🔥 Sending Wi-Fi Where it's Never Gone Before…
Skynet, yet? The US held the world’s first AI warfare conference, and according to this journalist, it was a bit of a Military-meets-Silicon-Valley Orwellian nightmare.
In this Open Letter (it’s a biggy!):
- Real growth: Sending fibre where it’s never gone before.
- ScarJo’s “stolen” voice, AI overflow & Microsoft’s local biz.
- R1k at Takealot: Did you win this week’s lucky draw?
- Trending now: 3 Hottest topics in SA startup right now.
- Something new: 70+ pro guides for growing your business.
- The best SA product to export: The poll results are in.
TRENDING NOW
112.7M Reasons for Fibre-Excitement
Smartphones are becoming the entertainment device of choice in SA townships.
In fact, when we visited Kazang recently, they shared how they discovered many people in townships have 2 mobile devices – 1 cheaper, lower-spec phone for travelling and a 2nd higher-end device that stays at home because it’s mainly used for entertainment.
In November last year, Showmax toppled Netflix, with its 2.1 million subscribers (compared to Netflix’s 1.8 million) to become the king of streaming services in Africa. And with the likes of the English Premier League games for only R69 a month, you can imagine that streaming on mobile devices is becoming more and more popular.
But the internet to pull this off is not quite there yet. A quick look at SA’s recent Census Stats shows some interesting numbers.
- Back in 2011, a staggering 64.8% of households had no access to internet services, with that number dropping significantly to only 21.1% in the recent 2022 Census.
- Also in 2011, only 8.6% of homes had an internet connection in the dwelling, with that number only bumping up slightly to 13.3% in 2022.
And here’s where it gets interesting. Over the same period (2011–2022) the number of households using a cellphone (or other mobile device) grew nearly 4x from 16.3% to a whopping 60.5%.
We have more devices, but home internet hasn’t kept up with the pace…
The data consumption conundrum
South African data prices have come down a lot in the last few years, but it’s still not quite at the level where streaming video becomes economically viable.
On average, streaming SD-quality video consumes around 0.7 to 1 GB of data per hour — R30 odd for watching a show, R60 for a football game. It’s still too expensive….
Are there other options than cellular data?
In the suburbs, fibre infrastructure investment can make sense as your type of consumer can typically afford a monthly premium over time.
But townships are different.
You have a lot of non-permanent structures and, with such narrow streets, it's not that easy to install fibre infrastructure. Not to mention your consumer’s earning cycles often mean debit orders and high monthly costs are less practical.
Enter fibertime, a Stellenbosch-based township internet provider founded by former Mxit and Herotel CEO, Alan Knott Craig Jnr. During an initial pilot, they financed and installed Wi-Fi devices in 880 homes in Kayamandi, Stellenbosch, at no charge to the occupants. Residents could then purchase Wi-Fi connectivity at R5 for a 24-hour voucher at speeds up to 100Mbps – even during load-shedding.
Can this make money?
Their model thrives on population density. While a suburban property typically houses 5 people, the same space in a township accommodates 100 – a twentyfold increase. Then there is a disproportionate cost in serving 20x more people as it won’t cost 20x more or require 20x infrastructure.
Also, vouchers are linked to individual devices, and not the entire home, meaning each person in the house could end up buying a voucher in the house for their own usage. They claim that making an average of R5 per home per day makes their model profitable and weekend surges have seen them nearly double to R9.20 per home.
By being active in Kayamandi, they currently cover about 0.25% of South Africa’s townships, so there’s lots of room for growth. And, as entertainment providers like Showmax make a push into the township market through mobile streaming, demand for data will keep rising.
And with an affordable unlimited data option, fibertime might just be onto something. We are watching this space…
IN SHORT
👩🏽💻 AI Overflow. Prosus-owned developer resource platform, Stack Overflow, is partnering with OpenAI to create OverflowAPI. This move will see OpenAI gain access to the popular Stack Overflow community and provide attribution to Stack Overflow community to foster deeper engagement.
🚀 To the moon? Nvidia announced quarterly results and set record quarterly revenue of $26.0 billion, up 18% from Q4 and up 262% from a year ago. The results also included a staggering $14.88bn net income for the 3 month period.
🤖 IllegalGPT. OpenAI could find itself in a spot of legal bother after it’s being accused of making a ChatGPT voice that sounds like actress Scarlett Johanson for its AI assistant called “Sky”.
🌐 Microsoft Support. Microsoft SA has agreed to a 10-year, R1.3 billion deal with the Department of Trade, Industry and Competition to support local small businesses and invest in youth skills development.
🌱Carbon Crunch. SA faces up to a 10% reduction in exports and a 9% reduction in GDP by 2050 due to global carbon taxes. This could also impact between 350k and 2.6 million jobs.
AND THE WINNER IS…
Congratulations, Christo Kleinhans, you’ve won a R1’000 Takealot voucher and a copy of SA startup must-read, The First Kudu. We’ll contact you, personally with your prize, but we just wanted to share how your big win went down…
But that’s not all, folks! Next Friday, we’re giving away another R1’000 Takealot voucher and another copy of The First Kudu. And all you have to do to see your name up in lights is to:
- Reply to this email and tell us what you think of The Open Letter. That’s right, give us a review (good or bad) and you will get entered into next week’s draw!
PS: The First Kudy is also available as an audio book which you can grab here.
HOW WOULD YOU BUILD IT?
Hot Topics in the SA Startup Space Right Now 🔥
If you’re here because you like how we show you startup and tech through the lens of the larger SA economic, business and social scope, then this week’s podcast is for you! We sat down, just Bobby and Renier, to unpack some burning topics in this pre-election “crazy season” that’s sure to impact the SA startup space…
Catch the highlights
1. What’s next for The Open Letter
From growth to 5-star partners and what is that we hear about a community…? – some crazy exciting updates right here.
2. Major opportunities coming out of NHI
From eliminating cost drivers (and we can name quite a few!) to just getting the entire system to operate at the level of efficiency that government foresees with the NHI bill creates so many new opportunities for innovation, it’s actually quite funny – get some MedTech ideas here.
3. Super-hot EdTech opportunities from the Bela Bill
The major impacts on local schools, centralised decision-makers, Grade R and homeschooling create room for and (given SA’s track record with education) probably necessitate a lot of innovation. And therein lie quite a few key opportunities – get the insights right here.
You can also grab the Spotify and Apple Podcast links on our website here.
SOMETHING NEW
70+ Free Guides for Building Your Startup
Some astute members have already noticed that there’s a new section on our website. So let’s just make it official: We’ve launched the Builder’s Toolbox and you can go check it out right here.
The ultimate SA build combo….Build, plant and braai
Quick-fire Insights on Specific Topics
OGs will know we’ve done boatloads of Builder’s Corner segments, featuring focused, quick-fire insights into doing specific things to start/grow/manage your company better.
Well, now we’ve collected them into a handy library, so you get pro tips on topics like…
- How to hire A-players for your startup
- How to boost your public image, Mr CEO
- How to unlock your growth market
- How to lower your CAC and increase profit
- How to valuate your company (like a VC)
- How to track and measure your WOM
And 70+ (soon to be 100s) more… Enjoy!
A WORD FROM VANTA
Free SOC 2 Compliance Checklist from Vanta
Are you building a business? Achieving SOC 2 compliance can help you win bigger deals, enter new markets, and deepen trust with your customers — but it can also cost you real time and money.
Vanta automates up to 90% of the work for SOC 2 (along with other in-demand frameworks like ISO 27001, HIPAA, and GDPR), getting you audit-ready in weeks instead of months and saving you up to 85% of associated costs.
Download the free checklist to learn more about the SOC 2 compliance process and the road ahead.
YOUR VOICE
We asked what SA products you think will sell best in the UK, and seems there’s no beating the biltong…
🟨⬜️⬜️⬜️⬜️⬜️ 🍮 Melktert (8%)
🟩🟩🟩🟩🟩🟩 🥓 Biltong (32%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🫧 Fizzers (3%)
🟨🟨⬜️⬜️⬜️⬜️ 👞 Vellies (12%)
🟨🟨⬜️⬜️⬜️⬜️ 🥫 Mrs Balls (12%)
🟨⬜️⬜️⬜️⬜️⬜️ 🦸 My startup services (7%)
🟨🟨🟨🟨⬜️⬜️ 🌟 Bottled sunshine & some rugby talent (26%)
Your 2 cents…
Yeh. Allistair, there’s nothing quite like it, hey?
Jip, Panache — no one here’s gonna complain if you say it’s the world’s best dried anything!
Heita, what a treat — know where our next pair’s coming from, thanks, Bertrand.
Ha ha, Mervyn, we were once on a plane with a bunch of Aussies, and they were handing out droëwors — tryna finish a kg bag they’d smuggled on the plane from SA.
Lekker, Pascal, you know we expect nothing less from you!