🚴🏽 Big Bucks in SA's Bikes…

Plus: Zuck’s $100M crash bill, digital cricket & 4 questions before you build a new product/service.
Newsletter
March 8, 2024

Caught them all? Ease into your weekend with a bit of Pikachu volleyball. Yes, it’s exactly what it sounds like and no, we can’t stop playing either.

In this Open Letter:

  • Keep rolling: Interesting opportunities in hobby sports.
  • Costly crashes, digital cricket and SA airport upgrades.
  • Get going: 4 Questions before you build your product.
  • Who wants to earn overseas: The results are in.
  • Share this: And get free business tools.

Big Bucks in SA’s Weekend Bikes

When it comes to hobbies, those that require equipment offer great business-building opportunities. 

Especially when that hobby takes up quite a bit of time and the busy working professional (who earns well) needs the best possible equipment to ensure the most enjoyable outcomes for the time they have available to practise it. Like golf.

Golf has become a $88 bn per year industry and golf brands like Titleist and Callaway have become recognised even outside of the sport – not to mention what the likes of Tiger Wood did for Nike...

But here’s the thing: Golf’s been around for a while, and it’s really hard for a newcomer in the golf gear space to compete with these mega-established brands.

Gotta find a new hobby

More modern hobbies, though, can offer opportunities to get into the sport/hobby space. And one that’s ripe for some innovation is cycling. 

Let’s dive in…

The Market

The global bicycle market is estimated to be worth around $100bn and is set to grow at 10% CAGR. In the USA and Australia, 2-3% of the population do recreational cycling in the form of mountain biking. That’s 10 million and 1 million people respectively. 

And this is a pricey hobby. 

High-end mountain bikes can cost as much as R200k and then you still need some kit and gear, which can set you back another R5’500 for a helmet. Not to mention the oversized sunnies and bike carrier.

And, just like golf, you have higher earning individuals splashing on getting the edge over their mates for when they hit the track. 

Just like gold, this smells of opportunity.

Our glorious tech-enabled biking future, according to AI.

Building on a bike

South Africa has a history of successful bike startup exits. In 2015, Stellenbosch-based iKubu sold to Garmin after building a product Garmin wanted – a radar and light combo that alerts oncoming cars of the cyclist and vice versa.

But there are still many opportunities beyond equipment in this space. And some South African startups/companies are capitalising on it.

  • Insurance can be quite specialised and, when a market is big enough, you can target a specific niche with a high-value offer at better prices. That’s what Two Three Bird has done. Founded in Australia by a South African, and then headquartered in Stellenbosch, they have expanded to AUS, UK, USA and beyond. 
  • We’re all used to tracking devices in cars helping safeguard and recover stolen vehicles (thereby reducing insurance risk and costs). Now meet South African startup, 3BO, featuring a small, lightweight device installed on your bike that lets you track it via WhatsApp. 
  • Starting out as management software for bicycle repair shops, Hubtiger learnt the game and built such a strong customer base across SA, it could expand into other niches (autobody repair shops etc.) and countries across the world, becoming one of SA’s most exciting global SaaS plays.

Find a sport with a higher barrier to entry than a pair of running shoes, players with money to burn, and a rising popularity, build tech that solves a problem in or around the sport, and you just might be onto a lekker thing. With new hobbies and sports popping up all around, we are watching this space…

IN SHORT

💰 Local win! Global HR-Tech Deel just acquired South African-based payroll and HR software services platform PaySpace for $100m.

🕹️ Schoolyard Bully? Apple has terminated Epic Games’ developer account to prevent them from launching their own app store in the EU.

🖥️ Crashed Computers. SA technology distributor Mustek reported a nearly 59% drop in headline earnings. The group expects the demand in the AI PC space will bring a new round of potential growth.

🛫 Airport Upgrades. The Airports Company of South Africa Limited (ACSA) is planning to invest nearly R22 billion, the biggest investment since the 2010 FIFA World Cup, to upgrade a bunch of SA airports.

💥 Costly Crashes. ICYMI: On Tuesday, a massive Meta outage across its platforms left millions unable to access their Facebook and Instagram etc. accounts. The couple of hours of the outage reportedly cost Zuck $100 million.

☕️ Coffee breaks? Earning more than R21k a month? New adjustments to the earnings threshold for Basic Conditions of Employment means if you do, your work hours, overtime and meal intervals aren’t regulated.

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BUILDER’S CORNER

4 Questions to Ask Before You Build Any Product/Service

Got a startup idea? Great! Now, how can you be sure it has any chance of actually being successful BEFORE you spend all that time and money building it?

Don’t say we didn’t warn you…

OG product people will tell you there’s a quick 4-question exercise you can do even before investing in validation (or use them to double-check your validation results) that’ll help you determine whether your product is worth the risk… 

Ask yourself this before you build

1. Is it Valuable (Enough)?

Will people buy (pay for) it? And, importantly, if they’ve already paid for it, will they CHOOSE to use it and keep using it?

You’ll often hear startups debating whether a problem is important enough to solve, or comment that someone failed because they “failed to find their market”. What they’re really saying is the problem the product solves is not valuable enough for the user to actually pay for or keep using.

The trick: Solve burning problems that either make/save a lot of time/money or create so much benefit/convenience that people can't imagine their life without it anymore.

2. Will it be Usable?

If your product/service is something people want and need, can they figure out how to use it? Can the interface and the steps to unlocking value be straightforward enough that they LOVE using it?

Now, of course, this one can be solved by superstar UX later in product development, but it helps early on to ask yourself whether you can even imagine a state/interface/mechanism where users can just jump in and use it, plug and play.

3. Is it Feasible?

In the simplest terms, is this something that you can and actually know how to build? Do you have the skills on the team, does the technology exist and do you have enough time and money to build it?

This can become a big issue when you’re dealing with integrations and evolving technology like machine learning. But it’s also as simple as asking if you have enough hours in the day over the next X period to do this right – because you might be working on other projects etc.

4. Can this sustain a business?

Is it legal or at risk of impending regulation? Can you afford to pay for the production? Do you have the skills, channels and knowledge available to effectively get the product to market?

An idea is only as good as its execution. And your desired result is almost assuredly building a profitable business with a product that makes money. So can you build out a realistic model where this product generates income and becomes profitable?

Got a startup building hack? Hit reply and let us know (and maybe you get featured here, too).

Today’s Builder’s Corner is done in collaboration with Lara (Nel) Prasad who is an expert in product management and UX at Next176.

You can connect with her on Linkedin right here.

THE RESULTS

We asked if you’d work for an overseas-based company, and it’s a tie between already doing it and building a local business…

🟩🟩🟩🟩🟩🟩 🇿🇦 I’m building a business locally. (24%)

🟩🟩🟩🟩🟩🟩 🍔 I’m already doing it and enjoying having 2x more Big Macs. (24%)

🟨🟨🟨🟨⬜️⬜️ 🦓 No. Loving the local work vibe. (18%)

🟨🟨🟨🟨⬜️⬜️ 🌍 I’m building an international business from here. (19%)

🟨🟨🟨⬜️⬜️⬜️ ✈︎ I am emigrating/have emigrated to another country to do so. (15%)

Your 2 cents…

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