Plus: A new Beatles song, SARS vs Adidas & the 8 biggest startup mistakes.

Newsletter

June 15, 2023

Hi there,

Imagine John Lennon, one last time. Because it’s happening. Paul McCartney has just announced that the last-ever new Beatles song will be released thanks to AI this year – 61 years after their first hit. Apparently, McCartney used AI to extract bits of Lennon’s voice from an old tape he had left him. Tell your mom.

In this Open Letter:

Big changes in Big Media: The 3M to 85M how-to.
SARS vs Adidas, presidential deep fakes & borrowing power from Mozambique.
Told you so: Avoid these 8 biggest startup mistakes.
Disrupting transport: How to just “go for it” in SA.

TRENDING NOW

The Turning Tide of Big Media

Multichoice, DStv’s operator, says it recorded a loss of R2.92 billion last year. And that despite the group reporting a 7% revenue increase.

They blame high tax costs and some foreign exchange losses, but in reality, more South Africans are ditching DStv with around 100’000 cancelling their DStv subscriptions.

*Considering most have DSTV just for sport, it’s safe to safe the Bokke have atleast 1.4m supporters.*

With interest rate hikes, rising inflation and the overall cost of living in SA, entertainment is historically where we cut to make ends meet. Not to mention people hate missing out on their favourite TV show when they’re in that 18h00–20h30 loadshedding slot…

But something else is happening across the board in media.

The way we consume media is changing faster than ever

And it’s not just the streamers that DStv (and its streaming service Showmax) should be worried about…

When Elon Musk acquired Twitter in 2022, he recognised the role Twitter could play in free speech. And many dismissed this as typical Big Tech warm and fuzzy, feelgood speak of “Let’s make the world a better place”...

And who could blame them?

Facebook & Instagram (Meta) and YouTube (Google/Alphabet) have long-standing censorship practices. All good in theory, until you realise much of the censorship was happening to creators and pundits who didn’t share the same political and ideological views.

Elon famously arrived at Twitter on his first day carrying a sink (“Let that sink in”). And since then it’s been one supposed “calamity” after the next. Everything from Twitter outages, staff getting locked out of Twitter’s offices, mass layoffs, and mass resignations from Elon’s “Extremely Harcore Twitter 2.0”.

From the outside, it looked like a complete and utter clown show. But…

*Tony’s morning routine looked a little different since Elon took over…*

The times they were a-changin’...

Something interesting was happening at Twitter while this seeming chaos was unfolding around him. Elon was making good on his free-speech promises.

Accounts that were previously banned, like the Babylon Bee, were back on Twitter (satire was allowed once more). Community Notes were introduced that help add context to certain pieces of content to help combat misinformation.

Last week, out of freaking nowhere, Tucker Carlson drops the first episode of his Twitter-hosted news show Tucker on Twitter a little over a month after being fired from Fox News. Now we get it, not everyone follows American politics and you might be thinking what are we talking about?

Here’s why it’s interesting

Forget who Tucker is, but picture this. In his last 4 weeks on Fox, Carlson brought in an average of 3.27 million viewers (compared to half that by his various replacements in the weeks since his departure). Tucker was by TV standards a big deal. And 3 million + views of his show, was considered big.

Yet his first episode on Twitter amassed 85.6 million views in less than a day, its current views are 116 million +, and climbing.

(And even that number is understated – Elon expands on that below)

Cinema on Your Phone

Long-format video was never really big on Twitter (that was YouTube’s turf). But suddenly, a number of “unpopular” documentaries found a home on Twitter 2.0, including Matt Walsh (from The Daily Wire)’s “What is a Woman”? With its 184 million-and-counting views…

The Opportunity Closer to Home

In 2022, of the over 41 million South Africans using the internet, there were nearly 3 million Twitter users in SA. And SA has great content creators, but not many doing Twitter long-form videos yet.

Even mainstream news channels in SA are underutilising Twitter as a video streaming platform. eTV News Anchor Annika Larsen’s interview with Ex-Eskom CEO Andre de Ruyter got almost 390’000 views – impressive in the SA context. But why link back to their main site and not just monetise straight on Twitter? (That sweet sweet SARS & Avbob ad revenue.)

For decades Big Media was telling the masses what to think. And Big Tech joined in recently. Now a boytjie from the mean streets of Pretoria is squaring up to them both – flying the flag of free speech.

Who’ll flinch first? We’re watching this space

Follow any good local Twitter long-form creators? Hit reply and share with us…

IN SHORT

🤖 AI Enters the (Election) Chat. The 2024 US election is heating up with a rival using deep fakes of Donald Trump “hugging and kissing” his former chief medical advisor to try and discredit him. And, yes, Trump’s actually running for president again – despite having been called to court on Tuesday where he pleaded not guilty to the 37 ongoing federal charges against him.

🚬 Drop the phone and hit the gym. SA is ranked high for the unhealthiest habits in the world according to a study looking at excessive snacking, avoiding exercise, consuming alcohol, smoking, and STD prevalence.

⚡Power Imports. SA is set to import power from a country whose GDP is 26 times smaller than its own. Mozambique to supply 1’000 MW of gas-fired energy to help ease one level of load shedding.

👟 They’ll find Ya. Sportswear giant Adidas is on the hook for R1.9 billion at SARS.

🖋️ The Biggest SOE yet. If Eskom’s R400b+ debt is not enough, the government passed a bill on Tuesday that might see SA create its biggest state owner enterprise yet.

BUILDER’S CORNER

8 Biggest Startup Mistakes

Mistakes are part of a startup’s journey, but avoiding them often saves a ton of money and could be the difference between life and death.

*Got a pitch competition coming up, we will be fine.*

We scoured the web to find some of the top mistakes founders make, particularly in the early stages of their journey :

Over-reliance on PR agencies: PR agencies can be expensive and may not provide the desired results, especially for early-stage startups. Instead, allocate your resources towards product development and customer relationships, which bring in more value in the early days. Once you are established, PR will be a great tool to create value, but the return on spend isn’t great in the early days.
Overspending: If you are frugal, good, but you are likely not frugal enough. Startup founders need to monitor every spend to make sure there is a good return or at least a good chance of return. Remain disciplined and frugal, especially pre-product-market-fit. Once your product has found its market and customer base, you can loosen the purse strings a little.
Ignoring advice: There's a wealth of experience and knowledge in your network and the startup community. Listen to advice, but critically evaluate it to see how it applies to your unique situation. You have to ruthlessly pursue your mission, but try to consult widely, especially in the startup space.
Hiring top-tier talent too early: Experienced professionals from big companies command high salaries and may not necessarily thrive in a startup environment. They can also strain your resources. Hire for passion, alignment with your startup's vision, and the potential for growth. That guy who was “smashing it” in corporate is probably not a good fit for your startup.
Looking for a saviour: Don't believe in a single person solving all your problems. Foster a problem-solving culture within the entire team to ensure a collective effort towards overcoming challenges. It’s like the sports team with too many stars, they just don’t win tournaments. The teams that consist of mostly slightly average players pulling together often take the trophy home.
Too much dependency on contractors: Contractors can be a great solution for short-term needs, but they may not have the same level of dedication and alignment with your startup's vision as full-time employees. Aligning the incentives is key to long-term success. Contractors want bills paid, whilst as a founder you are building equity value.
Unnecessary marketing spend: While marketing is important, it's crucial to spend on it wisely. Understand your audience, perfect your product, and then invest in reaching out to your customers. And sometimes understanding the audience does mean spending some money, just don’t blow it all quickly.
Reliance on ads for growth: Ads can help test messaging and gather data, but relying solely on ads for growth can lead to problems. Diversify your growth strategy to make it more sustainable. Get your hustle on. Partnerships and gorilla tactics are key.

Remember, while avoiding mistakes is helpful, embracing them as learning opportunities is equally important. No startup journey is flawless, but it's how you navigate the bumps along the way that determines your success.

Made a mistake in your startup journey? Hit reply and share it, we are doing part two soon.

THE THREAD

Do you have that startup idea, but you’re too scared to heed the advice of “just start’”? For many, it’s a step too far into the world of uncertainty.

We wanted to put some minds at ease. So we asked Velani Mboweni, the founder of Lula, to share some priceless tips in his journey to becoming a founder in one of South Africa’s most intricate industries.