🏉 Reaching 900m Screaming Fans...
Hi there,
Running low on storage space? You’re not alone as Toyota, the world’s second-largest car manufacturer, had to shut down all of its Japanese plants (roughly 30% of global production) because its servers ran out of disk space.
Guess we should tell our part-time Japanese intern to stop saving Open Letter memes on the company server, eh?
In this Open Letter:
- 900m eyeballs: RWC opportunities.
- The butchered vetkoek, cheapskate Eskom & the find of a lifetime.
- Fast value: How long does it take to buy gold?
- Cash flow: 6 Money-making business models.
- The results: Where you buy your fittings.
TRENDING NOW
The ball that pulls the eyes
Today is the day. The start of the Rugby World Cup 2023.
Now, even if you don’t like rugby, you have to appreciate that South Africa are the returning champs. Who can forget the vibes, 4 years ago, when Siya and the boys brought back that cup for the third time?
That’s why, with much anticipation, when the Springboks kick off against Scotland on Sunday, most DStv subscribers (and everyone they share their passwords with) will be watching.
How big an event is the Rugby World Cup?
The 2019 RWC broke broadcast records, with more than 857 million people tuning in – an impressive 26% increase from the previous World Cup. Not only that but a live average of 44.9 million fans watched the Boks beating out England in the final – the biggest in Rugby World Cup history.
And, locally, it was nothing to be shy about. Interest in the SA vs. England final was a combined 16.7 million viewers – more than double the 2015 numbers. It's big business – and you can imagine how much it costs to place your logo where 16.7 million middle-to-high-income people see it for 80 minutes straight.
Millions many don’t have. But there are more ways to capitalise on the gees.
Who is licking their lips for the eyeballs?
It's not just the matches. The buzz on social, posts on news websites – it’s all creating traffic and eyeballs. Four years ago, at the height of the World Cup buzz, Springbok players could earn as much as R58 000 per social media post.
Everyone is trying to get in on the vibes; from THIRSTI water teaching the Bokke French, to Checkers Sixty60 delivering a message of support to our boys, to CourierGuy getting Leon Schuster out to say “Bring vir my die Boks”, it all invites people to share these ads as part of the “gees”.
Then there is sports betting – 10% of South Africans do some kind of sports betting. And it might even be more as one of the core uses of 1Voucher is to redeem it for sports betting. With so much money flowing to sports betting, one can imagine how cutthroat it could be for local betting sites to get eyeballs.
The second-screen experience
But creating viral ads or making money as a Springbok player posting an ad is not the only people getting creative to get eyeballs. Second-screen experiences are a lucrative way to generate additional impressions that can be monetised through sponsorships and affiliate deals.
How do they work?
- Create a reason for fans to engage with something that you’ve built.
- Make that engagement exciting, but more importantly, drive engagement and virality – make the experience better when they bring friends.
- Get the eyeballs (lots of impressions).
- Convert the eyeballs into revenue through sponsorships and affiliate deals.
Remember Superbru? The paper-based league launched in 2001 at UCT with the online version soon becoming the go-to office pool game. At its height, Superbru had more than 2 million players. If each player logs in once a week to make a pick (let’s say generating 10 impressions) and once more to view results (maybe another 10), there could be over 100m impressions per month.
Couple that with some detailed user demographics and you could land a high CPM marketing deal and rake in a few million a year… Nice.
Along the same thinking, 4 South African friends built Golf Champs, a social game around pro golf. Pick your team, tally their scores, best score wins…. Easy. In a short space of time and using a very basic site (and app), it’s amassed 10’000+ active players. And with golf being so popular, this could be big, with nice sponsors and great prizes – watch out for this one.
7Qz is another innovative game within the game. A pool-based prediction game that’s easy enough for your grandpa to figure out yet has a nice level of strategic depth to it. Sure, there are your usual question categories like player performances and team performances. But then they take it a step further with Ref performances and quirky questions like “Will the Forwards score more tries than the Backs?” and “How many yellow cards will there be?”, which appeals to a broader market. They even asked once if there would be a streaker or not.
Wanna be part of it?
In the spirit of supporting a local founder in building a cool product around build World Cup “gees”, we have launched a special Open Letter 7Qz pool for the Bokke’s upcoming game against Scotland. Come make your picks and if you win, you win ultimate glory, a digital high five and a special mention in SA’s coolest newsletter. Join the pool here.
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OVER TO YOU
Who will win the World Cup?
Vote to see what everyone else says...
- 🇿🇦 South Africa
- 🇫🇷 France
- 🇳🇿 New Zealand
- 🇮🇪 Ireland
- 🇦🇺 Australia
- 🇬🇧 England
- 🇦🇷 Argentina
- 😕 What is “rugby”?
Login or Subscribe to participate in polls.
IN SHORT
🟥 Red-carded? SABC rugby fans were nearly left in the lurch this week when the public broadcaster and MultiChoice (who owns SuperSport and the local RWC broadcast rights) couldn’t agree on the R38 million broadcast rights to air the games on SABC. BUT, they reached an agreement at the 11th hour (literally). SABC will show the opening & closing ceremonies, the opening game, all the Bok games, 2x Quarter-finals, 1x Semi-final, the bronze final, and the Final.
💐 Rest In Peace. Retail giant Raymond Ackerman has passed away at 92. The Pick n Pay founder purchased 4 stores in 1967 growing the PnP footprint to over 2’000 stores across South Africa and 7 other African countries.
🔌 Sitting on it. 3 months in and South Africans are wondering why Eskom still hasn't taken up the first 100MW offered by Mozambique. This as SA hit Stage 6 loadshedding this week (some say it was technically Stage 7 on Wednesday night). Could it have something to do with the Karpowership’s game farm “donation” to Ezemvelo KZN Wildlife in return for not opposing the 450MW ship-mounted power plant proposed for Richards Bay harbour?
🚀 Surging Sixty60. Checkers Sixty60 sales have grown a massive 81% year-on-year ending 2 July 2023. While this growth, compared to 150% in the previous years, shows that the on-demand delivery trend might be normalising, app purchases for the Shoprite Holdings group still only make up less than 5% of the group's sales – looks like South Africans still prefer to shop for their groceries in person.
🔪 Butchered “Vetkoek”. Hollywood star Selena Gomez has set tongues a-wagging across Mzanzi for her pronunciation of ”Vetkoek” in a scene from the series “Only Murders in the Building”.
🤑 Norway Bru. A Norwegian man randomly found some pretty rare 6th-century gold jewellery while out on a walk. He was trying out his new metal detector and found stuff from 500 AD. Of course, you don’t need to go through all that trouble, you can just win yourself some real Troygold below…
THE INSIDE TRACK
Solid Gold in 4 Minutes Flat
Want to buy gold? A trip to your local dealer could take 30 minutes+. Then you prolly need a safe way to transport and store it. And, unless you are a boomer, we doubt you got that down. So what’s one to do if you need the gold?
Well, we tried Troygold for ourselves and the whole thing took us less than 4 minutes. From downloading the app to being the proud owners of some gold bullion.
Here are the steps:
- Download the Troygold app for iOs here or Android here.
- Verify yourself in their super-slick KYC process.
- State how much gold you would like to buy.
- EFT the money to their account.
- Get your gold.
The whole process took us less than 4 minutes. Proof!
Speaking of gold… Want to win some Troygold?
During September, we’re giving away R2’500 worth of gold, plus some cool Troygold merch to one lucky reader who shares our newsletter on LinkedIn! We got two entries so far, so be the third and have a 33% chance to win!
STEP 1: Click on this shiny button 👇
(The button opens a LinkedIn tab.)
STEP 2: Click “Share in a post” right under the Open Letter logo in that new tab.
STEP 3: Type a few words on what you think about The Open Letter, as a post to your followers.
STEP 4: Tag us: @TheOpenLetter and hit “post”.
Done, now you’re entered to get gilded.
THE THREAD
Exploring Business Models for Your Startup?
If you’re not earning, this week’s podcast is for you. It’s no frills, just a quick 30 minutes of deep-dives into revenue models for your startup. Enjoy!
A few highlights
- Advertising and affiliate programmes need SCALE
No really, low RPM (revenue per 1000 views) means you need eyeballs in the millions to generate even a modest income, which begs the question if SA even has the volume to support a lot of CPM (cost per 1000) based businesses. A notable alternative, though, is looking into hyper-niche segments that are more valuable and justify a higher CPM.
Much the same with affiliate marketing, which can work but at specific stages of your startup lifecycle. - E-Commerce/Marketplace needs a SMART approach
A popular and relatively easy space to get started in, but pretty hard to perfect at scale, since you have to work on low margins and constantly leverage tech to expand and capture new markets. That said, there are some significant opportunities in the B2B e-commerce space.
- SaaS is all about nailing METRICS
- Synonymous with tech, Software as a Service (SaaS) can be extremely rewarding, but requires a lot of investment and scale to reach profitability. And success in this space hinges on striking the perfect balance between your acquisition cost (CAC) and the money you make from each customer over a period of time (LTV), and how fast you can get to that tipping point where one outweighs the other enough to become profitable.
Also worth checking out is this discussion around another of tech’s fave approaches: "I just literally can't think of a local example of where the freemium model has worked."
Plus: Way more insights in the podcast itself…
Or if podcast app is your vibe, catch them here:
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THE RESULTS
Earlier this week, we asked where you buy your fittings and fixtures. And it’s overwhelmingly Builders… but great to see Livecopper’s gaining some traction.
Where do you source fittings?
🟩🟩🟩🟩🟩🟩 🔨 Builders Warehouse (64%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🛒 Takealot (3%)
🟨⬜️⬜️⬜️⬜️⬜️ 📱 Livecopper (15%)
⬜️⬜️⬜️⬜️⬜️⬜️ 👷 Leroy Merlin (3%)
🟨⬜️⬜️⬜️⬜️⬜️ 🤦♀️ I don’t renovate/DIY (15%)
Find more awesome business ideas from South Africa's favourite startup and tech newsletter.