Plus: Beyonce’s Swedish inflation hike, hyperlocal entrepreneurs & why Google wants staff to stop using Bard.

Newsletter

June 20, 2023

Hi there,

Beyoncé is being blamed for Sweden’s rising inflation. Cheaper concert tickets caused the entire world of Queen Bey fans to rush to the Scandinavian country, pushing up hotel prices and, in doing so, fueling a rise in inflation. Perhaps she does run the world?

Plus: We are upping the game for those who refer their friends to The Open Letter. Introducing the 25 AI Tools for Startups list. Yours when you refer 3 friends (find your link at the end of this mail). And now, on your way to this gift, you will also get a free vida coffee!

In this Open Letter:

A R500bn injection: Opportunities in SA’s changing medical landscape.
No Bard for Google staff, how to drop 2 stages of loadshedding & SA’s local hustlers.
Landing the message: How to make PR work for your startup.
Free downloads: 25 lekker AI tools for startups, 50 founder’s tools & a coffee on us.

TRENDING NOW

SA’s Biggest SOE Yet

And 500 billion reasons to take note

Last week the South African Parliament passed the National Health Insurance (NHI) bill. And it ruffled some feathers (to say the least). But if you take a minute to look past all the negativity, you’ll see there are some serious opportunities to be had...

*After not reading the news for 3 months, Tyrone saw opportunities everywhere.*

In short, the NHI is: “a health financing system that is designed to pool funds to provide access to quality affordable personal health services for all South Africans based on their health needs, irrespective of their socio-economic status.”

Ok, but that sounds awesome. Get sick. Go to a Dr that knows what they’re doing, and makes you better with the right type of care. All without costing an arm and a leg. So why the fuss?

Well, the whole thing will be owned and operated by the South African government. And if we look at the state of our other State Owned Enterprises (SOEs), therein lies the rub.

But hold up – let’s unpack a few things first.

Firstly, How Big is the Healthcare Sector in SA?

*Is public health underfunded or private health overpaying?*

What’s the basic premise of the NHI? To combine that spending and serve everyone equally.

Is this good for the poor and bad for the not-so-poor?

Improved healthcare for the poor is really something we ought to be doing in this country. But what about those that have medical aid? Well, medical aid numbers have been flat-lining and even declining over the last few years.

Inflation is on everyone’s lips – and impacting everyone’s pockets. But experts concur that healthcare inflation is around 4% higher than the CPI – meaning your medical aid increases will be between 8 & 10% for the next 5 or 10 years. It will get more unaffordable as time goes on.

Why the steeper than inflation rise?

This phenomenon of higher-than-normal inflation in this sector can be attributed to the multiple players involved in delivering private healthcare. Think medical aid, doctor, specialist, lab, X-ray, hospital group, big pharma, etc. All are private, and all have shareholders that want to make profits. If each makes a 10% margin, you could end up only getting 50% of the money spent in value… ouch.

And this value chain is bound to squeeze the consumer (patient) every year as companies face pressure from their shareholders. With these rises in costs, private medical care will ultimately become unaffordable for the middle class, and then something like the NHI would have been inevitable anyway.

So it was coming anyway, what’s next?

Government has yet to put a number on the cost of NHI – but Health Minister Joe Phaahla has told us to chill, Government will pay for it (read: the taxpayer will pay for it). The range of money thrown around by pundits could be anywhere between R170 billion and R450 billion, and the treasury still has to find the money for this.

Next, the bill will come before the National Council of Provinces (NCOP), before sliding across the desk of the President to be signed into law. And by many accounts, the scheme is set to be phased in from 2026.

Whether or not this is a good idea, whether the government can afford it or manage it well is a story for the Daily Mavericks of the world. But what is definitely true is that this bill introduces a major change in the healthcare landscape. And changing landscapes offer opportunities, especially ones that are enforced by regulation. So in pure Open Letter style, let’s dive in:

Medical aid changes: Just like how actuaries started gap cover for the shortfall of medical aid, they can create new medical insurance for items not covered, or only covered in part by NHI. Spot gaps early, offer great products and you could just become the Discovery of the NHI era.
Skills Exodus: With the implementation of the NHI, skilled medical professionals might want to leave our shores – if everyone gets the same pay, top performers could go earn more elsewhere. This poses an interesting question – and opportunity. How does one scale healthcare? Recently we covered Udok, an online GP consultation platform already connecting doctors and patients. With long queues on the cards, more affordable, scalable solutions could make doctors serve more patients and enable them to earn more.
Claims and practise management software: With medical procedures paid by the government, the claiming and tracking of payments offer a unique opportunity for a new entrant in this space to take on the incumbents. Perhaps even a trojan horse to better practise management software – a space we have heard could do with some disruption.
Medical Tourism: Just like companies have been offering holidays interspersed with medical/cosmetic procedures – think Turkey for hair implants and Cape Town for plastic surgery – the reverse could be true. Innovative travel agents can put together a 10-day trip to Mauritius to have your hip replaced.
Location: If healthcare “earns” the same irrespective of where you are serving customers, there are likely massive opportunities for healthcare centres in previously underserved areas. What’s more, why would a GP keep his fancy offices in a busy part of a wealthy suburb if he’s getting paid the same per consult as a doctor in a low-income area?
Rating: Doctors are mostly picked due to proximity. But in the UK where a similar central healthcare system (NHS) was implemented years ago, online ratings of doctors became extremely important. If all doctors charge the same, wouldn’t you pick the one with the best care?

In the end, should all the doctors leave SA, fear not, robotic surgeons are apparently not far away.

What opportunities do you see in NHI? Hit reply and give us your take…

IN SHORT

⚠️ Trust no one. Google advises its staff not to use chatbots, even their own AI, Google Bard. This stems from security concerns over leaks due to confidential info being entered into chatbots. Pretty sound advice really.

⚡ Power to the people. Maybe solving load shedding is simple after all – Eskom claims that clamping down on illegal connections in Gauteng alone (that cost the utility R 7bn per year), could see loadshedding reduced by two whole stages.

🚙 Never be caught without your drivers. Department of Transport’s plans to roll out electronic driver’s licenses (eDL) is on track for 2025/26 and means drivers will be able to access their driver’s licenses using their phones.

🌿 Hyperlocal Entrepreneurs. South African Hustlers are powering the gig economy using EskomSePush’s AskMyStreet to find customers in their local area, at no cost. Everyone from handymen & home bakers, to garden services & domestic workers are using the feature to market their goods and services.

👨‍💻 Cracking the code. A GitHub survey reveals that 92% of software developers are using AI, with only 6% saying they use AI tools exclusively outside of work.

BUILDER’S CORNER

How to Make PR Work for You

In last week’s Open Letter, we mentioned how startups can potentially waste money on PR. While that might be true in some cases, one of our readers, Nicole Mirkin, reached out to tell us it’s a little more nuanced than that…

Disclaimer: Nicole owns and runs the firm, Omnia Strategic Counsel & Communications, but what she had to say was good and important enough to relay here.

PR 2.0 is Here

“You were referring to old-school PR,” Nicole says, “and yeah, even I’ll agree that doesn’t always work in the tech space. Let me show you what does…”

What Nicole introduced us to instead is what she calls Strategic Comms. And here’s the diff:

It’s not about just blasting a message to add to the noise, it’s about delivering the message behind your product to where your niche market and investors live.
It includes a lot more stakeholder engagement and sometimes even government lobbying – to counter those regulations that threaten nearly all evolving tech spaces.
And turning what seems like bad press for your industry into opportunities to be a shining light.

Nicole also told us how to identify a worthwhile PR partner if you’re a startup.

*Speaking only asteroid-backwards, Yoda needed all the help he could get.*

5 Questions to ask your PR firm (before you start)

Could you describe your experience working with startups and how it compares to your work with established businesses? Because you want a partner that knows how to work with startups.
What is your pricing structure and how do you tailor your services to meet the unique goals of each client? You want a partner that has a special rate for startups. And then you want to know if they can align with your development goals (not standard PR goals).
Could you explain your strategy for maximizing the effectiveness of media coverage? Because it’s not just about the reach, you want to know that your message is landing in the right kind of publications. A million impressions in the wrong publication is a waste of time.
What kind of lasting value do you aim to provide to your clients beyond the duration of your formal working relationship? You want a partner that draws up a solid development-based plan that you can build on for the future public-facing side of your company post-engagement with the partner.
Can you tell me about the support you offer clients in terms of crisis communications and handling industry issues? You basically want to hear them say they’ll assign a dedicated person to you 24/7 to help you be able to quickly turn any industry news into an opportunity – apparently, this is a very important one.

And, just so we could check for ourselves, she gave the names of a few Cape Town startups that have benefitted from strategic comms: Momint, Maholla and Ion Capital Partners. Nice coverage.

Got a strat comms question? Hit reply and let us know – ‘cos, you know, we know people…