Clean air? When a group of Norwegians built a reactor to soak up CO2 from the air, a US startup’s Estonian deep-tech founder answered with these weird light towers that do the same thing plus then convert the CO2 into fuel. Great to see the green race going.

In this Open Letter:

• Game on: Enabling new ways to build in this $300bn industry.
• Home Affairs Premium, Wooden Spaceships & chuck all your cards.
• Growth unlocked: How they funded their next expansion phase.
• The future of last-mile deliveries in SA: The results are in.
• Lonely building your startup? Join SA’s only tech founder community.

Together with:

Did someone forward you this email? Join South Africans reading The Open Letter by signing up here.

TRENDING NOW

Bringing Data-Driven Decisions to Your Gaming

Mobile gaming is a big deal.

Around the world, there are more than 3 billion mobile gamers, with mobile games contributing about half of the $300 billion total gaming market size – more than consoles & PC games combined.

And they’re not just playing free games…

Player spending hit $41.2 billion in the 1st half of 2022, with massive mobile games like Diablo Immortal and Pokémon GO pulling in $100 million each in just 8 weeks and 2 weeks respectively.

Whilst it is a big industry, games are mostly B2C, which means lots of work and money to get the word out there. And it’s expensive…

Building in Hard Mode

The thing about gaming is it’s infinitely harder to create a profitable game with a lifespan anywhere near as long as most other tech products – ask any founder why they’d switch from B2C to B2B any day.

Why? Modern games are mostly online, and a large amount of people expect them to be free. So, to make the game successful, you need a large number of players (online games only work well when enough people are playing), but you also need to make money, which most games do by offering in-app purchases. Finally, you have to balance the game to make sure the free players are still enjoying it. It’s complicated.

And the complexity is taking its toll. 2023 was a blood bath for the gaming industry, as shown in the mobile gaming platform SuperScale’s white paper:

• 32% of mobile game studios had major layoffs in 2023
• 27% permanently downsized
• 24% almost shut down
• 29% had to cut their user acquisition budget
• Some sectors report 62% job losses
• And 40% started outsourcing development and publishing

  Why?

• 83% of games die within 3 years
• 47% of games die within the first year
• 17% die in 6 months, while 76% of games hit peak revenue in 1 year (and then it’s downhill from there).

Remember that the next time you complain about how hard it is to monetise your 1 tech product – building SaaS software is a bit less complicated…

The cost and complexities

But it’s not only in game design and development where things are complex. The fact is, it often takes an enormous amount of money to have a chance at success with a game. How much? Well, at one point, Candy Crush was spending $1M per day on marketing.

Keeping track of the return on investment (ROI) can get very complicated, especially when you are dealing with freemium games that have in-app purchases.

• Gamers from certain demographics (or cohorts) spend more on in-app purchases than others, leading to higher revenue.
• The cost to market to different cohorts varies.
• It changes over time (some cohorts play the game longer and spend more, others spend more over shorter periods, etc.).

The challenge? Constantly iterate to ensure the margin is as high as possible by adjusting where you spend your marketing money based on evidence from previous campaigns and some predictive analytics.

The local team revealing the map…

A cohort-based forecasting tool, Kohort, helps game studios forecast future events or trends with a much higher degree of accuracy, optimising and balancing marketing spending to help the specific game get better ROI on spend.

It works by categorising users by segment (sharing common characteristics like gender, country, age, platform, etc.) and cohort (a group of players who installed the game on the same day) to give game developers a more accurate view of players’ behaviour in the game. Basically, it tracks and reports if a specific ad results in a player with a specific demographic spending more or less than their average gamer on in-app purchasable content.

Then Kohort uses Machine Learning to produce extremely accurate forecasts should the current targeting and campaigns continue.

Before in-app purchases became popular, this problem didn’t exist, and we love how South Africans are pouncing on this opportunity. We’re watching this space…

CHECK THIS OUT

Enabling Growth: It’s the Little Things that Make or Break You

When Capetonian co-founders Theresa Ward and Edwina Butterworth set out to make their mark on the security systems industry, they thought their biggest battle would be against gender norms in this male-dominated space.

They were wrong…

The good news is their play worked and they grew their company Manyene Holdings from just 2 people in 2018 to 50 by 2024.

The bad news is the cost of such rapid growth depleted their cash flow and Theresa and Edwina battled to get financing with any of the traditional banks.

It’s an all-too-common story in South Africa, where 62% of SMEs struggle to access funding – making it the No. 1 barrier to growth in SA.

Fortunately, Theresa and Edwina found a lifeline…

With Lula, they got their approval within 24 hours or less.

Yet it is that easy, get access to a capital facility or capital advance of up to R5m from Lula.

Come Get Your Lula On

IN SHORT

Some titbits to drop at the braai tonight…

🌍 African Tech Fund. A new $250 million startup fund specifically for African tech companies is in the works. Tech accelerator Startup bootcamp, British-East African business tycoon Ashish Thakkar’s Mara Group and Blend Financial Services will target startup hubs in South Africa, Nigeria, Kenya, Ivory Coast and Egypt.

🪵 You wooden believe it. Japan’s Kyoto University and Sumitomo Forestry, have launched a new CubeSat made primarily from wood. Named after the Latin for “wood”, LignoSat consists of the scientific internals encased in a wooden box, with solar panels on the outside, and caught a ride on SpaceX’s latest Falcon 9 launch.

🧙 One ID to rule them all. South Africans could be getting a single digital identity that can be used to consolidate everything from your ID number, tax number, and medical aid number. This as Home Affairs is considering Home Affairs Plus — an expedited document processing and home delivery service for your NB Home Affairs docs. *Not really called Home Affairs Plus. Yet…

⚡️Instant Cross-Border Money. FNB has partnered with BankservAfrica to enable immediate processing of low-value payments within the Common Monetary Area of SA, Namibia, Lesotho and eSwatini.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with your own fractional CFO for less with OCFO, the easiest way to manage your finances with Xero and 12 more vital startup tools & services.

BUILDING TOGETHER

Happening over at The Open Collab

In the last few days alone, in our online community, we…

• Met for our first LIVE (in-person) Office Hours with good coffee in two locations: Stellenbosch and Cape Town. ☕
• Supported and celebrated our EdTech members making big plays at Injini EdTech this week.
• Ran into a whole bunch of familiar faces at Innovation City's startup speed dating — The Open Collab peeps are everywhere these days!
• Helped Gustav find the IoT dev connection he needed for his next steps.
• Started looking for a unique WhatsApp solution for Corne — this could be big.
• Getting ready for the next Product Masterclass with Roger Norton today.

Thinking about joining The Open Collab?

• Supercharge your network in the SA startup landscape — get that introduction, get that customer, or meet that partner.
• Get feedback on your products, services and/or offers from others who have built and are building their own products right now.
• Join all our online and in-person events for free!
• Exclusive 1-on-1 sessions with startup consultants.

SA’s only dedicated tech startup and scale-up founder community.

Join The Open Collab

HAPPENING SOON

Upcoming Events

Join us today (Friday 8 Nov) at 12:00 for the second in a 3-part series with The Open Collab exclusive Product Series. Want to learn what it’s about? Watch the video on IG below…

Instagram post by @theopenletterza

8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — Join The Open Collab community to attend for free.

14 November 2024 — TechSafari is coming to Cape Town! Join Caleb and team for a memorable night at Yoco to talk all things Tech and Startup in Africa. Get tickets here. Use OL20% code to get a sweet 20% off!

12-14 November 2024 — Cape Town: Africa Tech Festival: Including AI Summit and so many tech must-sees — remember you can get a limited free pass, or get access to everything by applying for a startup pass early.

15 November 2024 — Sales Masterclass: Part 2: How to spot opportunities to increase conversion rates — Join The Open Collab community to attend for free.

6 December 2024 — AMA with Alan Knott-Craig: After our LinkedIn Live with Allan, you voted to an Ask Me Anything session — Join The Open Collab community to attend for free.

View all our upcoming events here.

WHAT YOU SAID

Special delivery…

We asked about the future of last-mile, and drones are the way…

🟩🟩🟩🟩🟩🟩 🕹️ Drones. (40%)

🟨🟨⬜️⬜️⬜️⬜️ 🤖 Autonomous Robots. (16%)

🟨🟨🟨🟨🟨⬜️ 👩‍🌾 Trading with others once we’re living in post-apocalyptic, self-sufficient compounds brought about by today’s US election. (37%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🖨️ 3D printing what you need. (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚀 Supplies every 6 months to Elon’s Colony. (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💡 No, wait, I have a better idea... (3%)

Your 2 cents…

Haha, Barry – ja it could feel a bit like trading in the Wild West. 🎩

Good point, Henry! Airspace security qualms keep us grounded (literally). 🚀

Ah, welcome home, sir! 😂

Powered by beehiiv

Time to play? If you ever wished you could just prompt an AI: “Make me a game like Minecraft…” we’re almost there. In fact, you can test-play this AI-generated Minecraft game right now.

Tip: Drop some fences and then turn around… it’s freaky…

In this Open Letter:

• Next level: The missing piece of e-commerce in SA.
• Finding co-founders, SearchGPT & business owners with funding.
• Game changer: How to spot founder burnout (and counter it fast).
• How to prevent employee burnout: The results are in.
• Lonely building your startup? Join The Open Collab and get support.

Together with:

💡In Cape Town 14 November? We are going to Tech Safari’s Mixer event. Come join us. Use the code OL20% to get 20% off your ticket!

Did someone forward you this email? Join 15,085 South Africans reading The Open Letter by signing up here.

TRENDING NOW

The Missing Piece of SA E-commerce

E-commerce in South Africa is slowly becoming big business…

In 2023, SA’s online retail market hit R70 billion and is expected to reach a cool R100 billion in the next 2 years. Noice!

And, of course, Covid helped (or rather forced) it along as locals like Takealot, Checkers and Massmart doubled down – the space attracting international players like Shein, Temu and Amazon.

But it’s not all smooth cruising…

The Complexity in Delivery

Geographically South Africa is much more disbursed than some of the large metros of the developed world.

Just compare population densities:

• Paris: 20’000 per km2
• New York: 11’314 per km2
• Hong Kong: 6’900 per km2
• Cape Town: 1’530 per km2
• Johannesburg: 2’900 per km2

In fact, our richest and most populous province, Gauteng, only has 831 people per square kilometre. With only about 49 people per km2 in South Africa, to serve 1’000 customers, the average distance to travel is around 142.86 km versus just 7km in Paris or New York.

That’s likely why e-commerce historically had a slower uptake in SA than in many developed countries. In SA, e-commerce accounts for only 6% of retail, whereas in places like the US, it’s 16% and in the UK as much as 30%.

But where there is a problem, there is an opportunity…

‍

Delivering on your promises…

If you can’t deliver in key areas, well you can’t really sell online in SA (at least not well).

But having a delivery vehicle active in an area with unpredictable order volumes simply doesn’t make business sense.

So what if you could pay for a delivery on demand? Such a provider could aggregate a host of deliveries for that area, schedule them one after the other and in doing so provide the e-commerce a way to deliver there, whilst still making a schweet margin.

It’s the last mile as a service.

Hyper-local delivery drivers on call

Depending on how you look at it, local last-mile delivery provider Picup, is either a tech-based logistics company or a logistics-powered tech company.

Picup offers adaptable delivery options to suit various business needs. For example, it allows for both multi-collection routes, which is ideal for sequential deliveries, as well as on-demand, single-stop routes within short distances.

Imagine you own an artisanal soap-making business… Picup’s system can receive orders, generate optimised routes, and allocate drivers based on location and driver preferences. If you have a larger service area, Picup integrates with third-party couriers to expand your delivery reach even further.

Getting the scope and scale right

Picup has a flexible driver network of around 4’000 active drivers weekly using anything from motorbikes to large vans (and everything in between). And, as these drivers are independent contractors, it helps keep overheads (and by extension delivery costs) down.

With an impressive list of clients like Ucook, Dischem, Pick n Pay ASAP, iStore, Nando’s, McDonald's, Clicks, OneCart, and Waltons, Picup is expecting to hit 950’000 orders over this year’s Black Friday (a key date in Picup’s history), with order numbers set to continue into the new year.

Picup’s services include:

• field service (collections & deliveries)
• on-demand delivery
• third-party solutions (giving clients a white-label delivery solution to utilise within their existing applications)
• TMA (Transport Management as a Service)
• all packaged in a Delivery-as-a-Service (DaaS) model and SaaS platform with a bunch of powerful features to support end-to-end logistics.

With companies like Picup taking a tech-forward approach, it allows their clients to focus on scaling their business, rather than scaling their logistics. And is yet another key piece in the SA e-commerce puzzle.

We’re watching this space…

IN SHORT

Start a tech conversation…

📱 Business WhatsApp. Local startup Tetafi is leveraging AI to build a financial management platform that lets informal businesses, startups and entrepreneurs track their daily business transactions via WhatsApp. The platform also helps connect business owners to loans and buy-now-pay-later (BNPL) services.

🌍 African Connection. The Paratus Group has just completed its new East-West terrestrial fibre route running from the east coast of Africa in Maputo, through Johannesburg and across Botswana, to the west coast of Africa at the Cable Landing Station in Swakopmund, Namibia.

🤝 Co-Founder Connect. An app to connect cofounders called CoffeeSpace exhibited at the Startup Battlefield 200 at last week’s TechCrunch Disrupt 2024. The app’s algorithm aims to connect founders in a way that goes beyond the traditional CV, by presenting a sneak peek at their personalities and working styles, to help best-matched co-founders connect.

💸 Long after loadshedding. SARS is feeling the pinch due to Eskom’s decreased diesel usage as a result of more South Africans’ switch to rooftop solar. This R8.4 billion shortfall for SARS from the fuel levy is part of the total R22.3 billion shortfall SARS is expecting.

🔍 SearchGPT. Last week OpenAI announced its search model, available for paid users, (at least for now), with the ability to search the web for answers and provide links to the sources it comes back with. ChatGPT will reportedly use AI to decide when your query requires a search based on your request.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with easy-apply R5M business funding from Lula, next-level authority building with Stream and loads more vital startup tools & services.

BUILDER’S CORNER

How to Spot the Signs of Founder Burnout

And then treat it effectively…

Written in conjunction with organisational psychologist and Metavolve co-founder Cam Coutts.

It shouldn’t be a surprise that entrepreneurs are quite prone to burnout.

Building a new business creates the perfect environment for it: Long hours, high uncertainty, lots of moving parts, complex problems to solve with minimal resources…

That’s why news sources report that:

• 54% of founders are very stressed about their businesses
• 81% try to hide their stress, fears and challenges
• And 77% are reluctant to seek qualified professional help.

“What many of us entrepreneurs don’t know, though,” says organisational psychologist and Metavolve co-founder Cam Coutts, “is that we have access to a unique burnout ‘cure’ that doesn’t work in most any other industry…”

But to understand how it works, you need to know how to spot burnout…

The Symptoms of Burnout in Startup

1. Emotional Exhaustion

Unlike physical exhaustion, you end the day feeling completely drained and almost unable to cope with any of your normal night-time routines.

Or if you normally work till 6, but the last while you’re “done” by 3 and just want to “lie on the floor” in an attempt to force yourself to take a break.

And it kicks off a vicious cycle by triggering the next symptom…

2. De-Personalisation & Cynicism

“Your brain's internal self-defence mechanism to emotional exhaustion is, in lieu of being able to take a real break, to try and separate your empathy centres from your reality. I.e. make you care less,” Cam explains.

This plays out as, when you’re focused on a specific task, and an employee comes to you with an issue or you hear about a new customer query, you try to turn it away by saying “I don’t care” or “I don't have time for this now”.

You basically start ignoring personal and relational concerns, or fobbing them off as unimportant (when we all know they’re the real things that create flywheels in this game), leading you to make poor decisions and sometimes ruin relationships.

3. A Lack of Personal Accomplishment

The third symptom of founder burnout is when you are so overwhelmed by all the things that need doing, you don’t feel like you are getting anywhere.

Even if you are hitting major victories, they’re downplayed by the fact that there’s “so much more that still needs to be done”.

Basically, you are so exhausted that you don’t recognise small victories anymore. And you know you need to take a break, but you feel so much shame/guilt about it, that you can’t rest, so you end up going on holiday and coming back in an even worse state than before.

“Burnout is a syndrome (not an illness), that eventually becomes an actual illness,” Cam explains. “Left unchecked, burnout eventually leads to depression, anxiety, panic attacks and even physical illness – like when you suddenly get an extremely severe flu, that’s your body giving you a warning.”

The Founder-Only Burnout Cure

In most other professions, the treatment for burnout is reducing workload and taking a break. When doctors or nurses experience burnout, all they usually need is a holiday and time to recharge.

That doesn’t always work for founders, though – see, a doctor doesn’t need to care about the running of the entire hospital, but we founders do, so just going on holiday could actually stress you out even more when you can’t switch off.

The ideal treatment for a founder is to start with strategy. See those 3 burnout symptoms are a vicious cycle of one reinforcing the other, so the first step should be stopping the cycle – and out of all of them, number 3 is virtually the only one you can directly influence for immediate impact.

If you can win back your sense of personal accomplishment by clearing some of the chaos and giving yourself a measurable way to track that you’re improving by 1% every day, you break the burnout cycle. This should enable you to switch off a little over the holidays (i.e. tackle the first symptom), getting you fresh for the new year.

“We touched on this in a recent webinar,” says Cam, “and anyone can view it. Plus, I’m an organisational psychologist by training, so I am personally and professionally extremely passionate about helping founders deal with things like burnout.”

“All Open Letter readers are welcome to contact me if they have any questions or want to talk about burnout.”

You can reach Cam on LinkedIn here and connect with the rockstars at Metavolve here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last few days alone, in our online community, we…

• Learned to keep the customer pipeline filled in Friday’s sales masterclass.
• Sorted out who’s going to Stellies and who’s in Green Point for our first LIVE office hours this Wednesday.
• Got a sneak preview of Friday’s upcoming product masterclass on why product-led companies win out, with Roger Norton.
• Started the week with a Tesla Beetle beating a Porsche on the quarter mile 🏎️.
• Got intro-ed to a good-looking new virtual assistant to try out.

Thinking about joining The Open Collab?

• Supercharge your network in the SA startup landscape — get that introduction, get that customer, or meet that partner.
• Get feedback on your products, services and/or offers from others who have built and are building their own products right now.
• Join all our online and in-person events for free!
• Exclusive 1-on-1 sessions with startup consultants.

SA’s only dedicated tech startup and scale-up founder community.

Join The Open Collab

HAPPENING SOON

Upcoming Events

Join us this Friday for the second in a 3-part series with The Open Collab exclusive Product Series. Want to learn what it’s about? Watch the video on IG below…

theopenletterza

View more on Instagram

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Add a comment...

• 7 November 2024 — JHB: TechSafari is hosting its first JHB mixer. Get tickets here and use OL20% code to get a sweet 20% off!
• 8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — Join The Open Collab community to attend for free.
• 14 November 2024 — TechSafari is coming to Cape Town! Join Caleb and team for a memorable night at Yoco to talk all things Tech and Startup in Africa. Get tickets here. Use OL20% code to get a sweet 20% off!

View all our upcoming events here.

WHAT YOU SAID

Good for people…

We asked about preventing employee burnout, and you know best…

🟨🟨⬜️⬜️⬜️⬜️ 🍕 Pizza parties (15%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🏓 Foosball/Table Tennis/Air Hockey leagues (4%)

🟨⬜️⬜️⬜️⬜️⬜️ 💆‍♀️ Office massages (5%)

🟨🟨🟨🟨🟨⬜️ 🏖️ “Unlimited” leave days (31%)

🟨⬜️⬜️⬜️⬜️⬜️ 🪂 Team-building exercises (9%)

🟩🟩🟩🟩🟩🟩 🔥 Hmm, no I have a better idea… (36%)

Your 2 cents…

“My partner has just experienced a burn out at the company we both work for. What I have learnt from it is that companies need to listen to their employees more, take note of behavior changes and have open discussions around ways to make jobs easy and more efficient. Check in with staff on a monthly basis and even offer an industrial psychologist to those that are struggling.”

Michelle

Completely agree, Michelle! Recognising changes early and supporting staff with open conversations is the kind of proactive care that can really make a difference. 🙌

“It could be all of the above but the fact is you need to match it to the need of the individual. We all have different ways to re-centre, ask employees what they need.”

Freda

Exactly, Freda — meeting individual needs is so key! 😊

“Treat them like the adults they are. Give people a sense of purpose, let the output they receive more or less match the input they give. Might be idealistic, but I don't think burnout has to do with what you put in. But rather what you get out, or in this case don't get out, for what you put in.”

Andersen

Absolutely, Andersen! Purpose and fair recognition for input are such powerful antidotes to burnout. It’s not idealistic at all — just real talk on what makes work meaningful. 🔍

“Relaxed working hours...i currently have an intern work half day. No problems”

Private

Nice, a flexible approach can make all the difference! 👍

“Set clear expectations – Ensure everyone knows their role and goals to reduce ambiguity and boost confidence. Poor job clarity is shown to be a massive contributor to stress. Encourage open communication – Create a safe space for team members to discuss workloads and any stress points. Support work-life balance – Offer flexible hours or remote work options to help balance personal and professional lives. Schedule regular check-ins – Managers should touch base frequently to spot and address stress before it builds. Celebrate wins – Recognise achievements to keep motivation high and everyone feeling appreciated. Involve employees in decisions – Allow team members to help shape their work environment, building ownership.”

Jo

Great breakdown, Jo! Addressing stress and job clarity can prevent so much burnout — and celebrating wins keeps motivation strong. Spot on! 🎉

“Above the basic leave allocations, assign leave by interview. Let employees make their case based on their productivity, their value added tasks and their personal growth markers. Award the best employees with better leave opportunities - autonomy to decide when to go, vouchers for spa days/getaways/tanks of petrol. Instead of burning out those who are the backbone of the company, give them a little more stretching room to value them”

David

Such a thoughtful idea, David. Rewarding employees with meaningful leave options could be a game changer in making people feel valued. 🎁

‍

Home office? Well, it’s official, companies who want to force employees back to the office are crazy. A new working paper by an Australian finance prof shows that companies with WFH policies post better financial returns.

Can we get an “I told you so”, anyone?

In this Open Letter:

• AI for Wellness: The quest to save SA R161bn in burnout tax.
• African VC connections: Come join our JHB and CT events next week.
• Boston Dynamics creeps, a new Mac mini & free POS for err’body.
• What SA’s townships need most: The results are in.
• Lonely building your startup? Join The Open Collab and get support.
  ‍

TechSafari 🤝 The Open Letter: Big news! Our friends over at TechSafari are coming to SA for two gatherings, and we are partnering up to offer you all a great deal to get there! Check it out here.

Did someone forward you this email? Join 14,172 South Africans reading The Open Letter by signing up here.

TRENDING NOW

The Quest to Save SA Companies R161bn in Burnout Tax

Can you believe it’s November already? 

What are we saying, of course, you can – we feel the moeg in our bones this time of year.

It’s been a fun but tough one: A lil less loadshedding but economic up and downs, interest rates, elections, a new GNU, Siya and Rachel’s divorce – not to mention hard work and looking forward to a well-deserved break soon…
‍

And it’s needed, South Africans work hard, VERY hard. You can see it in the numbers as we approach burnout season:

• SA ranked 69th out of 71 participating countries in a recent Mental State of the World report – only the UK and Uzbekistan did worse than we did.
• 36% of the SA workforce experience excessive daily stress, with 71% either disengaged or actively disengaged – all signs of burnout.
• And it all costs the SA economy a staggering R161 billion every year due to lost days of work, presenteeism (being at work but unwell), and premature death.

‍

But what can HR do?

Staff are normally your most important business “asset”, but by far the most complex and expensive to manage.

And it doesn’t help that HR is notorious for overestimating employee wellness levels (i.e. in surveys more than 75% of HR leaders tend to think “our employees are super happy” but, when asked, more than half of those same employees are miserable and struggling).

It’s an expensive over-estimation. Employee turnover costs between 1.5 and 2 times an employee's annual salary to replace them – so it's in everyone’s best interest to keep our workforce happy and healthy.

The local player with a global mental health reach...

We’ve featured mental health scale-up Ollie in previous editions of The Open Letter, but they’ve added something new worth checking out – a global 24/7 AI Mental Health Coach…

Having established their B2B employee mental health platform (complete with a network of therapists, psychologists, counsellors and coaches), Ollie has introduced a custom-trained AI called, well, Ollie, that can chat with employees (via chat or voice) in over 21 languages to either:

• Coach them through a situation itself (AI)
• Pick up where the time is right to escalate it to a human, where they can chat with one of over 150 mental health experts around the world.
  

Ollie was trained by a research team using psychological methodologies. And, as a basic feature, can determine a baseline of where someone's mental state is at, giving a score out of 100 that indicates potential for burnout.

And it seems to be working…

Already making an impact

According to Ollie Health, Ollie the AI is already having over 1’000 daily chats with employees in need, with an average duration of 230 minutes (nearly 4 hours). So that’s like having a work bestie that you can dish with – except Ollie won't use anything you’ve told them to throw you under the bus for a promotion. 😊

This way, Ollie helps employees track and manage their own mental health score and build good habits – only using pro resources like therapists when it’s really necessary.

But then it becomes really interesting: The AI conversations are anonymous, but the data from conversation topics can be correlated with data points like sick leave and then give an overall burnout predictor at an organisational level.

Ollie then reports this in the company’s HR dashboard, which, together with their talent acquisition algorithm, can help HR identify which teams need more resources.

With companies like Ollie leveraging AI to give companies (and their HR teams) powerful insights into areas that were previously unseen spaces, we’re watching this space.

PS: A little over a year ago, we had Ollie’s founder, Marc Gregory, on the How Would You Build It Podcast. And some things have changed, of course, but it’s cool looking back at his founder’s and growth journey, with some insights on:

• Creating your own brand “currency” to grow your business.
• The hardest sell: growing when you’re selling a grudge purchase.
• Why AI is not about following the AI trend, but following human behaviour.

CHECK THIS OUT

Come Make African VC & Startup Connections

The Open Letter is happy to be collaborating with our African tech newsletter friends, TechSafari, when they come to SA next week.

We’ll be there, happy to welcome them to SA — and we’re inviting all of you to come along and meet some tech players, from founders to VCs from the wider continent setting.

We even organised you 20% off as an Open Letter reader…

The JHB mixer is happening on 7 November — Get your tickets here.

And the Cape Town event is at Yoco on 14 November — Get your tickets here.

And remember to use the code OL20% for your Open Letter discount.

See you there!

IN SHORT

Sound Smart at the Braai Tonight

💳 You Get a Point of Sale! Local online & e-commerce payments provider Payfast is planning to roll out FREE Point of Sale devices to SA merchants to make it easier for them to process payments.

🤖 RoboMechanic? Creep Factory Boston Dynamics has released a video of its robot Atlas sorting car parts. And while Atlas’ walking does seem a little awkward, it gets the job done. Hmmm. Wonder how it will react to getting shouted at by his Dad for holding the torch wrong, though.

🍎 Mini Apples. Apple announced the new Mac mini this week. A new M4 chip upgrade, iPhone Mirroring and Apple Intelligence, not to mention being Apple’s “first carbon-neutral Mac” — the 5 x 5in Mac truly is tiny but mighty. Check out the cool Mac mini launch video.

🍞 Smart Shopper eBucks. Hot off the heels of 99c bread for qualifying FNB customers, Pick n Pay announced that FNB Private Clients and eBucks members from RMB Private Bank can get as much as 30% of their spend back in eBucks when using PnP’s asap, and 20% back for those shopping in-store, as well FNB account specific rewards when shopping at PnP clothing.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with sustainable scaling and growth strategy help through Metavolve, your own CTO and tech team at a fraction of the cost with Octoco and 11 more vital startup tools & services.

BUILDING TOGETHER

Happening over at The Open Collab

In the last few days alone, in our online community, we…

• Helped connect Trevor with leads for a full-stack developer.
• Celebrated Sebastian’s moves into the Portuguese property market.
• Got excited for our first LIVE and in-person Office Hours next week 🔥.
• Helped Danei with the ultimate sales deck template.
• Celebrated Sabeeha’s 4 new clients.
• Celebrated Gustav’s first revenue & closing partners!
• Had a lekker discussion around mugging detection for bike riders.
• Secured our seats for today’s collab-exclusive Sales Masterclass.

Thinking about joining The Open Collab?

• Supercharge your network in the SA startup landscape — get that introduction, get that customer, or meet that partner.
• Get feedback on your products, services and/or offers from others who have built and are building their own products right now.
• Join all our online and in-person events for free!
• Exclusive 1-on-1 sessions with startup consultants.

SA’s only dedicated tech startup and scale-up founder community.

Join The Open Collab

HAPPENING SOON

Upcoming Events

Join us at 12 PM today (Friday 1 Nov) for the first in a 3-part series with The Open Collab exclusive B2B Sales Series. Want to learn what it’s about? Watch the video on IG below…

‍

1 November 2024 — Sales Masterclass — Online: Keep your B2B sales pipeline filled with this Masterclass session with sales expert, Sebastian Chapman — Join The Open Collab community to attend for free.

4-6 November 2024 — Injini EdTech Week — Cape Town: This is where EdTech entrepreneurs, the broader ecosystem members, government and policy stakeholders come together in Cape Town — PS: entrance is free.

7 November 2024 — Cape Town: Tinder for Business: Meet 20 investors, corporates or potential customers at Innovation City. Sign up here.

7 November 2024 — JHB: TechSafari is hosting its first JHB mixer. Get tickets here and use OL20% code to get a sweet 20% off!

8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — Join The Open Collab community to attend for free.

14 November 2024 — TechSafari is coming to Cape Town! Join Caleb and team for a memorable night at Yoco to talk all things Tech and Startup in Africa. Get tickets here. Use OL20% code to get a sweet 20% off!

View all our upcoming events here.

WHAT YOU SAID

Kasi deliverables…

We asked what you think townships need more of, and services are the key…

🟩🟩🟩🟩🟩🟩 ⚡️ Infrastructure (electricity & running water). (32%)

🟨🟨🟨🟨🟨⬜️ 🦺 Safety & security initiatives. (27%)

🟨🟨🟨⬜️⬜️⬜️ 🌐 Inclusion in the digital economy. (14%)

🟨🟨🟨🟨⬜️⬜️ 🎓 Education. (23%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚐 Last-mile delivery solutions. (4%)

Your 2 cents…

“The Taxi Connect idea sounds good but it won't work in places like Thembisa, Alexandra and Diepsloot. Taxi drivers feel they can do whatever they want because they have support from the government and taxi associations. They treat customers poorly and people only use taxis because they have no choice.”

Sakhile

Nice one, Sakhile, it’s that kind of user insight that can help tech companies know where to put their efforts. 🙌

“I think this could differ from one township to another, depend on which province it's in and on people's mindsets. Education should be coveted, infrastructure should be implemented and safety and security a rule. Once those 3 are settled, the rest comes automatically.”

Liesl

We certainly hope so, Liesl, and love that so many startups are trying to make a difference here. 🇿🇦

“I wish I could choose more than one here. It would be in the following order of importance from my perspective: Infrastructure-Safety-Education.”

Ayuballie

No probs, in our books you selected all 3. 😊

“Answer the safety and security issues and then they will be able to access electricity (without it being fed off to multiple illegal places) and water and sanitation staff will be able to enter and fix issues as and when they happen. Right now their lives are in danger, besides the people living there, it is when they need electrical and water support, the most basic needs, the workers get targeted by criminals, putting their lives in danger.”

Lynn

‍
Keen observation, Lynne. Safety and security is NB. 🔐

Boring humans? While recording demos of their AI taking over an entire computer (a new feature they’re working on), Anthropic’s Claude stopped in the middle of the recording, opened Google and started browsing pretty pictures of Yellowstone Park instead.

Moral of the story? Even AIs find work boring enough to wanna go climb a tree. 🤷‍♀️

In this Open Letter:

• Double bill: A two-pronged approach to this R200bn+ market.
• Apples for health, AI watchdogs and PDF podcasts.
• Worth a shot: Win R300k back in business expenses.
• Time to network: 7 SA tech events you don’t want to miss.
• What makes you walk out of a restaurant: The results are in.
• Lonely building your startup? Join SA’s only tech founder community.

‍

Together with:

Did someone forward you this email? Join 14,138 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Selling Direct to this R200bn+ SA Market

SA’s townships are alive with opportunity…

Unsurprising given that around 12 million of SA’s people reside in townships, with the bustling township economy worth nearly R200 billion – though in the past we said it could be worth over R400bn.

Opportunity. And challenges…

Now, if you’re thinking about the phenomenal rise in grocery delivery in SA – we wrote about this earlier this year – your big retailers and corporates recognise the opportunity to serve township communities but haven't been able to solve last-mile delivery yet.

And, in some ways, their need is more dire than us in the suburbs…

In the township, the local spaza shop is only really suited for small purchases – snacks, beverages, data and such.

Your basic monthly household shopping is a massive shlep – catching a taxi into “town” and lugging 3’000 bags back with you.

So, why haven’t Checkers Sixty60 and Woolworths Dash jumped on these?

Well, they have, kinda.

They’ve just run into some more uniquely South African challenges…

Challenge 1: Criminals have started targeting last-mile

We knew it would only be a matter of time right? Attacks on delivery vehicles have tripled from 2023 to 2024, with as many as 65 attacks per day in June this year alone. (And this month it’s around 20-25 hijackings per day – sheez!)

Also this month, Woolies Dash suspended its services in Hout Bay due to driver safety concerns. Not to mention retailers’ worrying trend of hiring mainly foreign drivers, further eroding trust in townships who would want to see local drivers benefit more from Checkers and Woolworths.

Hmm, OK so if you can’t send armies of little bikes to every home, what about using the existing spaza shops as distribution centres or something?
‍

Ah, and therein lies the next problem…

Challenge 2: Manufacturers lack basic market data

See, when you create a product in SA and distribute it to retail chains and wholesalers, the stores typically can give you sales data, so you can plan your plays in the market.

But the spaza owner who buys straight from wholesale doesn’t report back on what happens to your goods on their shelves, making it super hard for the producer to get a handle on the buying patterns in those markets and plan logistics accordingly to ensure healthy margins and reduce risk.

All of this leads to a bit of stagnation in solving the last-mile-to-Kasi conundrum.

Except, of course, for this one local startup that’s klapping both at once…

A two-pronged approach to township deliveries

Taxi Connect connects spaza shops and households with suppliers using – you guessed it! – minibus taxis for last-mile logistics.

They’ve got time to fill: Peak passenger times are 4–8 AM, with a money-wasting 8-hour break in between and a mad rush again 4–8 PM. So Taxi Connect lets drivers use those 8 hours to earn extra income from product deliveries.

And they know the township game: Drivers already know the safest and best way to drive through the township, to get to the specific spaza shop with maximum efficiency – and criminals know better than to try target taxis in the township. 

But the magic really starts when you combine it with shelfline. This unique platform empowers (mostly unemployed) youth to become traders supplying their local spaza shops (within a 10km radius). 

If you’re an entrepreneurial young person looking to make some cash, you can register on shelflife and become an agent who orders products from wholesale (the platform connects you to some really good ones) and supplies them to you using TaxiConnect after which you hop on your bike and deliver to whoever is ordering.

This goes a long way to creating opportunities for the youth, but the platform also sends much-needed trading data back to the wholesaler, retailers and ultimately producers, closing the data loop nicely.

With companies like Taxi Connect and shelfline creating unique opportunities in townships alongside established role-players, we’re watching this space…

THE OPEN COLLAB EXCLUSIVE

The Deep Dive

Join The Open Collab

IN SHORT

The latest SA and tech gossip...

👁️ Keeping an (A)I on it. Local artificial intelligence and computer vision solution provider visionAI has raised an undisclosed funding round from Kalon Venture Partners to continue its growth of innovative AI solutions that integrate with existing CCTV feeds in the manufacturing and supply chain sectors to increase operational efficiency.

🍏 Keeping the Dr away. Apple is continuing with its healthcare play with an app that helps pre-diabetic patients manage their food intake and make lifestyle changes. Apple tested the app on select employees earlier this year, and while it may not be released, reports suggest it could form part of Apple’s future healthcare products including the non-invasive glucose tracker that’s been in the works for years.

🎙️ RoboPod. Hot off the heels of Google’s NotebookLM “generate-a-podcast” feature, Meta has released an open implementation called NotebookLlama using Meta’s Llama models for processing. The project can generate a podcast-style delivery of text files uploaded to it using the guide for the PDF to Podcast workflow.

🤑 Healthy Funding. Absa has secured a R2.6 billion trade financing facility from British International Investment (BII) to help the SA lender provide liquidity to small- and medium-sized businesses in Africa, particularly in the agriculture and healthcare sectors.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with your own fractional CFO for less with OCFO, expert offshoring, company structure and legal advice from Dommisse Attorneys and 12 more vital startup tools & services.

CHECK THIS OUT

Earn Rewards for Doing Business

Not many banks really get the small business game. None, in fact, until the likes of Lula came along…

They know it takes more than most people have to build something from scratch… and that’s why they’ve decided to reward you a little for doing business… For the next few weeks, Lula will distribute R300k simply for trading using a Lula business account.

So, in case you don’t know yet, Lula lets you:

• Open a business account for free with no monthly fees 
• Earn interest on your positive balance
• The fastest way to access a credit facility — money becomes available within 2 hours of a successful application.
  
  

And now, for every transaction, you get a chance at a slice of R300k in rewards.

A better startup banking solution, anyone?

Get Lula now

HAPPENING SOON

Upcoming Events

Join us this Friday for the first in a 3-part series with The Open Collab exclusive B2B Sales Series. Want to learn what it’s about? Watch the video on IG below…

View more on Instagram

theopenletterza‍

30-31 October 2024 — AI Expo Africa — JHB: Join over 2’000 industry insiders for Africa’s largest AI and automation trade show at the Sandton Convention Centre in JHB.

1 November 2024 — Sales Masterclass — Online: Keep your B2B sales pipeline filled with this Masterclass session with sales expert, Sebastian Chapman — Join The Open Collab community to attend for free.

4-6 November 2024 — Injini EdTech Week — Cape Town: This is where EdTech entrepreneurs, the broader ecosystem members, government and policy stakeholders come together in Cape Town — PS: entrance is free.

7 November 2024 — Cape Town: Tinder for Business: Meet 20 investors, corporates or potential customers at Innovation City. Sign up here.

7 November 2024 — JHB: TechSafari is hosting its first JHB mixer. Get tickets here and use OL20% code to get a sweet 20% off!

8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — Join The Open Collab community to attend for free.

14 November 2024 — TechSafari is coming to Cape Town! Join Caleb and team for a memorable night at Yoco to talk all things Tech and Startup in Africa. Get tickets here. Use OL20% code to get a sweet 20% off!

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last few days alone, in our online community, we…

• Had the most powerful product masterclass with Roger Norton.
• Discovered the most remarkable use case for the Vision Pro 🤩.
• Discussed big new blockchain moves by Stripe looking ready to replace traditional finance.
• Developed a game plan for when potential big corporate clients want you to tweak your code.
• Got a sneak peek at Friday’s upcoming sales masterclass — it’s gonna be 🔥.
  
  

Thinking about joining The Open Collab?

• Supercharge your network in the SA startup landscape — get that introduction, get that customer, or meet that partner.
• Get feedback on your products, services and/or offers from others who have built and are building their own products right now.
• Join all our online and in-person events for free!
• Exclusive 1-on-1 sessions with startup consultants.

‍

Join The Open Collab

WHAT YOU SAID

Food for thought…

We asked about your most unforgivable restaurant faux pas, and it’s all about food hygiene…

🟩🟩🟩🟩🟩🟩 💅 Something gross in your food. (48%)

🟨⬜️⬜️⬜️⬜️⬜️ 🥜 Not removing something you’re allergic to. (8%)

🟨⬜️⬜️⬜️⬜️⬜️ 🍽️ Forgetting to order one of the meals. (10%)

🟨⬜️⬜️⬜️⬜️⬜️ 🙉 Loud/stupid music. (15%)

🟨🟨⬜️⬜️⬜️⬜️ 🤑 Charging extra for sauces and sides. (19%)

Your 2 cents…

“If a restaurant plays loud stupid music, it doesn't get the opportunity from me for any of the other faux pas. I go somewhere else, and take my chances on finding something gross in my food.”

William

Ha ha, ja William, some places just hit the wrong notes. 📯

“Not removing something you’re allergic to. They're all annoying but only one can potentially kill you....”

Yeh, no that’s serious business. 💉

🍟 Taking Food to the Cloud...

Plus: Checkers’ Hyper60 play 🛋️, no AI Getaway, why it’s clicking for Clicks & 7 SA tech events you don’t want to miss.

October 25, 2024

Something to say? A Japanese team is trying to learn to talk to fungi, and so far they’ve deduced that fungi can recognise shapes. Why? They’re looking for ways to use “dumb” lifeforms to build biological computers.

In this Open Letter:

• Food to the cloud: Welcoming restaurants to the 21st century.
• Checkers’ Hyper60 play, no AI Getaway & it’s clicking for Clicks.
• See you there: 7 SA tech events you don’t want to miss.
• How SA homes are growing in value: The results are in.
• Lonely building your startup? Join SA’s only founder community dedicated to tech startups.

Together with:

Did someone forward you this email? Join 14,102 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Welcoming SA’s Restaurants to the 21st Century

Years ago, restaurant operations were run with pen and paper – orders scribbled down, and cash counted out by hand.

Internationally, IBM introduced the first fully computerised Point-of-Sale (POS) system in 1973. And it took a few decades, but most people reading this will be familiar with restaurants having at least a Pilot or GAAP POS system.

You know, those static terminals your waitperson needs to run to every time you order a refill.

‍

And for a time it went really well… they eventually added touchscreens and card machines (oh, we’re flying now!) in the mid-late 1990s, then other smarter payment solutions like SnapScan and such.

But turns out many restaurants are still pretty dumb…

Here’s the thing… as culinarily “avant-garde” as that posh eatery is, tech-wise restaurants haven’t evolved much in the last 20 (probably more like 30)-odd years.

It’s still basically a static POS terminal in a closed system (not connected to the net) – meaning online orders are tricky, table ordering impossible, and even your Uber Eats orders all need to be added entirely separately.

And switching out is a big mission. Hardware to buy and training on new systems often keep busy restaurants just moving along with what they’ve got.

Eateries are due for a cloud update

During Covid lockdowns, Uber Eats in South-Saharan Africa saw a 1860% increase in demand. And it never really returned to normal – much like grocery delivery, the food delivery market has been growing steadily Year-on-Year, expected to be in the R21bn range in 2024.

Online bookings have also skyrocketed, with bookings app Dineplan showing a 9.3% rise in web, a 50% rise in app bookings and steady declines in telephone bookings, noting that diners like to plan further and further in advance and prefer tech to help them do it.

And don’t even get us started on intelligence! What data-driven decisions can a restaurant make with a closed system that can’t pull big data from the cloud? Just look at the kind of menu-planning decisions a simple data extract like Uber Eats’ annual cravings report can deliver – and now imagine what a local restaurant can do with that level of insights on your palettes, in your neighbourhood.

Nah, it’s definitely time we welcomed the restaurant industry to the 21st century, and one SA startup is on the job…

The future of SA’s restaurants

Local cloud software platform Munch is developing a comprehensive suite of tools designed to streamline restaurant management, covering everything from POS and Inventory to Kitchen Management, Online Ordering, and Self-service Kiosks. Their cloud-based platform moves beyond the limitations of traditional POS systems, freeing restaurants from bulky, outdated setups.

Their suite of products include:

• Mobile POS: Enables waitstaff to take orders directly at the table, reducing errors and delays and allowing payments to be processed on the spot.
• Standard POS: Handles dine-in and takeout orders with a user-friendly tablet interface, eliminating the need for expensive, specialised hardware.
• A Customer-Facing Munch App: Lets diners browse the menu, order, and pay using their phones, all in one seamless process.
• Kitchen Display: Keeps the kitchen team in sync with real-time updates, streamlining meal prep and reducing wait times (no more lettuce and tomato sitting under the hot light while the burger patty is cooked to perfection…)
• Back Office: All the above (and more) are managed in Munch’s Cloud Portal (even remotely from your phone).

And with a 30% reduction in wait times, a 90% decrease in incorrect orders, and ordering happening 50% faster, the proof is in the pudding that Munch is eliminating inefficiencies in the restaurant space one table at a time. 

We recently chatted to Munch on the latest episode of the “How Would You Build It” podcast. And they’re frying up some pretty cool stuff all along the restaurant value chain building a consolidated Menu, Inventory, and Order Management system – processes that typically are run by separate disjointed systems.

‍

Catch the full episode or jump to highlights:

• How to land that first customer in B2B SaaS — Munch’s early track record.
• How to know what features to build next.
• How to simplify complex problems when building.

THE DEEP DIVE

Learn How This Startup Works

The Deep Dive is exclusive to members of The Open Collab. Join SA’s only founder community dedicated to tech startups and scale-up founders.

Join The Open Collab

IN SHORT

Say something interesting…

🍊 Code Orange. Jozi-based entrepreneurs are invited to apply for the 2025 cohort of the Orange Corners Designs (OCD) programme run by the Craft and Design Institute (CDI) and supported by the Ministry of Foreign Affairs of the Netherlands. The 12-month programme supports the 20 participants to grow their businesses and a chance to access R1 million in funding.

🤔 AI Cover Art? Local travel mag Getaway published an image of Mpumalanga’s Blyde River Canyon on the front cover of its October 2024 issue. But it would seem that it might be an AI-generated image from Shutterstock submitted by a Pakistan-based photographer who joined the site in August. Hmmm… Interesting…

🚚 Hyper Delivery. Checkers has updated its Sixty60 app by adding Checkers Hyper products including electronics, camping gear and more — making an e-commerce play to compete with Takealot and Amazon. Products vary from region to region though, are limited to specific time slots, but qualify for free delivery with R100 spend.

💊 Healthy Results. Local pharmacy retailer Clicks seems to be hitting it out of the park reporting on double-digit growth in its full-year results filing, and plans to open around 50 new stores and pharmacies to edge closer to reaching the 1’000 store mark.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with your own fractional CFO for less with OCFO, easy-apply R5M business funding with Lula and 11 more vital startup tools & services.

CHECK THIS OUT

Work more on the things that matter

A scaling business normally equals chaos. Staffing, operations, clients, finance and more all need attention and all seem equally important. But what if they aren’t?

Metavolve’s Scale programme has helped agriBORA double their customers with only a 25% increase in employees – in just 4 months.

“Confidence is the win that I can really talk about here.

I'm now able to assert where the company is headed, be more firm with shareholders and guide my team with certainty.

And the main reason why I'm able to do this now is because of the clarity I got from the strategy process we went through.“

agriBORA CEO, Kizito Odhiambo

If you want to grow with a mission, sign up for the Metavolve scale program and start focusing on the stuff that matters most!

Want to learn more about Metavolve’s framework that has helped more than 100 founders and business leaders develop sustainable scaling strategies?

Book a free strategy session now

HAPPENING SOON

Upcoming Events

25 October 2024 — Product Masterclass — Online : SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

30-31 October 2024 — AI Expo Africa — JHB: Join over 2’000 industry insiders for Africa’s largest AI and automation trade show at the Sandton Convention Centre in JHB.

1 November 2024 — Sales Masterclass — Online: Keep your B2B sales pipeline filled with this Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

4-6 November 2024 — Iniji EdTech Week — Cape Town: This is where EdTech entrepreneurs, the broader ecosystem members, government and policy stakeholders come together in Cape Town — PS: entrance is free.

7 November 2024 — Cape Town: Tinder for Business: Meet 20 investors, corporates or potential customers at Innovation City. Sign up here.

7 November 2024 — JHB: TechSafar is hosting its first JHB mixer. Get tickets here.

8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

It’s all happening at SA’s only founder community dedicated to tech startups and scale-ups. In the last 48 hours alone, in our online community, we…

• Helped Tiaan find a fast and simple, local card payment solution.
• Got such good feedback from the in-person check-ins with members.
• Helped Laurie connect with potential partners for his wife’s startup.
• Helped Erhard gain some traffic and traction for his new product.
• Tried to get Roger to pose more like Steve Jobs for his Product Masterclass cover shots.
• Celebrated Sabeeha’s four 🔥 new paying leads.

WHAT YOU SAID

In case of emergency…

We asked how happy you are with your home’s growth in value (as an investment), and ooops…

🟩🟩🟩🟩🟩🟩 Well, everything was fine, until I read that post… 😬 (31%)

🟨⬜️⬜️⬜️⬜️⬜️ Nah, I keep a handle on these things, it’s growing lekke 😎 (8%)

🟨🟨⬜️⬜️⬜️⬜️ Dunno, better get Hoom for my sale 🏡 (13%)

🟨🟨🟨⬜️⬜️⬜️ Not worried, I bought it for my family, no need to profit ❤️ (18%)

🟨🟨🟨🟨⬜️⬜️ Haven’t bought yet, dreaming of one day… 💒 (25%)

🟨⬜️⬜️⬜️⬜️⬜️ Yeah, that’s why I choose to rather rent 💰 (5%)

🏡 Getting 7M Homeowners the Best Deal

Plus: SA’s CO2 cloud, AI interview coach, SABC’s streaming numbers & lessons from an SA product legend.

October 22, 2024

Lunar fashion? It looks like the next generation of NASA astronauts will be wearing Prada to the moon. Thankfully those visuals are just to create some hype — the final new design is set to be unveiled soon.

In this Open Letter:

• Big moves: The startup helping SA homeowners get better deals.
• SA’s CO2 cloud, AI interview coach & SABC’s streaming numbers.
• Building things that matter: Join our SA product legend Masterclass.
• The emergency services you really want: The results are in.
• Lonely building your startup? Join The Open Collab and get support.

Together with:

Did someone forward you this email? Join 14,008 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Helping 7M+ Homeowners Get the Best Deal

How hard/easy is it to lose a lot of money selling your house in SA?

Because selling seems simple enough, there are estate agents everywhere…

Nearly 4’000 Estate Agencies are listed on Property24, with some 40’000 Property Practitioners moving and shaking in SA’s R7 trillion residential property sector. 

And house prices seem to be skyrocketing, so it must be booming, right?

Uhh not quite.

SA’s big property dilemma

See, what you might not know (and likely neither do many estate agents) is that SA’s property sector has actually been battling to deliver real returns for quite some time.

We had a decent boom between 2000 and 2006 where prices rose by around 20% annually, and it’s kinda gone downhill from there:

• The 2008 financial crisis and a new credit act saw prices fall -16.5% in real terms.
• A decent-seeming 51% boost between 2011 and 2019 was brought down to just 0.4% due to inflation.
• During lockdowns, a brief 8% uptick was deteriorated to 1.1% by inflation.
• And we’ve had negative growth of -4.28% in 2022 and -4.19% in 2023.

So, you might be selling your house for more than you technically paid for it (or owe), but there’s a good chance you’re not getting what it’s really worth.

Remember that, unlike investing in unit trusts, where the diversification you get from a suite of shares tends to balance each other out for growth, a property is just one asset – if it depreciates, that’s a solid loss.

And in that scenario, you don’t just want an OK-ish agent, you want the best representation money can buy.

The moral? Estate agent choice can be make or break

Estate agents typically charge between 4-7% and at that fee, you want to be sure they are fighting for the best price for you, have access to the right kind of buyers and top of their game when it comes to the administrative side.

And considering property is often the biggest investment (or at least one of the biggest) most people will ever make, so, no pressure… 

‍

The local player connecting you with your ideal agent

Enter Hoom. An online marketplace for sellers to find the perfect estate agent for their sale.

It all starts fairly simply; as a seller, you:

• List your property details in 6 simple steps 
• Specify agent preferences (ages, agent category, languages, gender) 

Then, within 24 hours, Hoom matches you with up to 5 estate agents in your area, based on your requirements, complete with pic, bio, value proposition, full disclosure on their commission rate, plus any additional services they offer (like photography, video tours, international market exposure, ID verification for viewers, etc.)...

All in the name of helping you find that one agent who will get you the deal you’re after.

Plus, if you sell your home using one of the estate agents you found via Hoom, you get some lekker seller-perks – most notably cashback (anywhere between R6’250 and R20k+, depending on the value of your house), for yourself, or to donate with one of the causes Hoom partners with.

And estate agents also benefit

From the agent’s perspective, it pays to bring your A-game when listing on Hoom, because: 

• The platform acts as a constant funnel for new listings
• There are no upfront fees or monthly costs for agents
• Hoom’s back-end and admin means all the leads are qualified and warmed up for sale.

But what’s really cool is that Hoom offers great opportunities for new entrants into the market to help transform the real estate industry. You no longer need a R1 million marketing budget to compete with the big agencies to get in front of sellers.

They’re currently only operating in Cape Town, with plans to gradually expand to the rest of SA over time. And, they were recently a PropTech finalist, and "Most Innovative Real Estate Company" contender at the 8th African Property Investment Summit. 

With more and more innovative startups shaking things up in an old-school industry, we think PropTech is ready to take some serious ground. We’re watching this space…

THE OPEN COLLAB EXCLUSIVE

The Deep Dive

Join The Open Collab

IN SHORT

Sound smart at the watercooler

💼 Ready. Steady. Job. MindCiti, a local mental health, soft skills, and job readiness app has launched its AI Interview Job Coach to help job seekers prepare for their next interview using personalised coaching and feedback, that simulates real-life interview scenarios.

💨 Carbon Clouds. Carbon Mapper has released the first methane and carbon dioxide detections from the Tanager-1 satellite including a 3-km-long carbon dioxide plume in South Africa, and methane plumes in both Texas and Pakistan.

📦 Go for Africa. Local click-and-collect delivery service Pargo is set to launch into more territories across Africa as it builds on its 4’000+ strong South African pick-up points and the 150 pick-up points in their trial program in Egypt that launched last year.

👀 StreamingABC. After launching a little over 3 months ago, the SABC’s free streaming service has racked up more than 500k registered users. The revamped platform offers catch-up content, on-demand video, as well as live streams of all SABC radio and TV channels.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with sustainable scaling and growth strategy help through Metavolve, your own CTO and tech team at a fraction of the cost with Octoco and 11 more vital startup tools & services.

CHECK THIS OUT

One less thing for Small Business Owners to stress about

According to a recent Xero study, 24% of SA small businesses reported cash flow problems, with 72% of them using personal funds to keep their business afloat. 

A major cause is delayed payments, with businesses spending an average of 1–2 months chasing late invoices. But, even with on-time payments, it’s tricky covering the salary run when your customer payments runs don’t line up.

It’s a pain Sports & Corporate owner Allistair Bunding has experienced firsthand…

“We pay staff on a weekly basis, but we only get money from our clients at the end of eight weeks.”

Add to that the need to buy raw materials upfront, and it’s easy to see why cash flow becomes a pressing issue, particularly around month-end.

Allistair describes how stressful it is to juggle these financial demands:

“You don’t want to be telling your staff on a Friday, ‘Sorry, we can’t pay you,’ especially when December comes around, with holiday pay and bonuses on the line.”

Like many entrepreneurs, Allistair initially tried to rely on traditional banks to fill the gaps.

But the process of getting funding is so complicated and time-consuming that 92% of small business owners do not even attempt to get funding from traditional banks anymore.

“Dealing with these commercial banks, nothing is basic, and most of the time, it’s not functional.”

Traditional banking often adds unnecessary complexity to an already hectic schedule, and the last thing a small business owner needs is additional stress over funding.

‍

That’s where Lula steps in

With its Revolving Capital Facility, Lula offers a streamlined and efficient way to secure funding – quickly. 

“The transaction was done in five minutes.”

With Lula, there’s no complicated paperwork or endless waiting. Just a simple, functional solution that gives you the cash flow you need when you need it.

So if you’re tired of banking headaches, there’s a better way to get funding faster.

Get Lula – and make month-end a breeze.

Get Lula now

HAPPENING SOON

Upcoming Events

Join us this Friday for the first in a 3-part series with an SA product legend. Want to learn what it’s about? Watch the video on IG below…

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Add a comment...

25 October 2024 — Product Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Sales Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

15 November 2024 — Sales Masterclass: Part 2: Learn to improve your conversion rates with sales expert, Sebastian Chapman — The Open Collab community exclusive.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Had an incredible chat roulette experience that made us feel at home 🤗.
• Got some last-minute tickets to SA Future Trust Summit.
• Helped John get AI to process all his looooong docs in seconds.
• Marvelled at how far AI has come with insane generations with Google’s ImageFX.
• Celebrated some remarkable Open Letter growth over the weekend.
• Got a sneak peek at Friday’s upcoming sales masterclass — it’s gonna be 🔥.

Coming Up This Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

Join The Open Collab

WHAT YOU SAID

In case of emergency…

What other emergency services would you like at the push of a button?

🟨🟨🟨🟨⬜️⬜️ 🍫 Midnight snacks (19%)

🟨🟨🟨🟨⬜️⬜️ 🤓 A helping hand so I don't have to work late (19%)

🟨🟨🟨⬜️⬜️⬜️ ☕️ Caffeine hit (your drink of choice, of course) (14%)

🟩🟩🟩🟩🟩🟩 💐 Instant gifts (for those forgotten anniversaries, birthdays, etc.) (29%)

🟨🟨🟨🟨⬜️⬜️ 🔋 Charger delivery (when you’re running low on juice) (19%)

Your 2 cents…

“It would be amazing to have an app that offers different categories of gifts and prompts for certain occasions, wraps them, and hand delivers them to your person of choice.”

Culpepper

Ooh, sounds like we’d support, Culpepper 🎁.

“I have a great coffee setup at home, but it would be lekker to hit a button and have a fresh Cortado at my gate within a handful of minutes...”

Jason

Not bad at all, Jason ☕.

Early Black Friday? Online retailer Zando announced that they are pulling out of South Africa. The upshot of this, though, is they’re selling all their stock at like 50-85% discount with free delivery.

In this Open Letter:

• Vital charge: The startup that helps save South African lives.
• Local EVs, deepfake Elon & AI drones to save your potatoes.
• Lonely building your business? Join the Collab’s Chat Roulette.
• Our fave traffic light behaviours: The results are in.
• Short on ideas? Share this and get 100+ SA startup ideas.
  
  

Together with:

Did someone forward you this email? Join 13,943 South Africans reading The Open Letter by signing up here.

TRENDING NOW

The New Tech Saving SA Lives Every Day

It’s no secret that it’s hard to get a hold of the cops in SA…

Around 26% of calls to 10111 are dropped. And if your call does get answered (anywhere between 8 and 35 minutes), our guys in blue are stretched pretty thin, with around 145’200 cops to keep 62 million of us in check. 

For context: The police-to-population ratio in SA is 1:427 – the United Nations recommends a ratio of 1:220, so we are barely halfway there…

Can technology help improve the situation?

Technology can be highly effective in crime detection and prevention. Just think:

• Surveillance, monitoring, and behavioural analysis: AI-powered surveillance systems can analyse footage in real time, identifying suspicious activities or behaviour that might need police intervention.
• Gunshot detection: AI-based acoustic sensors can detect gunshots, pinpoint their location, and alert law enforcement instantly.
• Predictive policing: AI algorithms can analyse historical crime data, identify patterns, and predict potential crime hotspots.

But ultimately, no matter how cool the tech is (or how powerful), for now its going to require human intervention to respond to emergencies.

A local platform with your nearest first responder at your fingertips…

AURA is a B2B platform that allows anyone to access a vetted, first responder (be it security or medical) that’s closest to their location in the event of an emergency.

They’ve built a response tech platform that sits behind their API which companies (like insurers, couriers, and even government) can bolt onto their existing applications in order to create panic buttons for their users – suddenly giving them access to AURA’s network of 3’500 response vehicles.   

And, from the looks of it, it works: They’re able to deliver an 8-minute response time nationally with 3’500 vehicles, and internal data shows they save up to 5 lives per day in South Africa.

But here’s the thing…

We actually spoke about AURA at the beginning of this year in our post on security tech opportunities in SA, but simply had to bring them back, because…

AURA launched in the UK earlier this year, and that brought with it an interesting new set of challenges. Over there, private security companies usually act as intermediaries that only monitor alarms, it’s the police that are actually dispatched when an alarm goes off – hmmm, must be nice…

Yeah, and that must be why many folks over there didn’t even bother getting a security company – why pay when the police show up anyway?

But, all that recently changed: The UK police have stopped responding directly to alarms, requiring that alarm activations be confirmed before they come over. In other words, the UK became a lot less like the UK and a lot more like SA – ideal for some innovative SA brand to swoop in and…

And you guessed it: AURA quickly spun up a gig economy for private security and medical personnel, with their solution cutting down the archaic traditional process (which requires multiple human interventions) in half with its smart technology and auto dispatch to the nearest emergency responder in the UK. They initially created synthetic demand to seed the marketplace until there was enough action on the platform to ensure supply and demand met each other in a win-win-win way.

But don’t let us spoil the story for you. We had Warren Myers, the Co-Founder and CEO of AURA, on the most recent episode of our “How Would You Build It” pod, so check it out for even more juicy details, including:

• Innovation, handbrakes, and working with SAPS.
• How emergency responses differ in the UK.
• How to generate demand when building a marketplace.
• The future of emergency detection (and apps).

THE OPEN COLLAB EXCLUSIVE

The Deep Dive

IN SHORT

Grab a knowledge nugget for the braai…

⛴️ Going places. Fleet management company GoMetro has secured a R3.2 million grant from the UK Freight Innovation Fund for a 6-month trial of GoMetro’s EV-FIT solution and its Bridge fleet management software platform with UK’s Maritime Transport and Welch’s Transport companies.

🥔 Spud drones. SA potato farmers are getting a helping hand with autonomous drones that can detect potato leaf disease using AI. A partnership between local digital business consultancy Moyo, and Dell Technologies is bringing Dell AI Factory with Nvidia and Precision AI-ready workstations to a potato farm near you for advanced crop health monitoring.

💼 Business crypto. Yellow Card, an African crypto startup, has raised $33 million in Series C funding led by Blockchain Capital (they’ve already invested in Worldcoin, Coinbase, and OpenSea), to support its pivot towards its business customers in 20 African countries.

🔒 Own Goal. Local trading platform Banxso’s licence to operate has been provisionally withdrawn by the Financial Sector Conduct Authority (FSCA) and several of its bank accounts placed on hold by the Financial Intelligence Centre (FIC). The platform has been accused of “benefiting” from deepfake AI ads featuring among others Elon Musk promising profits of up to R300k per month.

⚡️ Tax-Free EV? SA President Cyril Ramaphosa is apparently considering incentives for local electric vehicle manufacturers, as well as tax rebates or subsidies for those purchasing and using them. Speaking at the South African Auto Week conference, Pres. Ramaphosa said it was about ensuring South Africa remains competitive in global markets.

🏦 No Crypto. Earlier in the week, Capitec blocked all transactions to local crypto exchange Valr, citing fraud concerns. Capitec still allows transactions to Valr via Capitec Pay but at a premium to EFT transactions.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy local and international payment processing with WigWag, expert offshoring, company structure and legal advice from Dommisse Attorneys and 11 more vital startup tools & services.

CHECK THIS OUT

Empower Your Team To Scale Fast

Let’s not mince words here…

The only thing harder than starting up and proving your product/idea is worth the time and effort is achieving Market Fit and scaling up. Because scaling often means moving founder-led sales to a team of sales personnel.

Their challenge? Well, they often don’t have the trust and authority in the marketplace that a founder does — which makes closing sales a tough gig. But when the brand or product they represent has trust and authority, it really greases the sales wheels….

In fact, 81% of customers only buy from brands they trust. 46% of those are willing to pay more for products from brands they recognise.

The Fastest Way to Build Authority

The truth is: there are no shortcuts to trust, it’s earned.

But how do you earn it? Content marketing is by far the fastest, simplest and most effective way to do that – delivering 3X higher brand engagement at a fraction of the cost.

If you are a tech scale-up, you need to content to:

• Empower your salespeople
• Create high-quality touchpoints that add value
• Attract the right type of audience
• Differentiate yourself in a competitive market
• Position yourself and your brand as a thought leader
• Lower your cost of customer acquisition
• Improve your conversions

That’s why we created Stream:

• We marry engineering expertise
• With award-winning copywriting
• And a super-flexible pause-and-cancel subscription model

To give your tech scale-up the ability to build trust with authoritative content that empowers your sales team, and helps you say the right things to the right audience at the right time.

Get in touch today for a free consultation on what content can do for you.

Get Stream

HAPPENING SOON

Upcoming Events

Today at 12:00 — Digital Chat Roulette: It’s like startup speed dating, but you don’t have to leave the house/office — The Open Collab community exclusive.

25 October 2024 — Product Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Sales Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Product Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

18 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Gave Chris a warm intro to the COO of the company he’s been trying to secure a meet with for months 🤗
• Hooked Elijah up with a contact for building a WhatsApp CRM.
• Discussed both internal and outreach comms: email VS WhatsApp VS in-person.
• Celebrated Garth’s successful custom GPT pilot.
• Helped “hook” Gustav up with the Boardroom founders.
• Got super-sweet connections to get into Africa Tech Festival for free, but with access to more of the event than the normal pass.
  
  

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

Sustainable fashion for way less…

We meet a lot of cool SA founders and started doing quickfire pitches where they tell us what their startups are all about.

This is Nick and Michaela from sustainably sourced fashion platform Thrif, where conscious buyers get quality goods at a great price…

‍

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WHAT YOU SAID

Don’t stop believing…

We asked what you do during peak traffic at a robot🚦, and air-drumming the wheel’s the game…

🟨⬜️⬜️⬜️⬜️⬜️ 🥪 Take the next bite of a meal. (8%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💅 Fix makeup/hair/beard. (5%)

🟨🟨⬜️⬜️⬜️⬜️ ✋ Ward off window washers/pamphlet handers/car trash collectors. (18%)

🟨🟨🟨⬜️⬜️⬜️ 🔊 Send voicenotes (including rhythmic indicator sound). (23%)

🟩🟩🟩🟩🟩🟩 🤘 Steering wheel/air drum. (46%)

Your 2 cents…

“Skips to front with motorcycle :)”

Phillip

Nice one, Phillip. Ja you can’t beat that for mid-city traffic. 🛵

“...or pick my nose....hahaha”

Monica

Haha love the honesty… ☝️

“Whilst being happy about my hybrid not guzzling fuel.”

Andersen

Nice, Andersen, keeping it clean and green. 🔋

🚦 The End of All Traffic Jams

Plus: Google power, Starlink Kenya turns 1, SA gaming on the map & 5 steps to increase your chances of success.

October 15, 2024

Good catch? If you enjoyed SpaceX’s history-making rocket launch-and-catch manoeuvre this weekend, why not try it yourself? Test your skills at their official land your starship game.

In this Open Letter:

• Game changer: The startup that’s ending traffic jams, for good.
• Starlink Kenya turns 1, Google power & SA gaming on the map.
• Technical precision: 5 Steps to increase chances of success.
• The future of electric vehicles in SA: The results are in.
• This lonely startup game: Join The Open Collab and get support.
  
  

Together with:

Did someone forward you this email? Join 13,816 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Saving SA’s 11 Million Drivers’ Daily Sanity

There are a few things as frustrating as being stuck in traffic…

Aside from the usual peak morning and afternoon slow-moving traffic, and getting caught up behind an accident or bumper bashing – thanks, rubberneckers – another leading cause for traffic is the good old faulty South African “robot” (traffic lights/signals for our international readers).

‍

Look, Robots everywhere…

South Africa has a pretty extensive road network that requires a lot of robots to keep traffic flowing — about 1’500 and 2’000-plus in larger metropoles like JHB, Durban and Cape Town. And maintaining them isn't easy:

• First, the municipality relies on responsible citizens to report it – either via call centre or e-portal.
• Then, a technician must be allocated and head over to the intersection to assess and determine the fault type.
• Then plug into the robot to turn it off and on again to see if that works.  

Getting stuck in traffic is costly business…

According to TomTom’s 2023 Traffic Index, it takes South Africans between 13.5 and 16 minutes to travel 10km at an average speed of just over 30km/h during rush hour. 

Living in Pretoria, Cape Town, Bloemfontein, Durban, or Johannesburg, that means you’ll lose between 43 and 49 hours to rush hour this year… 

Considering the 11 million+ cars on the road, think about the stress, economic impact, and CO2 emissions for each vehicle – and the relief shaving off even a handful of minutes each way, per day could bring…

‍

‍

_{Unjamming SA’s roads}

Local AI R&D company Bytefuse is tackling SA’s traffic jams head-on with an AI system to optimise a robot’s timing, reduce congestion, and improve traffic management called Quebit.

Quebit takes sensor data from a specific intersection’s robot using edge computing modules installed at intersections, to process real-time data and adjust signal timing optimising traffic flow through the intersection. Think cameras and other smart sensors detecting traffic from different directions, feeding the data into AI models to adjust the timing of lights in real time. It’s basically a robot, a robot.

Quebit also allows traffic engineers to receive the data from the module, pick up if there is an issue, troubleshoot and even reboot the traffic light remotely – without leaving the office or breaking a sweat.

Finally, it also allows traffic departments to remotely adjust timings during events with high traffic volumes, such as funerals, sports matches, or music concerts at stadiums. Replacing the current expensive mode of going out to reprogram the light for a specific date and time which is both costly and labour-intensive.

Quebit is currently piloting in Stellenbosch and early indications show double-digit improvements in traffic flow. And with case studies like these, it could start rolling out to more municipalities in the future, and become your favourite solution you’ve never even heard of (unless you read The Open Letter).

We’re watching this space… 

IN SHORT

Have Something Fun to Say at the Staff Social…

🛰️ Kenya believe it? 12 months after launching in Kenya, Starlink has more than 8’000 subscribers, making it the 10th biggest internet service provider in Kenya. And while the numbers might still seem small the satellite internet services provider is poised for growth, with the last year considered as one of the fastest expansions for an ISP in Kenya.

‍
🎮 Game face. SA’s gaming industry is set to receive a boost with the establishment of the AfriGames Consortium. Funded through the National Treasury’s Jobs Fund, EOH, and ABSA, the consortium has already secured R25.8 million to put SA gaming on the map.

🚀 Gear up with Google. Applications are now open for the next cohort of the Google for Startups Accelerator: Africa,  Google’s three-month hybrid accelerator program specifically aimed at Black-led technology startups in South Africa who are between the Seed and Series A stages.

💰 Funding Growth. Endeavor SA's Harvest Fund III has achieved its first close at R190 million, aiming to boost tech-related companies across Africa. Major investors include Standard Bank, Allan Gray, and the SA SME Fund, with plans to invest in a select pipeline of 135 companies, focusing mainly on southern Africa.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy local and international payment processing with WigWag, expert offshoring, company structure and legal advice from Dommisse Attorneys and 11 more vital startup tools & services.

BUILDER’S CORNER

5 Steps to Greatly Increase Your Product’s Chances of Success

By reversing what you think you know about building products

Written in conjunction with Heinrich De Lange of Octoco.

This past weekend, SpaceX made history (again)...

After 67 years of everyone “knowing for a fact” that the only way to get to space is to sacrifice your ($millions) booster rockets and let them burn up in the atmosphere, SpaceX challenged that notion…

And basically detached a booster and caught it again back on Earth to refuel and blast the next one within 60 minutes – an important requirement in the mission to occupy Mars.

It’s more than cool viewing, though. This simple feat of engineering will save hundreds of millions of dollars in wasted booster rockets by making them reusable in the future.
And this level of ingenuity is not reserved for space engineering or billionaires with R&D teams – you can use the same publicly available principles Elon and the SpaceX team use right now for software, hardware or any venture you can think of, with the Octoco interpretation.

It all comes down to 5 steps…

See, when most builders start engaging with an idea, we tend to develop a rough requirements list for how this thing could maybe work and then start building out on those initial assumptions.

The wrong way: Stop us when this starts to sound familiar:

1. You start looking for ways to automate most of the processes in your initial idea.
2. Then, you realise how taxing it is, so you try to speed up parts of it.
3. But it’s not enough, so you go back and try to simplify it a bit.
4. Still too long/slow/difficult? Try delete some parts of the process.
5. You realise that 90% of the things you thought you had to do were unnecessary – you were wasting time and money all along. And, by this time, your company’s probably failing.
   

Psst… it’s because you’re doing it the wrong way around…

The Right 5 Steps (in the Right Order)

1. Assume All Your Requirements Are Wrong

Musk uses the word “dumb” instead of wrong. And the lesson comes from the Tesla factory…

After a lot of wasted time and resources trying to solve a problem with fire insulation between specific components, Musk discovered that the insulation wasn’t even necessary – it had been “dreamt up” as a requirement early on by someone and accidentally included in the formal process.

The core of this step is to include info such as Who added a requirement (name of person) and their Why (reasoning) for it so that you can think critically about every product requirement. Use the ABC model to interrogate every requirement: Assume nothing, Be curious and Confirm the important (make sure you understand why it’s there).

This lets you interrogate each product requirement and try to see if it is really necessary. By eliminating as much wastage early on, you make your requirements “less dumb” and much lighter.

2. Delete Parts of the Process

Be ruthless and remove as many parts of your process as possible that let it still work.

See, our brains are naturally cautious; we try to be smart and pre-empt things. But that’s how you end up with overly complex systems (see point 1).

The rule of thumb is: If you’re not spending at least 10% of your time adding deleted parts back into the system (because it turns out they were actually needed), you’re not deleting enough parts.

3. Simplify and Optimise Design

If you’ve done steps 1 and 2 well, you will have removed as many non-critical parts as possible.

A vital move, because most people trip themselves up by wasting time optimising things that shouldn’t even be there. So if you’ve nailed 1 and 2, you should be able to laser-focus on stuff that matters by now.

4. Speed Up Cycle Time

Notice how we haven’t iterated on anything yet until now? Yeah, that’s the point: If you speed up things that shouldn’t be there, you just dig your grave faster.

Speed is important, though. Musk found bureaucracy can account for 35% of production delays – you’ll want to focus on eliminating those.

If you’ve done 1–3 well, the things you speed up will be only what’s necessary.

5. Go Ahead & Automate

Same here. If you’ve done them all well, and they work as expected, then (and only then) start automating for scale.

Crucially, though, automation comes last.

This process can often feel uncomfortable at first as it forces you to venture into the unknown, but after executing it successfully a few times, it starts to feel natural (which, in part, could explain Elon’s companies’ exponential success). 

If you want to avoid some of the pain and pitfalls when taking this approach, speak to the guys at Octoco about getting it done right. They have applied these principles to building technology for Henlo Coffee, LeaseSurrance, Intelligent Safe and more.

HAPPENING SOON

Upcoming Events

18 October 2024 — Digital Chat Roulette: It’s like startup speed dating, but you don’t have to leave the house/office — The Open Collab community exclusive.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Online Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

18 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Got our Chat Roulette invites 👯.
• Enjoyed last week’s Alan Knott-Craig interview so much, we voted unanimously to invite him back for a members-only live AMA session.
• Discovered that Riverside recording tech is 💩.
• Laughed/cringed/cried at former FTX co-CEO’s going to prison LinkedIn update.
• Enjoyed SpaceX’s historical 5th Starship flight test, courtesy of Enrico.
• Welcomed some new members! (It’s a vibe).

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

We Bring-a da Spice

 .

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Got some startup memes? Send them our way or tag us on socials.

WHAT YOU SAID

Better Electric

🟨🟨🟨🟨⬜️⬜️ e-Scooters ⁠🛵 (27%)

🟩🟩🟩🟩🟩🟩 ⁠⁠e-Taxis 🚐 (39%)

🟨🟨⬜️⬜️⬜️⬜️ ⁠e-Trucks 🚚 (17%)

🟨🟨⬜️⬜️⬜️⬜️ E-Lon’s passenger cars 🚗 (15%)

⬜️⬜️⬜️⬜️⬜️⬜️ e-Ships 🚢 (2%)

⬜️⬜️⬜️⬜️⬜️⬜️ e-Planes ✈️ (0)

Your 2 cents…

“Gotta back the guest on this one. They did some mega extensive research. One of my favourite episodes of the pod.”

Jason

Oh definitely, Jason. You think oh it’s just another transport guy and then Justin comes in and 🤯

“Minibus taxis always come first!”

William

Indeed, William, it’ll be incredible to see what we can do in that space. 🚀

⚡️Charging Up SA’s Minibus Taxi Future...

Plus: Safety drones 🛰, peachy WhatsApp commerce, SARS in your crypto & the hard-hitting startup truths you need to hear.

October 11, 2024

Time to whine? To celebrate 30 years of Green Day’s Dookie album, you can now purchase DE-mastered low-fi versions of all 15 songs on 15 different mediums they were never meant to be heard on.

Jip, that means stuff like “Basket Case” on a Big-Mouth Billie Bass, “Welcome to Paradise” on a GameBoy and “When I Come Around” on a wax cylinder (phonograph). 🤘

In this Open Letter:

• Driving change: The green side of SA’s minibus taxi revolution.
• Safety drones, Peachy WhatsApp commerce & SARS in your crypto.
• Good medicine: All the hard-hitting startup truths you need to hear.
• How you prefer your customer support: The results are in.
• Lonely building your startup? Join The Open Collab and get support.

Together with — Innovation City Cape Town

Did someone forward you this email? Join 13,620 South Africans reading The Open Letter by signing up here.

TRENDING NOW

The Future of SA's Taxis

15M Daily commuters & cutting SA’s carbon by 3.5M tons

If you’ve been a reader of The Open Letter for a while, you’ll know we’re quite bullish on SA’s Taxi Industry…

This R90 billion industry keeps the wheels of SA turning, with SA’s 250’000-strong minibus taxi fleet getting 15 million South Africans from their homes and back every single day.

But it’s hard work operating a taxi

Check out some back-of-the-napkin maths we shared in a previous Open Letter.

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Sjoe, think we’d rather be the Gaaitjie than owner/operator…

Nearly 40% goes towards petrol, the lifeblood of keeping any (well most) vehicles moving…

And, yeah, the fuel price might be coming down now, but it’s been fluctuating the last few years, making it hard for taxi owners to price daily expenses – and drivers know: you either adjust your fares and risk losing passengers or suck it up and live off already razor-thin margins.

It gets scary when you have price jumps like when the petrol jumped R3 per litre between Jan & May this year – that alone adds around R6k in extra costs each month. Eek!

Not to mention the cost of maintaining your taxi… with the daily mileage these guys rack up, it can get costly, quickly.

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The local solution putting more cash in drivers’ pockets

Last week, a consortium led by GoMetro, launched SA’s first electric taxi, the eKamva.

We spoke to the founder on the latest “How Would You Build It” podcast and, in 2 years of research, they concluded that while pedestrian/private EV vehicles might be sexy, cool and all hyped up, it’s not necessarily where Africa’s EV future lies. 

The 15-seater eKamva (isiXhosa for “into the future”) sports a 60kW battery and has a 200km range, with 2 charging options: a 75-minute fast charge (ideal for the 3-hour window between peak hours), and a 10-hour slow charge for overnight charges.

eKamva is supported by flx EV, an early-stage, charging solution taking an Afro-centric view by seeing how SA taxis operate and using fast charging services. They have also partnered with various municipalities to develop charging facilities in close proximity to existing taxi ranks.

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GoMetro pegs the operational cost saving at between 40% and 70%, and since there are fewer (check out the pod, it’s like 8) moving components than on a combustion engine that can get damaged – think filters, spark plugs and oil – operators can avoid costly repairs.

And if something does go wrong, the vehicle is under warranty and the motor gets sent off for repairs, with a replacement motor provided to get them back on the road asap.

The eKamva will set you back between R1.1 and R1.2 million, (thanks to the 40% import duties on “luxury” EVs). But if the government can be convinced to remove this tax, it could bring the price down to between R650 and R750k – on par with the Toyota Quantum.

The green to care about

Replacing taxis with eKamvas could reduce carbon dioxide emissions by 13.7 tonnes, per vehicle, per year (at 250k taxis, that’s 3.425 million tonnes of CO₂ per year). And that type of green might not be a big motivator for operators. But they might fancy the green cash that initiatives like this can put back in their pockets. We’re watching this space.

We had Justin Coetzee, the CEO and founder of GoMetro tell us more about the journey to eKamva, the challenges, opportunities and work that still needs to be done to green SA’s taxi industry – check it out or catch some highlights:

• At the intersection of tech & transport – how to spot a contrarian opportunity
• Why SA is perfectly positioned to formalise the informal transport sector
• Championing change – how to onboard people when disrupting
• Easier said than done – the ins and outs of taking it global
• Innovating outside of product line – bringing EVs to SA
• Measuring up – the nuts and bolts of eKamva busses

IN SHORT

Say something interesting…

👀 Tracking Takealot. A new analytics platform called Takealytics has launched to help sellers on Takealot make decisions on what products to sell on the e-commerce platform. Using Takealot’s public API, it pulls product data like reviews, competitors, descriptions and imaging of each day to inform sellers of what products could do well on Takealot.

🍑 Life is Peachy. Local digital payment provider, Peach Payments, is bringing a new sales channel and WhatsApp-based sales to its SA merchants through a partnership with Kenyan CRM and conversational commerce platform, Sukhiba.

🕹️ Sky Lens. SA is seeing a surge in drones in the surveillance and security industries as security industry players look to tackle crime. Local SOE Passenger Rail Agency of SA (PRASA) has reportedly seen a 75% decrease in infrastructure vandalism since it started using drones. So if you’re into security and drones, could be a lekker opportunity for you.

🎯 Taking Aim. SARS has set its sights on the nearly 6 million South Africans holding crypto assets. It’s partnering with the Financial Sector Conduct Authority (FSCA) to ensure tax declaration compliance by crypto holders.

🎓 Busy Body. Old Mutual’s had a busy week this week. Not only has it launched its own Mobile Virtual Network Operator (MVNO) service, Old Mutual Connect (complete with a R5 sim card), but the insurer also introduced its updated financial literacy platform, Moneyvarsity with added resources and some AI-based capabilities.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with your own fractional CFO for less with OCFO, easy-apply R5M business funding with Lula and 11 more vital startup tools & services.

CHECK THIS OUT

The Fastest Way to Meet Potential Investors & Partners in CT

Building ventures is not all about hard work & determination.

The Economist Intelligence Unit found that 8 out of 10 successful founders attribute a big part of their success to networking. And most VCs end up investing in founders they met in person.

Great! But how do you lure enough of the right people to a place where you can meet them?

Answer: You don’t. You simply go to Innovation City’s Business Speed Dating Event on 7 November, instead.

With tailored matchmaking and a super-sharp format of 5-minute rounds, you’ll meet all the investors, founders and potential partners you can handle in just 2 hours.

But there’s a catch: Seats are limited (and going fast), so it’s best to secure your spot early.

Submit your application here.

HAPPENING SOON

Upcoming Events

Today — Linkedin Live: We chat with author and serial entrepreneur Alan Knott-Craig about his new book, Life Lessons — Join here.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Online Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

14 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Helped Enrico find the No 1 🔥 note-taking app for meetings.
• Helped John find some of the best AI Pro packages out there.
• Marvelled at GPT4’s South African accent.
• Helped Jaco find some rad local providers for airtime via API.
• Discovered the world’s raddest tea thread.
• Spent an hour working together: From Blouberg to Durban, Pretoria to Düsseldorf and everywhere in between — we all logged in and it’s a vibe.

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

MEET THE STARTUP

The LinkTree upgrade every solo needs

Every day we meet local founders doing amazing things, and we bring them straight to you.

Trevor’s Savvy Sites lets solos and SMBs get online in just a few minutes… and soon accept and process easy payments via WhatsApp too..

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Got some startup memes? Send them our way or tag us on socials.

WHAT YOU SAID

A little bit of customer success

We asked how you talk to customer support, and WhatsApp gets the all-green…

🟨🟨🟨⬜️⬜️⬜️ Anything but automated robot calls! 🤖 (24%)

🟨⬜️⬜️⬜️⬜️⬜️ I actually like talking on the phone ☎️ (11%)

🟨🟨⬜️⬜️⬜️⬜️ Nope, it’s email or nothing 📧 (16%)

🟩🟩🟩🟩🟩🟩 I like engaging on WhatsApp ✅ (44%)

⬜️⬜️⬜️⬜️⬜️⬜️ Can’t we just go back to good old face-to-face? 🤗 (5%)

Your 2 cents…

“I prefer a person to a bot or a mix that gives me real solutions.”

Joanne

Yeh, Joanne, if it adds to the experience or gets you helped faster, great. 🥳

“I have absolutely never had a good experience with WhatsApp as a channel for customer service. FNB once treated me to several hours of misery over three days just to request a simple transaction, for example. I have others.”

William

Eina, sorry William, yeh tech only helps when it actually HELPS, hey? 🤔

“It depends — If I'm going to be holding for a while, I'd much rather use WhatsApp, otherwise I've found that talking on the phone typically resolves my query faster.”

Jason

Guess it comes down to call volumes and query times, eh Jason? 🤙

“Providing customer support face-to-face is invaluable for start-ups. At this early stage, offering personalised assistance, even through video calls, helps build trust and ensures customer satisfaction. When your customer base is small, you can provide "white-glove" service, showing clients that their needs are a priority and addressing any issues promptly. As your business grows and scales, maintaining this level of personal support may not be practical, so it's important to maximise the opportunity while you can to create loyal and satisfied customers. Look after your first-adopters, they form the foundation of growing your client base.”

Trichardt

Pure wisdom, Trichardt! We always say find your ultimate five-star user experience. 👌

🎯 Making Sales While You Sleep...

Plus: Beer money 🍺, scaling local startups, Superbalist’s restructure & 20 years of startup lessons in minutes.

October 08, 2024

A bit of privacy? Two Harvard students hacked Meta’s smart Ray-Ban glasses to identify people they’re looking at. But, like in the Watchdogs games, it goes a step further and sends insanely in-depth private info about you straight to their phones. Eeek!

Here’s a doc by the creators on how to protect yourself from this type of tech.

In this Open Letter:

• Customer X: Tech that makes sales while you sleep.
• Beer money, scaling local startups & Superbalist’s restructure.
• Shortcut: Get 20 years of hard-earned startup lessons in 40 mins.
• How startup founders approach sales: The results are in.
• Short on ideas? Share this and get 100+ SA startup ideas.

Together with WigWag:

Did someone forward you this email? Join 13,474 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Future-Proofing this R54bn SA Industry

Back in the 1980s, the primary way to buy insurance in South Africa was through brokers. That’s when South African entrepreneur Douw Steyn identified an opportunity to sell insurance to more price-sensitive consumers via telephones — it was a massive success both locally and abroad, giving birth to the telesales industry in South Africa.

Today, the total call centre industry in South Africa employs over 270k South Africans and is estimated to generate somewhere between R35 billion and R54 billion for the SA economy (about 0.4–0.7% of GDP).

And it’ll grow: the government has committed R569M to grow SA’s BPO (Business Process Outsourcing) sector, which is the fancy name for call centres, with an eye on growing it to a R62 billion per year industry by 2027.

Especially the Western Cape, which houses about 60% of SA’s call centres, netting about R21 billion and 10k new jobs per year for Cape Town’s economy… it’s big business.

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But how is this game-changing with AI? Well, AI calling bots are here; just check this demo of a close-to-perfect South African accent that could easily act as an insurance salesperson.

And, you guessed it…

Call Centres Need to Evolve or Die

According to McKinsey’s Customer Care Report 2024, voice calls are surprisingly still alive and kicking but facing their gravest challenge yet:

• rising call volumes
• high levels of employee attrition
• and persistent talent shortages
  
  

And with AI and automation as an answer, the biggest and best customer-facing organisations are investing heavily in digitally-enabled customer care (like omnichannel, but for call centres) and McKinsey notes that it’s lifting all customers’ expectations from interactions.

Being able to combine live voice with simultaneous chat, video and image-sharing is boosting customer experience through the roof — especially when interaction can be done asynchronously — in, say, an instant messaging format.

Now, throwing Large Language Models into the mix is no doubt lowering costs and doing the same job in a fraction of the time.

So, just how are SA organisations engaging customers in new and creative ways?

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The Local Player Redefining Customer Care

Local scaleup, rather.chat helps companies connect with customers in a new and engaging way via WhatsApp – probably the only channel with equivalent penetration to phone.

Originally built as a tool for selling policies on the popular platform, rather.chat has now been spun out as a full-service solution for businesses to:

• Market to potential customers and generate leads
• Perform and close actual sales virtually
• Handle customer care and customer service
• And take over some customer feedback functions

And the proof’s in the pudding: rather.chat has facilitated over 15 million connections between customers and companies and concluded over 150k actual sales (85% of which were entirely automated, and required no human intervention whatsoever).

In fact, they’ve partnered with a host of local companies, from Ackermans to Clicks, Discovery to Cars.co.za, and on average, manage to lift low engagement levels of around 1.5% through traditional branded app channels to over 40% through WhatsApp. What’s more, research has shown that customers are 47 times more likely to engage via WhatsApp than download your fancy app to chat that way.

Customer engagement is changing faster than ever and rather.chat is offering a way for consumers to engage that prefer to rather chat. We’re watching this space…

IN SHORT

Great Openers for Your Next Meeting.

🍻 Scaling with because of Beer. The SAB Foundation’s Social Innovation Accelerator and Fund has awarded a combined R3 million in funding to 3 local startups. They are Respo, an affordable private ambulance service app for low-income South Africans, Syked, an online wellness platform providing secure video counselling sessions, and Word of Mouth, an end-to-end e-commerce platform for informal entrepreneurs.

🐟 Scales and Fins. Local FinTech startup LittleFish has successfully closed its seed investment round, with TLcom Capital leading the financing — marking TLcom’s first venture into South Africa — and Flourish Ventures also participating as a co-investor.

💳 Card Scaling. VCs 54, First Circle Capital and Sunny Side Venture Partners have led a pre-seed funding round for Scale, a South African card-issuing orchestration startup. The  R12 million round will help Scale in its mission to connect FinTech platforms with banks, issuer processors, KYC and payment networks so that they can launch cards faster.

😢 Scaling Back. Local e-commerce Superbalist is expected to retrench around 28% of its staff as it restructures its business after recently being sold off by Takealot. Hopefully, those impacted are able to bounce back quickly.

🪙 Crypto Pay Scale. Thanks to a partnership between Luno and Zapper, you can now use crypto to pay for a bunch of stuff like medicine, petrol, flight tickets, parking and more at more than 30k Zapper merchants - hopefully as quickly as using a credit card.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with sustainable scaling and growth strategy help through Metavolve, your own CTO and tech team at a fraction of the cost with Octoco and 11 more vital startup tools & services.

CHECK THIS OUT

Sell It Now and Let Them Pay Later

When it comes to online payments, it’s become super easy to get up and running to receive payments with WigWag.

Even if you are a small or solo business selling on social or via WhatsApp, WigWag is one of the fastest ways to set up and get paid.

But what if your customers can’t pay right now? 

Let’s face it, some bigger ticket items are just sold better in instalments – but as a small business, you don’t have the option of selling it that way… until now.

From tomorrow, if you are registered on WigWag to receive payments, you can switch to Happy Pay’s Buy Now Pay Later (BNPL) solution to allow your customers to pay for your products or services in two convenient, interest-free payments. 

So, if you are collecting payments using Wigwag, you now get:

• Automatic access to Happy Pay through the WigWag platform.
• Seamless integration of BNPL at checkout, increasing customer satisfaction and conversion rates.
• Guaranteed weekly payments, ensuring you can start fulfilling orders immediately after checkout.
• A simple and user-friendly dashboard, showing all payment types — including Happy Pay transactions — in one place.
  

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Keen to get the simplest online payment solution now with the convenience of Happy Pay’s BNPL solution?

Sign up for a WigWag account now.

HAPPENING SOON

Upcoming Events

11 October 2024 @ 12:00 — LinkedIn Live: We chat with author and serial entrepreneur Alan Knott-Craig on his new book, Life Lessons. Join here.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

8 November 2024 — Online Masterclass: Part 2: How to keep shipping truly great products, fast — The Open Collab community exclusive.

14 November 2024 — Cape Town: In-person: Building SA’s most-used digital products — tickets available soon.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Got our recordings of legal pros teaching us how to start companies overseas.
• Introduced Chris to the COO of the startup he’s been looking to collab with.
• Helped Trevor get his job spec looking 100% fly.
• Tried out a bit of the new ChatGPT with Canvas ability.

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• Friday 12-1: Masterclasses, where we either LinkedIn Live chats with startup legends or get masterclasses in practical building skills from industry pros.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

MEET THE STARTUP

Didn’t know we were looking for love…

We meet a lot of cool SA founders and started doing quickfire pitches where they tell us what their startups are all about.

This is Serisha, sharing how the Boardroom App helps busy professionals find love in a fast, fast world…

 .

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WHAT YOU SAID

Show Me the Money

We asked how you make sales for your startup, and it’s DIY for most…

🟩🟩🟩🟩🟩🟩 🎯 I do it myself (cos then I know I can eat) (62%)

⬜️⬜️⬜️⬜️⬜️⬜️ 📢 Influencers, ads – anything but selling myself (3%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🚀 I hire and train the best salespeople in the world (6%)

⬜️⬜️⬜️⬜️⬜️⬜️ 👔 I get like 90% of my leads via my LinkedIn (9%)

🟨⬜️⬜️⬜️⬜️⬜️ 😎 Very easily since I found Apollo on The Open Letter’s Founder’s Stack (20%)

Great! And remember to check out the sales tools in the Founder Stack:

You can find and contact leads with Apollo via your LinkedIn, build drip campaigns via email with Beehiiv, collect payments with WigWag and automate workflows between them all with Make so it all runs automatically 24/7.

You don’t even have to write any copy yourself, just get Stream to do it for you. 😉

💸 How to Claw Back 30% of Company Revenue

Plus: Africa startup acceleration 🪘, Elon’s SA investments & 300 million seeds & how to offshore your startup.

October 04, 2024

Deeper meaning? Some joker asked Google’s NotebookLM to generate an entire podcast from a document with only the words “poop” and “fart” written on it, 1’000 times. And the AI did it — behold 10 minutes of poop-fart deep-dive.

Should we be worried about how good AI is at making stuff up?

In this Open Letter:

• Sales optimised: How to claw back 30% of your company revenue.
• Africa startup acceleration, Elon’s SA investments & 300 million seeds.
• Offshore savvy: Join us to learn about housing your startup overseas.
• What most of us are saving up for: The results are in.
• Short on ideas? Share this with one friend and get 100+ startup ideas.

‍

Together with:

Did someone forward you this email? Join 13,252 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Clawing Back 30% of Your Revenue

Let’s face it, when it comes to buying something from someone, nothing beats face-to-face. 

In fact, research has found that face-to-face is 36 times more successful than digital channels. But that doesn’t always mean it's best for the business. 

Face-to-face sales are pricey! Travel time, travel cost, and aligning calendars (think travelling salesman problem) all add up to make it likely the most expensive of sales processes.

Traditionally salespeople spend as much as 70% of their time on “non-selling” tasks – i.e. stuff they have to do but that aren’t bringing in revenue, like:

• Administrative work,
• team meetings,
• reporting and documenting, etc.

And that’s why many organisations have become adept at doing sales remotely. Sure, it’s less effective, but at a fraction of the cost and complexity, in some cases, it does make sense. 

Taking it a step further, the advent of AI has seen people building AI callers that do sales calls for you. Old Mutual is piloting such a tool in SA right now – robocalling insurance armies.

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Whilst certainly effective in certain market segments, it will be completely ineffective in others – that’s where instead of using tech to replace humans, one should use tech to make humans more effective at sales, all while reducing costs.

But running human sales teams in a post-covid, remote first world is complicated. 67% of sales managers say that overseeing a remote sales team is more challenging than they expected and 77% of B2B companies said they had faced challenges with their field reps working from home. 

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Bringing the Human Back

Smart devices have done a lot for field sales. 

Being connected back to the office, easy calendar bookings and navigation using on-device navigation have all made the process of field sales force more streamlined. 

But add reporting, intelligence and sales capturing intuitively and all of a sudden you have a field sales team that turns into a field sales force.

That’s what local scale-up Skynamo started doing back in 2012. After building a field sales force solution for themselves in a company called EMSS (which later became Alphawave), they realised that there might be opportunities to build solutions like that for other companies, pitching on an array of tenders (including a field installation app for SA’s Digital TV rollouts, that due to politics never ended up happening). 

But they soon realised that while many people need a solution like this, most don’t have the budgets to build and maintain their own solutions. 

And right there, the SaaS opportunity was born with a 6-in-1 Field Sales Software platform catered towards:

• Sales Reps — give your sales reps access to live stock checks and instant reports, execute assigned tasks/visits and access relevant info on the fly.
• Sales Managers — watch sales unfold live and respond to customer queries or escalations.
• Sales Intelligence — smart analytics and insights help you make decisions that can lead to better results.
• Customer Intelligence — predict customer needs accurately.
• Strategic Forecasting — using past data, simplify your future forecasting and planning.
• Revenue Intelligence — figure out which deals/customers are most profitable.

Initially called Honeybee, they were renamed to Skynamo in 2018 and were able to raise $30 million right before COVID. Good for cash flow, not so great for international expansion plans. 

Once the lockdowns eased, they hit international markets, particularly the US hard with on-the-ground teams. Since then they have scaled back their on-the-ground US operations — a decision founder Sam Clarke explains on the latest ep of our “How Would You Build It” podcast. 

Skynamo is however still one of SA’s greatest SaaS success stories and continues to grow its customer base both in SA and beyond. 

And with the Robocallers going into overdrive, we think in-person sales will be more effective than ever and tools like this will have a major role to play. We are watching this space…

We recently chatted with Sam Clarke, CEO of Skynamo, on the “How Would You Build It” podcast. Check out the latest episode, or dive into some highlights:

• What is Skynamo (and building apps around 2010)?
• Getting Skynamo’s first customer, without paperwork or even pricing.
• Liquor licenses, tyre customers and conceptual debt — understanding your customers’ industry.
• Skynamo’s funding journey - at the time, local VCs just couldn’t write big enough cheques.
• Expanding overseas when the pandemic hit.

IN SHORT

Drop some nuggets at the weekend braai

🔘 Hit the Start Button. The SA SME Fund, the Department of Science and Innovation (DSI), the Technology Innovation Agency (TIA) and impact investor E Squared Investments, have launched a R300 million Seed Fund of Funds. Aimed at early stage, tech startups, the fund will provide a much-needed boost for local startups starting out.

🚢 All Aboard. Local shipping platform for e-commerce exports TUNL has raised a seed round, after closing a $1 million pre-seed round in December 2023. Great news as it expands its local growth and dives into international payments & marketing support for local SMEs (to sell their stuff abroad).

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✨ Investments in the Stars? Elon Musk has expressed his desire to “invest in and otherwise support South Africa” should South Africa relook the telecoms regulations tripping up digital inclusion in the sector and SA at large. This comes off the back of our Communications minister Solly Malatsi’s meeting with Starlink reps to talk about potential SA investments.

🚄 African Acceleration. Fifteen African startups, including 10 from South Africa have progressed to the second phase of the UCT Graduate School of Business’ Solution Space and ayoba’s e-Track programme. The 12-week programme is aimed at accelerating the development of validated ventures (from the first phase) and will culminate in a demo day on the 28th of November.

🚀 Boosting Benefits. Employee benefits tech platform Bento has just concluded a R5.2 million pre-seed funding round, led by NEXT176. With employee benefits playing a larger part in helping SMEs land top talent, that’ll help Bento’s mission of helping more SMEs offer competitive, flexible, and affordable employee benefits.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with easy cloud-based accounting with Xero, superior quality tech content to build brand trust from Stream and 11 more vital startup tools & services.

CHECK THIS OUT

Wish you learnt about money sooner?

You're not alone, over two-thirds of the world is considered financially illiterate!

But what if we could change that?

Remember playing Monopoly as a kid: The flipping the board in a heated game?

FinMaster is here to replace that with something better — a game that’s fun, fast-paced, and teaches real-world financial skills to children 13 and up.

In FinMaster, you’re not just collecting assets, you’re controlling the market!

Will you build your wealth or cause the next financial meltdown? It’s your choice.

From creating booms to surviving crashes, FinMaster turns learning about money into a thrilling experience.

Here’s what some of our playtesters are saying:

• What a fun game!
• A lot more realistic than Monopoly.
• Engaging, educational, with an element of competition.
• Interactive and great for a group of friends.

Pre-order your FinMaster today and make it part of your next friends and family games night. It’s the modern-day money game South Africa’s been waiting for!

Pre order FinMaster

Events that rock

Stellenbosch, you beauty

Oh man, were we underestimating Africa’s AI and Machine Learning capability — our latest event guests gave everyone an entirely new perspective on SA’s AI and ML capability earlier this week. We heard stories about:

• how they are using it to help small companies beat their giant incumbents
• as well as how to use it to intelligently deploy traffic department staff to reduce road fatalities by up to 50%

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Was great meeting so many of you there, see you at our next event!

Upcoming Events

4 October 2024 — Online Masterclass: All about offshoring with Andea du Toit from Dommisse Attorneys — The Open Collab community exclusive.

11 October 2024 — Linkedin Live: We chat with author and serial entrepreneur Alan Knott-Craig on his new book, Life Lessons.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

• Celebrated Erhard’s startup Hoom going live!
• Debated the whole Elon-Starlink-coming-to-SA thing…
• Helped Pieter get square on his next startup steps.
• Celebrated with Richard making great progress, with some help from Collab members.
• Debated whether it’s best to focus on 1 thing or spread your luck/risk.
• Welcomed 5 new members!

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

It’s a jungle out there…

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WHAT YOU SAID

Priorities, priorities

We asked what you need to save for, and investing in getting to market or PMF’s the big one…

🟩🟩🟩🟩🟩🟩 Cash for my startup or MVP 🚀 (32%)

🟨⬜️⬜️⬜️⬜️⬜️ Home improvements – need that new pool, baby 👙 (11%)

🟨🟨🟨⬜️⬜️⬜️ A car or house – gotta keep moving up 💸 (17%)

🟨🟨🟨🟨⬜️⬜️ Purchase an investment property – esp. if interest rates keep dropping 🏘️ (21%)

🟨🟨🟨⬜️⬜️⬜️ A lekker holiday! It's time 🏖️ (19%)

Your 2 cents…

“Purchasing property and stashing cash for retirement! at 35 years old, I am trying to put as much money away as possible for retirement as damn! You need a lot to retire!”

Michelle

Nice one, Michelle! Do you know FinMeUp? Local guys that help you get your risk profile and manage investment goals in a fun and engaging way. 😎 💸

“The home improvements list gets longer by the week...”

Jason

Oh, by the way, Jason, please remember to fix the cupboard door. 🤣

‍

🇿🇦 Taking R50bn to the Next Level...

Plus: Uber safaris 🦁, Eskom’s magic coal dust, solar-powered home bots & tickets to our next startup event.

‍

Pearly whites? Researchers used toothpaste to make edible transistors, opening up the possibility of microchips you can safely swallow to help track and manage your body’s health from the inside.

In this Open Letter:

• Uniquely SA: Helping 19 million save better, more securely.
• Uber safaris, Eskom’s magic coal dust & solar-powered home bots.
• See you tonight: Our Stellenbosch event is tonight — book your spot.
• How often you eat out: And the latest poll results are in.
• Startup fuel: Share this 10 times and get Pro membership.

Together with:

Did someone forward you this email? Join 13,111 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Helping SA Manage R50bn in Savings

SA has the most mature and robust banking industry in Africa (and right up there with the best in the world, mind you), but despite that, late last year, we learned that a staggering 19 million South Africans remain underbanked. 

And while most still get paid in cash and use that cash to spend, many remain in the cash world, so it made sense that saving also happened in the world of cash: Hence the Stokvel.

‍

Ah, the Stokvel 

For those who don’t know: A Stokvel is a member-only group savings system where 12 or more people contribute a set amount of money to a shared fund regularly (weekly, bi-weekly, or monthly) with different members receiving the entire collected amount in a lump sum on a rotational basis.

Let’s say you’re 12 people, each contributing R1’000 per month. In a classic rotational stokvel, each member chooses a month out of the year, and for that one month, you get R12’000 to use for yourself.

Now, stokvels are guided by a constitution that outlines all the rules: contributions, payouts, and member roles. And by law groups must be registered with the National Stokvel Association of South Africa (NASASA), the only association approved by the Registrar of Banks in terms of the Banks Act 1990 (Act No. 94 of 1990).

And, as one can imagine, you can use this mechanism in various ways. That’s why there are different types of Stokvels: from grocery stokvels to investment clubs.

‍

The Stokvel game is no small thing…

According to NASASA, there are more than 800k Stokvel groups in South Africa with more than 11 million individuals. 

And the industry manages around R50 billion each year, essentially creating a massive network of “human banks” in the local economy.

Now, up until very recently, we would not have thought that a digital stokvel is viable. It faces adoption challenges and “money-in” friction. Basically, if someone has to take cash to a bank to join a stokvel, it's costing them way too much in terms of time and taxi fare. It’s a non-starter.

But things have started changing fast in the financial infrastructure for townships space.

Earlier in the year, we covered how Kazang has a presence in more than 85’000 spaza shops across SA and how their tech is enabling merchants to take cash deposits, allow withdrawals from cards (and make payments with cards), sell bus tickets and a host of other interesting offerings.

With this footprint, it could finally make sense to do the digital stokvel and it looks like it’s happening…

‍

The local player bringing the Stokvel into the future

StokFella is a digital stokvel app designed to make running a stokvel more efficient and secure by offering tools for record-keeping, financial tracking, and communication – all in a user-friendly, secure platform.

They’ve got a pretty flexible subscription-based pricing, starting with a free plan for up to 15 members, which covers the basics of running a stokvel. 

But if you wanna go pro for R500 per month, stokvels get meeting resources, detailed reports, executive coaching discounts, and higher interest rates on savings. They are also integrating innovative solutions to offer members such as a link into Troygold to allow stokvels to effortlessly invest in gold via API.

With over 42’000 members and more than R220 million transacted, StokFella is bringing an innovative solution that modernises old-school, traditional savings and investment schemes like stokvels. We’re watching this space…

IN SHORT

Sound smart at the watercooler

🤖 Power Bot. Local home energy management company Plentify has joined forces with one of SA’s largest solar and electrical distributors Herholdts to launch SolarBot. This intelligent controller analyses weather patterns, load-shedding schedules and customer demand to make smarter decisions on when to charge and discharge the battery.

🦁 All Hail Safari. Uber has just launched Uber Safari in South Africa. And just like the name suggests, users will be able to book a full-day “Wildlife Adventure” from Cape Town to the Aquila Private Game Reserve which includes a 3-hour game drive to see Africa’s Big 5. The round trip will set you back around R3’400 for 4 peeps and runs on Fridays and Saturdays.

🏠 Home affairs at Home. South African home affairs is notorious for long queues, confusing processes and frustrations. However, given that their budget has been cut by as much as 40%, perhaps that’s part of the reason. The new Home Affairs minister is planning to build Home Affairs @ home, taking everything online and making it digital. If it works, no more queues…hooraay!

🛣️ Recycled Roads. Eskom’s Research, Testing, and Development (RT&D) initiative is trialling the use of recycled coal ash instead of traditional cement for road construction. It’s starting its trial with a new access road at its Kusile Power Station and is expecting to use around 2’904 tonnes of coal ash per km of road.

🏦 Take it to the Bank. Africa's largest financial institution by market capitalisation, FirstRand, is set to acquire all of HSBC Bank plc’s South African operations including clients, banking assets, liabilities, and staff with the deal set to close at the end of 2025.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy local and international payment processing with WigWag, expert offshoring, company structure and legal advice from Dommisse Attorneys and 11 more vital startup tools & services.

CHECK THIS OUT

Do banks even know what startups are?

One recent Open Letter user poll revealed that South Africans are tired of their banks.

• High fees
• Horrible service, and
• A general sense that their bank just doesn’t get their needs.

But there is hope. Introducing Lula’s ZERO fee bank accounts.

That’s right, zero monthly fees to set up and use a Lula business bank account.

What’s more, when you have a Lula bank account, you can:

• Stay on top of finances with their free, powerful cashflow manager called Lulaflow
• Earn 1.5% annual interest on positive balances
• Get dedicated support from real humans in real time

Finally, with a Lula business bank account, it’s never been easier to get access to up to R5 million in business finance.

Trusted by SMEs for more than a decade – get a bank that understands small business.

Get a Lula bank account today.

HAPPENING SOON

Upcoming Events

1 October 2024 — Stellenbosch: How to Build an AI Startup with Dries Cronje and Retief Gerber — tickets here.

4 October 2024 — Online Masterclass: All about offshoring with Andea du Toit from Dommisse Attorneys — The Open Collab community exclusive.

11 October 2024 — Linkedin Live: We chat with author and serial entrepreneur Alan Knott-Craig on his new book, Life Lessons.

25 October 2024 — Online Masterclass: SA’s very own “product legend” Roger Norton is here for the first in a three-part product building series — The Open Collab community exclusive.

1 November 2024 — Online Masterclass: Keep your B2B sales pipe filled Masterclass session with sales expert, Sebastian Chapman — The Open Collab community exclusive.

View all our upcoming events here.

BUILDING TOGETHER

Happening over at The Open Collab

In the last 48 hours alone, in our online community, we…

‍

• Learned that in 3-or-so weeks, TJ Strydom is releasing a new book on how the Capitec founders turned their tiny little startup into a Big 5 contender.
• Shared what business books everyone is reading — got 7-odd awesome recommendations.
• Discovered an awesome new spreadsheet and data presentation tool.
• Learnt where to get Padel gear for a good price.
• Discussed how similar the CIA’s description of activist groups is to meetings in academia.
• Welcomed a host of new members! (It’s starting to buzz in here).

Coming Up Next Week

‍

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

FOR THE MEMES

Always keeping it spicy

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WHAT YOU SAID

A Bite to Eat

We asked how often you eat out, and once a week’s the way…

🟨⬜️⬜️⬜️⬜️⬜️ 🍜 Daily – lunches at the office (13%)

🟩🟩🟩🟩🟩🟩 🍔 Once a week (38%)

🟨🟨⬜️⬜️⬜️⬜️ 🍕 Monthly as a payday treat (17%)

🟨🟨🟨⬜️⬜️⬜️ 🥞 Special occasions only like birthdays or anniversaries (23%)

🟨⬜️⬜️⬜️⬜️⬜️ 👨‍🍳 I don't eat out – I make better food at home for a fraction of the price (9%)

‍

Your 2 cents…

“Being vegan it's hard to eat out locally and there is often a surcharge for the vegan cheese or milk etc (it's rather off putting actually). Fortunately I love cooking and experimenting at home, but it would be a nice treat to have something really delicious out once in a while.”

Spatzendreck

Nice one for cooking, Spatzendreck. Guess it also depends where you live — in Cape Town, we have some good-looking vegan options (our favourites are always vegan desserts, ‘cos everyone can enjoy them together). 🤗

‍

“My brother used to work in the catering and fast-food business, so I know how small the margins are and the concept and software mentioned is brilliant. But just a heads-up about the industry as a whole facing a new challenge. Some restaurants in the Midrand area are facing thugs threatening to report them to the Department of Labour and Home Affairs for employing foreigners, unless the owner pays a monthly charge determined by the number of foreigners he or she employs. Sick and sad.”

Chris

Oh wow, Chris. Yes, we’ve been noticing lately a lot more reports on extortion networks in SA than we seem to have had before — hope it doesn’t become an issue in the future. 😥

“60% of my meals are takeout.”

Princess

We hope initiatives like HeadsUp help ensure you always get value, Princess! 🌯

“Becoming too expensive, when you add everything up.”

Marius

Eish, ja, Marius. We’re hoping for cost savings and better Rand making things a little more affordable again. 💸

‍

♨️ Using AI to Find the Best Prices...

Plus: OpenExodus 🤖, Cape Town’s salty water plans, Meta’s AR specs & look who’s sponsoring our next event drinks.

Ready to launch? Behold the most amazing exploding rocket video yet! This beauty comes to you courtesy of China’s Deep Blue Aerospace as the Hollywood-movie quality vid of their failed launch-and-land attempt.

In this Open Letter:

• Game changer: Using AI for better food prices.
• OpenExodus, Cape Town’s salty water plans & Meta’s AR specs.
• Drinks on us: Grab your event ticket + check out our drinks sponsors.
• What you like most about the Collab: The results are in.
• Last chance: 24 Hours left to get 50% off The Open Collab.
• Meet the Startup: The latest startup we bumped into at our event.

In partnership with

Did someone forward you this email? Join 13,006 South Africans reading The Open Letter by signing up here.

TRENDING NOW

Putting More Meat on This R100bn Industry’s Plate

It’s hard to imagine an industry more cut-throat than a restaurant. Complexities of managing staff and customers aside, restaurants operate on tiny margins of around 4.4% in South Africa.

It goes without saying then that planning leads to large amounts of food waste or something as simple as overpaying for some of the 700+ items they order and use can destroy profits, if not sink the operation.

Not to mention, most restaurants are likely still recovering from those nasty hard lockdowns, where more than 770 restaurants shut their doors.

‍

Margins like carpaccio…

This nearly R100 billion per annum industry operates through ±16’000 restaurants nationally. Half of these are quick-service restaurants, typically part of a franchise where central ordering and price negotiation take that burden off the franchise owner.

However, non-franchise restaurants typically order all of their stock themselves, buying from a large array of suppliers. On average, they spend about R500k on suppliers per month and, because of their lack of data, are often at the mercy of suppliers not overcharging.

This is a major risk for restauranteurs… overpaying by 10% could be the difference between making a profit or making a loss.

‍

Wouldn’t it be nice to know you’re paying a fair price?

Local startup HeadsUp built an AI-powered app that gives restaurants price transparency by comparing ingredient prices to market data from others’ invoice histories.

How it works is: restaurants send HeadsUp their supplier invoices via WhatsApp or email, and the AI organises and analyses the restaurant’s data, compares it with their other users’ invoice data, supplier info, products, and prices (they have thousands of data points to work with), and lets users know if they’re over-paying for specific products based on current market prices – and what this would cost you over the space of a year.

Restaurants can then decide to switch to another supplier (if they’re getting ripped off and there’s better value to be found elsewhere) or equip the restaurant with solid info to negotiate better prices.

HeadsUp charges a SaaS fee to restaurants, which they say is easily offset by the amount they save. They regularly find products being marked up by as much as 80%! And that’s likely why more than 200 customers are using the product.

We had Sven Tietz the CEO & Co-Founder of HeadsUp on this week’s episode of our “How Would You Build It” podcast. His passion for helping restaurants double their margins using HeadsUp is palpable, and he shares candidly about how they’re building HeadsUp. Check out the full episode, or catch these highlights:

• Just how much product is HeadsUp tracking?
• A photocopy paper box, a stack of printed invoices and how it all started.
• Getting their first (non-familial) customer, and how they settled on pricing.
• Getting your customer to “fire” their current solution and “hire” yours…

THE OPEN COLLAB ONLY

Get exclusive insights into this startup, the industry and other opportunities, PLUS join our community of founders who get access to free events and support in building their businesses and

Join the Open Collab

IN SHORT

Nuggets for the Weekend Braai

👋 Bye Bye OpenAI. Three top leaders from OpenAI have announced their departure from the company including CTO Mira Murati, VP of Research Barret Zoph and Chief Research Officer Bob McGrew. This comes after a string of OpenAI executive departures in May and August this year, amidst the company’s planned restructure to a for-profit benefit corporation where Sam Altman is said to receive 7% equity.

🚚 Special Delivery. The SA leg of the Last Mile Innovation Nexus held in Jozi on the 17th of October will see local logistics startups get the chance to pitch to and connect with over 100 supply chain leaders, including Woolworths, Pick n Pay, Massmart, Homechoice, Clicks Group, and more.

🤓 Orion’s Specs. Meta just launched Orion, (previously known as Project Nazare) to Meta employees and select external audiences. The AR glasses combine the look and feel of a regular pair of glasses with the immersive capabilities of augmented reality, with Meta calling Orion “the most advanced pair of AR glasses ever made”.

⚡️Blast from the Past. Longing for the late 90s listening to MP3s on your computer via Winamp? Well, they’ve just released Winamp’s complete source code on GitHub, inviting developers to help make some improvements to it.

🚰 Don’t be Salty. Remember Cape Town’s Day Zero in 2018 and talk about a desalination plant? Turns out the City of Cape Town (CoCT) has commenced its feasibility study on the proposed R5 billion, 22’000 m2 sea-water, reverse-osmosis desalination plant set to be ready by 2030.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with expert growth strategy help from Metavolve, fractional CTO for hardware & software from Octoco and 11 more vital startup tools & services.

CHECK THIS OUT

Unlock Referral Bonuses by Connecting Friends with Top Jobs

Meet Draftboard: A platform where referral bonuses are open to everyone. Share job opportunities from companies like SeatGeek, Via, Formlabs, Bilt, Triple Whale, and OneSignal with your network. Earn when your friends get hired.

Here’s How:

• Seamless Sharing: Copy and share your unique referral link via text, email, or social media.
• Diverse Companies: Access job postings from over 80 premier companies across multiple sectors.
• Real-Time Updates: Track the progress of your referrals as they advance through the hiring process.
  
  

Join the Draftboard community and unlock your earning potential. It's free and easy!

HAPPENING SOON

This Tuesday in Stellenbosch

Want to learn how Vodacom saves billions per year using AI?

Or how The Daily Maverick uses AI to uncover corruption and fraud?

Then you don’t wanna miss our upcoming event on 1 October in Stellenbosch.

Only a few more tickets left — it’s R150 or free if you’re an Open Collab member.

Buy Tickets

If you aren’t in Stellenbosch, don’t despair; check out these cool events coming up, including taking your business offshore, why Mxit failed and mastering Sales.

BUILDING TOGETHER

Happening over at The Open Collab

‍

In the last 48 hours alone, in our online community, we…

• Thoroughly unpacked Meta’s Orion glasses play — taking no prisoners, dragging Apple and Epic Games into the ring too.
• Got our tickets to the sweet-sweet next startup event in Stellenbosch.
• Celebrated Gustav’s app launch on Apple!
• Celebrated Danei’s pre-orders rolling in!
• Discovered a ton of helpful payment gateway info.
• Got the lowdown on startup showcase.
• And had the entire community gang up to convince us to do pitch events, with pitch deck workshops beforehand… hmmm…

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• New: Free monthly startup strategy calls for all Open Collab members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

MEET THE STARTUP

Justin from Rainchekk

We meet a lot of startups and love learning about all the crazy and cool things people build.

Here’s Justin Coomber telling us all about his startup that’s like an “operating system” for local businesses…
 

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WHAT YOU SAID

The Open Collab Favs

We asked what you look forward to in The Open Collab, and it’s the events, of course…

🟩🟩🟩🟩🟩🟩 🥂 Free entry to all startup events, of course! (34%)

🟨🟨🟨🟨⬜️⬜️ 🤩 Being able to ask successful founders questions (25%)

🟨🟨🟨⬜️⬜️⬜️ 🥹 Connecting with other founders (in this lonely game) (17%)

🟨⬜️⬜️⬜️⬜️⬜️ ✅ 24/7 support, introductions and free consults on the chat (8%)

🟨⬜️⬜️⬜️⬜️⬜️ 💡 The deep-dive content & opportunities (looking to expand my biz) (8%)

🟨⬜️⬜️⬜️⬜️⬜️ 📚 I’d actually like to see what the upcoming courses are (8%)

⬜️⬜️⬜️⬜️⬜️⬜️ 😎 I’m hoping to get sweet partner discounts (0)

Well, in that case, good news! 

If you join The Open Collab, you get free entry to all 10 of these startup events in the next 2 months — that’s like almost an event a week!

PS: Today is the last day to get 50% off the annual plan… use the code HERITAGE to claim your discount.

🦓 The Best Place to Build a Startup...

Plus: Kenya’s solar road trip 🛵, SA’s investment boom & SA goods on Amazon.

Celebrating SA? Don’t forget this Heritage Week you get free entry to Cape Nature parks for some swimming, hiking, mountain biking — whatever you fancy.

And more good news: the price of braaibroodjies is stabilising — see Johann Biermann’s braaibroodjie index. It’s a South African food inflation indicator, showing that, while the cost of braaibroodjies has increased year on year, we are at least in better space than January! If you needed more reason to light a fire, there you go… you’re welcome.

All in all, a good time to be living and building in SA…

In this Open Letter:

• Heritage special: The best place to build a startup.
• Kenya’s solar road trip, SA’s investment boom & SA goods on Amazon.
• Where people buy their clothing: And the results are in.
• Startup fuel: Share this once and get 100+ startup ideas!
• Save: Get 50% off The Open Collab this week!

TRENDING NOW

Happy Heritage Day!

We’re doing things a little differently today since it’s a Public Holiday, and many of us might be taking it easy – especially if you were strategic and took yesterday off as well.

So let’s just take a minute to celebrate…

The Best Place to Build a Startup

Building a Startup in SA is special…

We’re exposed to some unique challenges and limitations – but that also means we’re perfectly poised to build really powerful, solutions that solve these uniquely South African challenges.

‍

And, naturally, we at The Open Letter have developed a pretty in-depth overview of the SA startup scene over the years. We have

• Interviewed hundreds of founders and builders over the last 2 years.
• Shared 160+ deep-dives into SA ventures, industries and opportunities.
• Published 129+ podcasts featuring SA founders, investors and PMs.
• Collected/curated preferential services, deals and tools for SA founders.
• Built an engaged community of SA founders, investors, developers and startup pros.
  
  

The best part of what we do? Seeing South Africans come up with really unique solutions to some of our most complex problems. So, to celebrate, here are some of our favourites…

1. The last-mile play that’s keeping SA rolling

Local Rent-to-Own bike startup Bike2Own have more than 400 riders earning between R2’600 and R6’000 per week, renting their delivery bikes from Bike2Own for anything between R650 to R850 per week. And after 18 months, the bike becomes theirs. 

(Pssst… something pretty cool happens to about 60% of the riders once they’ve paid off their bikes – read the full Open Letter on SA’s rent-to-own bikes).

2. Connecting more SA townships for cheaper and faster

Many people in townships have two 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.

Unfortunately, the internet speeds available in townships haven't kept up with the demand for streaming. 

Until now. fibertime, a Stellenbosch-based township internet provider, financed and installed Wi-Fi devices in 880 homes in Kayamandi, Stellenbosch, at no charge to the occupants, giving residents the ability to purchase Wi-Fi connectivity at R5 per day with speeds of up to 100Mbps. Learn more about it in this edition of The Open Letter.

3. Helping 15m+ South Africans combat the debt trap

Debt is a massive issue in South Africa, with some 62% of people’s incomes going towards servicing their debt. Local HRTech Jem is leveraging WhatsApp to provide a powerful Earned Wage Access (EWA) product that helps employees access the part of their wages/salary they’ve already earned so far that month. Check out the Jem feature in this Open Letter on financial inclusion tech.

4. The future of learning built right here in SA.

Local EdTech Lessonspace is building a virtual classroom, online tutoring & collaborative learning platform with a collaborative digital whiteboard which teachers and tutors can use to make notes, draw drawings, and explain concepts.

A key differentiator is Lessonspace’s set of education-specific tools built specifically for a wide range of subject matter - find out which subjects in this previous edition of The Open Letter on digital classrooms in SA.

5. Curing 2.5 million people with AI

Tuberculosis (TB) kills 153 people in South Africa every day, partly because it’s so hard to detect. 

Local MedTech AI Diagnostics are revolutionising TB screening with their AI-enabled digital stethoscope that captures and analyses a patient’s lung sounds to help diagnose if that patient has TB. (Find out how it works in this Open Letter.)

These are just a few of the local startups we’ve recently featured building powerful solutions for South African problems – there are 160 more right here. 

But founders: you don’t have to go it alone…

Of course, building in a special place requires special people… And developing a new business is as tough and lonely as it is rewarding. And right here in SA, we are changing that.

‍

The Open Collab (previously known as The Open Letter PRO) is a thriving startup community of more than 50 South African founders and operators building together. In The Open Collab, founders get to…

• Connect with other local founders.
• Access a broader network in order to make progress faster.
• Learn nuanced skills like B2B Sales and Product in a South African context.
• Get access to experts who have done it before and be able to ask them questions and engage with them.
• Book 1-on-1 coaching sessions with startup specialists.
• Get deep dives into the business models and workings of all the startups we feature.
• Find up to 3 auxiliary opportunities to work with every startup we feature in every newsletter (twice per week — that 6+ real SA business ideas, every week).

We have some fantastic workshops lined up (did someone say B2B sales?!) exclusive to members of the community and we would like to make our circle bigger by offering 50% off this week.

Join For 12 Months, Get 50% Off

We’re doing a special Heritage Day Sale where you can join The Open Letter Collab for R2’500 for 12 months (our normal price is R5’000). Head over to The Open Collab page, choose the annual plan and use promo code HERITAGE (valid until Friday)

JOIN THE OPEN COLLAB

We’re bullish on startups and bullish on South Africa. It’s why we’re building The Open Letter to be the leading startup publication and hub in South Africa with all of you. We’re watching this space…

IN SHORT

🪴 Growing Startups. The British High Commission’s UK-SA Tech Hub has awarded an undisclosed amount in its third round of funding (with previous rounds reaching R2 millie) to assist high-growth start-ups in South Africa by propelling the SA Start-up Act Movement’s efforts.

🇿🇦 Proudly Mzansi. Amazon.co.za has launched the ‘Shop Mzansi’ storefront which houses more than 160 brands from new, emerging, and established South African businesses to make it easier for South African customers to find products from these local small businesses.

🛵 Sun Scooting. A solar-powered electric motorbike designed and built by Roam, a Kenyan electric mobility company will travel around 6’000kms from Nairobi to Stellenbosch in South Africa, in October. The partnership between Roam and Researchers from the Faculty of Engineering at Stellenbosch University (SU) will see the Roam Air arrive at SU on October 18 for its Electric Mobility Day.

🤑 Local Investing. South Africa is seeing an investment boom in the 100+ days after the formation of its business-friendly coalition government. ArcelorMittal decided against closing two steel plants, Qatar Airways bought a stake in SA Airlink, Toyota opened a $70 million auto parts facility, and Anglo American announced a $625 million iron-ore investment.

🛏️ Fancy Staying. Two South African hotels (and the only ones from Sub-Saharan Africa) have cracked the nod for the 2nd edition of the World’s 50 Best Hotels. The Mount Nelson in Cape Town came in at 28 (and was also crowned Best Hotel in Africa), while Singita Kruger National Park took the 44th place.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with zero-monthly-fee bank accounts and business loans with Lula and specialist small- and medium-sized business accounting software for less with Xero.

What You Said…

We asked where you buy your clothing, and it’s the usual suspects…

🟨🟨🟨🟨🟨⬜️ 🇿🇦 Local Proudly South African brands (26%)

🟩🟩🟩🟩🟩🟩 🛍️ SA’s usual fashion retailers (Mr Price, Ackermans etc) (29%)

🟨🟨🟨⬜️⬜️⬜️ 👠 International chains (H&M, Zara etc) (17%)

🟨⬜️⬜️⬜️⬜️⬜️ 👜 High-end fashion labels (9%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🤩 Novelty tees with funny illustrations (2%)

🟨🟨🟨⬜️⬜️⬜️ 🧵 In this economy, I’ve taken up sewing to make my own clothes (17%)

‍

Your 2 cents…

“Actually, I do a mix of all of the above :) ”

Joanne

Nice, healthy balance, Joanne. 🤸

“Bring on the classic Cape Union and Old Khaki! ;-)”

Herman

Hey, way to go local, Herman. 🧭

“I have bought off Shein mainly over the past 3 years as they have more variety than local stores and they are more cost effective.”

Michelle

Money-smart, Michelle. Hope you don’t get impacted by extra tax… 👠

“I've kept my clothes so long its back in fashion...”

Bzaar

He he, nice one Bzaar, keeping and maintaining your clothes is an art form. 🪡

🧢 Unboxing SA's R193bn Fashion Game

Plus: SA’s coolest champ, Happy funding, the last of your Tupperware & your ticket to home-grown AI insights.

Bright future? Scientists have found a way to store an entire human genome in 5D memory crystals for billions of years. The material is one of the most chemically and thermally stable substances on Earth and could be the next way for today’s billionaires to attain immortality (kind of).

In this Open Letter:

• Data unwrapped: Levelling up SA’s R193bn fashion game.
• SA’s coolest champ, Happy funding & the last of your Tupperware.
• Taking the leap: How to set up an offshore entity for your startup.
• Your biggest gripes with big banks: The results are in.
• Startup fuel: Share this 10 times and get Pro membership.

Together with:

Did someone forward you this email? Join 12,922 South Africans reading The Open Letter by signing up here.

TRENDING NOW

A Shoo-In for SA’s R193bn Fashion Sector

There are a handful of things humans need to survive…

Food, water, maybe a shelter of some kind – and, of course, clothing.

Early humans started wearing adapted animal skins and vegetation around 170k years ago to protect them from cold, heat and rain, particularly as they migrated to newer climates.

With the advent of newer technologies like sewing needles (50k years ago), dyed fibres (36k years ago), and later on looms, and high-tech machinery to produce the type of modern textiles we use to manufacture clothes today, clothing form an integral part of human history. 

‍

The big bucks in global fashion…

And with more than 8 billion people on the planet, it’s no wonder the global fashion/clothing/apparel market is huge.

Despite taking a knock in 2020 during Covid, the global clothing market is set to be $1.79 trillion this year, employing 1 in every 8 workers (~12%) around the world in the fashion and textiles industry.

There are more than 100 billion items of clothing made each year — equating to about 12 items of clothing per person per year.

Closer to home, South Africa has the largest apparel and footwear industry in sub-Saharan Africa – worth over $11 billion or R193 billion+.

‍

Big bucks also mean big headaches…

The fashion industry is highly cyclical… Warm clothing for autumn and winter, cooler for spring and summer. Not to mention different colours or colour schemes, different styles and cuts, different patterns and textures – all dependant on current trends (or what’s about to become trendy).

Then, retailers are often sourcing stock from multiple suppliers. Plus they’ve got to get that fine stock balance just right – too little stock and you suffer from stockouts. Too much, and you’re overstocked.

So imagine a large retailer with multiple stores across the country (sometimes with quite a broad range of socio-economic customer base) having to source and place a variety of items, in different sizes, all in a way to maximise sales and minimise leftover stock that needs to go on the profit-eroding sale rack at the end of the season. It’s complicated….

‍

The local player helping local fashion retailers 

But this is exactly the kind of problem where machine learning shines.

Local startup Pattern has built a business intelligence platform tailored to solve this problem for fashion retailers. 

It uses big data and AI to automate typical resource-heavy activities like merchandise planning and buying, stock allocation and replenishment to ensure that fashion retail teams can focus on getting the right mix of stock into the relevant stores to ensure their customers’ needs are met. 

It integrates with a fashion retailer’s existing systems, where it takes the data from those systems to track in-season trends, optimise stock, and analyse historical customer purchasing patterns.

With greater granularity on single stock items, users are able to see how each item is specifically driving revenue. They can also see how each item performs at a store level, and assess the size curve accuracy (did they have enough of the item in the various sizes to ensure optimal stock levels?), which helps them understand future stock levels.

Pattern consolidates a ton of merchandising intelligence available in real-time and at their fingertips, to help teams make critical buying and planning decisions on the fly.

In the fast-paced world of fashion, companies like Pattern are bringing old-school industries into the future. Through data-driven insights and automation, they're helping fashion retailers thrive in a highly competitive environment. We’re watching this space…

‍

On the Pod…

We had James Townsend the Co-founder and CEO of Pattern on the latest episode of our How Would You Build It podcast. Check out some highlights below:

• What is Pattern (The Elevator Pitch), and how James started out in the fashion industry?
• How hard is founder mode?
• Getting that first client and convincing notable retailers to invest in local tech.
• Shein and Temu and its impact on the local retail landscape.

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IN SHORT

🛍️ Syfting to Xero. Syft, a local cloud-based reporting and analytics platform will be acquired by global accounting software firm Xero for a cool $70 million. Having started in 2016, Syft’s AI financial reporting platform provides small and medium businesses with access to reporting tools.

🚀 Happy Funding. SA BNPL player Happy Pay has raised R32 million in pre-seed funding to accelerate the FinTech’s growth and product offering expansion. It’s also just hit the 150k active user mark after launching in 2023.

🥽 I can (almost) see clearly now. Neuralink’s experimental Blindsight implant has been designated as a "breakthrough device" by America’s Food and Drug Administration (FDA). The Blindsight implant is being touted as being able to potentially restore blind people’s sight.

🥶 World Champions of Staying Cool. Philippus Saayman was the sole winner from South Africa at the 2024 WorldSkills Competition where he was awarded the 'Best of Nation' medal for being the top competitor in the Refrigeration and Air Conditioning skill category.

💨 Disappearing kitchen supplies. After nearly 80 years as a staple in kitchens around the world, Tupperware has filed for Chapter 11 bankruptcy in the US. Perhaps they should start a lid/container swapping marketplace for people to complete their Tupperware sets.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with super-easy social payment collection by WigWag and your own CTO (for less) with OCTOCO.

BUILDER’S CORNER

How to Set Up an Offshore Entity from South Africa

Written in conjunction with Jacques Stemmet of Dommisse Attorneys Inc

Setting up an offshore entity can seem daunting, but, if done right, it can open new doors for your business. We asked the experts at Dommisse Attorneys Inc. to break down the four key steps to establishing your company offshore:

‍

Step 1: Understand Why You Want to Offshore

Before you leap, make sure you know why. Do you have an international market or investors? Or perhaps you’re planning to sell offshore one day…

Whatever the case, it’s about more than just wanting to earn foreign currency – there are legal and tax implications, including South Africa’s exchange control regulations, to navigate. 

Offshore entities must meet criteria like “place of effective management” and “a foreign business establishment”. I.e. OffshoreCo needs real people conducting real business to maintain compliance and avoid hefty profit taxes. 

Additionally, exchange control requires you to get approval to license IP to a related offshore party and outright forbids selling the IP. It’s not impossible to offshore IP, but following the right process is paramount. 

Step 2: Choose the Right Structure

There are two primary ways to structure your offshore company in relation to your South African company (SACo):

• Mirror Structure: OffshoreCo mirrors the shareholding of SACo, forming a synthetic group structure where both entities operate in parallel. This is achieved by a stapling agreement, which ensures that any movement of shares in SACo must be replicated in OffshoreCo (and vice versa). In effect, an investor will subscribe for equal shares in both entities. On exit, the investor will sell their shares in both entities and benefit from growth from the respective entities.  
• Holding Company Structure: OffshoreCo acts as SACo’s holding company, which is often preferred by international investors because of its simplicity and industry-standard approach. It’s complicated, though: it creates a loop structure, requiring strict conditions to be met and additional reporting obligations.
  
  

Your structure impacts present and future tax, investor relations, and operational setup. And your circumstances can impact structure choice: shareholder limitations, numbers and company valuation may be so high that a mirror structure is more cost-effective than the legal and tax implications of restructuring to a holding company. 

Step 3: Pick the Right Destination

Where you establish OffshoreCo matters. The destination should align with your business goals, target market, and investor preferences. Although popular jurisdictions offer tax benefits, business-friendly environments and reduced administrative burdens, you still need to do your homework, as some jurisdictions may offer more beneficial grants or tax breaks for your specific industry, or may be the most appropriate jurisdiction to leverage investment and your business growth. 

It’s crucial to assess the long-term advantages, maintenance costs and risks before making a decision.

Step 4: Build the Right Team

The success of your offshore expansion hinges on having the right team to support you through legal and financial challenges. You’ll need advisors who are experienced in international structuring and can guide you through compliance, exchange controls, transfer pricing and ongoing obligations.

If you’re ready to take the next step and explore international structuring, contact Dommisse Attorneys Inc. 

“Our team is here to help you achieve your global ambitions with ease”, says Dommisse’s Jacques Stemmet.

ENGAGE

Upcoming Event

On Tuesday, 1 October, you’re gonna want to report to LaunchLab in Stellenbosch by 6pm — we are hosting two South African AI pioneers, to give us the skinny on where AI is realistically going in the next decade, and what it means for business in South Africa.

Tickets are R150 right here, but Pro members can get in for free.

Psst If you are a TOL Pro member, use the THEOPENLETTERPRO promo code to claim your free ticket!

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• Access to exclusive AMA’s with industry experts where you can ask them anything and learn.
• Weekly office hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• Need an intro? After 20 years in the industry, we are super connected and can likely get you where you need to go.
• Free tickets are available for all our in-person events.
• Join the conversation with 50+ founders and operators and get the support you need to take your startup to the next level.

Join our community

What You Said…

We asked about your biggest gripe with banks, and the fees are a problem…

🟩🟩🟩🟩🟩🟩 😭 High fees (32%)

🟨🟨🟨🟨⬜️⬜️ 👎 Horrible service (24%)

🟨⬜️⬜️⬜️⬜️⬜️ 💩 Products don’t suit my needs (9%)

🟨🟨🟨🟨⬜️⬜️ 😔 They don’t really care about me/my business (27%)

🟨⬜️⬜️⬜️⬜️⬜️ 🥰 Nothing, I love my bank (8%)

Your 2 cents…

“Impossible to get finance from them especially FNB.”

Xpress

Ai, Xpress, now at least you know you can get up to 5 mil with Lula. 🤑

“Hi I must say, I am quite excited I came across your organization, there is hope for Small Businesses especially in traditionally unbankable communities. The fact that I can also open a Business Account in minutes with no costs at the beginning is magic. We have been struggling with the big banks to get our account going, it's a major struggle. Thank you.”

Ranyawa

Wonderful, Sir! We love seeing you succeed. 🚀

‍

“I miss the days where talking to my bank meant I could talk to a person. Not message an app. Some issues with my bank stay unresolved because of the anonymity and because I just give up.”

Erika

Ha ha, ja Erika would be great if they could try to get customer success right. 🤗

“Constantly following up on whether they have resolved issues, no one gets back to you, and those godforsaken call centers where you have to repeat your issues to 6 different people before the call cuts and nothing gets done.”

Nikhil

Eish, sure everyone can feel that one, Nikhil. 🛎️

“I switched to Capitec a long time ago and have never looked back.”

Alana

Sounds like you got it good, Alana. Nice one. 💳

‍

💪 Enabling 2.5 Million SA Enterprises

Plus: Clear glass solar panels 🌞, Cyril X Elon, Bezos’ SA grid hook up & meeting SA’s AI startup OGs in Stellenbosch.

Ready to play? Not that he isn’t always in the news, but if you noticed even more MrBeast hype than usual, it’s because someone leaked an internal MrBeast production document (hope it’s now been taken down yet) and it’s basically a playbook for how to become successful on YouTube. Enjoy!

In this Open Letter:

• Banking on innovation: Enabling 25M SA enterprises.
• Clear glass solar panels, Cyril X Elon & Bezos’ SA grid hook up.
• AI fireside in Stellies: Come join us in learning about AI from SA’s OGs.
• Where you’d invest R100M right now: The results are in.
• Startup fuel: Share this 10 times and get Pro membership.

‍

In partnership with

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TRENDING NOW

A Play for SA’s R400bn Banking Space

In Friday’s Open Letter on Africa FinTech investment, we featured a stat about the Big 4 banks having combined revenue of close to R400 billion per annum. 

Banks are big business. But with the five banks well established (if you add the largest bank by customer account numbers, Capitec) are there still any opportunities for new banks? 

Let’s dive in…

The first shakeup in traditional banking

Perhaps one of the most noteworthy success stories in South African banking is Capitec. 

Founded in 2001, Capitec quickly differentiated itself by targeting underserved markets with simplified, low-cost banking. It provided easy-to-understand accounts, minimal fees, and an accessible approach to savings and loans.

In terms of market capitalisation, Capitec has seen exponential growth. In 2006, Capitec’s market cap was around R3 billion. By 2010, it had surged to R18 billion, and today, it boasts a market cap of over R350 billion, serving 22 million active clients (11.2 million of those on the Capitec App).

And just like that, there it was… A South African case study that proves focussing on niches is the way to take on the big banks.

The riches in niches…

Discovery Bank, which labels itself as the world's first behavioural bank, is another example of how niching down can bring great gains. 

They recently announced that their one-millionth customer was ahead of plan. They offer a completely digital product (no branches) to target higher-income earners and use behavioural incentives to better quantify and manage risk.

Other players in the consumer banking space include TymeBank (whose deposits recently grew by 59% to R6.5 billion), Former FNB CEO-backed Bank Zero, as well as Old Mutual, which is planning to launch their bank by the end of the year after recently appointing a CEO.

But there is a sector which has been largely overlooked when it comes to banking… small and medium-sized businesses.

‍

The business of business banking

South Africa has roughly 2.6 million small and medium-sized businesses, contributing up to an estimated 34% of GDP. That being said, it's estimated that less than 20% (or 520k) of these businesses are formalised. 

That means roughly 2 million small businesses still need to be formalised, start paying taxes, and get bank accounts. Talk about banking the unbanked…

Local FinTech, Lula, started out in 2014 by offering funding to small businesses, where banks would either not help their clients or were simply too slow or rigid in their credit scoring processes to meet the demands of small businesses. 

But after seeing how inefficient traditional banks were when it came to serving small business customers, solving their problems, and just how much these banks charged them, Lula launched its small business banking offering. 

Not only can businesses get a free bank account with 1.5% annual interest on their balance, but they can also get access to as much as R5 million in funding within hours – a game-changer for SMEs that often struggle to get the support they need from traditional banks.

With more than 2 million customers up for grabs and an economy set for growth, what the big bank play people might be missing is small and medium-sized banks. We are watching this space…

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IN SHORT

👨‍🌾 AgriTech Growth. NEXT176 is investing more than R7 million in local AgriTech startup, Pumpkn to help scale its lending operations that bridge the financing gap for more than 100’000 local small- and medium-sized agricultural businesses (Agri-SMEs) to access much-needed finance.

🪟 I can see clearly now... SA is getting a transparent glass solar panel technology through a partnership between Aussie glass solar technology developer ClearVue and local distributor Concept Business Solutions. The insulated glass unit (IGU) window can generate up to 30 W of electricity per square metre — without impacting window transparency or building aesthetics.

📞 Making the call. Affordable international calling app Talk360 has raised R25 million in pre-series A funding. The round led by Havaic will help Talk360 deliver on its next phase of growth, reaching 7 million users and achieving profitability across its global operations.

🛰️ Star(link)s aligning? SA’s President Ramaphosa has apparently spoken to Elon Musk to help kickstart the conversation for South Africa to become one of the next African countries to receive Starlink services, as well as other local investments for the SA-born Billionaire.

⚙️ Gearing up SA’s Grid. The Global Energy Alliance for People and Planet (or Geapp), a global organisation backed by Amazon Founder Jeff Bezos’ climate and biodiversity fund, is gearing up to attract R319 billion in investment into South African municipal power grids to prepare for the introduction of more renewable energy.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with next-level project management like Notion and your own startup CFO without the hefty price tag with OCFO.

Learn AI-led Business & startup strategies, tools, & hacks worth a Million Dollars (free AI Masterclass) 🚀

This incredible 3-hour Crash Course on AI & ChatGPT (worth $399) designed for founders & entrepreneurs will help you 10x your business, revenue, team management & more.

It has been taken by 1 Million+ founders & entrepreneurs across the globe, who have been able to:

• Automate 50% of their workflow & scale your business
• Make quick & smarter decisions for their company using AI-led data insights
• Write emails, content & more in seconds using AI
• Solve complex problems, research 10x faster & save 16 hours every week

Register & save your seat now (100 free seats only)

Engage SA’s Most Vibrant Startup Community

Did you miss our last event?

We have some good news… Tickets for our second Stellenbosch event are available!

And it’s a special one…  

On Tuesday, 1 October, we are hosting two South African AI pioneers — the “crazy” guys we met who were talking and building LLMs 10 years ago — to give us their take on where AI is realistically going in the next 10, and what it means for business in South Africa.

Tickets are R150 right here, but Pro members can get in for free.

Want to unlock valuable opportunities on tap?

In the last 48 hours alone, in our online community, we…

• Connected Trevor with insider insights into selling tech products into UAE schools.
• Got some gold market-fit journey insights from Paul — that sparked a nice discussion about what it really takes to succeed in SA startup.
• Received a 🔥 pitch deck from Ben Shaw in preparation for Friday’s exclusive high-growth AMA.
• Got our free tickets to the lekker-est Stellenbosch event in 2 weeks’ time.
• Welcomed a whole bunch of new members!

Coming Up Next Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.
• Friday 12-1: A Pro member-exclusive AMA session on maintaining focus in a high-growth venture with EXCEO co-founder, Ben Shaw.
• New: Free monthly startup strategy calls for all Pro members.
• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

Meet the Startup

We meet so many awesome founders that we decided to start featuring them on our socials. Check out this quickfire interview with Tim from Yazi.

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What You Said…

We asked where you’d invest R100m, and FinTech’s the way…

🟩🟩🟩🟩🟩🟩 👨‍💻 FinTech startups (37%)

🟨🟨🟨🟨⬜️⬜️ 🌾 AgriTech startups (29%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💎 MinigTech startups (4%)

🟨⬜️⬜️⬜️⬜️⬜️ 🪙 Bitcoin (7%)

🟨⬜️⬜️⬜️⬜️⬜️ 💵 Money market (7%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💳 Gold – as in Troygold (6%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🛏️ Under my mattress (1%)

🟨⬜️⬜️⬜️⬜️⬜️ 💭 Somewhere else (9%)

Your 2 cents…

“Fintech is great from an investment perspective but doesn’t always feel like it solves a meaningful problem. Agritech feels like it really helps farmers that have been [at a disadvantage] in the food economy for decades and it helps the man on the street be healthier for less.”

Mia

Hear, hear, Mia! We carbon-based life forms will always need to eat. 🌽

“People want the easiest way to do transactions from small payments for essential from a spaza shop to payment for services without a lot of hassle or high fees.”

Chris

That’s right, Chris. And they’ll support the most innovative, for sure. 💳

“I'm confident that Bitcoin will have a good upswing soon. Note to self: DO NOT forget the wallet's password!! Lol”

John

With interest rates coming down and US election excitement, John, you’re probably right on the money re Bitcoin. 🚀

“Food security in the face of climate change will mean national security by the latter decades of the 21st century. I would invest in agritech companies building scalable solutions for an industry which has no choice but to adapt to the challenges of today and tomorrow.”

Tom

Right you are, Tom. When it gets right down to it, those with food and water will always thrive. 🌱

“The AI balloon is getting bigger daily. That combined with the need for better financial services, is a must-invest in the sector.”

Vakele

Indeed, Vakele, there’s big movement in the space. Just be sure not to be around when the balloon pops. 🤖