Hi there,

Want to know what AIs do when we’re not asking them dumb questions? Check out Chirper, it’s a social network for AIs only – no humans allowed. Seriously, you can look but you can’t post or take part in the convo unless you create your own AI chirper and let it loose inside. Wild.

In this Open Letter:

• Going postal: How to save SAPO.
• E-panic buttons for all, Google’s secret weapon & WoodTech…?
• During the build: Crucial marketing while developing an MVP.

TRENDING NOW

The Hows and Whys of Saving the Post Office

There’s a reason “SA Post Office” isn’t a common shipping option in e-commerce. For years, SAPO has battled to deliver its most basic service – some years only achieving a 61.2% delivery rate. Meaning, your parcel has only a 3 out of 5 chance of ever arriving.

Compare this to its US counterparts (also government-owned). The US Postal Service has a 91.2% success rate with an average 2.5-day delivery time across the entire US. And they do this at scale. USPS handles almost half of the world’s total mail and delivers more than the top private carriers do annually on aggregate, in just 16 days.

USPS powering the US e-comm market

In the US, e-commerce accounts for over half a trillion dollars in sales annually, and is growing at double-digit rates each year. It employs an estimated 980k people and is a prime enabler of e-commerce growth, with 89% of small and medium-sized US e-commerce businesses relying on them. Even Amazon uses USPS for about 30% of its deliveries.

Can SAPO do the same for SA?

Mark Barnes, former chair of Purple Group (the holding company of EasyEquities) has always believed SAPO can; hence putting his business interests aside to step into the CEO position in 2016. His plan was to modernise the Post Office with technology and systems and turn its focus to e-commerce and financial services. A strategy which his board disagreed with and ultimately led to his resignation in 2019.

But now 4 years later, SAPO is facing the end of the road. They have been placed on provisional liquidation, and with liabilities (R4.4bn) exceeding its assets (R4bn), they are no longer a going concern.

Three options are on the table

SAPO (although through Post Bank) delivers social grants to some 7 million beneficiaries and that needs to stay in place. But what happens to traditional mail and parcel deliveries? One of three options remains:

• Just drop mail and parcels. Let Post Bank run with social grants.
• Bail out SAPO. The finance minister gave them an R2.4 billion bailout in February, but they need more. They are merely kicking the can down the road.
• Sell it (partially). Mark Barnes made an offer a year ago to buy the majority of SAPO and recently said that his offer still stands.

Whilst option 3 would be great for an e-comm-focused strategy, you can’t help but wonder about its mandate and how it would keep serving South Africa. Yet, a similar semi-privatisation of the German Post Office (Deutsche Post) took place in 1998. And that worked very well – Deutsche Post eventually became DHL, a successful global logistics operation with 94.4 billion Euros in revenue. All that with a 8.4 billion Euros operating profit.

The Opportunity

In the US, US postal service has a 17% market share in e-commerce deliveries. Should SAPO be able to capture 17% of the local e-commerce market, projected to hit R98.6 billion this year, it could boost its revenue by 35%. Not quite making it break even yet, but considering it should have the capability to do this, it’s a no-brainer.

What’s more, with physical locations spread across the country, a contract to disburse social grants and the capability to pull even more feet if it does e-commerce well, the Post Office has the power to get feet, eyeballs and wallets that could match the likes of Pep or Shoprite.

As time runs out, we sure hope that government does see growth in e-commerce as a major economic enabler. It could give our economy, and local e-commerce hustlers, a much-needed boost.

IN SHORT

🚨 Don’t Panic. At the passing out parade for the 3’000 newly graduated peace officers, Gauteng Premier Panyaza Lesufi announced a pilot program to equip Gauteng residents with e-panic buttons.

🔥 Let’s get ready to Braai again. We’ve been keeping an eye on food cost trends – specifically braai prices and there’s good news (perhaps just on the other side of winter). Despite increasing food production costs, carcass prices are lower and that should translate into meat prices coming down.

😬 Yikes: Remember the MTI saga? Labelled in 2020 as the biggest crypto investment scam in the world, a US judge just ordered MTI’s Cornelius Johannes Steynberg to pay R63.6 billion for running an illegal Ponzi scheme.

🤖 Secret weapon: With AI being every second word Big Techs say these days, it’s no surprise that Google has pulled out the big guns by merging DeepMind with Google Brain. For 9 years, Google funded DeepMind, without asking for any return, giving it complete independence. Now, Google’s bringing its secret toy out to play with OpenAI.

🌳 Green tech: Not sure who asked for it, but a group of Swedish scientists just created the world’s first wooden transistor. Not much for performance (it only does 1Hz) but this could be the start of a new wood-tech movement – trees are biological engineering marvels, so there could be something to it.

­

THE BUILDER’S CORNER

What Marketing should you do While Building an MVP?

OK, you’re in the building phase, how can you create some excitement for launch? Well, conventional knowledge (i.e. ChatGPT and Google) generally tells you to create content, share stuff on socials, start a blog, build a community and database etc. Which is all good and well but what exactly are you supposed to say, to whom and how… to make it really effective?

‘Cos remember everyone is sharing stuff to steal your eyes and attention. Not just businesses, but your grandma on Facebook, too. The web is the biggest, busiest bazaar in history…

Pre-launch marketing that actually makes sense

1. Build in public – Controversial as it is, it actually creates natural talking points and loads of content for you to share. And it’s all relevant. As mentioned before blockchain marketplace Momint has a revenue-generating building-in-public segment on their YouTube channel.
   
2. Craft an HVCO – A High-Value Content Offer is a document, report, tool – any piece of content with valuable information you can’t get anywhere else. For example, a founder making his playbook available, that’s an HVCO. Then use it as a lead magnet: Create an HVCO your eventual market will be interested in, offer it for download (you can even run ads) and build a database you’ll be able to market to when your MVPs’s ready.
   
3. Build a waitlist – This one’s tricky; pre-launch waitlists are hard to wangle. But we’re putting it here because a lot of international startups are raving over WaitlistAPI. Reviews say it’s managed to get people thousands of customers pre-launch (3.5 million for 7’500 startups), so worth checking out.
   
4. Find your market’s emotional buying triggers – Next-level but not impossible to do yourself. Use social listening (i.e. snooping on forums and socials, copy-pasting people’s comments) to find your market’s biggest Fears, Pains, Hopes and Uncertainties to refine your Value Proposition, Offer and Guarantee based on people’s emotive needs – a powerful selling tool.

Need help? Ask Renier and Elvorne about this one.

THE CHIRP

Checked out Chirpet yet? Here are some posts AI came up with on a “Twitter” clone only AI can post on. The challenge for those building chatbots on Chirper? Get the most human followers.

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This Open Letter is brought to you by Renier Kriel, Jason Mill and Elvorne Palmer.

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