💸 60 People That Make 1bn Per Quarter…
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Can’t trust your AirPods? It might be best to CT scan them – see what real Apple AirPods VS counterfeits look like under computerised X-rays.
In this Open Letter:
- Big play: Driving usage on SA’s first stablecoins.
- G’bye Fitbit, Apple’s big iOS18 play & early Black Friday deals.
- Go wide: How to build a killer remote startup.
- Building GPTs: The results are in and it’s gone live.
- Tell someone: Share this & get free business tools.
TRENDING NOW
The Business of Stablecoins
One of crypto’s biggest criticisms has been its volatility.
Now, volatility is great for day traders who profit from ups and downs, but when you want to pay someone, it gets tricky…
You are getting more or less, but not the amount you agreed on.
That’s where stablecoins like USDT (Tether) or USDC are useful. And Tether provides a safe retreat back into good old FIAT currency in times of great volatility without having to exit crypto altogether. (Just exchange your crypto for the USDT and wait for the storm to pass then exchange it back.)
But what is a stablecoin?
The world's first stablecoin, Tether, was launched in 2014 and is backed 1-to-1 with the dollar, according to Tether Limited Inc. In simple terms, it's real-world-equivalent money used as digital money to transact on various blockchains. Think of it as having dollars in crypto format.
How does Tether work?
There are 5 steps in creation, using and redeeming tether.
Step 1: A KYC -erified user deposits FIAT currency into the Tether bank account.
Step 2: USDT tokens get created for the amount deposited minus fees and sent to user selected address.
Step 3: USDT is used by users and can be transferred, traded or stored for later usage.
Step 4: Users can redeem their USDT for FIAT currency.
Step 5: Tether removes the USDT from the blockchain and deposits the funds to the user’s bank account.
Then Tether generates revenue in two main ways:
- Fees that you pay either to create Tether or redeem it.
- Interest and gains on their treasury — currently sitting at a cool $86billion.
Basically, they sell you Tether for real dollars, then they use those dollars to invest in mostly US T-bills (government bonds) at roughly 5% per annum. That’s a boatload of interest which they are not sharing with users.
Ridiculously profitable and that’s how they manage to generate $1b+ per quarter profits with just 60 employees.
Well played, mon wascals…
The only caveat? You need enough utility and liquidity for people to want it and trust it.
So the playbook in simple terms is:
- Create a use case for your stablecoin (trading, paying, investing, etc).
- Drive adoption and create liquidity — so there are enough tokens for it to actually be useful.
- Then, with enough reserves, you can invest the reserves at low risk and benefit from the returns.
Sound easy? It’s not. But as the adoption of blockchain grows, there might just be a chance that South Africans see a need for a ZAR-backed stablecoin.
After all the South African Rand is one of the top 20 most-traded currencies in the world. As more and more trading moves to blockchain, the need for a ZAR-backed stablecoin might just increase.
The local stablecoins
Now, if you grew up in the 90s, you might remember Gareth Cliff on 5FM had a tech insert at one point hosted by Simon Dingle. Well, after leaving the journalism world behind, Simon founded ZARP stablecoin.
While it’s not SA’s first and only attempt (XZAR is another rand-pegged stablecoin), ZARP recently announced that Old Mutual will be pumping “substantial” liquidity into ZARP.
Why could this be big?
- More ZARP made available could fuel the usage. And when usage increases, demand likely follows. When demand increases, so will reserves.
- Old Mutual manages the treasury of ZARP, so there is likely a margin on assets under management.
- It could become a play for Old Mutual later to be a leader in the blockchain banking space once regulation around it is sorted out.
Got ZARP?
For now, the use cases are limited, but it could very well be adopted by local crypto exchanges as an on-chain irrefutable proof of customer funds. In addition, forex traders of USD and ZAR can now trade USDC/ZARP on-chain, should the transaction fees be economically viable.
But as Decentralised Finance (DeFi) becomes more mainstream, we could see more and more use cases for ZARP emerge. Pull it off, and this might just be one of the most profitable fintechs (by % margin) in South Africa yet.
OUR TOP OPPORTUNITY PICK FOR THIS TREND
Keen to capitalise on this trend? Here is our top pick idea to make the most of this trend
OVER TO YOU In
IN SHORT
🎉 Early Black Friday. With Black Friday becoming more of a thing in SA in recent years, many retailers are already hustling to get their hands on your South African rands, with some retailers already in the thick of it with some lekker discounts on tech gadgets.
💸 Going for Broke. MultiChoice invested R500 million into Showmax ahead of its relaunch in late 2024. Looks to be causing some cold sweats for shareholders, though. The increased investment could reduce trading profits by as much as R1.3 billion – and comes off the back of MultiChoice’s share price dropping 43% YOY.
🙅♂️ Thanks, but no. Green digital utility startup WiSolar, has turned down a $1.5 million loan offer from the Industrial Development Corporation of South Africa (IDC) citing unfavourable loan terms that could potentially hinder their growth and mission. Instead, they are opting to install prepaid solar systems.
💁♀️ Throwing in the towel. After being acquired by Google back in 2019, Fitbit is turning its back on SA shores, and taking Nest (also owned by Google) with it. The wearable brand’s reason for waai’ing is part of a move to align its hardware portfolio to the Pixel smartphone’s regional availability.
🍎 Apple’s Big Plans. Apple is launching iOS18 next year and promising it’ll be “ambitious and compelling” with major new features, designs and ramped-up performance and security. We’re gonna hazard a guess and predict they adding some major AI capabilities. Anyhow, it’s set to be Apple’s biggest OS update yet.
BUILDER’S CORNER
How to Build a Killer Remote Startup
You got your idea, a few key individuals lined up and you’re ready to go. And like most startups, you don’t have a dedicated building space, but what if your team is scattered all over the country or province?
Not that remote Jimmy…..
Yes, you can build an entire company full-on remotely. It’s said that the best startup newsletter in the known universe is 100% remote. And it’s exactly as easy AND as hard as you imagine.
But there are 3 core elements you need to nail from Day 1 (because it’s too hard to change afterwards), namely:
- Alignment
- Autonomy
- Trust
Here’s how
1. Get the team aligned on the vision
Whether it takes vision workshops, scenario planning, goal-setting sessions, freaking role-playing or a mix of them all, do it. Ensure everyone is aligned on what you’re doing and where you’re going before you make anything official.
2. Autonomy is king
People need to be and feel 100% empowered to execute, call to question, interrogate and even stop production if necessary, when they feel something is not working towards company goals.
Likewise, they need to have full control over their time and contributions. For this, it helps if your roles and responsibilities are super clear – possibly even having domain specialists as a team.
3. Adapt to asynchronous work
The biggest hurdle for most companies is saying goodbye to the 9 to 5. When you’re remote, people can’t and shouldn’t always align calendars. Everyone’s rhythms differ, and you frankly get the best quality work when you let people work when and how they want. This means designing a way of working without meetings and using tools to fill the gaps.
4. Meetings with a purpose
Speaking of meetings, cut them down to the absolute bare minimum your company needs to survive and they must have a specific purpose, agenda and action points.
We at The Open Letter have only 2 super-short video meets per week – a quick review the night before you get your newsletter. But they’re entirely optional (we’ve rarely had any with everyone present), because our system of work negates the need for real meets.
5. Have a central truth centre
If you have information and strategies that change all the time, keep a central “truth centre” where the new direction is constantly and centrally updated so everyone can see it.
We chop and change all the time, so we use Notion to keep track of our current truth. But you could have a Miro board, Trello or whatever collab app you choose.
6. Project management & accountability
When you have co-founders and team members, you need absolute transparency and accountability around tasks and progress. No worries, your truth centre takes care of that, too.
Got a remote startup hack? Hit reply and let us know how your team optimises…
THE RESULTS
We asked who’s gonna be building GPTs when it goes public (which it has), and the majority said YAY…
🟩🟩🟩🟩🟩🟩 💡 Yes, I have a ton of ideas. (32%)
🟨🟨🟨🟨⬜️⬜️ 😐 Normal ChatGPT is fine for me. (24%)
🟨🟨🟨⬜️⬜️⬜️ 📱 Nah, but keen to use other people’s apps. (16%)
🟨🟨⬜️⬜️⬜️⬜️ 😕 WhatGPT? (12%)
🟨🟨🟨⬜️⬜️⬜️ 😈 AI is evil, I refuse to participate in any of this. (16%)
Your 2 cents…
It’s live: If you have GPT-4, Nicky, hit “Explore” and start building!
FOR THE MEMES
Instagram post by @theopenletterza
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