💸 SA's Next SuperApp...
So, you know how we got Grindstone’s Will Green as a guest on the Open Conversation on LinkedIn Live next week (see below)? Well, we’re spicing things up by giving away 2x R500 vouchers. Reply to this email with a question you want our guest, Will, to answer – the best questions win.
Also, join the event on 1 March and ask a question live and you can win the other R500 voucher!
In this Open Letter:
- Getting it: What makes a SuperApp.
- SA’s sugariest soda, a R1.1m iPhone & greener money.
- Innovation space: How tech can capitalise on tax.
- The contenders: SA’s next SuperApp candidates.
- VC funding insights: Will Green Open Conversation reminder.
- Watch: Africa startup cash & when politics affect business.
TRENDING NOW
The SuperApp Race Is On
A few weeks ago we reported how you can buy doughnut vouchers using a credit line in your Vodacom app. Well, you can now also buy an on-demand security subscription with your DSTV. Has the world gone mad? No, everyone is just trying to be a SuperApp. Let us explain…
“You’re not getting it”
That’s what Elon Musk said to a Twitter employee who asked questions about his planned SuperApp, just called “X”. The reason people aren’t getting it, is that they think “X” will simply be a neobank or allow payments…a new form of PayPal if you will.
But there’s more to SuperApps than simply adding features or adding payments. The SuperApp philosophy is about attention conversion. How do you convert time spent at a specific place (in this case, in an app) into more revenue?
The concept isn’t novel.
Shopping malls are built on the same premise. Modern malls are massive, designed to make it hard for you to find your exit, and offer an array of attractions and distractions to keep you there. The longer you linger, the likelier you are to spend more money.
That’s what a SuperApp is meant to be. And, just like the mall doesn’t own all the stores in it, so too the SuperApp simply facilitates engagement with various services.
South Africa’s first SuperApp
You might be surprised it already came and went.
Back in 2003, a small services company in Stellenbosch under Herman Heunis started playing around with an app for cheaper messaging than SMS. At the time, an SMS cost 75 cents for 160 characters. Mxit officially launched in 2005, offering messaging at a fraction of the cost.
Soon, Mxit was everywhere and people were spending an enormous amount of time on the app. So Mxit brought in other apps, games and third-party applications. Eventually a peripheral would catch your attention, just like in a shopping mall.
Now, Mxit went bust after selling to World of Avatar in 2011, just after WhatsApp launched (2009), and they soon learnt the magic of Mxit was never the side services, it was the initial promise of cheaper messaging.
Lesson learnt. But it’s worthwhile noting not even Meta has fully capitalised WhatsApp yet. But its Chinese Tencent equivalent has…
WeChat’s Rise to SuperApp Status
When WeChat launched back in 2011, Chinese language keyboards weren’t well developed. So the app offered voice notes long before WhatsApp. And, just like Mxit, WeChat quickly captured a massive market share and, unlike Mxit, kept developing the app’s core function, to keep it modern and fresh.
With a little help from the Chinese government in keeping out international competitors, WeChat soon became the app where most Chinese people spent their time on their phones. Now the peripheral services started, essentially creating a one-stop app for everything you want to do in China.
And we mean everything
But WeChat failed in SA?
WeChat threw everything at making it work in SA. We had SnapScan integration, and they gave away thousands of rands to users to start using it. But when the free money dried up, so did the active users. The same problem Mxit had, if the users aren’t spending time there already, they aren’t going to use the peripheral services.
The Open Letter Guide to Building a SuperApp
Step 1: Find something that is super sticky, I mean really sticky. As in 10 times cheaper or better than the current alternative sticky. And grow a user base.
Step 2: Introduce payments that work seamlessly for your user base.
Step 3: Make it super easy for third parties to integrate and sell services to your user base.
Step 4: Make sure step 1 stays relevant and sticky.
“Now you’re getting it.”
Elon didn’t buy Twitter to irritate the left. He bought it because it's sticky and has the potential to be even more so. And he realised the only way this user base will grow and continue to be relevant (step 1) is by making it more balanced.
It's working, user numbers are up every month. And payments and third-party are likely to follow.
What’s not clear to us is why someone hasn’t called Zuck out of the Metaverse sooner to come and help Whatsapp dominate this battle. They’ve been making SuperApp moves, WhatsApp business generated $5 billion in revenue in 2020, but with a staff contingent of 55-odd, a CEO sidetracked by a failing passion project and Musk as an opponent, this might soon become a one-horse race….
IN SHORT
Those overpriced soy milk lattes will now save even more of the planet. Contribute to fighting climate change with every swipe.
Would you eat 10 spoons of sugar in one sitting? You would if you drank this drink.
“People will never pay to use social media!” until they are. Meta is following Musk in charging for verification.
Are you paying your cleaning lady enough? Check the updated minimum wage in SA.
What an investment: An iPhone 1 sold for 100 times its original price on auction.
Flashback: Guns ‘n Roses' “November Rain” just became the first pre-2005 hard rock song to get over 2 billion views on YouTube.
A truly green home: This startup builds houses out of plant material.
WATCH THIS SPACE
What’s Missing in the Tax Space
Millions of users are sitting and waiting…
It’s tax time in South Africa with this tax year ending on 28 Feb 2023 and many side hustlers and crypto traders filing provisional tax returns.
And let’s face it, even amidst a lot of corruption, the government needs tax money to have any chance of functioning properly. And although paying tax is the right thing to do, it does make sense to pay absolutely only that which is legally necessary.
With some exciting announcements around what qualifies for refunds for those that WFH, the potential of refunds for load-shedding equipment/solar (although only for the next tax year), and the rise of PolyJobbing, it’s become an absolute minefield for us mere mortals to navigate.
To add to all of that, the SARS e-filling platform still looks like it’s built and maintained in Windows Vista.
Filing tax is mandatory, and the fines imposed for non-compliance are severe. And with a guaranteed annual customer base, one would think that this space is a great opportunity for tech innovation and disruption.
Options for a personal tax return
If you don’t have a mate that’s an accountant, you can make use of TaxTim.
Having helped over 7 million South Africans complete their taxes since 2011, TaxTim is one of the best-known tax help platforms. Taking the form of a conversation with a “TaxBot” called (yep, you guessed it) Tim, users answer a bunch of questions across all the sections of your tax return, which then integrates directly with the SARS e-filling platform and submits your tax return for you. Simple.
Tax Tim also offers a range of tools like calculators, logbooks etc. and partners with several financial institutions to provide their customers discounts on tax return submissions.
Got some crypto losses to report?
If you have spent any time in DeFi, you would know that moving to the next best-yield farm is often the name of the game. But keeping track of what was a reward token (taxed as income) and what was increased in token price (capital gains tax) is well, impossible.
Koinly is a product built for this problem. With integrations into many crypto platforms as well as on-chain analysis of your DeFi activity, it's bound to make the process of filing the right data, simpler.
What we didn’t find
Since the launch of ChatGPT, almost every problem faced is met with the thought “Maybe chatGPT could do this”. We tried, and it gave some good, solid, chatGPT-generic advice.
It couldn’t however do the work for us. So, surely the time is ripe for an automated AI solution for tax reporting? We are watching this space…
SA SUPERAPP CANDIDATES
Moyo – a data-free app (use it without paying for the data) multi-functional browser app with some real traction. It might be hard to convert users into paying for services, though – if your stickiness factor is “no charge”, will users have cash for Uber Eats?
Ayoba – offers everything you would want to see in a SuperApp: chats, payments, games, music & more. Questions remain on whether it can stay sticky and grow the user base fast enough.
Avo – claims to be Africa’s first “supershop app”. Offering e-commerce, take-out, vouchers, prepaid & more. There’s a lot you can do in-app, but if this is not already your store of choice and the offering isn’t substantially more convenient than Uber Eats, MrD and/or Takealot, what’s going to get people to spend a lot of time on here in the first place?
The Corporate Plays
Many corporates have added an array of features to their core offering in an effort to upsell to their current clients.
FNB offers probably more non-banking features on their app than banking, as do a lot of other big banks.
Vodacom added payments, vouchers and even discounted offers. While Discovery always makes a strong case for being the starting point of any purchase for their customers with a great loyalty program.
DStv is also following suit, starting to offer an array of other subscriptions.
Who is winning? Hit reply and let us know what you think…
VC FUNDING INSIGHTS
As a startup, securing the right funding and support can mean the difference between success and becoming a statistic. And, with funding a little in short supply in Africa, we connected with entrepreneurship engineers GrindstoneXL Programme Director, Will Green.
Bringing years of VC, entrepreneur support and global startup ecosystem knowledge to the table, Will joins us for the next Open Conversation happening on LinkedIn Live on 1 March 2023 – register here for free.
THE THREAD
Renier and Bobby Sequeira delve into African startup funding levels – and why SA’s lagging – as well as political trends that could impact your venture in a new instalment of Busines Gambit.
ONE LAST THING
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