift through to make an appropriate shortlist. 

For many companies, it takes an average of 42 days, multiple rounds (3 or 4, sometimes more) of interviews with key organisational stakeholders and costing anywhere between R30k and R60k in time taken to make just one hire.

And the cost of a bad hire is massive…

But if you think hiring someone is hard, it’s even harder to let them go.

It’s not that hard for people to misrepresent what they can do, and once hired, South African Labour law dictates quite a lengthy and costly process to part ways with an employee taking anything from 3 (if you are lucky) to 12 months to resolve.

So needless to say, a major need in this space is to be able to hire better, faster.

Enter Wamly.

Go from candidate to hire more accurately

Wamly enables employers to create customisable interview questions which prompt a candidate to answer the questions in a one-way video interview. Why video? Because, whilst CVs feature important information, getting a feel for a person is a critical part of hiring. And being able to do that at scale, improves accuracy and reduces cost.

Integrated into the self-interview style flow, companies can also make use of assessment tools to rate individuals’ skills.

Finally, with all the data in one place, teams can collaborate by scoring candidates and making comments, helping the hiring manager collect data asynchronously. Meaning no aligning of calendars to meet up and discuss candidates and less bias or pressure to select certain candidates.

They already optimise various parts of the recruitment process. From cutting down the number of interviews per candidate by over 70% to increasing the number of interviews a recruiter can manage in a fraction of the time. Smart plays and that’s why we got founder, Francois de Wet on our latest podcast. Highlights include:

• The costs and challenges of being first to market.

• Quality, consistency, fairness and candidates’ Wamly interview experience. 

• A gold nugget on innovative pricing for B2b

• How to navigate resistance to change

This industry is growing fast and there are major opportunities here. To learn more about Wamly, how they make money and other opportunities in this space, sign up for The Open Letter Pro.

IN SHORT

🌬️ Powering Energy Tech. Remember when we wrote about The Energy Gold Rush back in June 2023? Well, the SA startup we featured Open Access Energy has just landed $750’000 in investment to aid its mission of enhancing the distribution and management of renewable energy.

🤖 AI-Powering SmartPhones. Google has announced that it’ll start rolling out its Gemini AI assistant to Android devices including its latest line of Pixel phones.

🤢 Dirty Air Hotspots. Scientists from the South African Consortium of Air Quality Monitoring have developed SA's first air quality monitoring system using sensors, IoT and AI called Ai_r to identify air pollution hotspots in real-time.

📱Banking on Streaming. Capitec and Showmax have joined forces to give the bank’s 12 million app users Showmax streaming vouchers for as little as R22 to watch series, movies and more, or all English Premier League games for only R34.

🏆 SA Champs. SA’s UFC champion Dricus du Plessis will be walked into the octagon by Bok World Champs Siya Kolisi and Eben Etzebeth as he defends his middleweight UFC belt down under on Sunday morning (local time).

😎 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.

CHECK THIS OUT

Build Trust or Fade Away

In South Africa, trust and authority are not nice to have — they literally make or break your business.

Edelman’s landmark SA Trust Barometer 2024 shows that 65% of South Africans are willing to trust businesses over the government and the media — but 89% agree they only trust businesses that communicate openly and consistently

In fact, the 2023 study found that 61% of consumers will only buy from brands they trust — and 73% of investors agree, saying they only back startups who put time and effort into becoming credible leaders in their niche.

But, there’s a problem…

Founder-led trust-building doesn’t scale. Once your company starts moving, you’re stretched thin managing product development, fundraising and team building.

And that’s as it should be — your time is simply better spent running the nuts and bolts of your business.

So what to do? Content.

Demand Gen’s 2023 report shows that 65% of B2B buyers want short-form blog posts and infographics that talk to their pain points — with 71% saying they prefer web content the closer they get to making a purchasing decision.

That’s why we created Stream, an unlimited content subscription for SA tech companies. We combine tech expertise (engineering) with pro writing to help you build authority and trust.

Engage SA’s Most Vibrant Startup Community

Want to unlock valuable opportunities on tap?

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

• Connected Richard with a moonshot opportunity for his new secret project.

• Helped Andy discover the best/most efficient way to produce video content.

• Helped Danei find a freelance Bubble developer.

• Got Renier some rad video-cutting tool suggestions.

And we have two upcoming events you don’t want to miss…

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 ever lied on a timesheet, and you have to see it to believe it…

🟨🟨⬜️⬜️⬜️⬜️ 🕵🏼 Of course! Mine reads like a mystery novel (16%)

🟨🟨🟨🟨⬜️⬜️ 🤓 Never, ever – rules is rules (29%)

⬜️⬜️⬜️⬜️⬜️⬜️ 😎 Only when I’m really trying to impress HR (3%)

🟨⬜️⬜️⬜️⬜️⬜️ 🙉 I tried, but my conscience clocked me out (10%)

🟩🟩🟩🟩🟩🟩 🤨 What on Earth is a timesheet? (42%)

Your 2 cents…

Indeed, John, which is why we don’t share these polls with HR. 🥸

Right? Sometimes compliance is easier than defiance. 🤷‍♂️

Ah yes. A clear conscience is a soft pillow. 😴

CrazyGPT? Uh, Open AI just caught GPT emulating people’s voices. Under the “Observed safety challenges, evaluations & mitigations” of its latest self-scoring report there’s an actual audio clip of it having an outburst and speaking back to the user in their own voice. Dun dun dun…

In this Open Letter:

• Productivity play: The startup helping SA clock in with selfies.

• 1st Nigerian in space, electric arrow busses & Jozi’s solar crown.

• Let’s hang out: Two awesome Open Letter events — book your seats.

• How expensive is being a parent: And the results are in.

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

TRENDING NOW

Clocking in with a Selfie

Around 211 BC, the Romans changed the world (again) by switching from paying soldiers in salt (“sal” in Latin, where the word “salary” comes from) to silver coins.

The Denarius became the backbone of Roman currency. But more importantly, it was the unit of daily wage for Roman soldiers and labourers.

This was the birth of the workday wage.

Yet as timekeeping became more mainstream, wages changed to reward set hours and certain skills differently. In the industrial age, with machines running 24/7 and massive workforces, keeping track of all that data became mission-critical.

And to this day, clocking in and out is common practice for 9+ million South Africans across industries like construction, agriculture, retail, security and restaurants. 

Yet, with the rise of gig-work and flexible employment, chances are it might become even more common in the future.

What’s currently out there?

Some companies still use mechanical sign-in, while some more modern solutions include the use of tags or biometrics.

But biometrics or even tags aren’t always practical. For one, the scanners are often fixed to factory walls and often carry a heavy price tag and upkeep costs. So what do you do when your workforce operates remotely but still needs to check in and out for work, like in the construction industry, where workers are required somewhere other than the company’s offices?

This is where local startup WorkWeek’s solution is a cost-effective alternative to traditional clocking devices or systems.

Simply submit a selfie

With one internet-enabled smartphone on-site, an entire workforce can clock in and out by simply taking a selfie. The metadata of the image submitted is then used to check location and time and match that with an active working site or project predefined by the employer. 

This allows the company to have live data of who is working and where without having to send out a biometric scanning device to the field. The system then generates reports for payroll and business performance management purposes and where applicable data for health and safety records.

Because a selfie is hard to forge, it eliminates “Buddy Clocking” — when someone clocks in for a colleague. And live wage reports in real-time help companies forecast their payroll.

They have made some solid progress with around 80 clients and 3’000 workers logging roughly 5’000 clocking events per day in a short amount of time.

With smartphones becoming more accessible, and with more startups building solutions that leverage their built-in capabilities, we’re watching this space…

But there’s more…

This industry is growing fast and there are major opportunities here. To learn more about WorkWeek, how they make money and other opportunities in this space, sign up for The Open Letter Pro. 

IN SHORT

👑 Solar Crown. Jozi’s Eastgate Mall has claimed the rooftop solar crown as its more than 13’600 solar panels make it Africa’s largest “registered” rooftop solar installation.

🚪 TikTok LayOffs. TikTok has laid off as many as 50 of its African team members from South Africa and Nigeria as part of its latest round of global layoffs.

🚍 Keep on Rolling. Golden Arrow Bus Services has signed a memorandum of cooperation with Eskom to set out terms for the introduction of 120 65-seater electric buses into the public transport sector later this year.

👩‍🚀 Nigerians in Space. Nigeria’s first space traveller will join other space travellers from India and some small island nations yet to be determined on the next Blue Origin space flight.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with tools like easy no-code websites via Webflow and services like Dommisse Attorneys who can help you get all your legal stuff sorted, fast.

CHECK THIS OUT

Scale Smart, Scale Healthy

In the high-speed world of tech startups, time is everything — which is why waiting days for a doctor’s appointment just doesn't cut it.

But founders and teams often prioritise product development over their health, which can lead to burnout and decreased productivity.

This is where Udok comes in.

It’s tech-driven healthcare that moves as fast as you do. Just log in and see the doctor in minutes from anywhere in the world.

And, like all good tech, it makes things affordable — Udok consults are up to 40% cheaper, too.

Keep yourself and your team at peak performance with Udok, now also with group health for startups.

Engage SA’s Most Vibrant Startup Community

Want to unlock valuable opportunities on tap?

Over the weekend, in our online community, we…

• Made sure everyone had a break! (y’all deserve it)

• We did all laugh at Australia’s Olympic breakdancing, though.

But we did get requests for more events, so we’re delivering…

If he’s not exiting, he’s scaling internationally… and you should definitely learn from him… This Friday (16 August) at 12:00 sharp we have an online AMA with SnapScan, JourneyApps and Offerzen co-founder Philip Joubert.

Become an Open Letter Pro member to get access.

And then tickets for our next in-person event are live!

You’re invited to the Stitch offices at 29 Solan Road in Cape Town on Tuesday 27 August where we have product-legend-of-our-time Roger Norton from OkHi and co-founder and COO of WhatsApp-enabled HR heroes Jem, Caroline van der Merwe, talking about how to build uniquely African solutions…

If you remember our event from last week, you’ll know to hurry — it sells out quite fast, so go grab your ticket here.

It’s R150 per person (the first 20 get them for R100), or you can get in for free by joining Open Letter Pro.

What You Said…

We asked how expensive it is to be a parent, and we need a couple of million R20M grants pls…

⬜️⬜️⬜️⬜️⬜️⬜️ 😎 I don’t even notice it (4%)

🟨🟨🟨⬜️⬜️⬜️ 😅 It’s not that bad (24%)

🟨🟨🟨⬜️⬜️⬜️ 🦕 They eating me out of the house (28%)

🟩🟩🟩🟩🟩🟩 💵 R1.8m to raise them? More like R20m! (44%)

Your 2 cents…

Ah yes, Chris, the 3 Bs at the heart of every good home!

Oh no, don’t say that, Vakele; most of us still have a good 10/20 years to go.

Great outdoors? You got solar for your home, now how bout a high-tech solar hat to keep your phone and devices charged wherever you go… Noice.

In this Open Letter:

• Little-big solutions: Giving 21M+ parents a helping hand.

• Toasters on demand, breaking an e-sweat & Woolies’ solar power play.

• Engage: Your chance to learn from an SA startup royalty!

• The worst thing the internet gave us: The results are in.

• Grab yours: Share this and get 100+ SA business ideas.

TRENDING NOW

Helping 21+ Million Parents Save the Day

Ask any parent and they will tell you: having kids is expensive... 

In the US, the cost of raising a child is an estimated $313k (±R5.6m). Sure, things are more pricey in the USA, so adjusted using the Big Mac index, that’s roughly R1,85 million to get them from birth to employment (excluding tertiary education).

Tough on parents, but this also means that, for every child born, it contributes that much to the GDP over the next 18 years. And with 1.2 million babies born in SA every year, it's safe to say that children growing up has a great impact on economies around the world. (Not to mention the tax revenue and contribution to the workforce once they reach 18). 

That’s why many people are concerned about declining birth rates globally.

Birth rates worldwide have declined by almost 54% since the 1950s and the UN estimates it’ll drop by another 34% by 2050.

In SA, the amount of babies being born per year has been consistent, but with population growth that actually means our birth rate is coming down. We are currently sitting around 18.8 births per 1’000 people (a 56% drop from 1950). 

The cost of having children, changes in the modern workplace resulting in more women being involved, urbanisation and other factors play major roles in declining birth rates. 

But one often-overlooked reason is just how difficult and taxing it can be to raise a little one in our modern, busy lifestyles.

Diagnosing issues quicker, and doing the right things that lead to healthy development – all while trying to not lose your mind — is something most modern parents battle with.

Make it all make sense

Parent Sense is a science-backed mobile app that features real-world advice about your baby’s sleep, health, play, and nutrition, tailored specifically for your baby, to make parenting through different life stages a little bit easier…

Pregnancy: The journey starts during pregnancy, where Parent Sense walks the journey with an expecting mother explaining what’s happening, normalising some of the changes taking place and helping identify potential issues.

0–3 Months: The app uses the data moms enter to provide guidelines around sleep, feeding, and general health.

3–6 Months: As the baby gets older, the app navigates topics like improving a baby’s sleep, when and how to start with solid food, and how to deal with regression (that fun thing babies sometimes do: sleep poorly).

6–9 Months: Tips and tricks on how to fast-track your baby’s developmental leaps through play, as well as recipes and shopping lists for your little-big eater.

9–12 Months: As your baby approaches toddlerhood, Parent Sense is right there with advice on all the key things for their next developmental milestones.

And it’s quite a unique business. With roughly 140k potential new customers per year and a customer lifetime of at least 12-odd months (a baby’s first year) all the way up to 5 years, founder Meg Faure explains how they made it work on the latest episode of our Podcast 'How Would You Build It'.

Highlights from our podcast with Meg include:

• Why B2C is hard and how they’re making it work in South Africa.

• How being a subject matter expert helped her win.

• Building authority through content opened doors that were otherwise not possible.

IN SHORT

🛵 On-Demand Toasters. Massmart’s Game now lets customers shop for electronics and small appliances from its 51 stores via the Uber Eats app. Game has also integrated 23 of its stores into the on-demand delivery app OneCart.

👨‍💻 Coding For Madiba. More than 32’000 youth from Africa and Asia have participated in this year’s #Coding4Mandela tournament, with 70 teams heading to the national finals in September.

🎮 Breaking an Esweat. Fancy winning Olympic gold but couldn’t be bothered to train 12 hours a day? You’re in luck. The International Olympic Committee (IOC) have decided to create the Olympic Esports Games, with the first competition to take place in Saudi Arabia in 2025.

☀️ Solar Power Play. SA retailer Woolworths is upping its renewable energy project investments with more than R10 million in solar installations, and just over R7 million per annum in other renewable energy projects.

🏃‍♂️ Discovering Vitality. Discovery is planning to merge 2 of its 3 separate businesses Discovery South Africa, Vitality UK (VUK) and Vitality Global (VG) into a single global entity, Vitality.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with easy no-code automation with Make, your own CFO for a fraction of the cost with OCFO and loads more.

CHECK THIS OUT

Work more on the things that matter

A scaling business normally equals chaos. Staffing, operations, clients, finance and more all need attention and all seem equally important. But what if they aren’t?

Metavolve’s Scale programme has helped agriBORA double their customers with only a 25% increase in employees – in just 4 months.

If you want to grow with a mission, sign up for the Metavolve scale program and start focusing on the stuff that matters most!

Want to learn more about Metavolve’s framework that has helped more than 100 founders and business leaders develop sustainable scaling strategies? 

Click here to book your free 1-hour strategy session.

Engage SA’s Most Vibrant Startup Community

Want to unlock valuable opportunities on tap?

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

• Helped Natasha walk into her product meeting with a 🔥 new idea

• Gave Richard an idea to potentially repackage a feature for other industries

Oh, and, of course, we had the most awesome event in Stellenbosch…

It was fantastic meeting so many of you in person at our first event. Look out Cape Town, we’re bringing the vibes your way in a few weeks.

But first…

We want to give you the chance to learn from SA startup royalty, so we’ve put together a very special online AMA opportunity.

Let’s put it this way… Would you like to learn a few business tricks from the co-founder of SnapScan, JourneyApps and Offerzen?

Well, great! Because that’s exactly who we’ve organised for an online Ask Me Anything (AMA) session next week on Friday (16 August) at 12:00 sharp.

Just one catch. This one’s only for our Open Letter Pro members.

What You Said…

We asked what about your pet internet peeve, and would you believe ads win out…?

🟩🟩🟩🟩🟩🟩 📢 Ads (42%)

🟨🟨🟨🟨🟨⬜️ 🍪 Cookie consent popups (40%)

🟨🟨⬜️⬜️⬜️⬜️ 📰 MSM amplifying its lies/truths (16%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🗳 Politicians succeeding in getting the left on Threads and right on X (0)

⬜️⬜️⬜️⬜️⬜️⬜️ 🎙️ RickRoll (2%)

Your 2 cents…

Ha ha, yes, Ayuballie, sometimes it’s like those cookie consents are an anti-UX conspiracy.

You’re so right, Jason. And our favourite investigative reporters just did a very insightful deep-dive on this very topic. 😉

Hands free? A Neuralink competitor called Synchron connected its brain-interface device to an Apple Vision Pro, and it basically lets a disabled man control digital devices with his mind — see for yourself.

In this Open Letter:

• Make ads great again: Clawing back R1 trillion in ad revenue losses.

• Starlink’s Chinese cousin, SA’s lucky startup 7 & PnP’s big bucks.

• Engage: Great local startup events coming up!

• How you pay for big-ticket items: The results are in.

• Startup fuel: Share this and get 100+ SA business ideas.

TRENDING NOW

Clawing Back R1 Trillion in Lost Ad Revenue

Let’s face it, cookies were great for marketing – re-targeting ads alone could boost revenue by up to 33% if you used it right.

Until they weren’t…

The war on cookies (or trackers installed on websites to track and share information) kicked into gear in 2018 with GDPR regulation going into effect. 

Recently, Apple’s new privacy laws and Google’s announcement it would stop support for third-party cookies entirely in 2024 ended the era of businesses using cookies to track engagement and better target potential customers. 

Now, we’ll admit, the increased privacy is great for marketers giving us the creeps…

But it’s caused a much bigger problem for virtually every business on the planet (yes, yours too!)... cookie armageddon brings with it CACs of doom.

And it’s not just about conversions, those targeting tools were great for collecting the type of customer data and insights that we in tech use to plan and service customers better – a practice also taking a knock in the post-cookie apocalypse.

Ad fatigue is a real thing…

People are served anywhere between 4’000 and 10’000 ads per day – prolly too much to process. 

And with 96% of people thinking ads aren’t truthful, and over 51% thinking the ads they see are not relevant to them, it’s no wonder over 40% of internet users have ad-blocking software – an expensive exercise costing businesses around the world around $54 billion in ad revenue (that’s R1 trillion) this year alone. 

Marketing is unimaginably massive.

Global digital ad spending is hovering at around R17 trillion and locally as much as R14 billion per annum.

It’s too early to tell, but Deloitte has predicted a bloodbath of advertisers struggling to find quality prospects, re-engaging potential customers and measuring the success of their campaigns. In fact, it seems to believe only the top 61% of high-growth companies who have the capital to build first-party data channels will have a chance of making it – their article reads like a bit of a eulogy to negative-growth companies.

So with most of the ad spend not yielding the results it used to, where will the money go to get the same kind of impact?

Getting users to engage and share data willingly

After years of getting requests to execute interactive digital campaigns in short amounts of time, local gaming and animation studio, Seamonster, spun out an entity to do just that called Hailr.

Hailr is a low-code platform that enables marketers to build interactive, web-based campaigns and games that make digital campaigns more appealing, more engaging, and finally helps collect some of the data cookies used to capture (and maybe even more), completely out of free will from the customer or participant. 

And some of the things they can pull up within 4 weeks are pretty neat…

• Scan a QR code in a broadsheet to play an interactive game and win a voucher. This collects data, enhances the impact of the broadsheet and tracks conversion through the redemption of the voucher.

• Take a social media campaign up a notch by offering an interactive game when users click it.

• Scan a QR code while in a line at a physical retailer to play a game on your phone while you wait, with a chance to win some prizes - all in exchange for some of that sweet, sweet data.

Some campaigns have seen up to 37% basket size increases at some of the top retailers in SA, with an average conversion rate of 70% with some of their other clients. And with the likes of Sanlam, Clicks and KFC building these branded engagement games and platforms, they’re bringing digital advertising innovation to some old hands in the marketing game.

Hailr is but one local startup capitalising on this major change, and we are sure many more will come…we are watching this space.

IN SHORT

🍀 Luck of the Irish. 7 local startups have been selected to participate in the 3rd edition of the Irish Tech Challenge SA 2024. The startups include Smartview Technology, Momint, The Awareness Company, Athena, AdBot, Samanjalo, and Credipple.

🛰️ Starlink’s Rival. China is creating its own Starlink with the launch of the first batch of satellites as part of Shanghai Spacecom Satellite Technology’s “Thousand Sails Constellation” plan.

🤖 CurroBot. Local independent school, Curro, is again hosting SA’s edition of the World Robot Olympiad with 755 teams of nearly 2’000 learners from 160+ schools competing at this year’s event.

💰 Chipping in. The Pick n Pay Group has overshot its rights offer by R4.3 billion — more than double what it set to raise in its bid to recapitalise the business and to turn around the trajectory of the struggling retailer.

🙈 Recession time? Fears of a recession in the US sparked by slower job growth, industry layoffs, and housing market concerns saw major indices take a dive. PS If you have any crypto, look away for a while…

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

CHECK THIS OUT

The right time to involve a lawyer

A study by Harvard Business School found that startups that seek legal advice are four times more likely to succeed than those that do not.

And if you’re raising funding (now or down the line) a National Venture Capital Association (NVCA) survey says that 90% of venture capitalists consider the legal preparedness of a startup as a significant factor in their investment decisions.

The reality is that most founders and business owners avoid involving lawyers because they are scared of the associated costs. But not all legal services should cost you the farm.

For years, Dommisse Attorneys have been helping South African startups with:

• MoI and shareholder agreements to help navigate co-founder and shareholder relationships.

• Offshoring IP and setting up abroad to make your startups attractive to foreign investors.

• For the sale of shares and fundraising, get a great team on your side to help you avoid blind spots and protect your interests.

Need legal advice for your startup? Get in touch with Dommisse Attorneys today to explore how they can set your startup up for success.

Engage SA’s Most Vibrant Startup Community

Want to get valuable connections on tap?

Last week in our online community, we…

• Helped Leigh find a valuable connection to get MVPs rolled out in schools.

• Connected Danei with the best CRM consultant in the biz.

• Got Piet connected with a fire AWS expert.

• And sourced a high-quality merch contact for Renier (wonder what for…?)

We also have our first in-person event tonight (which is sold out!), and an Ask Me Anything (AMA) session is coming up with Philip Joubert, co-founder of Offerzen (previous founder of SnapScan and involved in early builds of many startups you know) on Friday 16 August at 12:00.

Philip will be talking about assembling a winning team and answering your burning startup questions!

Also, it's all systems go for our first Cape Town in-person event. Get more details here.

This event is exclusive to The Open Letter Pro members, so sign up today and get access to all our events for free, PLUS join our online community of 40+ startup founders and operators.

What You Said…

We asked how you pay for big-ticket items, and saving up is the game…

🟩🟩🟩🟩🟩🟩 💰 Save up (67%)

🟨⬜️⬜️⬜️⬜️⬜️ 💳 Credit card (18%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💵 ⁠Borrow from my partner (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🐖 ⁠Emergency fund (6%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💸 ⁠BNPL (6%)

Your 2 cents…

Wise words, Vakele, gotta learn that delayed gratification is the most valued.

Good one, Leslie, helps you stay frugal and smart.

Wow, Graham, that’s definitely an inspiration!