THE OPEN LETTER NEWSLETTER

Pulse racing? This 5-minute video of a space capsule returning to Earth is like a mini sci-fi masterpiece. Highlights: the red glow of re-entry and that first free spin in the atmosphere.

In this Open Letter:

• Smart play: Earning Dollars & Pounds in SA.
• AI customer service, presidential cattle and hacked company registers
• Steady income: How to set up a subscription business.
• What business you trust grads with: The results are in.
• Share this: And get free business tools.

TRENDING NOW

Earning Dollars & Pounds in SA

Cape Town is one of the best places in the world to live… 

And that’s not us being biased. 

The city was voted the 2nd best city globally to visit or stay. 

Yes, it’s beautiful, but one of the main reasons it's such a great place to live has nothing to do with Cape Town the city itself – but rather the general affordability of things in South Africa. 

According to the Big Mac index, (a cost-of-living comparison tool some economists swear by), a Big Mac costs R51.90 in SA and £4.49 in Britain. Considering the exchange rate, SA is 52.6% cheaper to live in.

No wonder we have so many Europeans and Americans living like lords here at the Southern tip of SA…

But it goes the other way, too.

Spending those international pounds locally is obviously good for South Africa’s economy. 

So we think it was a surprisingly smart (if a little late) move of government to announce its visa for foreign remote workers wanting to enjoy a more affordable quality of life over here – even if only for up to 6 months a year.

Not just for Remote Workers

In the UK the average salary is just under R60’000 vs just under R 25’000 in South Africa. 

Meaning if you can land a job in the UK that you do from South Africa, not only do you get around 2.5x more in income, you can buy ± double the amount of Big Macs (or anything else by that estimation).

Skilled South Africans in IT and finance are being headhunted by international employers, leading to a surge in global recruitment over 2023.

In Offerzen’s 2024 State of the Software Developer Nation, we see that 9.1% of the companies South African software developers work for are based outside of South Africa (probably around 10’000 of them).

This number is up from last year’s 3.9% and is indicative of the value international companies are seeing in hiring SA workers and how rapidly the trend is growing.

There is a catch to this, though.

The legalities

Hiring a South African from abroad is not straightforward – you need a local business entity that can hire, file taxes and manage employment matters.

But that’s where Employer of Record (EoR) services come in. 

EoR sets up entities and manages the admin of payroll and taxes for overseas companies wanting to hire South Africans, all for a monthly fee per employee.

While there are a few global players (like Remote, Papaya and RemoFirst) that offer the service within SA and abroad, there are local ones: HireJustNow can do the same thing – probably for lower fees, though, since they live in SA where the cost of living is lower and all that.

So if the company with that overseas job you’re eyeing doesn’t have an EoR yet, you know where to send them (and get yourself hired).

The world is becoming more globalised and more and more South Africans are taking remote jobs from within SA. And with that, chances are there are major opportunities everywhere. We‘re watching this space.

IN SHORT

🤑 Funded. South African startup Cue lands R38 million in seed funding. The AI-driven customer service platform aims to provide faster and more personalised customer service experiences for businesses.

🥸 Hacked. The Companies and Intellectual Property Commission (CIPC), the official regulatory body for registering companies, co-operatives, and intellectual property rights in South Africa, has suffered a security breach that compromised its clients’ and employees’ personal information.

👨‍⚖️ Sued. Elon Musk is suing OpenAI, the makers of ChatGPT and its CEO, Sam Altman, saying they’ve abandoned their original mission to build artificial intelligence for the benefit of humanity.

📃 Regulated. The Independent Communications Authority of South Africa (ICASA) is amending some of its regulations, including how data bundles are consumed (the ones expiring soonest). Unused data from 7-30 day bundles will get carried over. And networks are required to send alerts to users when they reach 50%, 80%, and 100% of their data allowance.

🐄 Auctioned. SA President Cyril Ramaphosa’s Ntaba Nyoni cattle auction at his Phala Phala farm earned nearly R15 million in sales. The top-selling lot was a 3-in-1 — a pregnant Ankole cow plus a calf, sold for a cool R1.8 million.

BUILDER’S CORNER

How to Set Up a Subscription Business

Shortly after the rise of digital business in the early 2000s, we all learnt a pretty crucial lesson: You can’t just keep forking out money to get new customers. 

Fostering loyalty and return business was the name of the game for most of the 2010s.

But if you caught last week’s How Would You Build It podcast on unlocking the township economy, you’ll know a major SA trend right now is creating lifestyle-based subscriptions like Ucook etc., rather than just once-off e-commerce sales.

Good for the customer, but more importantly, good for business.

It’s the global trend called the subscription economy and basically requires building long-term customer relationships, in exchange for steady, predictable income. Here’s how to get going …

What you need to get set up

1. Get an online presence

If you can build a website, great: There are lots of easy low/no-code tools like Webflow or WordPress with commerce capabilities. Otherwise, you can simply set up a LinkTree to cross-promote various social channels and places where you display products/services – and even link to your payments processing (see Point 4 below). You can even use Whatsapp as a way to get customers.

2. Get logistics/delivery sorted

One of the main plays in subscriptions is making sure your customers get their goods every month. Fortunately, you have flexible options like Pargo. They offer a practically nationwide delivery network using pickup points (so you don’t have the headaches of home delivery). And it also gives your customers some options about where and when they collect their goods. Nice.

3. Organise your warehousing/storage

Next, you want your stock to be secure and easily accessible to customers when they need it. So look at services like Parcelninja which offers smart warehousing, storage, picking, packing and even integration with bigger retailers. It’s just so much easier than trying to store and manage all your stock from home.

4. Get super-easy payments collection

Lastly, and probably most importantly, you want to make paying for your services simple, easy, effective and enjoyable – no more haggling and stressing over late EFTs on WhatsApp, please!

That’s when you get yourself a smart social payment solution like WigWag. It comes with a handy subscription API that you just set up for the customer once and then it’s all automated – it’ll even do automatic retries if a debit fails for whatever reason.

And there you have it; with everything automated, you can focus on what’s really important: Growing your subscription business!

Got a startup business model hack? Hit reply and let us know (and maybe you get featured here, too).

Today’s Builder’s Corner is done in collaboration with Danielle Laity who is an expert in product strategy, specifically in FinTech.

You can connect with her on Linkedin right here.

THE RESULTS

We asked what you would (or wouldn’t) trust grads with, and things got a little interesting…

⬜️⬜️⬜️⬜️⬜️⬜️ 🤷🏽‍♀️ nothing (5%)

⬜️⬜️⬜️⬜️⬜️⬜️ ☕️ my extra hot soya milk latte with 1.25 sugars order (5%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🪓 manual labour only (7%)

🟩🟩🟩🟩🟩🟩 🧠 all kinds of interesting work (71%)

🟨⬜️⬜️⬜️⬜️⬜️ 📉 they run my business (12%)

Your 2 cents…

FOR THE MEMES

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Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Miss the good old days? Don’t worry, DVDs are back — Shanghai researchers are building the Super-DVD, a single DVD-sized 1.6 petabits (that’s 200k GB) storage device that holds 40k DVDs or 100 years’ worth of movies (if you live that long).

In this Open Letter:

• Big niche: A R8.1bn opportunity in SA grads employment (what?)
• SA’s AI taxman, Apple’s canned car & a 46% e-commerce growth.
• Building big: How to unlock SA’s R450bn township market.
• What you really use WhatsApp for: The results are in.
• Free business tools: Share this and get cool gifts.

TRENDING NOW

SA’s R8.1bn Grads Play

Unemployment in SA is out of control.

With the highest unemployment in the world, nearly 33% of working-age South Africans sit without jobs. And it gets worse (62%) for youth unemployment (15 to 24-year-olds), and 71% when you consider those who have given up finding a job. 

Our economy is growing slower than our birthrate and to add to it, our wealth equality gap is widening. Meaning the little economic growth we are getting is likely moving to the wealthy, while the middle class is shrinking. 

No wonder our tax base is getting smaller and smaller. 

‍

The fight back

This doesn’t paint a pretty picture. But the government is attempting to tackle this:

• The Presidential Youth Employment Intervention programme provides funding to qualifying NPCs and NGOs to employ youth in community service projects for up to 16 hours per week for 6 months.
• The National Student Financial Aid System (NSFAS) distributes around R47bn per year to fund some 450k students’ education – with many first-generation graduates, it’s probably one of the top achievements of a post-democracy South Africa.

But is this enough? It’s when you start looking at SA’s 338k annual graduates that things get interesting…

The SA graduate opportunity

We recently covered how qualified doctors can’t find work. But it extends beyond the medical profession. In 2023 the graduate unemployment rate was 10.6% – significantly lower than the national unemployment rate. No problem, right?

Not exactly. 10 years ago back in 2013, the grad unemployment rate was only 5.5% – meaning this percentage has (nearly) doubled in the last decade.

But there’s reason to pay attention here.

See, South Africa produces more than 338’568 new graduates every year (StatsSA 2016) and with the average graduate salary of around R240k per year, that’s about R81bn per year of grad salaries.

Now, build a product or service that helps find, place, hire, upskill etc. graduates in SA alone, and charge a percentage fee (5-15% is standard in the recruitment space) and you’ve got yourself a market:

• At 5%: R4bn
• At 10%: R8.1bn
• At 15%: R12bn

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Get those graduates hired

One of the major hurdles for graduates to get recruited is job experience. That’s why local startup Jobox is helping grads get their first gig. You pay Jobox a fee to source, equip and place a grad intern, they help them get a stipend from the government. So the intern doesn’t go on your payroll, you simply pay Jobox a fee.

Another startup in this space is Leaply. They use smart screening and AI to match graduate candidates with ideal graduate jobs at some of the biggest corporations in South Africa. Saves the corporates time screening and helps grads land great jobs. The best is it’s free for applicants as recruitment costs are passed on to the companies using the platform.

Keen to help solve the jobs problem? Well then consider applying for the Next176 Job Creation Unhackathon that’s all about startups in the job creation space. You will get supported by their venture team as you validate the idea and could even get some funding and ongoing support.

What’s more, if you build a successful tool in the graduate niche, who’s to stop a founder from expanding overseas or to the larger, more general recruitment market? The space is big, and we are definitely watching it…

IN SHORT

📦 Prime Time. With the launch of Amazon in SA happening soon, they also announced they will be launching Amazon Prime as well. The subscription service includes free unlimited expedited shipping on any order size as well as other Amazon services like Prime Video (similar to Netflix), Music, Photo, and Gaming.

🫗 Bitcoin Crash. Bitcoin rallied so hard, it crashed Coinbase with some users of the trading app reporting a zero balance. In this major rally, Bitcoin passed $60k, inching closer to its all-time 2021 high.

💀 Canned Apples. Apple has announced that the autonomous car they’ve been teasing since 2014 is getting canned. Many of its engineers are joining the AI division and a magnitude of retrenchments is also expected.

🤖 AI Taxman. SARS has been using AI to get back some R210 billion for the current financial year. In part, SARS leveraged AI for its debt propensity modelling to help identify cash-strapped taxpayers more likely to settle their tax bill.

🛵 Delivering Growth. Woolworth’s Food division’s online sales have jumped 46% year-on-year in the last half of 2023, driven by Woolies Dash, its on-demand delivery venture. Great progress, but still lagging behind Sixty60.

HOW WOULD YOU BUILD IT?

How to Unlock SA’s Township Market

If you’re looking to unlock a share of SA’s massive R450bn township economy, this week’s podcast is for you. We sat down with Leon Qwabe, founder of Order Kasi, whom you might recognise from Covid-time news reports on their then-township-focused food delivery startup. 

Well, Leon and his team have since pivoted into broader township last-mile solutions and, as you can imagine, business is good.

Catch the highlights

1. Townships are hungry for e-commerce

With over 6 years of hard lessons in the township delivery space, Leon says here that now’s the time for more advanced offerings. With a sudden rise in kasi entrepreneurs building businesses via WhatsApp and looking for innovative ways to get paid via socials, there’s room (and spend) for more online retailing.

Particularly in the health and fitness space, says Leon, where you have a broader lifestyle element to each purchase. Apparently, Herbalife does really well in SA townships right now.

2. People are banking and shopping online

For years, the mantra was that townships ran on cash so payments were an issue. But, as Leon explains here, that was due to the reversing trend of people growing up and moving to the suburbs. Nowadays, the trend is to stay in the township and upgrade the family home.

With that, you have a growing younger, employed market using banked money within their local market. To the point where Order Kasi’s entire niche is now township dwellers with a bank card, who are used to shopping online.

3. It’s all about keeping it local

As Leon says here, navigating and route planning in a township is a different game – some areas have roads and street names, some not so much. And one of the key ways Leon learned to overcome that hurdle is to use local drivers, guys who know the area and can communicate with the customer like a local.

That, however, extends to Leon’s own approach to building a business in this space. One of his biggest sources of information is the local merchants whom he signs up as customers – don’t just try and sell them your service, sit awhile and ask for guidance, they know the game inside-out.

You can also grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked what you’d like to do on WhatsApp in future, and most just want it to stay as is…

🟨🟨⬜️⬜️⬜️⬜️ 💳 Banking and payments (19%)

🟨⬜️⬜️⬜️⬜️⬜️ 🍔 ⁠Uber and food delivery (16%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🔔 ⁠Dating apps (5%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🏝️ ⁠Travel and tourism (7%)

🟩🟩🟩🟩🟩🟩 🤳 ⁠Nah, I’m fine with just chat and voice (53%) Your 2 cents…

Nice observation, Joshua, can’t wait to see what SA’s tech future holds.

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Long and short of it? Check out the video of the world’s tallest and shortest people together. He’s 2.5 metres tall, and she’s just under 65cm — a bit taller than his shoe. Don’t feel too bad, though, they’re both globe-trotting Guinness World Record celebs.

In this Open Letter:

• Go big: Unlocking 30M users in SA.
• Big ANC tech promises, gas-shedding & no more spam.
• Think scale: How to take your product to the masses.
• How you like your grocery delivery: The results are in.
• Free business tools: Share this and get cool gifts.

TRENDING NOW

Tapping Into SA’s Sleeping 30M Market

WeChat is China’s super app. 

With 1.2bn monthly active users, it’s not only the go-to chat and communication app, but with several apps built into it, you almost can’t do anything in China if you don’t have WeChat.

Ordering food? Do it on WeChat. Make a payment? WeChat. 

It really is a powerhouse app powering 24%+ of Tencent’s $350 billion market cap.

So it's no surprise that both WeChat and others have tried to nail the super app in territories outside of China. 

WeChat’s efforts have mostly failed in SA, though. 

They just never could dethrone WhatsApp as SA’s go-to messaging app.

SA’s chat leader

But WhatsApp itself has been slow to go the super app route. 

With their API launching in 2018, 9 years after it was originally planned, they almost took an Apple-like approach, patiently building out the building blocks to get to a truly global super app – something quite unconventional for Meta, who, under Zuckerberg, is all about speed to market and breaking things. 

But a smart move. 

The biggest challenge, as Meta no doubt learned with Facebook, is likely complying with regulations in each territory, getting payments going etc. 

So instead of trying to be that in each territory, WhatsApp’s strategy seems to be making a robust API available and letting others do those things.

And WhatsApp definitely has the power to pull off the super app play in many territories. 

‍

We have already covered how slick payments by the likes of WigWag enable a host of business opportunities on WhatsApp with our look at selling on social media and our recent podcast on building a business on WhatsApp.

But what exactly is possible with the app that, reportedly, 30 million South Africans use regularly? 

4 innovative local WhatsApp API use cases

1. One of the OG use cases for WhatsApp’s business API was GovChat. 

After seeing the impact a government/citizen engagement platform could have via Mxit, Eldrid Jordaan set off to build the same on WhatsApp. 

Offering services like:

• Skipping SASSA grant application queues 
• Logging service delivery requests (water outage, potholes etc)
• A hotline for reporting corruption
• And getting info directly from the government.

But in 2020 Meta blocked the GovChat app, saying it violates their terms of use. The Competition Commission ruled that this was anti-competitive behaviour by Meta and referred the matter to the competition tribunal, but nothing has come of it as yet and now GovChat’s gone into business rescue and Eldrid left the company. Sad.

2. And then there’s FlySafair, whose WhatsApp experience is setting the bar high for how to engage customers on this channel. 

Flight reminders, boarding passes, check-ins via WhatsApp – it’s everything you need when travelling. 

You can even request additional luggage after check-in and pay for it, all using WhatsApp. Nice.

3. We touched on the overcrowdedness of our public schools recently, and Dacod Magagula was in one such school growing up. 

He recalls using old exam papers to help him study and managed to get to UCT and graduate as a software developer. 

A few years later he pioneered FoondaMate – a WhatsApp service that helps students by providing old papers and/or questions they can use to prepare for exams. 

After raising a cool $2M recently, they’re launching in other countries and building out their product.

4. Finally, getting real-time market data is something that many large organisations need to make quick, informed decisions. 

That’s where Yazi comes in. They use WhatsApp to survey large segments of the market and gain valuable insights almost instantly. Just look at this research they recently did in partnership with Stitch showcasing the adoption of various payment methods in the market. Powerful stuff.

WhatsApp and its API are slowly starting to get the traction that could soon see it become a super app. And with that, a whole host of opportunities will be there for those that are early. Builders, are you ready? We are watching this space…

IN SHORT

☀️ Go Big or Go Hohm. South African startup Hohm Energy, which provides alternative energy solutions to battle load shedding, has raised over R154 million in funding — it looks like it may be the largest seed round for a tech startup in SA ever.

🥽 Big Tech Promises. The ANC launched its election manifesto and it’s full of high-tech stuff. They promised SA would become a “world player in green hydrogen, battery and electric vehicle production”, “universal access to broadband internet”, and “digital hubs in townships to produce digital content, including animation, gaming, VR & AR tools”.

🧛‍♂️ Pricey Data Breaches. Companies in SA are having to fork over nearly R50 million on average should they experience a data breach. According to the 2023 Cost of a Data Breach Report, the frequency and costs associated with data breaches are increasing around the world.

💨 Running Out of Gas. Looks like SA is set to experience gas-shedding after Sasol announced it will stop natural gas production in June 2026 — leading to a “day zero” for gas users. While it can still be imported in the future, the high import costs could put pressure on manufacturers.

 🛑 Reddit IPO. Popular social community Reddit filed to list on the New York Stock Exchange. It will be the first social media company to IPO since Pinterest in 2019 and with a $1.3bn raise thus far, it’s valued north of $10bn.

✋ Spam Calls Failed. South Africa’s Information Regulator has ruled that telemarketing amounts to electronic communication and must be regulated in terms of the POPI Act and that companies making spam calls face fines of up to R10 million or jail time. Thank goodness.

BUILDER’S CORNER

How to Unlock Your Growth Market

We’ve all been there; You get good prototype/MVP feedback, start iterating the product and attract some early adopters. But now, how do you take this mainstream? 

Because your product (and sanity) literally depends on it.

‍

This weekend, I was reminded about the whole early-adopter-to-mainstream market dilemma by this LinkedIn post from US product marketing specialist Anthony Pierri.

“Crossing the Chasm”, a term coined by Geoffrey Moore in his book of the same title, refers to the intentional niching down on a specific customer, getting it done well for them and then going horizontal to others. 

It works well, but sometimes the niche is just not big enough. And when you are building in SA, that is more often the case than not.

So there is another way to do this – skipping the niche altogether and going after the end user trusting that their love for the product would eventually force their bosses to buy it. 

The first to do this was probably Apple as far back as the 80s – IBM and Microsoft were going after companies and corporates, and Apple went after the end consumer. And it's not uncommon today that a Mac is on the wishlist of many an employee who joins a company.

Modern examples? Slack, Airtable and Notion.

Let’s dive in on a product-led approach to building a startup.

Community-powered PLG

Your product needs to be useful on an individual level. i.e. Notion helps you keep track of personal projects and tasks and they do so without charging you.

When it does this well, you fall in love with it and then start searching how to do specific things and this is where you find the community – in Notion’s case, they used Reddit.

Notion’s team hung around here and helped those that asked, to solve niche problems publicly. This helped them gain a big following and affiliation for the product.

These users loved Notion so much, they literally took the product into their work environment and did all the selling work.

11 years in and Notion is valued at $10bn.

To mimic it you need:

1. Super fast Time to Value (TTV)

Whatever your product does, it should do it for users as soon as possible (with as few as possible steps). That means easy setup, intuitive user interfaces, or the ability to achieve a specific goal with minimal effort. The faster users see value, the more likely they are to stick with the product and recommend it to others.

2. Intuitive onboarding

You essentially want entirely self-service adoption, so new users can just start using the product without any assistance from a sales or customer support team. Usually, that means highly intuitive design, clear documentation, and fully automated onboarding processes. But you can just imagine it as making your product plug-and-play.

3. A viral distribution mechanism

Next, you need to build features that encourage them to get more users. I.e I invite my wife to join me on my family holiday planning Notion board and just like that, they have another user. It works alone, but it works better with others.

4. A community ready to die for you

Easier said than done, but you start by finding your core community and offering them a place to engage and realise value, with your product at the centre stage – Notion started by posting on dev subreddits, then eventually expanded to their own subreddit, which eventually became their customer support.

Then, you need to engage the community in iterating the product – “Hey guys, we just put together this new feature idea, play around with it…”.

The aim is to use your community to construct a highly effective and efficient product, while simultaneously gaining enough users to make your mainstream sale pitch super easy – “Look, 60% of your colleagues are already using it to do X, Y, Z easier, better, faster…”

Got a startup growth hack? Hit reply and let us know (and maybe you get featured here, too).

Today’s Builder’s Corner was written by Renier Kriel who is an expert in startup strategy & growth specifically for South African startups.

Connect with him on Linkedin right here.

THE RESULTS

We asked how you like to receive your food/parcels, and scooters look like the way to go…

🟩🟩🟩🟩🟩🟩 🛵 Scooter, it’s fast and affordable. (58%)

🟨⬜️⬜️⬜️⬜️⬜️ 🚗 Car, I like to know my stuff is safe and sound in the boot. (10%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚚 Delivery truck, I don’t mind waiting around all day (or maybe till tomorrow). (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🪦 The Post Office, I like living dangerously not knowing if I’ll ever receive my stuff. (6%)

🟨⬜️⬜️⬜️⬜️⬜️ 📦 Collection, I trust only myself (and saving that R35 delivery). (13%)

🟨⬜️⬜️⬜️⬜️⬜️ 🛒 Never, I only go to the shop in person. (10%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🧐 By gold-plated helicopter, of course, thank you, Charles. (0)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Take two? Behold, scientists have managed to grow a teeny, tiny pair of testicles in a test tube. And, we assume, asking everyone to stop laughing at their itsy-bitsy breakthrough.

In this Open Letter:

• Big moves: 7 Plays for a stake in SA’s R112bn last-mile industry.
• Soaring AI chips, Google’s colour problem & SA hunting digital nomads.
• The highlights: 17+ insider secrets for building a startup in SA.
• How you use your AI at work: The results are in.
• Free business tools: Share this and get cool gifts.

TRENDING NOW

Scooting Into SA’s R112bn Last-Mile Space

On pre-pandemic SA roads, it wasn't that often that one saw a scooter cruising around doing a delivery. 

Sure, Mr Delivery was already a thing, and you had one or two local convenience stores (think mom-and-pop hardware stores or the local pharmacy) with their own delivery driver. But these were few and far between.

Fast forward to 2024, and we find ourselves in a post-pandemic, last-mile-fueled, e-commerce-comfortable place where scooters are so commonplace that an entire industry has been birthed, seemingly overnight.

How big is this space? 

Research says delivery fees are about 30-50% of e-commerce costs. So, if SA’s e-commerce industry is set to do R225 billion per year by 2025, we can safely assume the last mile space could be worth anywhere between R67 billion and R112 billion per year. 

But the opportunities lie not only in the demand for deliveries from a host of new and old e-commerce players but also in services and products used when fulfilling those deliveries.

‍

Replace the driver, and there is money to be made. This is perhaps why international drone delivery startup Zipline is now valued at $4.2 billion. And, although not a unicorn just yet, back home Autonosky is building a last-mile delivery drone called Autono1 which looks pretty cool.

But looking at the other costs, there are opportunities across the board. Let’s dive in…

‍

1) You need a Delivery Vehicle

EVs drive free (no petrol) so if you can use their entire charge during the day, you get max upside.

And if you consider a partnership like the one between Zimifleet’s electric fleets and Versofy’s Solar as a Service solution, a driver could basically charge their e-scooter using the sun and drive for free. Not sure which EV to buy? Get Zimi’s 2024 EV catalog featuring all commercial EV options.

But if you’re still keen on going with the good old 95 unleaded, online classified aggregator ananzi.co.za has nearly 500 listings gathered from all parts of SA classifieds for delivery scooters.

2) Optimised route planning

Route planning and solving the traveling salesperson's problem of finding routes and managing work to shorten trips and spending is a big one.

Loop is tackling this. Using algorithms, it is a cloud-based delivery platform providing route optimisation utilised mostly by last-mile delivery services.

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3) Lockers

The use of lockers for deliveries and collections has risen over the last few years with the likes of Pudo, Bob Box (from the old Bid or Buy crew), and DSV (used by Makro) popping up everywhere. Delivering to lockers is substantially cheaper than home-based deliveries and with e-commerce providers footing the bill for delivery (if you meet the order threshold), they prefer it when you choose this option.

4) Making money while you drive

Its good business if your bike is out on the road all day. But that also means people see it. And the folks at MotionAds offer branded top boxes and fins – really hard to miss when you’re stuck in peak-hour traffic. And with location data, one could predict how many people saw it.

5) Get bikes back on the road

Vehicles that drive a lot can break often and having to take them into a repair shop could waste a lot of time and lose revenue. So getting mechanics, parts, and servicing on the road is a win to keep vehicles moving.

That’s what SA startup Fixxr is doing – using tech to reduce labour costs and get the mechanic to come to you.

6) Bespoke insurance solutions

Driving a delivery scooter on SA roads is not for the faint-hearted and normal insurance simply won’t cut it.

That’s why tailored insurance that doesn't just include the bike (think helmet and accessories) like FareDrive or King Price Insurance, offers comprehensive value.

7) An API to get a delivery done

Having an employed driver comes with a host of admin and overhead – and in most cases, it makes sense to outsource deliveries — even Sixty60 does it using Pingo. Last-mile as a service (LMaaS) is about to boom.

• Pargo: a network of over 4’000 Click and Collect points in SA that integrates with Shopify and WooCommerce to handle delivery for you.
• Picup: Instant, hyper-local collection and delivery within 1 hour leveraging a crowd-sourced driver network.
• OrderKasi: last-mile deliveries in townships (we’re chatting to the founder on our HWYBI podcast next week).

So many ways to get a slice of this pie. And by the looks of it, it will be a big pie. We are watching this space.

IN SHORT

🇿🇼 Zim-Combinator. Zimbabwean AI startup, Ocular AI has been selected for Y Combinator’s winter 2024 batch. The AI startup connects a company’s data from different sources to search, visualise, and automate workflows on a single platform.

🚀 Chips Are Up. NVIDIA, the graphics processing unit (GPU) and AI chip company has reported their Q4 revenue (ending Jan 2024) has grown 265% YoY to $22.1 billion. This shows how the demand for accelerated computing and generative AI has surged across the globe.

🎨 Broken Colour Picker. Google says it’ll pause its Gemini AI’s abilities to generate images of people after users found the tool was generating inaccurate historical images. Everyone from the US Founding Fathers and Nazi-era German soldiers have been depicted as, well, not white.

🥤 Past It’s Prime. Bottles of popular Prime Hydration that were selling for as much as R800 in some places early last year (pre-launch on Checkers for R40) have seen their prices slashed and you can now get your hands on a bottle for as little as R10.

🤑 Big Spenders. In case you missed the SA Budget Speech this week, Finance Minister Enoch Godongwana announced that the government net loan debt has grown to R5.06 trillion – 71.7% of the country’s GDP.

👩‍💻 Digital Nomads in Mzansi? South Africa is hunting wealthy digital nomads earning at least R1 million annually, with the publication of draft regulation for digital nomad visas. If this bill eventually passes, it could make South Africa only the 5th African nation to offer these visas.

HOW WOULD YOU BUILD IT?

17+ Gold Insights for Building a Startup in SA

If you’re working on, in, with or around startups in the tech space, then this week’s podcast is for you. It’s our 50th episode and 1st anniversary, and as a special treat, we’ve packaged all of our gold moments and founder insights from the year — in one awesome 40-minute experience.

So, if you’re new to the How Would You Build It podcast, or you’ve joined recently and haven’t had the time to watch and re-watch all our previous episodes, here’s a highlight reel of some of the best startup insights we’ve had over the past 12 months.

Awesome insights

From everything you learn working “in the line of fire” at a startup that you’d never get at Nedbank or Investec, to knowing exactly which ideas are actually actionable, taking big risks as a founder, how to get your first 100 sales to how to market yourself, how to build to exit, all the way to building a massive tech company without knowing how to code — it’s all here in this week’s podcast, plus loads more. Enjoy!

You can also grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked if you’d ever take a remote dev job and just wing it using AI for 4x your current salary, and naturally we’re all pretty honest (and AI savvy)…

🟨⬜️⬜️⬜️⬜️⬜️ 🤫 I’ve applied to multiple jobs to do just that. (8%)

🟩🟩🟩🟩🟩🟩 🤖 No, but I am using AI to do my current job. (36%)

🟨🟨🟨🟨⬜️⬜️ 💡 How do I do this? (27%)

🟨🟨🟨🟨⬜️⬜️ 🙅🏼‍♀️ Nope won't do it (27%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🕵 What is AI? (2%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Flights of fancy? Air Canada may have killed off its support chatbot after it made up its own refund policy and cost the airline refunds plus interest and legal fees. Whoops!

In this Open Letter:

• Just in: Exciting new data on SA’s software devs.
• Awkward Zucks, 360 KFC-tainment & SA’s hydro-BMs.
• Tipping point: How to boost your public image (ala Elon).
• How you like your ads: The results are in.
• Free business tools: Share this and get cool insights.

TRENDING NOW

A Boost for SA’s R49bn Development Industry

There are roughly 140’000 software developers in SA, making up a total of ±800’000 on the continent. It's dwarfed by a country such as India with 5.8 million. 

Just look at the average salary of a software developer in SA – at R60-R100kpm+, it is 3 times that of the average South African salary. 

And while we are currently introducing 2’900 new devs into the economy every year, many are finding jobs overseas – the local supply is not enough.

Can AI solve this issue?

When AI became mainstream, one of the first questions was, “Can it write code?”. Well, yes it can, but just how useful is the code written by AI?

Local tech talent recruitment company Offerzen is releasing its State of Developer Nation report today, and it’s always packed with valuable insights and stats (such as the stats above).

But, this year, we found the AI insights particularly interesting.

‍

1. Usage of online code assessment tools

Many development companies use coding challenge platforms to evaluate developer skills before hiring.

But, with AI, there's a growing mistrust in the tools, since developers could potentially use AI to artificially boost their performance on the tests.

This gives us some insights though: if developers are turning to AI to help them with certain challenges, it suggests that they recognise AI can help with at least some coding tasks — pointing to AI being a practical tool in software development.

2. AI as a code-writing assistant 

What’s more, the number of developers using AI to help speed up and streamline their work has doubled since last year. 

More devs are using AI now than those that don’t, meaning even they realise that AI is not a threat but rather a tool to help them work better and faster.

3. Beyond writing code

Asked what they actually use those AI tools for, it's no surprise that it’s for way more than coding. 

AI is pulled in to process large amounts of data and provide insights, but with a quarter of respondents using it for automation and process improvement, it’s a sign of just how integrated AI will soon become in the digital products we use.

4. ChatGPT still leading the way

Finally, ChatGPT made massive waves and most other tools have been playing catchup.

Personally, we think Google’s Gemini (formerly Bard) is the most useful at the moment. But for now, ChatGPT is still the favourite among developers.

Will AI replace developers? 

We believe this isn't likely until the advent of Artificial General Intelligence (AGI), which could still be years away.

In tasks like writing LinkedIn content, AI is great at creating rough drafts, helping with ideas, expanding vocabulary, varying the tone etc. But it lacks a certain creative flair only we humans can add.

It’s the same in coding. AI is simply not capable of the sparks of brilliance a human hand can deliver.

What AI means for software development

There are still unending problems in the world, and as we’ve seen over the last 30 years, software is really good at either solving them or playing a part in getting them solved.

But with the adoption of AI as a tool to write better code faster, we will likely see the cost of software development go down — not necessarily salaries, but rather an increase in the amount of work that every developer can deliver.

And with more software getting built, we’ll need more product owners, interface designers (or LLM for frontends), analysts, business strategists and even hosting providers.

This is why OfferZen is bullish on the future of developers and so are we. We’re watching this space.

IN SHORT

💰 Small to Medium. South African financial services platform iKhoka has distributed over R2 billion in working capital to its small to medium-sized customers in collaboration with Retail Capital, a division of TymeBank.

📱 Text to Video. The end of film as we know it? Over the last couple of days, the internet has been flooded with videos generated by OpenAI’s latest model, Sora, a text-to-video tool that can create incredible photo-realistic video from a single prompt.

🍗 Food to Fashion. KFC has launched a brand new concept store called KFC Play Braam. The store will have everything from new dishes like "cola dunked wings", "chilli lime burgers" and "hot and spicy chachos", to VR gaming, and the latest in music and fashion. And VR gaming makes sense…everyone hates that friend that touches your PS5 remote post eating his Streetwise 2.

🔋 Electric to Hydrogen. A fleet of hydrogen-powered BMWs is set to hit SA shores for testing. This comes after an agreement was signed by BMW, Anglo Platinum and Sasol at last year’s Hydrogen Summit and recently announced at the Hydrogen Council’s regional meeting.

🤖 Zuck to Awks. Mark Zuckerburg was spotted ringside at UFC 298 to support Alex Volkanovski in the main event. Well, our guy from Meta was seen being mega-awkward and of course, the internet responded.

BUILDER’S CORNER

How to Boost Your Public Image

By Nicole Mirkin,  Founder & CEO of Omnia

Once you have your product out there, with some adoption, a working funnel and it looks like you’re gaining traction, it’s time to scale. But then the big one: How exactly do you performance market the pants off this thing?

Sometimes it’s tempting to think, I wish I had Elon’s influence…

‍

OK, that may be shooting a bit high for now, but it’s not impossible to start building your (and your startup’s) public image right from the start – even Elon was a nobody in the early days of Zip2 and PayPal.

Getting your face and message in front of the right people (including investors) is crucial for shaping their perception of you and your company. And you don’t need $44bn to buy out and rebrand Twitter to X to achieve this – a strategic PR campaign offers a simple yet effective solution instead.

3 Rules for Strategic Comms Success

1. Stay on message: Explain it in 5 words or less

You have to be able to distil your service offering, product or value in five simple words for people to understand it. End of story. 

It’s all about using 5 key words to effectively communicate the narrative of the value your service or business provides, its mission, and unique selling points.

At Omnia, our strategic message is “helping brands be seen and heard”.

2. Turn up the volume

Next, you need to amplify and reinforce that message across all channels and platforms – from press statements and social media posts to investor pitches. And don’t think small; founders must strategically diversify channels to reach their target audience in various ways – think socials, LinkedIn, thought-leadership pieces in high-reach mainstream media, podcasts, stakeholder engagement, events, in industry newsletters, everywhere.

Think of it this way: No matter where you are in the world, if you see that golden arch “M”, you know a McDonalds is nearby – that’s what you want to do for your brand. Communicating on message, in volume helps you convince the consumer that your way is the only way, and every time they see your “M” they’ll come running for them fries.

3. Keep it consistent & long-term

Thirdly, it’s all about keeping momentum. Consistency over an extended period of time establishes trust and credibility with investors, customers, and relevant stakeholders. By keeping at it over time, you’re telling the world that you are 1000% sure of yourself and the value that your startup brings to the table. 

If you stay on message, and drive it in high volume, over time, nothing and no one can stop you from kick-starting your public image in a meaningful way that supports your startup’s business development goals.

Got startup PR, brand and comms insights? Hit reply and let us know (and maybe you get featured here, too).

Today’s Builder’s Corner was written by Nicole Mirkin who is an expert in strategic communications and PR in the tech & startup space.

Connect with her on Linkedin or via her company Omnia Strategic Counsel and Communications.

THE RESULTS

We asked whether you’d like to only see ads for things you’re really interested in, and most of us still wish for an ad-free world…

🟨🟨⬜️⬜️⬜️⬜️ 👍 Yeh, beats getting bombarded with random stuff. (22%)

⬜️⬜️⬜️⬜️⬜️⬜️ 👎 No, that’s so invasive! (0)

🟨⬜️⬜️⬜️⬜️⬜️ 😎 As long as I get data access for my business, too. (11%)

🟩🟩🟩🟩🟩🟩 🧐 How about no ads at all? (48%)

🟨🟨⬜️⬜️⬜️⬜️ 🙃 I dare any algorithm to try figure out what I really want… (19%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Feeling Meta? The jury is still out on whether it was Mark Zuckerberg’s Apple Vision Pro review that prompted Warren Buffet to sell off some of his Apple shares.

In this Open Letter:

• Hyper-personalised: The next frontier in customer data.
• Crime-fighting plates, end of SMS & Stellenbosch space bucks.
• Inside track: Capitalising on SA’s surge to renewables.
• Augment teachers with AI? The results are in.
• Free business stuff: Share this and get cool tools.

TRENDING NOW

The Next Frontier for Personalisation

If you grew up in the 80s, you’ll remember how simple life was back then. 

Thirsty? Well, there was Coke, Fanta, Iron Brew or Creme Soda. 

Buying a car? BMW, Toyota, Mercedes or VW. Simple.

But as supply chains developed, manufacturing processes advanced and entrepreneurs spotted opportunities to create niche products and services, we got overspoilt for choice.

Now add e-commerce, online marketplaces, last-mile delivery, social and influencer marketing, and you have access to whatever your heart desires – plus some stuff you never even knew you wanted.

We’ve gone full circle – from no choice to too much choice.

Cutting the noise

The problem with noise is it overwhelms and debilitates – extending sales cycles.

So for a while now companies have been looking into reducing the noise and using insights to offer you exactly what you want and need. From personalisation to hyper-personalisation.

There are two ways to do this:

1. Have large datasets that can be analysed to pick up on trends and behavioural signs
2. Use data points to hyper-personalise customer experience and offering.

(All POPI compliant, though – itself an opportunity for consulting services to manage.)

Hyper-personalisation has been every company’s pipe dream for decades: What if I knew what you wanted and offered just that instead of my entire catalogue? You’d probably buy it. 

But it’s been hard to do well. 

In e-commerce, patterns aren’t impossible to spot. But go check your own order history on Takealot – if it’s anything like ours, you’ll understand why they have a hard time predicting what you’re gonna buy next:

• nappies for a friend’s baby shower
• a LEGO set for your nephew
• and a few monthly necessities here and there…

A human won’t be able to make sense of it, and neither would machines.

But it’s changing fast. The acceleration in the development of AI has brought with it the capability to be more accurate in personalisation. 

Fueled by Data

Yeh, you have heard this since we almost got wiped out by the Y2K bug, data is the new oil. In fact, this has been so clichéd I doubt many people still believe this, but they should.

The more data points these AI algorithms have the more useful they become. 

And whilst not all data is equal, i.e. your morning routine might be less useful than your browser history, every data point fed into a system creates a point of reference for the AI to figure out how to personalise your experience or can be used to analyse and spot trends.

Drilling for oil

Loyalty programs are the ultimate data generators. 

Every time you swipe that loyalty card, it creates a whole host of data. Think time of the month, total basket size, what was in the basket – all mapped with the details you filled in signing up. 

Add a delivery app and you have location data, lifestyle insights (hey, you seem to braai every Friday!), and what’s more, personalised pricing. 

Deals and offers tailored for you and pricing strategies that mutually benefit both retailer and customer.

Now add external sources, and it gets fascinating – health and fitness data for one. Having a view of the health and fitness habits of your customers has long been a focus via programmes like Vitality and Multiply. 

But the application of this data extends beyond health and life insurance.

That’s where a startup like FitVault becomes interesting – initially launched as a way for Momentum customers to track their fitness activity and claim rewards, they have now evolved into a data platform that provides an SDK (software dev kit) and integrated data lake (centralised storage repository) to app developers to aggregate and augment health data from devices and other datasets securely and ethically. 

This means you as the user of the app have full control over what data you share with which companies. In many cases the data is synthetic (anonymous, not directly linked to you personally), meaning the access offers amazing general insights into a large market segment, but not personal details.

So if you feel overwhelmed by choice, the good news is decision paralysis might soon be a thing of the past. 

But then again, will we ever try new things if machines figure out exactly what we like/want? That remains to be seen. But one thing is for sure, we finally figured out how to make data(oil) useful. And it’s going to change everything – we’re watching this space.

IN SHORT

🚀 Space Bucks. CubeSpace a South African spacecraft attitude determination and control systems (ADCS) developer and manufacturer has just received R47 million in VC funding from the Stellenbosch University of Technology Fund and Savant Venture Fund.

👮‍♀️ Crime-Busting Plates. Gauteng will be getting new high-tech number plates in April in a bid to combat crime in the province. The plates are apparently tamper-proof and very difficult to copy.

💬 Scammy SMS. With nearly 5% of all SMS traffic around the world being fraudulent, it could spell the end of SMS as a business platform. Between 19.8 billion and 35.7 billion fraudulent messages were sent in 2023 alone with various attacks being used.

🚙 Vrooming ahead. WeBuyCars is continuing its upward climb having bought and sold over 100’000 cars in just 4 months. They’ve also added to their national footprint taking their national capacity to over 10’000 bays.

🍺 Bitter Brew. Beer giant Heineken has written down the value of their South Africa business by a staggering R10 billion due to higher inflation and lower sales — that comes within a year of their purchase of Distell and Namibia Breweries in April last year.

HOW WOULD YOU BUILD IT?

How to Capitalise on SA’s Renewables Drive

If you’re looking for spaces to build something unique in renewables, there’s no better time (thanks, Eskom!) and this week’s podcast is for you. We sat down with Ross Mains-Sheard from rent-to-own solar installer Versofy and Michael Maas of EV solutions builder Zimi for some insights on opportunities in the alternative energy space.

Just the highlights…

1. Renewables look poised to heat up in SA

As the guys mention here, adoption rates of renewables in SA are showing phenomenal growth, with a close to 350% increase in renewable added to the grid in the past year alone – driven by the necessity due to load shedding, of course. But the shift points to a lot of potential for startups to build exciting solutions that could also have uses in other regions facing similar challenges to SA. 

2. Electronic vehicles and solar – a match made in heaven?

As the team says here, one such opportunity lies in collabs between the Electric Vehicle (EV) industry and solar. EVs paired with solar energy offer a sustainable and cost-effective solution for transportation. Charging or full-on powering EVs with solar can help reduce operating costs for commercial fleets and even the man on the street…

3. SA innovations making international waves

Cutting-edge technologies being developed in SA to address the power crisis are turning SA into something of a testing ground for innovations in EVs, fleets, data analytics and energy efficiency. As the team mentions here, some local products and developments are starting to raise eyebrows globally.

You can also grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked whether you would have liked having an AI tutor, and there’s a lotta pro-AI…

🟩🟩🟩🟩🟩🟩 👍 Definitely yes – I might actually learn something. (62%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🙅 No, I’d never listen to a robot. (8%)

🟨⬜️⬜️⬜️⬜️⬜️ 😏 Oh yes, way easier to manipulate a machine. (13%)

⬜️⬜️⬜️⬜️⬜️⬜️ 😗 Depends on how hot the avatar is. (4%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🤔 Would it be better or worse at spotting me cheating? (0)

🟨⬜️⬜️⬜️⬜️⬜️ 🕶 Seems dumb to give our future overlords access to our children. (13%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Too-woke AI? The latest in the “should-AIs-be-woke?” debate is Goody-2, an AI so ethical it won’t answer any questions at all. Go on, just try to ask it something inoffensive.

In this Open Letter:

• Smarter EdTech: The business case for AI in schools.
• Calls from your X, lost traffic fines and SA’s first moon base.
• Killer marketing: How to build a startup content strategy.
• Where the doctor belongs: The results are in.
• Free business stuff: Share this and get cool tools.

TRENDING NOW

The Case for More School-GPT

UNESCO recommends there be one teacher for every 20 kids in a classroom.

And, while the average ratio of SA public schools is around 30:1 (crowded but manageable), 15% of primary schools have over 50 pupils per class.

In fact, half of schools have class sizes exceeding 40 students. And recent reports are that the average class size for grade 6 learners is 61 in Limpopo, 59 in Mpumalanga and 54 in KwaZulu-Natal. 

Bless those poor teacher’s souls!

‍

All about maximising efficiency

And there’s a reason UNESCO proposes that ratio:

• Increased Individualized Attention
• Improved Learning Outcomes
• Enhanced Classroom Management
• Greater Teacher Effectiveness:

However, getting to this ratio could be extremely expensive. 

Getting our ratio in public schools down to 20:1, means we need another 200’000 teachers to serve the ±12m learners. 

And, at an average income per government teacher exceeding R500k (if you include all the benefits) per annum, just the salaries would increase the government’s education spending of R368 billion by another R100 billion.

SA simply doesn’t have the money for this.

AI assistants could help

Some schools are making use of classroom assistants or tutors that can help reduce the load on teachers at a reduced cost – they earn less per hour and can come in for shorter bursts where needed. 

With the advancements in large language models (LLMs like GPT-4 etc), however, you could use AI to supercharge a teacher and their capability to deliver high-quality education even with larger classes. 

This could have a great impact on understaffed public schools. 

But it would likely take years for the government to roll it out.  

And that’s why a good place to start might be the private sector…

‍

The Business Case for AI in Private Schools

Private school group ADvTECH reports that 84% of their building capacity is currently utilised – efficient, for sure, but if teachers can handle bigger classes with the support of AI, there is money to be made. 

Even if AI tutors can increase classroom capacity by just 1%, it could increase annual revenue by R40m for the group (assuming an average annual school fee of R100’000) – significant. 

They currently have just under 40’000 students enrolled and it's been growing at 10% per year – highlighting a healthy demand. 

And that’s exactly why they have been looking at using AI.

ADvTECH schools use ADvLEARN a customised platform to provide personalised learning paths and use adaptive technology to give students a bespoke learning experience while improving their understanding in core areas. By helping teachers pinpoint where individual pupils are struggling and using data from locations around the continent to improve the curriculum and upskill teachers, it’s a winning formula.

But they are not the only ones…

A startup doing something interesting in this space is Mindjoy. It’s like School-GPT: They aim to help schools develop their tech and STEM talent amongst teachers by providing STEM teachers with their very own customisable AI Tutor to personalise and enhance their students’ learning experience. 

You can give it a personality and avatar and get kids to not only learn from it but give it insights (which go to the teacher) on how well students understand topics. Call your bot Einstein and get it to explain the theory of relativity to a 10-year-old – nice.

Have a look…

As AI continues to advance at breakneck speed, more and more industries (just like EdTech) will be able to leverage their deep-rooted domain knowledge and create personalised AI-powered solutions to add value to users and their industries. 

Not only will this have a positive impact on education, but there sure is money to be made. We’re watching this space.

IN SHORT

🇿🇦 Scientific Champions. Two aspiring young scientists from SA won big at the 2024 Taiwan International Science Fair walking away with a Third Award in the computer science and information engineering category, a Fourth Award and the Viewer’s Choice Award in the behavioural and social sciences category.

📞 Calls from your X. Soon Elon Musk will ditch his phone number and only use X for texts and audio/video calls in a bid to make X the one app to rule them all. Just hope he has his 2-Factor Auth set to Email.

♊️ Gemin(A)i. Google’s AI tool Bard has officially become Gemini with the launch of Gemini Advanced with Ultra 1.0 which is already available in 150 countries & territories including South Africa.

👮‍♀️It’s Not Fine. Looks like you’ll never get a traffic fine again. The SA Government wants to force traffic departments to use the Post Office to issue fines as part of the proposed Administrative Adjudication of Road Traffic Offences (Aarto) Act said to be implemented on 1 July this year.

🌝 To the moon. SA will work with China, Russia and a bunch of other countries to build a lunar base on the moon as part of The International Lunar Research Station (ILRS) project.

🤑 Raising funding. Sam Altman is on the hunt for $7 trillion in investment. The OpenAI head honcho is apparently in talks with officials in the UAE to present his plans to build a whole lotta new chip factories (OpenAI guzzles up a LOT of computing power).

👨‍💼 User Words. Are you a techie battling to explain your value proposition/what your product is about? Business comms author Chris Fenning is doing a free talk on turning “Geek Speak to Street Speak” at Innovation City this Wednesday (14 Feb) at 1pm. Should be great for learning to chat with users and stakeholders and feel less awkward about it.

BUILDER’S CORNER

How to Create a Killer Startup Content Strategy

You’ve got a product (or on its way!) and it’s time to start creating some buzz around it, building an audience and activating potential users. Great!

But now comes the thing: What content exactly are you supposed to do?

I mean, it’s a busy space; web, socials, YouTube, podcasts – there’s so much going on already. How do you stand out?

‍

Nothing drains your marketing budget (and your audience’s excitement) faster than dull, boring copy-pastes of the same old thing everyone else is doing. So it’s time to think way outside the box…

Unlocking the “Unique” in a Crowded Space

1. Forget your brand & pretend you’re Rupert Murdoch

The biggest mistake brands make around content is they start with questions like: What do we (the brand) want to tell people? Content is just like a product – it’s all about the user and their journeys, not yours.

Rather: pretend you’re an editor who was just hired by a big media company to create a new publication/podcast/TV show etc. targeting your audience. What commercial content product would you build to attract and engage them? Make that your content strategy.

2. Give them something they can’t find anywhere else

Go find out 1) what your audience really wants to know/see and 2) what information is not available out there on the net or socials yet. And build that into a strategy.

Example: I once had to do a strategy for a boat dealership. All the competitors were posting about engines and boats. We went a step further and said: What do people use boats for? Fishing, of course. So we became the first boat brand to build content around fishing and fishing competitions instead, and were rewarded with tens of thousands of active, engaged users and zero competition for our content (because they couldn’t get it anywhere else).

3. Or just ship it on a brand-new channel

Ok, so some topics are done to death. In most places, but usually not on all channels. So you can use the existing channels as your resource and ship the content on a new channel (that you know your users would really prefer.)

Example: Yeah I lied about being the first to talk about fishing competitions for that boat brand. You could get lots of fishing news at that time; the problem was it was only in printed magazines. So all we really did was take that info and publish it online and on the socials – where people actually wanted it – and boom! Content success.

You can do it too. Just look at what’s available on blogs but not on YouTube yet. Or deep-dives on podcasts that are not on carousels or video yet and give it to your people.

BONUS: Thinking of your content as a separate “product” is very useful, because it forces you to ask: How’s this gonna make money (or pay for itself)? It reminds you to include your organic traffic in your marketing channel analysis and physically check: How many new users is it bringing in, at what cost (CAC), and what’s the conversion rate?

Remember: The ultimate goal of content is for organic to eventually replace or overshadow your paid traffic, so you can lower your CAC and make a profit.

Got startup content and marketing insights? Hit reply and let us know (and maybe you get featured here, too).

Today’s Builder’s Corner was written by Elvorne Palmer who is an expert in Audience Development.

Connect with him on LinkedIn here.

THE RESULTS

We asked where and how you see your doctor, and good old face-to-face is still the game…

🟩🟩🟩🟩🟩🟩 🧑🏻‍⚕️ In-person at their offices (76%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🏥 At the clinic (5%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📱 On my phone (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💻 On my laptop (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚑 Only in emergencies (hospitalisation) (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💪 Haven’t seen a doctor since 1999 (10%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Ready to fly? Check out this awesome video of the Star Warsy new model space plane being mounted on its cargo module at NASA's Neil Armstrong Test Facility.

In this Open Letter:

• Supply and demand: Tech to solve SA’s doctor dilemma.
• Flying mangoes, the bank of WhatsApp and the “Please Call Me” guy’s R20bn.
• Social payment: How to build a business on WhatsApp.
• How we like to gamble: The results are in.
• Free stuff: Share this and get cool business tools.

TRENDING NOW

Solving SA’s Sawbones Supply

South Africa is severely short on doctors.

Which is funny because, just a few days ago, about 1’000 newly qualified doctors marched with their CVs to meet the Health Minister at the GCIS offices in Pretoria.

Their mission: To ask the department’s hospitals to employ them.

The answer: No, sorry, the government doesn’t have the money to employ them right now.

Talk about your catch-22.

But we’re not here to discuss the politics – seems bad financial planning is behind gov’s inability to hire the new doctors it so desperately needs, if you must know… No, we’re here to look at the opportunity.

What we have right here, is a supply and demand issue. And it’s quite severe.

How Many Doctors Do We Need Exactly?

Look, we all know doctors’ services are sorely needed in SA. 

And according to this interactive map by the WHO, South Africa has 8 Drs per 10’000 people. So, about 48k doctors in SA.

Now, compare that to the likes of Australia (41 per 10k), Sweden (70 per 10k), and even some of our BRICS counterparts like Russia (38 per 10k) & Brazil (21 per 10k). If we want to get to Brazil’s density of medical doctors, we need an additional 78’000 which could take 78+ years at our current graduation rate of 1’000 per year (probably longer considering retirement, etc).

So it does seem like we need more doctors, so why can’t we get them jobs? Is there even a market for them?

But there is a market

The current healthcare situation is actually abysmal. Last year, South Africa ranked in the bottom 22% of the global healthcare index. Almost all our African neighbours – including war-torn Sudan — have better healthcare than South Africa.

Not that our care is bad, quality healthcare is just unaffordable for most. See SA spends an inordinately large portion of our health spend on private healthcare, which only serves 16% of the population, meaning almost 84% are entirely underserved (50m+).

Medical aid costs upwards of R5’000 pm for a family of 3 (which the 16% is currently buying), but Unicef says most households in SA earn only R18k per month. Realistically, taking living expenses into account, those people can only afford to spend a few hundred Rand per month on healthcare.

Even if you can only reach a fifth of the remaining 84% of SA’s population, that’s still a market of 10 million people.

So arguably if one can get the cost of primary healthcare down to a level this 10m can afford, you have a massive market, with a large demand on your hand.

And by looks of things, there are many unemployed doctors ready to serve it.

Tech to get the cost down

The traditional GP service includes a whole host of people and facilities that bloat the cost. Think facilities, reception, finance, etc. Not to mention all the admin involved in claiming from medical aid and losses due to no-shows and non-payment. It’s a very ineffective process — making the consult price high.

Introduce tech to slice that price in half and all of a sudden the market size is massive. And some local startups are making great progress in this space.

• Kena Health (backed by Next176) provides online nurse, doctor and therapist consultations. They use AI and nurses to collect diagnosis information optimising the time a patient spends with the doctor and by doing so, they get the price down.
• Udok also connects patients with a doctor for a virtual consultation and one can consult a doctor either through their online platform or at many Clicks Pharmacies across the country.

Whilst both of these currently offer online consultation, this is merely the start of introducing technology in the supply chain of primary healthcare, decreasing costs to patients, increasing healthcare and catching the ball where the government is dropping it. We are watching this space.

IN SHORT

💳 Mastercard Investing. Mastercard has just forked over R3.8 billion for a minority stake in MTN’s MTN Group Fintech pushing the valuation of the telecoms operator’s Fintech arm to nearly R100 billion.

📱 WhatsApp Banking. Absa has launched a new WhatsApp wallet called ChatWallet that allows users to manage money directly in the messaging app without needing an existing bank account.

👠 Fashion Incoming. A new eComm fashion player in town is setting its sights on Superbalist, Bash and Shein. Chinese eCommerce marketplace Temu launched in SA last month and is already one of the Top 3 free apps on both Google’s Play Store and Apple’s App Store.

🥭 Mango Flying. Low-cost airline, Mango, might be able to take off again soon after its business rescue practitioner has greenlit the sale to an unknown investor.

👨‍⚖️ Vodacom Appealing. A Supreme Court of Appeal ruling has instructed Vodacom to pay a former employee R20 billion (10% of its market cap) for part of the revenue generated from the “Please Call Me” service since 2001 within 30 days.

HOW WOULD YOU BUILD IT?

How to Launch a Business on WhatsApp

If you’re building a product or business that might benefit from selling directly on social media, this week’s podcast is for you. We caught up with Danielle Laity and Dean Pienaar at payments startup WigWag to tell us about what it takes to launch, grow and get paid via socials.

The highlights

1. WhatsApp is now a massive marketplace

As Daniele explains here, WhatsApp is extremely popular, with 96% of SA internet users being on WhatsApp, its 21m user base in 2022 is expected to grow to 26m users by 2026.

And the community feature really unlocked the ability for people to create dedicated spaces around a common interest – from secondhand baby clothes or luxury goods sales to job postings.

You might see actual buying and selling going on in these groups, but some of them have grown so huge that even they themselves are starting to charge membership fees and effectively becoming businesses. 

2. Solving the payments problem

As mentioned here, handling payments has always been a pain point with these social communities. EFT and cards always have a major trust barrier on socials, and cash is often a big risk for people.

So what WigWag, who is part of payments innovator Stitch, did was to build a super-sleek payments interface, where the seller can push people through to a branded dedicated instance, with their logo and everything to process payments safely. 

3. Beyond the solopreneur

What’s interesting is, as Danielle mentions here, that it’s not just small-scale and solos jumping on this tech. Service businesses can easily run their payments through the platform, and even restaurants that want to do their own deliveries and not pay exorbitant app fees and commissions use WigWag to process mobile orders and payments.

They even have an Internet Service Provider who runs all their monthly service billing via the platform. A simple script runs through their customer list and sends each customer a WhatsApp with the payment link. And that’s how they collect their cash every month.

You can also grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked if you participate in sports betting, and the majority no, but there’s some gambling going on…

🟩🟩🟩🟩🟩🟩 🚫 Nope (64%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🏆 Big games only (6%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🤑 All the time (9%)

🟨⬜️⬜️⬜️⬜️⬜️ 📈 I'd rather bet on the stock market (15%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚀 I reserve my bets for myself (and my startup) (6%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Some people, eh? A 21-year-old product manager was pulled over and reportedly arrested for driving his Tesla while wearing a new Apple Vision Pro headset — on the day it released, nogal!

More importantly, though: Cue the confetti, The Open Letter grew by 22% just over the last 3 months (we flew past 5000 subs 🎉)! Remember: if you share this email with friends using your unique share link, you get free startup tools, a coffee on us and loads of free AI tools.

In this Open Letter:

• Big leagues: Inside SA’s lucrative sports betting space.
• Cape to Kruger direct, R48bn acquisitions and bigger paydays.
• Lean team: Hiring the best people on a tight startup budget.
• Where we shop fresh: The results are in.
• Tell a friend: Share this and get free stuff.

TRENDING NOW

Making The Big Bets

When Takealot recently announced its leadership changes, a lot of the focus was on Frederik Zietsman becoming group CEO and Mamongae Mahlare stepping up to group Executive Chair.

Understandably so, with the coming of Amazon’s marketplace coming to SA and all.

But something interesting is to note where Takealot's founder and former chairman, Kim Reid, is likely turning his attention – the BLV group, owner of BetKing.

Founded in 2018, the Nigerian sports betting service serves 9 million customers and employs around 350 people globally. Something even MultiChoice noticed, investing an initial R1.5bn for a 20% stake in BetKing in 2020 – upping that to 49% with a cool R4.4bn in 2021.

The perfect match?

Sports betting’s number one cost by a long shot is its customer acquisition cost. 

Buying media in popular sports content slots is very expensive – so partnering with a company that owns a lot of media can help you get a better acquisition cost for the win. 

And it's not a novel strategy, Barstool Sports was bought by Penn Entertainment, a Pennsylvania-based sports content platform and casino operator which runs ESPNbet, for more than $550 million.

They ran into regulatory challenges, though, and eventually had to sell it back to Barstool’s founder for $1. But there’s still merit to the idea of marrying a content platform to a betting service if you can navigate the red tape.

‍

The margins

What makes sports betting easier than traditional casinos, though, is the precise nature of how they offer bets to customers. 

Bradley Prior did a great job of unpacking it in this article, but the TLDR is that they offer you either side of a specific outcome. 

Let’s say in the upcoming Bafana Bafana vs Nigeria game:

• they would offer a bet to say Nigeria will win by one goal or more and you can pick whether this will happen or not.
• the odds are then set up so that you can’t profit from by betting on both sides.
• and they often skew it a bit by offering less value to a popular outcome. I.e. you win less by picking the popular outcome even though that outcome is less likely.
• and some even change odds as time goes on, to balance their risk and ultimately make better profits.

With these models, their gross margins sit typically around 4% to 6%, with cost to service per customer typically going down as you add new users. Meaning: the bigger the book, the bigger the profits — and that’s why you need media… lots of it.

Sports betting is big

We know betting’s big internationally – estimates say over 50 million Americans placed bets during Superbowl 2023, with over $1.3bn expected to be wagered in 2024.

Locally, data is scarce – but we can tell you it's rumoured that the amount of Flash 1Vouchers (sold mostly at spaza shops) getting used for sports betting and casinos at one of their 46 partners is in the region of R1bn per month.

The moral of the story is: Yes, there are some massive players in this space (for good reason), and you will need deep marketing pockets to take them on. But with the sheer amount of cash flowing, there’s bound to be some peripheral opportunities for startups – we’re watching this space.

IN SHORT

🙅‍♂️ Acquisition Denied. French broadcaster Canal+ is facing an uphill battle in its bid to acquire the MultiChoice Group. Its latest offer of R105 per share (a deal worth R48 billion in total) was rejected by MultiChoice shareholders last week.

🗝 Decentralised Social. The crypto world is abuzz with the rise in adoption of Farcaster, a decentralised platform that allows people to build social apps that connect to it. Think X, Facebook, etc but you personally own the data and can move it across different apps.

🦁 Direct Lion. Off the back of a bumper tourist season, Cape Town is getting a direct flight to the Kruger National Park from the 2nd of April. Two of SA’s hottest tourist destinations are now that much closer, with the 2.5-hour flight going for under R2k one-way.

🤳 Turning off the Tap. FNB will sunset its tap-to-pay functionality in April in a move to encourage customers to switch to existing contactless payment methods like Google Wallet, Apple Pay etc. due to the rise in popularity of these platforms.

🤑 Insured Takeover. Sanlam Limited, SA’s biggest insurer, is preparing to buy 100% shareholding in Assupol Holdings Ltd for R6.5 billion. This comes after the announcement last year that 2 major shareholders in Assupol are looking to dispose of their shareholdings.

💸 Better Wages. South Africa’s minimum wage is set to increase by 8.5%, well above the 6% CPI. The new minimum wage, which comes into effect on 1 March 2024, will see an increase from R25.42 to R27.58 per hour (or R220 odd per day).

BUILDER’S CORNER

How to Hire (the Best People) on a Budget

– By Ben Shaw author of The First Kudu

Finally! – you’ve found the perfect candidate. You consult your cofounders. You receive nods of approval from your board. Your poor understaffed team’s begging you to make this hire... 

But, you don’t simply have that amount for the salary.

Look, if you’re even trying to compete with corporates on salary offers, you’re playing the wrong game. Startups have things to offer that no corporates can – so it’s worthwhile learning the startup hiring game…

A winning startup hiring formula

1. Acknowledge you need to do more with less

Your first hires need to buy 100% into what you’re building. The risks, personal development opportunities, improbable rewards and ultimate company vision need to be the core reason they want to join you. 

Now, that limits your options but it also enables you to make it your core offering – “you’re gonna learn and do things here you simply can’t do anywhere else!”

There is some good news here – there are many excellent people in SA who will jump at the chance to work in a stimulating, empowering environment. And there are ways other than monthly salary to remunerate them.

2. Get the tough conversation out of the way early

You’re not just hiring for skills, you need to know exactly how much each position will add to your company’s value and earning potential. If they can demonstrably bring in X new revenue, partnerships, subs etc. how much equity (shares) can you realistically give them in exchange for that?

You need to understand and start all hiring conversations by exploring this idea of the delivery-remuneration ratio. Literally, ask them how much new business they plan to bring in and calculate what that’s worth to your company right now.

Then, ask them: “On a scale of 1-10, if I offered you the job at R[x] per month, how would this opportunity rate for you?”. It’s not a direct offer, but it anchors the candidate on your expectations and lets you see how they respond. You could even make the R[x] slightly lower than what you have in mind, so you have room to negotiate.

3. Prepare non-cash incentives to sweeten the deal

Equity (company shares) is the ultimate long-term incentive, so reserve that for senior hires that you really want to make core to your team. For most new hires, the major incentive (especially if they’re coming from corporate into the startup space) is the ability to “Learn and Earn” – you get to learn the startup game first, then earn bigger later.

Then, as a founder, offering access to your network is a great incentive for ambitious candidates. Offer to introduce them to top contacts and take them with you to events etc. It helps them feel secure that, even if this startup fails, they still get long-term value and opportunities – which helps them get over the initial jitters of joining your team.

Don’t rely too heavily on lifestyle perks like hybrid working, extended leave, free food and free days to work on side projects – almost everyone’s offering that these days.

4. Sense-check your own expectations

Let market conditions guide you a bit – check the role’s earning bracket and balance it against how much the role will meaningfully contribute to your business.

Then share this openly with each candidate – transparency helps you build quick rapport. And then just treat the hiring process as a conversation as much as possible.

Try to keep it simple and look for the candidate who will love waking up to build the future with you.

Getting the best people can often be a matter of life and death for a startup, so it’s worth the founders to put in the effort here.

Got startup hiring insights? Hit reply and let us know (and maybe you get featured here, too).

Today’s Builder’s Corner was written by Ben Shaw who is an experienced founder and author of SA’s must-read startup insights book, The First Kudu.

Connect with him on LinkedIn here or via his website.

THE RESULTS

We asked where you buy fresh veggies, and no wonder “fresh” seems like a growth opportunity for retailers…

⬜️⬜️⬜️⬜️⬜️⬜️ 🍓 The old housewife market (10%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🌾 Direct from the farm (5%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📱 On Match Exchange, of course (3%)

🟩🟩🟩🟩🟩🟩 🛒 The retailer’s fresh section (77%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🍖 What are “vegetables”? (5%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Macaque trouble? After almost a week of failed attempts, Scottish animal authorities hired a specialist mountain rescue team using thermal imaging drones to recapture an escaped Japanese monkey that terrorised the Highlands with cuteness for days on end.

Pssst Founders… we want to follow your journey, let us know what you are building.

In this Open Letter:

• Fair game: Saving SA’s R300bn agri sector.
• Brain implanted, “struggling” TikTok artists and kissing the millionaires goodbye.
• Press play: Supercharging SA’s economy overnight.
• Where you like to buy: The results are in.

TRENDING NOW

Saving our R300bn Breadbasket

Agriculture is big. HUGE, actually.

The South African agriculture market will be worth R303bn this year – almost double that by 2029.

Over all of Africa, it was R5.2 trillion in 2023, accounting for 35% of Africa’s GDP – and could be around R19 trillion by 2030.

So why then are 78% of SA’s farmers not seeing any profit?

A clue comes from the DA’s Shadow Minister of Agriculture, Land Reform and Rural Development who told parliament in May 2023 that farmers are “facing a cost-price squeeze” and most are battling to service their debts.

See, most of us assume that, with official-seeming indexes like SAFEX, there must be some form of universally accepted pricing for agricultural goods. But due to supply chain costs, timing and quality, the farmers often end up taking whatever price is offered – inevitably putting them in a compromised position.

‍

The Wild West of SA’s Agri Pricing

A grossly simplified way this works is:

• A broker engages the farmer and offers a fixed price for goods — effectively a future.
• He then works relationships to sell the produce at a higher margin, before actually having to take ownership of the goods.
• The difference between the buying price and selling price is then the agent's margin – he is selling contracts (with little risk to himself).

A major issue with this model is the misalignment between the broker’s incentive and that of the farmer. The broker is trying to pay the farmer as little as possible and sell it for as high as possible – not a win-win.

And what’s more, as a farmer, you don’t have any way of doing proper price discovery.

The stuff you just sold could be worth 10 times what you got paid. 

You would never know, until now…

‍

Fair Prices and Agri Markets

Some local players have pounced on this pain and have gotten good traction.

• The Match Exchange is a tech-enabled marketplace that connects farmers and buyers directly (i.e. cut out the middleman). Which is great for price discovery and managing supply and demand, while still ensuring the farmer gets what his goods are truly worth.
• Nile.ag is another marketplace that connects farmers and buyers, but they are taking it one step further, providing a marketplace for farming inputs (think fertilizers etc.). This is another part of the process that suffers greatly due to the limited distribution of sales reps and price discovery — smaller or better-priced input providers simply cannot get to some farmers.

By connecting the farmer directly to the source of his feed, materials etc. the farmer gets to run his business more cost-effectively while finding great prices for their outputs on the same platform… Noice.

With prices rising and consumers feeling the pinch, there are still a lot more opportunities for innovative tech to solve real problems in the agri space – which we are, as always, watching pretty closely.

IN SHORT

⛷It’s here. The Apple Vision Pro officially launches today with over 600 apps and games optimised specifically for it. If you paid the $3500 to get it, let us know how it goes.

👋 Millionaire Exits. South Africa has lost over 9’000 US-dollar millionaires in the last 10 years with many having moved to a “safe haven country” including Australia, Switzerland, Monaco, Singapore, the UAE, New Zealand, Malta, and Mauritius.

🔇 Muted Tok. The Universal Music Group (UMG) has pulled its music from TikTok. It would appear that struggling artists like Taylor Swift, Billie Eilish and Ariana Grande are receiving royalties only at “a fraction of the rate that similarly situated major social platforms pay” from TikTok.

🚙 Unbundled Cars. Transaction Capital’s share price surged this week at the announcement that the board has resolved to unbundle its mega second-hand vehicle trading platform WeBuyCars, with all WBC shares to be listed on the JSE at the same time.

🧠 Implanted BrainTech. Elon Musk has announced that his BrainTech company Neurallink has successfully implanted its first wireless brain chip in a human and that the patient is recovering well, with promising brain activity detected.

⛑️ Aerial Rescue. Ellies Holdings, one of the JSE’s longest-surviving tech companies has been placed into voluntary business rescue after its planned acquisition of Bundu Power fell through.

🌌 Orbital Tours. SpaceX has been contracted to launch Starlab, the ISS’s replacement, in six years — the world’s first privately owned space station (Airbus), whose own website describes it as a “science park” in space.

HOW WOULD YOU BUILD IT?

How to Supercharge Your Economy Overnight

If our reports on regulating crypto asset service providers in SA got you excited, this week’s podcast is for you. We chat with Tobie van der Spuy, co-founder of Block Markets Africa about how this can potentially fast-track fintech projects in SA.

The highlights…

1. Who’s getting in on the FSP licensing bandwagon?

An interesting insight shared here is around the 20-odd applications that were withdrawn from the Financial Sector Conduct Authority’s Financial Services Provider (FSP) licencing process. The first reason was that existing FSPs wanted to also get licenses to trade crypto - but one of the criteria is to have a key individual who not only bears the responsibility but also understands the complexities and risks that exist in the crypto space.

2. SA’s best-kept Crypto Secrets!

One of South Africa’s best-kept secrets is that we have a really mature and highly innovative space. Arguably one of the best in the world, actually, Tobie says. He shares that he often has international customers come and visit them in Cape Town, and can introduce them to 20 different really serious players in the crypto space (in a 3.5km radius) – all doing things of global significance.

3. The FinTech opportunities in SA and the rest of the continent

One of the challenges with trading crypto as a South African is that we have to do it using other currencies. Tobie and his team have been working on the EZAR, it’s a standard for any licensed financial service provider to issue their own stablecoin. Listen in here.

So if you want to understand how blockchain will affect all of our lives check out the entire episode for these and more gold nuggets.

You can grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked if you buy on social media, and most have yet to explore it…

🟨⬜️⬜️⬜️⬜️⬜️ 📱All the time (15%)

🟨⬜️⬜️⬜️⬜️⬜️ 🙅 Don’t trust it (13%)

⬜️⬜️⬜️⬜️⬜️⬜️ 😤 Can’t seem to pay without issues (5%)

🟩🟩🟩🟩🟩🟩 💳 Only normal e-commerce for me (64%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🛒 I only buy in physical stores (0)

⬜️⬜️⬜️⬜️⬜️⬜️ 🧔🏾♀️ I live a self-sufficient life living off the land (3%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

More power? A Chinese tech company made a coin-sized battery that lasts 50 years without charging. It’s small now, but could do wonders for powering phones in the future.

In this Open Letter:

• Savvy payments: A better way to sell on the socials.
• Dodgy farm funds, SA’s best-loved tech & triple growth.
• People power: Retaining quality as your team grows.
• What we really want from blockchain: The results are in.
• Tell a friend: Share this and get free stuff.

TRENDING NOW

A New Way to Sell on Social

Checkers Sixty60 and its rapid grocery delivery have revolutionised how we shop for everyday items. Joined by PnP asap!, SPAR2U, and Woolies Dash, these services deliver our grocery favourites within an hour – and speaking to any of these retailers, that side of the business is booming. 

It's a remarkable convenience for consumers, but it's not without its ripple effects. 

One significant impact is the decline in foot traffic at the malls where these stores serve as anchor tenants. A decrease that affects the smaller retailers who rely on the flow of customers visiting the larger stores – a massive shift that’s hard to quantify without official data. 

A glimpse at the fleet of Sixty60 motorbikes zipping in and out of a Checkers store offers a clue:

• If one bike manages 3 trips per hour, that could very well be 24 deliveries a day.
• Multiplied by 20 bikes for some bigger stores, you're looking at up to 480 daily deliveries per store.
• And that’s essentially 480 potential customers who no longer pass by the smaller shops on their way to the anchor tenant (up to 14’500 per month!).

‍

This is a significant blow to these small businesses and poses questions about the future of malls' business models – perhaps a major contributing factor to why Amazon has decided to launch its marketplace in SA. 

But that’s a story for another day.

Today is about how small businesses are adapting.

The Small Business Sales Revolution

While setting up an e-commerce store has become incredibly accessible with no-code and low-code platforms like WooCommerce, Webflow, or Squarespace, many are turning to social media spaces where South Africans spend an average of 3 hours and 44 minutes daily. 

With 40% of GenZ using platforms like TikTok and Instagram for product searches, and 26% of South Africans using social media to buy and discover products online, the potential to sell on social has become significant (and will likely continue to grow).

From clothes to furniture or even braai wood, small businesses and solopreneurs are increasingly harnessing social media to market their products and finalise sales. 

And it's not only new items but also second-hand goods that are finding a marketplace on platforms like Facebook Marketplace and various WhatsApp groups.

However, a major pain remains in the payment process. While social media provides a certain level of trust and community verification, completing transactions securely and efficiently remains a hurdle. 

Social Sales, Solved and Optimised

That's where local payment startup WigWag’s checkout product comes in. They've tailored a solution specifically for small businesses and solopreneurs, allowing them to accept card payments online with minimal fees (as low as 2.55%). 

Sellers can send customers a payment link with a pre-set or adjustable amount and even integrate the delivery address into the payment process, streamlining the entire transaction and minimising the need for back-and-forth communication. What’s more, a simple interface makes it easy for sellers to keep track of their orders.

This gives the small business or solopreneur a single payment tool to use on WhatsApp, Instagram, Facebook, and email – basically everywhere you can imagine.

With online commerce set to keep on rising, expect to see more of your local small businesses sell online… we are watching this space.

IN SHORT

🐄 Unlicensed to Thrill. SA AgriTech startup Livestock Wealth, which allows investors to invest in livestock and farmlands, has been accused of operating without a license and using another entity's license number by the Financial Sector Conduct Authority.

🎧 Top Tech in SA. South Africans have voted for their favourite tech brands in a recent Analytico survey of 2’500 respondents. South Africans prefer Luno for crypto, JBL headphones, PCs for gaming, Huawei routers, Samsung Storage and Windows Defender (to keep those gaming PCs virus-free) — and The Open Letter for tech and startup news (we’re joking, that's not in there, but it should be).

🤝 Takealot Shakeup. Takealot has appointed a new CEO. Frederik Zietsman will take the helm (including Takealot.com, Superbalist, and Mr D.) from the 1st of February 2024. Outgoing CEO Mamongae Mahlare will move to the position of executive chair of Takealot Group.

📈 3x Good News. South Africa’s economy is expected to grow from 0.5% in 2023 to 1.5% in 2024 according to the Bank of America. This is despite national elections, interest cuts expected in the second half, and deteriorating public finances

🙊 No Jokes. Looks like you can't even make a joke about loadshedding anymore — at least not on social media. The CCMA recently ruled in favour of the Ford Motor Company when an employee made a joke about employees not needing to work due to Stage 6 Loadshedding.

🎤 Dealing with it Swiftly. X has blocked users from being able to search for “Taylor Swift” after AI-generated fake explicit images of the singer went viral. Crazy Town.

BUILDER’S CORNER

How to Maintain Quality When Your Team Grows

We’ve all seen it before. You have the world’s coolest product/service when you or your founding team are sweating away and doing it yourself.

But then, as soon as you get real momentum and bring new people on board, things start moving really fast… And quality can, naturally, suffer a bit.

It’s a biggie, not just for startups. And a possible answer came from Netflix. Their years-long HR guru, Patty McCord, has explained a few times how they managed quality throughout rapid growth by focusing on culture.

3 Key People-and-Growth Insights

1. Teach everyone how the business works

A massive bone of contention, because management always seems to want to keep the financials and true goals hidden. Modern workplace psychology, however, tells us teams perform better when they have the full picture.

Netflix actually had weekly meetings where they discussed their acquisition numbers, returns, and profits – the works! They held nothing back because that gave them the ability to unlock Number 2…

2. Show everyone how and where they add value

When everyone knows how the business works, it makes it clearer how each person’s individual contribution adds to the overall picture. Which is a great internal motivator.

“Oh, if I do X, Y and Z, the organic subs go up, lowering our CAC and increasing our LTV, increasing profit. So, if I put in this extra effort, I qualify for this and that bonus…”

You could even structure reviews around it, showing and explaining to team members how their tasks fit into the big picture. It increases autonomy and ownership, motivates and creates a culture of accountability, where everyone is working towards the same goals.

3. Hire selfishly

The third part of this is realising that where a) what I’m good at doing and b) what I love doing meet, is where people will be most efficient. So, large corporates look at this and go “How can I develop my people more?”.

But you’re not a large corporate. As a startup, you actually can’t afford to develop anyone, you need the right people to help take the company where it needs to go.

So, you still focus on finding out what people love doing, but flip it around and look at what your business needs most. Then, only hire the people who really love doing the things you really need.

Got a people or hiring tip for growing startups? Hit reply and let us know…

THE RESULTS

We asked which blockchain products you’re most excited about, and it’s not much…

🟨🟨⬜️⬜️⬜️⬜️ 🪙 Bitcoin only (14%)

🟨🟨🟨🟨⬜️⬜️ 🏡 Digital title deeds (23%)

🟨🟨🟨⬜️⬜️⬜️ 🖼️ Tokenising other assets 17%)

🟨⬜️⬜️⬜️⬜️⬜️ 💳 Payments (12%)

🟩🟩🟩🟩🟩🟩 🥱 I couldn't really care less (34%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Grand entrance? Don’t take it too far. A tech CEO plunged to his death this week making a theatrical stage entrance at a company event. Sheez, sorry, man.

In this Open Letter:

• Fast forward: A bold new financial future for SA.
• VR treadmills, raising R82m & Chinese walkie-talkies.
• Solid start: How to build a startup in a funding drought.
• The results: How fast you want your claims processed.
• Tell a friend: Share this and get free stuff.

TRENDING NOW

The Future of Finance in SA

There are two schools of thought when it comes to cryptocurrency… 

1. Leave it unregulated to keep it open and free from government controls.
2. OR regulate so that mainstream adoption of tech can accelerate us into the glorious fin-tech future for our dreams.

And whilst the dream of keeping it open and free gives us all the noble Robin Hoodsy feels, unfortunately, the world has proven itself a little less than trustworthy with this tech. 

‍

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Between Bitconnect, Onecoin, Quadriga (the one where the founder faked his own death), our very own MTI and of course FTX, Crypto has a bad reputation.

That’s why many industry players have been working with the South African Reserve Bank to develop a framework to introduce regulation. 

SA’s Crypto FSP pioneers

Just this week the Reserve Bank announced that the first 50 Crypto Asset Service Provider (CASP) license applications have been submitted for review and are expected to be issued within weeks.

What this means:

• Declaration as Financial Products: In October 2022, the FSCA declared crypto assets as financial products under the Financial Advisory and Intermediary Services Act (FAIS Act). This subjects Crypto-Asset Service Providers (CASPs), e.g., trading platforms, exchanges, etc. to FSCA registration and compliance with its regulations.

• Anti-Money Laundering and Combating Terrorism (AML/CFT): Amendments to the Financial Centre Intelligence Act (FICA) are proposed, making CASPs "accountable institutions" subject to FICA's AML/CFT obligations. This includes Know Your Customer (KYC) procedures, transaction monitoring, and reporting suspicious activities.

• Consumer Protection: The "treating customers fairly" requirements of the FAIS Act will apply to CASPs, aiming to protect consumers from scams and unfair practices.

• Taxation: SARS is developing regulations clarifying the tax treatment of crypto transactions, including income tax, capital gains tax, and value-added tax (VAT).
• New players: Most importantly, perhaps, is that regulation paves the way for listed companies and banks to join the party!

But it also opens a whole lot of exciting new doors for fintech and beyond…

‍

Opportunities lurking

Regulations will surely bring about some limitations, but what it does also do is provide a level of legitimacy to crypto assets and the technology behind them in general. 

Particularly people will most likely easily adopt it as legal tender and more will consider it as part of investment options, bringing about opportunities:

• Making digital ownership certificates: Having a digital authentic ownership certificate can facilitate a whole host of financial products and transactions. From more efficient escrow in purchases (managed by smart contracts) to raising liquidity against all kinds of assets. 
• One to watch out for here is digital title deeds for property – something FNB’s CEO has said they’re looking into. Fanfire is a Stellenbosch-based company that has run a few projects including selling ownership certificates to fine wine. These kinds of solutions stand to benefit mightily once there is mainstream adoption of crypto as it will introduce more buyers.
• Raising funding: IPOs have gone out of favour, at least in South Africa. But the blockchain could provide a way to raise funds. 
• This is something Momint is doing with SunCash. By purchasing ownership certificates to shares in solar projects, you get the returns from these projects over time as long as you hold them. 
• The exciting part is really that once crypto gets regulated, this can become a recognised financial instrument that can be traded or used as surety for loans.
• Instant payments: Blockchain has long been seen as the answer to borderless payment mechanisms. VALR has already introduced this in VALR Pay and has introduced the ability to pay using crypto at Pick n Pay, for example.
• All kinds of other verifications or certificates will get a boost: Wanna know where your meat’s been grazing? BeefLedgerSA can give you irrefutable proof — sure they have been going for some time, but mainstream adoption is bound to help companies like this.

Whilst there are quite a few blockchain solutions in play, once banks warm up to crypto due to regulation, expect to see way more action here… we are watching this space.

IN SHORT

💪 Digital Muscle. The Western Cape Government has launched The Western Cape Digital Productivity Business Technology and Innovation Support Programme which aims to catapult local businesses into the digital age by offering support to start-up businesses valued up to R100 000.00.

🥽 VR Treadmills. Tired of banging your knees and shins into furniture while wearing VR headsets? Well, Disney has developed HoloTile, a system that allows a VR user to remain on the system’s pad whilst walking on tiny round tiles that act as an omnidirectional treadmill.

🦾 Jobs Secure. Still worried about AI snatching jobs? Don’t be. An MIT study just proved that it’s way too expensive to replace humans with AI. At least, for now.

🐔 Walkie Talkies. 540 million tons of chicken feet, a South African delicacy will be making its way to China every month in a new deal worth R300 million per year. Despite the recent bird flu challenges faced by the industry, it’s great news for poultry farmers and clients.

🧑‍💻 Big Dev Push. SA’s leading developer job marketplace gets a shot in the arm as OfferZen just secured R82 million in funding and plans some of the biggest platform updates yet.

HOW WOULD YOU BUILD IT?

How to Build Startups in a Funding-Drought

If you’re wrestling with how to fund big ideas without bootstrapping, this week’s podcast is for you. We spoke to venture studio Next176 CVO Tramayne Monaghan about strategies for de-risking and building with an exit strategy.

Just the highlights

1. The state of startup funding in SA

The macro-economic reality in SA, and thus the amount of risk a funder knows they can safely take on, is starkly different to developed countries. And, as Tramayne explains here, the sentiment among funds here is really that they only want to back ventures that are generating revenue.

This naturally means getting early-stage funding is tough, and it’s not likely we’ll see much of a shift with the current economic flux we’re in. And that’s part of the reason why he believes venture studios are an important new way for founders to get their ideas built.

2. A new way to build in SA

As Tramayne discusses here, incubators and accelerators started because the developed markets had many VCs and not enough early-stage ideas to invest in. Africa has the opposite problem. And that’s where venture studios come in.

Venture Studios house a collective of really top-notch people – at Next176, for example, Tramayne has a team of people from Google, Salesforce, Tencent etc. – and they sit with founders and really build out the idea, validate, shape and start building it with you. Not over a few weeks, but in-depth and long-term.

And what’s great about bringing such an experienced team together is you create a space that is at once rigorous and creative.

3. Building to Exit

Thinking about exiting before you build is often a bit tricky for founders, as Tramayne mentions here. And where VC conversations can get a bit uncomfortable in later sales stages, his personal experience has been a greater sense of security since they’re corporate-backed (Old Mutual, if you didn’t know), which means there are quite a few natural exit opportunities almost baked into the process.

You can also grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked how long you think is acceptable to wait for an insurance claim to pay out, and 7 days is where you draw the line…

🟨⬜️⬜️⬜️⬜️⬜️ Immediately (8%)

🟨🟨🟨🟨⬜️⬜️ Less than 3 days (37%)

🟩🟩🟩🟩🟩🟩 Less than a week (45%)

⬜️⬜️⬜️⬜️⬜️⬜️ Who cares? (2%)

🟨⬜️⬜️⬜️⬜️⬜️ I don't have insurance (8%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Excess heat? See how this spa warms its pools with BTC mining. They claim they don’t even want to profit from it, it’s just a fancy way of keeping things steamy (and attracting BTC bros to visit of course).

In this Open Letter:

• Fleet innovation: Hidden opportunities in claims processing.
• GPT-5, space drones & who will and won’t be on Vision Pro.
• People power: Building the ultimate startup team.
• Your drinks of choice: The results are in.
• Free stuff: Share this and get cool business tools.

TRENDING NOW

Opportunities in Speeding Up Vehicle Claims

Remember when they said South Africans are among the worst drivers in the world? 

Reports show we have around 1 million accidents per year, and a lot of them are fatal – 44.8 people out of every 100’000 South African citizens die in road accidents. 

And it’s all thanks to a dangerous mix of speeding, alcohol use, unroadworthy vehicles, illegal drivers and poorly maintained roads, of course.

Let’s face it, folks, every time you pull out of your driveway, you’re practically heading out onto The Fury Road.

‍

Now imagine your business depends on road travel

We showed in the past how hard all this is on SA’s taxi industry, but take a moment to imagine what it must be like for anyone operating a commercial fleet (think logistics, taxis, Ubers, buses).

If one of your fleet is in an accident serious enough to warrant repair time, the costs can escalate quickly – those in the know say that the total amount of hidden costs and lost revenue in an accident can be ten times the repairs, insurance and injury costs.

No wonder we need so much insurance, right?

Ah, but therein lies another point altogether…

The time it takes to process a claim

Insurers have quite a robust claims management process – and it can be time-consuming (bad news if you’re a fleet manager who’s losing money every second that vehicle’s off the road).

Typically the steps involved in processing a claim are:

1. Put in a claim
2. Get quotes for repairs
3. The insurer sources an assessor and assigns them to the case
4. Find a suitable time to inspect (when both you and the assessor are available)
5. Approve quotes
6. Payment flow
7. Order parts
8. Wait for parts
9. Repairs get done

How long does this take? Well, it depends on whom you ask. The insurers themselves, like Discovery, will say it takes only a few days. But that’s just their internal processing time, not taking into account the accessor’s time, actual repair time, parts order time – and the delays in these processes that result from when they actually make the money available to the repairer.

In reality, you’re looking at weeks – sometimes as much as 1 to 6 weeks. (In the US, for example, the average actual time is around 3 weeks.)

That’s a lot of lost revenue for commercial operators.

Now, imagine if you can create and offer a product or service (or the entire workflow suite) that shortens any of these steps by a meaningful amount of time. Do it well, and you’re in business. 

AI might make it easier than ever

For example, Carscan. This local AI-powered Augmented Reality app helps capture accurate conditions of vehicles, detect damages and generate competitive quotes from a network of repair workshops to fix the damages — probably cutting time to get insurance payouts by days.

And despite only being a couple of years old, they’re already operating in South Africa, Nigeria, Kenya, Ghana, India, and the Middle East and raised a cool R20 mill in early 2022. And it will keep getting better. With a database of over 2 million vehicle images in various conditions, Carscan’s AI trains itself to identify issues with high accuracy.

Of course, that’s just one element (the assessment part) of the workflow. There are likely many awesome tech startup opportunities up and down this claims workflow. We are watching this space.

IN SHORT

☀️ Charge Up Off-Grid. SA’s first Eskom-free electric car charging station is set to launch by June 2024. Zero Carbon Charge started building its first fully off-grid EV charging station in November 2023 and aims to have 120 of these sites (including a charging station, farm stall, parking area, restrooms and botanical garden) by September 2025.

🚁 Mars Drone Found. NASA has regained contact with Ingenuity, its mini-helicopter currently living on Mars. The first motorised craft to fly autonomously on another planet was taking a test flight last Thursday when it lost contact. Engineers were able to re-establish contact via the Perseverence Rover over the weekend.

🙅‍♂️ Snubbed Apples. Apple is bargaining on cementing its position as “the ultimate entertainment device” by locking in some of the world’s most popular entertainment apps. But Netflix will not be developing an app for the Vision Pro. Ditto for YouTube & Spotify.

🤖 Level 5 GPT. ChatGPT-5 is expected later this year and will be power-packed with improvements including better reasoning capabilities, more accuracy and fully multimodal with speech, image, code and video support.

🚗 No Tesla. Elon Musk confirmed on X that there aren’t any plans to bring Tesla to SA amidst high import duties imposed on electric vehicles by the government. Remember what we said about car manufacturing in SA a while back?

🇿🇦 Winning Nation. Sunday was a big day for South Africa. Dricus “Stillknocks” Du Plessis won the UFC Middleweight Championship & Bafana Bafana won their AFCON Group Stage match against Namibia. South Africa takes on Tunisia tomorrow night at 7PM in a bid to qualify for the Round of 16. Let’s GO!

BUILDER’S CORNER

How to Assemble Your Ultimate Startup Team

While doing research for our recent piece on venture studios, we noticed that many of the best tech and venture people in SA were being snapped up by Next176. As you might expect, we investigated and traced it all back to the desk of their CVO Tramayne Monaghan. 

So, when the topic of building innovative startup teams came up, we asked Tramayne to take the lead…

‍

There’s a major difference between someone who has shined in an established business vs someone who will succeed in the pace and chaos of the startup world — so it’s important to look for the right things when hiring for your startup.

When I’m hiring and managing, I look for people who will take extreme ownership of their domains. They must be proactive, willing to challenge my (and the entire team’s) thinking, know how to work in flux and adapt to change fast.

I look for people who will be able to think on the fly and execute fast, knowing we’re working towards the same vision.

The following 10 characteristics are key

Embrace Change

Maintain a Competitive Mindset

Value Results Over Perfection

Challenge Conventional Wisdom

Are accountable

Push Boundaries

Resourceful and Efficient

Recognise and Mitigate Weakness

Embrace Challenges

Prioritise Doing the Right Things

But how do you test whether candidates have these characteristics? You ask them good questions. Here are a few examples:

5 Interview Questions to Help You Find Those Values

1. Assessing Agility & Critical Thinking

Ask: “How do you approach problems that have no clear solution or path forward?”

Assess: The candidate is expected to exhibit their skill in dissecting a problem into more manageable segments, pinpointing possible solutions, and considering various elements to reach a conclusion. Moreover, an effective response would highlight the candidate's capacity to assimilate new data and modify their strategy accordingly.

2. Assessing Drive & Creativity

Ask: "Tell me about a time when you identified and seized an opportunity that put you or your team ahead of the competition. What was the scenario and how did you go beyond the usual limits to achieve this?"

Assess: The ideal answer will showcase the candidate's ability to foresee opportunities and their strategic thinking in outpacing competitors.

3. Resourcefulness & Efficiency

Ask: "Describe a project where you had to prioritize results over processes and use limited resources efficiently. What compromises did you make and what was the impact of those decisions?"

Assess: You're assessing practicality and problem-solving skills. Look for their ability to make strategic trade-offs, use resources wisely, and their capacity to deliver results under constraints.

4. Accountability & Self Awareness

Ask: "How have you held yourself or a team member accountable for a mistake, and what steps did you take to rectify the situation?”

Add: “How do you address your own weaknesses in a professional setting?"

Assess: Look for integrity and self-awareness. Good responses should reflect honesty in acknowledging errors, taking responsibility (whether personal or shared), and concrete steps taken to correct mistakes.

5. Prioritising & Decision-making

Ask: "Can you give an example of a challenging situation where you had to make a critical decision to ensure long-term success? How did you determine the right course of action and what was the result?"

Assess: This tests strategic thinking and decision-making under pressure. Candidates should illustrate their ability to evaluate complex situations, weigh various factors and potential outcomes, and make decisions that align with long-term goals. Pay attention to their thought process in solving the problem.

Today’s Builder’s Corner was written by Tramayne Monaghan who is the Chief Venture Officer at Next176.

Got a team hack, insights or tip to share? Hit reply and let us know… we might feature your insight next.

THE RESULTS

We asked what your social drink of choice is, and, well, they say South Africans love their beer…

🟨⬜️⬜️⬜️⬜️⬜️ Water (9%)

🟨⬜️⬜️⬜️⬜️⬜️ Coffee (7%)

🟩🟩🟩🟩🟩🟩 Beer (33%)

🟨🟨🟨🟨⬜️⬜️ Wine (24%)

🟨⬜️⬜️⬜️⬜️⬜️ Spirits (7%)

🟨⬜️⬜️⬜️⬜️⬜️ Non-alcoholic beers (9%)

⬜️⬜️⬜️⬜️⬜️⬜️ Non-alcoholic wine (0)

⬜️⬜️⬜️⬜️⬜️⬜️ Non-alcoholic spirits (2%)

🟨⬜️⬜️⬜️⬜️⬜️ I'll just have a Coke thanks (9%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Fancy ice? This startup is exporting chunks of glacier ice harvested from fjords in Greenland to exclusive bars in the UAE. Compressed over millennia, frozen without bubbles, and uncontaminated by humans, guaranteed to be purer than the stuff kicking around in ice trays in your deep freeze.

In this Open Letter:

• Smart flava: South Africa’s teetotaller opportunity.
• Local startup buys startup, Apple takes the lead & Busy Airports.
• Find and convert: How to use storytelling to win at marketing.
• The results: What Startup founders are struggling with most.
• From the rooftops: Share The Open Letter and get free business tools.

TRENDING NOW

The money in sobriety

Drinking isn’t as cool as it used to be. 

At least that’s what it looks like if you follow movements Sober October (Ocsober) or Dry July. But ask any person who quit booze what the most annoying thing is about quitting – Having almost no options for drinks in social settings – it's either extremely sweet juices and sodas, or water. Until recently…

Raise a glass for the sober ones

When making beer or wine, the sugar reacts with the yeast to create alcohol and carbon dioxide. So naturally when alcohol is made, the fluid loses most of its sweetness. And it's this natural removal of the sweetness that gives these drinks its unique taste. 

For years, people have attempted to create drinks with a similar taste but without the sugar turning into alcohol. Unfortunately, they were never able to achieve the same result. Alcohol-free beer tastes like cold bitter Horlicks (a malt drink consumed hot in winter) and alcohol-free wine tastes like grape juice (Which is literally what it is. Lol). 

Enter the process of de-alcoholisation

Removing the alcohol post-manufacturing however keeps a lot of the taste intact – or at least it's closer than anything up until now. And this is something many traditional alcohol brands have jumped on. 

Locally Castle Free, Heineken 0.0, and Savannah no-alc are some of the most popular sober versions of otherwise popular drinks. And these sober versions of popular drinks are likely making good money.

When you buy a normal beer or cider alcohol tax (commonly called sin tax) applies to the volume of alcohol in the drink – it results in SARS collecting roughly R2 per beer over and above VAT. Yet non-alcoholics don't pay this tax, and also sell at prices higher than their alcoholic counterparts. Meaning there’s some nice margin to be made.

Just how big is this market?

Unfortunately, as with so many industries, South African data points are really hard to come by, but some assumptions point to a massive and fast-growing market. In the USA for example, the non-alcoholic market is roughly 13.5% of the size of the alcoholic beverage market. With the SA alcohol market at R173 billion, one could estimate that the demand for non-alcoholic beverages locally could be as much as R23.35 billion soon. And it lines up with predictions that it will grow at 8.9% per annum over the next few years.

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But it's not only beers and ciders

Initially, non-alcoholic beers, ciders, and wines hit the shelves. But recently local manufacturers have started producing non-alcoholic spirits as well (with even less tax to pay, one can imagine the margins are really attractive).

• Mahala Botanical is a South African distilled non-alcoholic spirit infused with 9 hand-sourced botanicals. As the name ‘Mahala’ (Zulu for free) suggests it’s free from sugar, alcohol, colourants and artificial flavours.
• Abstinence is a range of non-alcoholic spirits and aperitifs inspired by the Cape Floral Kingdom.
• Iconic is another distilled non-alcoholic spirit with its Citric Rose offering made from natural and classic London-Dry (yeah, the London-Dry type gin) ingredients. 

But that’s not all. Overnight e-commerce offerings, Drink Nil and Zero Drinks popped up even retail giant Woolworths has fridges stocked with low and no-alcohol drink options.

This space is set for massive growth and there are opportunities across the value chain here. We will be keeping a sober eye on this space.

IN SHORT

🧙‍♂️ Epic Pass. Private school learners in South Africa (including online learners) who wrote their 2023 matric exams through the Independent Examinations Board (IEB) have achieved a 98.46% pass rate. Will be interesting to see how that compares to the rest of the 2023 Matric class’s results being released today.

🦶 Secured Footprint. Stellenbosch headquartered Entersekt has acquired Modirum’s 3-D Secure payment solutions for an undisclosed sum to help it expand its customer base and secure over 2.5 billion transactions per year.

🍎 Big Apple. Apple has overtaken Samsung as the world’s largest smartphone seller, ending Samsung’s 12-year unbeaten run. Apple ended 2023 with 20% of the smartphone market share, while Samsung grabbed 19.4%.

📈 Good Tymes. TymeBank has become the first digital bank in Africa to reach profitability, and it did so in less than five years. Pretty impressive considering less than 5% of all neo-banks around the world have reached profitability. They are also looking to raise at a valuation exceeding $ 1 billion soon — unicorn incoming.

🛬 Busy Airport. Cape Town International Airport set a new record in December 2023 for the most traffic in and out. Beating the previous record set in January 2020.

🇿🇦 Fight Morning. SA’s very own Dricus “Stillknocks” du Plessis will challenge current UFC middleweight champion Sean Strickland for the title in the wee hours of Sunday morning (thanks Canada) at UFC 297. The main fight will be broadcast on SuperSport (around 5AM) — with English, Afrikaans and isiXhosa commentary. #hulleweetniewatonsweetnie

HOW WOULD YOU BUILD IT?

How to Market Your Startup Like a Guru

If you’re battling with marketing, acquisition, growth, awareness and beating competitors, then this week’s How Would You Build It podcast is for you. We sat down with serial entrepreneur, founder and marketing guru Dave Duarte, to chat about how to market a startup, build the brand and build a community. And it’s solid GOLD.

Some of the best bits…

1. Tell a good story and your marketing is done

Dave jumps straight in with the one hack that does all your marketing for you. He says not to leave marketing to the “arts and crafts” department, build the narrative of what you’re trying to do internally at the core of your product.

Sometimes a single line makes every sale so much easier. Uber’s was so good – “press a button, get a ride/taxi” – that it built the company to mega-scale, and even led to other startups comparing themselves to Uber – “we’re the Uber of the xxx space”. 

It’s your job as founder to figure out what that one line is for your brand. Dave says to make your customer the hero of a story – “They are Luke Skywalker, your product is the lightsaber, get Luke to understand that he needs that lightsaber to save the universe.”

2. Identify your audience by eating your broccoli

Dave says there’s only one reliable way to find your user and that is to get in front of a whole lot of people you think might have the problem you’re solving and have a three-tier conversation: Who they are, What problems they’re facing and then Frame your product as the solution to those problems.

Then comes the acid test: If that person looks you in the eye and says, “Oh my goodness, yes! I want it, right now. Where do I sign up?”. Only then do you have your audience – everyone else is a mom (they like the idea of your product but they will never buy it).

The broccoli part is actually finding those people and getting them to talk to you – via video call or in person.

3. Startup marketing hacks

First off, you gotta actually have a plan and budget to build and test a suite of marketing approaches (channels). Then Dave says you structure it like so…

1. Truths: Expend some of your budget and effort on doing the basics right: Create your story, have an awesome website, get a great product video, and engage with your audience on socials or wherever. Just make yourself look like a company you’d actually buy from. Clients "Look before they eat”, so make sure things look awesome.
   
2. Trends: Test out trending marketing approaches – try TikTok, approach influencers, and run ads and adjust. You never know if you don’t try.
   
3. Trifles: Keep a little bit of budget to do crazy, fun stuff you really want to do. The key is to just have fun – host an in-person event, try something whacky with AI – and just have fun with a bit of your marketing.

Then, bring it all together in a channel-based approach: Try different channels, measure them, see where you have success, double down on those and gradually just build a series of marketing channels that actually work for you.

If you are a founder, you have to listen to this one, we promise it will be worth the 40 minutes.

You can also grab the Spotify and Apple Podcast links on our website here.

THE RESULTS ARE IN

We asked what you mostly need help with in your startup, and market fit and acquisition come out tops…we can help with that btw, so hit us up.

🟨🟨🟨⬜️⬜️⬜️ Securing Funding (23%)

🟩🟩🟩🟩🟩🟩 Market Fit and Customer Acquisition (37%)

🟨⬜️⬜️⬜️⬜️⬜️ Product Development (7%)

🟨⬜️⬜️⬜️⬜️⬜️ Scaling the Business (10%)

⬜️⬜️⬜️⬜️⬜️⬜️ Team Building and Management (0)

⬜️⬜️⬜️⬜️⬜️⬜️ Regulatory Compliance and Legal Issues (3%)

🟨⬜️⬜️⬜️⬜️⬜️ Marketing and Brand Awareness (10%)

⬜️⬜️⬜️⬜️⬜️⬜️ Financial Management (0)

🟨⬜️⬜️⬜️⬜️⬜️ Competition and Market Differentiation (10%)

⬜️⬜️⬜️⬜️⬜️⬜️ Work-Life Balance (0)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Space dust? NASA says it finally managed to open the container with the world’s first actual asteroid sample. It only took 3 months, but already scientists say there are super interesting hydrated organic compounds from asteroid Bennu in there.

In this Open Letter:

• Venture studios: A new way to build a startup in SA.
• Cheaper streaming, magnetic forests & accelerating Africa.
• Easy growth: Ensuring you have the perfect market fit.
• How we like our pocket AIs: The results are in.
• Free stuff: Share this and get cool business tools.

TRENDING NOW

Ultimate Startup Support in SA

In the startup-verse, the harsh reality is that the majority (9 out of 10) don't make it. 

Yet, the prize and thrill of building a successful startup has many wondering, is there a better way? This has led to a whole host of mechanisms to help give as many new startups the best possible shot at making it.

At the core are the grassroots startup development initiatives we all know – accelerators like Y Combinator and Techstars, incubators and VCs to help fund and develop new ideas.

And they all fit together in a specific way:

• Incubators are short-term programmes that validate ideas and help get early traction.
• Accelerators are short-term programs for growth-stage startups (already have an MVP just need to grow) that help them reach a point of raising capital.
• VCs are investors, offering capital to help startups reach their goals.

But there is another, slightly rarer and, some might say, more in-depth type of startup developer. One that acts more like co-founder…

Enter the Venture Studio – a game-changer for startup development

Venture Studios are like the special forces of the startup world. They're not just passive investors; they roll up their sleeves and get involved in building businesses from scratch. 

They employ top people across various disciplines and bring them to the table to help you build while often supplying the funding needed as well – the whole shebang.

1. A scientific approach to building startups
   Venture Studios don't gamble on hunches; they use a structured, gated process for developing and testing hypotheses. This approach allows for the early identification and discontinuation of less promising ventures, thereby focusing resources more efficiently on those with greater potential.

2. They learn the nuances of a startup in a specific territory faster
   By managing multiple ventures at once, they accumulate knowledge rapidly across various sectors and technologies. This breadth of experience means they can avoid repeating mistakes, improving the success rate of new ventures.

3. They share expert skills across multiple startups
   Venture Studios operates several ventures simultaneously, sharing expertise, services, and other resources between them all. This shared model is particularly beneficial for startups that need experienced, yet costly resources early in their lifecycle. In a Venture Studio, these resources are distributed across various projects, offering significant cost savings and synergies.

4. Opportunities for older founders
   Contrary to popular belief, the typical successful founder isn't in their early 20s, but rather closer to 45 – experienced but often burdened with responsibilities that make high-risk ventures less feasible. Venture Studios offers a solution here: They provide roles like venture architects or venture owners, allowing “startup founders” to earn a salary while working on startups. While this might mean less equity than founding a startup independently, it also means less risk and a steady income — nice.

The numbers speak for themselves 

Startups backed by Venture Studios have shown impressive Internal Rates of Return (IRR) – around 53%, compared to 21% for those backed by traditional VC funds.

In the South African eco-system, you have companies that do venture services like Specno who assist startups, corporates and scale-ups in building ventures. And then there are those like The Delta that have a hybrid model of building some of their ventures internally whilst also helping corporates build their ventures.

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A new way to build

But, you often get the best results when a studio builds along specific verticals… 

This way they create synergies between startups that complement each other. Put a large corporate in the mix that has many problems to solve and opportunities to unlock and you might just create a powerhouse for SA startup creation.

And that’s exactly what's happening over at Next176. 

Backed by Old Mutual, they’ve set up their own Venture Studio to create disruptive and innovative businesses as well as invest in growing startups — a hybrid model. And they have lofty goals – to positively impact a billion African lives – by focusing on consumer-led products in the Health, Education, Jobs, Business Ownership, Debt Management and Environmental Sustainability space. 

Heck, they’ve already invested a collective R84 million into tech-driven startups like Kena Health and JOBJACK. And they say they are also building a bunch of new startups internally with some exits on the horizon.

So, with VC funding drying up, perhaps venture studios are the future of building startups in SA. We can see them having a major impact on the local ecosystem. We are watching this space.

IN SHORT

🫰 Cheaper Streaming. Showmax subscribers in SA can expect to pay 10% less on its monthly cost when it launches the much anticipated Showmax 2.0. Showmax is set to cost R89/month, while its mobile offerings are also set to be similarly discounted.

🦈 Magnetic Forests. A South African startup, SharkSafe Barriers has come up with an innovative, safe way to deter sharks from popular beaches: an array of flexible pipes that mimic a kelp forest (sharks steer clear of them) with magnets inside that disrupt sharks’ electromagnetic receptors.

🧴 Iced Sunscreen. Scientists at the North Pole have found traces of sunscreen in the snow after collecting glacier samples from the Brøggerhalvøya peninsula. Pretty interesting considering the sun doesn't shine there in winter, and could point to long-range atmospheric transport from contaminated air masses from Eurasia.

👟 African Acceleration. Pan-African venture capital firm Norrsken22 has opened up applications for its eight-week Accelerator Program for African startups. The program offers upfront funding of $125,000, as well as interactions with unicorn mentors and leading investors. Apply here now.

📵 Hanging Up. Mobile Virtual Network Operator (MVNO), Lyca Mobile has ended operations in SA, 6 years after entering the market. Lyca Mobile is one of the largest MVNOs in the world, with operations in some 60 international markets.

🌍 African Expansion. FirstRand is looking to acquire banks in the other African countries it operates in to capitalise on the rapid economic growth in other countries on the continent.

BUILDER’S CORNER

How to Make Sure You Have Market Fit

We often speak about product-market fit, which is just building the right product, the one the market needs most right now. And, generally, the market rewards you by buying it.

Startup guru Brian Balfour actually breaks market fit into 4 distinct categories. Each with its own exercises, measures and methods.

So, if you’re pretty far along and have a product already, this is one to pay attention to. (And if you’re still building, keep it in mind as a place to build towards.)

Nailing all 4 Market Fits

1. Market-Product Fit

How to Check: It’s sorta the opposite of product-market fit, in that this time you check to ensure that the market you’re targeting is the ideal fit for your existing product.

Do some surveys to gauge how well your product meets their needs – try the “bait” survey to find your superuser. And then look at customer satisfaction, retention rates, and your Net Promoter Score (NPS).

How to Get It: If you don't have Market-Product Fit, consider pivoting your product features based on customer feedback. Niching down on a specific segment of the market should do the trick. Find a few segments to test and see if you get better feedback, retention and NPS scores among those niches.

2. Product-Channel Fit

How to Check: Analyse the effectiveness of different marketing channels (Google VS social networks, Facebook VS Linkedin, Instagram VS TikTok, email VS app etc.) in reaching your ideal customers. 

Look at your customer acquisition cost (CAC), conversion rates, and engagement levels in each channel. Your best channels are the ones where you have the best possible CAC.

How to Get It: To improve Product-Channel Fit, test different marketing channels and strategies. Optimise your messaging for each channel and focus on those that bring the highest quality leads at the right cost.

3. Channel-Model Fit

How to Check: Now you need to check if your business model works with your sales and distribution channels. How profitable is each channel for you? And then, how scalable is that channel? 

Consider the lifetime value (LTV) to CAC ratio you get from each channel. You ideally only want to spend a low percentage of 20—30% of LTV as CAC, so look at the channels where you think that’ll be possible. Then, also analyse channels based on sales cycle length – the faster you can get to the sale, the better.

How to Get It: If you’re spending too much to acquire new customers, there’s only one of two options: 1) Find different channels that work better with your business model, or 2) Adjust your business model, pricing strategy or sales approach to better leverage existing channels.

4. Model-Market Fit

How to Check: Assess if your business model is sustainable and scalable in the market you’re currently targetting. If you niched down, check that the niche is big enough, reachable enough and able to pay in your competitive landscape.

If yes, great, go for it. If not, you’ll have to find a way to increase your potential market to unlock growth.

How to Get It: If you lack Model-Market Fit, you could try and discover a newer, larger market – though that’s easier said than done, and takes you back to Step 1.

More often than not, model-market fit might require you to pivot your business model. Maybe you can change your revenue model, target a different market segment, or adapt your operations to better suit the reality of the market (i.e. slim down operations until you are profitable in the current situation).

See how to reverse-engineer startup success.

Got a market fit hack to share? Hit reply and let us know…

THE RESULTS

We asked whether you’d use an AI pocket assistant like rabbit r1, and most people haven’t found a use for it just yet…

🟨⬜️⬜️⬜️⬜️⬜️ 👍 Already ordered mine (15%)

⬜️⬜️⬜️⬜️⬜️⬜️ ✍ My human personal assistant will do just fine (4%)

🟩🟩🟩🟩🟩🟩 🤷 I really don’t know how I would use it (48%)

🟨🟨🟨🟨⬜️⬜️ 💥 This is the beginning of the end of the world (33%)

Find more awesome business ideas from South Africa's favourite startup and tech newsletter.

Hi there,

Remember when…? If you’re in tech, it’s always cool to look back at how far we’ve come. Now you can check the main tech advances in the year of your birth. (For everyone born after 1970, though.)

In this Open Letter:

• On trend: The future of human-machine interfaces.
• AI-friendly chips, deeper diamonds & SA’s e-commerce battle.
• Kickstart: Building a tech company in 2024.
• The tech presidents need: The results are in.
• Tell someone: Share this & get free business tools.

TRENDING NOW

The Future of Human-Machine Interfaces

Steve Jobs made a historic trip to Xerox's Palo Alto Research Center (PARC) in December 1979. It’s famous because here he would be introduced to several revolutionary technologies, including the computer mouse and the graphical user interface (GUI). 

Steve knew immediately what he saw would change computing forever – an intuitive way for humans to communicate with computers. 

Because, before GUI, the way we talked with computers was a bit of a mess…

And Apple ended up shaping much of the world as we know it today by releasing GUI (with keyboard and mouse) in 1984, along with its operating system, Macintosh. 

Microsoft followed suit, releasing Windows and finally gaining success with Windows 3.0 in May 1990. A move that would set up Microsoft as a global leader in software.

Over the next 30 years, user experience design and user interface development have become massive industries. There are millions of designers and developers working daily to create interfaces for humans and machines to engage.

Talking tech

However, at its core, user interfaces are simply the communication layer between humans and computers. It’s a mechanical way for us to translate our human instructions into code, so the computer can display data in a way that’s helpful to us – a simple concept that spawned entire UI-based industries.

But when computers innately start getting better at understanding what we want from them, we might not need all of these interfaces anymore. 

Now, you might be familiar with Large Language Models (LLM) that’re used in innovative AI tools such as ChatGPT. Enter LAM, a Large Action Model that enables a computer to execute tasks humans normally do.

Introducing Rabbit

The rabbit r1 is a pocket-size AI companion built on the world's first LAM operating system. It was announced a few days ago at CES and, on its first day, it already sold 10‘000 devices at a retail price of $199.

The LAM operating system connects to an online vault where you can give it access to your online accounts such as Uber, Airbnb, etc and it can then execute complex tasks on your behalf by simply following your voice prompts. 

Not quite replacing the phone, and likely more playing in the personal assistant space. But what it's doing is challenging the status quo in how we interact with computers. 

In fact, it probably won’t threaten all the user interfaces we know and love just yet. But we do think that, just as Steve Jobs got excited about the mouse and what it could do, LAM is going to play a big role in human-machine interaction in the future. 

This might just be the start of an exciting new tech journey… and we’re definitely watching this space.

IN SHORT

🖋️ Kenya Startup Bill. Kenya’s president will sign Kenya’s Startup Bill 2022 into law by April 2024. The bill will set out to provide employment opportunities for Kenyan youth, provide tax breaks and access to platforms to access information and support, as well as a credit guarantee scheme.

🔨 Battening the Hatches. Things are hotting up in the local e-commerce battleground as Naspers boosts investment into Takealot in anticipation of global e-comm giant Amazon’s arrival on SA shores this year.

👨‍💻 Consumer Electronics Show. CES 2024 kicked off in Vegas this week and showcased all of the upcoming incredible tech set to hit the streets including the next generation of laptops, tablets & handhelds powered by AI-friendly chips, transparent TVs from Samsung & LG, and Honda’s global EV series Honda Zero.

💎 Diamonds are Forever. Diamond behemoth De Beers and the government of Botswana have approved the $1 billion deal to dig under the world’s richest diamond mine Jwaneng, to extend the life of the mine by 20 years and haul out up to 9 million carats per annum.

🤑 Taken for Granted. South Africa has 28 million grant recipients, nearly 12x as many as in 1994 and 4 times as many as the 7.1 million taxpayers.

🌝 To the moon? The Securities and Exchange Commission (SEC) has approved 11 exchange-traded funds (ETFs) that hold bitcoin (BTC).

HOW WOULD YOU BUILD IT?

Building a Tech Company in 2024

If you’re amped to build something innovative in South Africa this year, then this week’s How Would You Build It podcast is for you. We spoke to the ever-vibrant Zanele Matome, founder of Welo Health, and she has some remarkable insights into building a MedTech, as well as some awesome general startup advice.

Some of the highlights…

1. Taking the leap & being bold

Zanele says she was in a mining job when the entrepreneur bug bit her. Then, engaging with some people in tech inspired her to want to head to Silicon Valley, to immerse herself in what tech was all about.

However, as she explains here, Zanele had nothing but the clothes on her back when a “happy accident” with the old car she was driving gave her an insurance payment just big enough to cover a plane ticket to San Fransisco. So She risked everything and went – a move she credits as enabling her to come back to SA and build Welo Health.

2. Build up your core tech team internally

Zanele explains that she’d made the strategic decision early on the outsource most of their development but regrets not building an internal tech team when they had successful funding rounds.

Having an internal dev and CTO, made up of people who are inside the company and share your vision is key, she says. 

3. Be smart about managing your cash flow 

Zanele also has some great insights on managing startup money. She advises, as a startup getting corporate or government contracts, to negotiate faster payment options – even if you have to lose up to 50% of the contract value just to get them to agree, getting paid faster is more important in the early days, she feels.

Then, she recommends saving and building up a windfall of 6 to 12 months of operational expenses in the bank as soon as possible and advises every founder to think twice before making any hires.

You can also grab the Spotify and Apple Podcast links on our website here.

THE RESULTS

We asked what tech you think politicians need, and of course like 60% of us said tech to improve their delivery 😜

⬜️⬜️⬜️⬜️⬜️⬜️ 🗳️ Tech to win more votes (8%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📨 To answer my requests (3%)

🟩🟩🟩🟩🟩🟩 💪🏽 To actually do something (60%)

🟨🟨🟨⬜️⬜️⬜️ ⚖️ To be less corrupt (29%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🌿 They don’t need tech (0)

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