🇿🇦 Empowering 7M Futures…

Time to play? Google’s DeepMind has revealed the latest in AI-gen tech: Genie, a tool that will let you generate games from a single image. Still a ways off from being Sora-for-video-games, but looks like a first step in that direction.

In this Open Letter:

• Early birds: Opportunities in SA’s Early Childhood Development.

• Elon’s Robotaxi, Eskom’s battery back-up & Moove’s Uber to Europe.

• Fight the churn: How to retain more with customer success strategies.

• Your go-to source of daily/weekly news: The results are in.

• Err’body likes free stuff: Share The Open Letter and get you some.

TRENDING NOW

Unlocking a Better Future for 7M SA Kids

Early Childhood Development (ECD) is foundational education focussed on preparing 0–6-year-olds for primary school. And if you thought SA’s school system needs some TLC, ECD is screaming for a lifeline.

In June 2023, the Department of Basic Education presented a report on the shift of the ECD function from the Department of Social Development to Education. The report revealed some dismal statistics:

• 1.3M SA children aged 3–5 are NOT enrolled in any early learning programmes whatsoever.

• There’s no data on approximately 3.5 million children aged 0–2 in SA. 

What’s more, only 45% of SA’s kids inside early learning programmes are meeting the developmental milestones as expected. Uh-oh 😬.

Why ECD matters

In the first few years of a child’s life, the brain forms more than 1 million neural connections per second – and it happens only then, never again.

And the clues that a lot of SA’s ECD-aged kids are missing something are visible in our primary school pupils’ performance:

• 81% of South African Grade 4 learners are struggling to read for comprehension at age 10.

• SA had the third-lowest score out of the 64 countries in a recent study.

One of SA’s largest corporate ECD programmes, The Unlimited Child says that, currently, some 64% of kids who start Grade 1 are unlikely to ever finish school – sheez! And, for some insights on the reasons why, check out their partners, The LEGO Foundation’s research and resources. 

What are the pains and opportunities?

Currently close to all ECD centres in SA charge fees, meaning it's mainly a private sector activity. The most recent census found that only a third (34%) of ECD-aged kids are enrolled in a programme, mainly due to parents not wanting to pay the fees.

And it’s a big market: the 2022 census showed nearly 11 million SA kids were between the ages of 0 and 9. But ECD age is only up to 6, so for a lack of data, we can guess that there are roughly 1.22 million kids per year or ±7.33 million kids aged under 6. Almost 12% of the population!

What’s not so visible in the data is that the parents who don’t enrol their kids into ECD programmes don't just leave them at home; there are numerous unregistered and unlicensed “daycare” services across SA’s neighbourhoods – apparently, unregistered daycares outnumber registered ones in the Western Cape.

This tells us 2 things:

1. It’s not that parents can’t afford to spend at all, they just want a cheaper/better option.

2. You don’t have to reinvent the wheel, just help those unregistered centres become legal and you’ll be helping create jobs and new businesses, too!

Local Plays in the ECD Game

Grow ECD is an NPO early-learning social enterprise that helps equip prospective ECD businesses with the resources needed to provide 5-star early learning for every child, including a free ECD mobile app, ECD Business Accelerator Training Programme and ECD Small Business Programme, they are doing great work in equipping ECD centres to be better.

Play Sense is an ECD startup that helps people establish micro playschools co-founded by entrepreneur Meg Faure. With the belief that ECD is best done in small groups, they offer curriculum, training and management to allow adults to set up and run a micro-playschool in their homes. And it's empowering – to date, they’ve helped establish 56 woman-led businesses and more than 1’150 kids currently participate.

Homeschooling? South African sisters Christelle and Stefanie started Creative Crafting Club, an online platform that helps adults set up and run arts & crafts clubs in their communities. With a variety of resources needed to run your own club, it’s helped over 10’000 people from more than 70 countries start and grow clubs with a monthly subscription income. 

Yes, ECD is one of those tough ones – sorely needed but with affordability as a chief concern. However, with such a big need and parents’ growing awareness of having to better prepare children for success, there could be some golden opportunities here. We’re watching this space.

IN SHORT

🛒 Shoprite’s VC Fund. Five leading global grocery retailers, including the Shoprite Group, have started a VC fund, W23 Global to invest in innovative start-ups and scale-ups that use tech to enhance customer experiences, transform the grocery value chain and address sustainability challenges.

🤖 Elon’s Robotaxi. Elon Musk has said that he’ll unveil the Tesla Robotaxi on the 8th of August this year, amidst reports that Tesla’s abandoning its plans to build a lower-cost EV.

💰 Empowering Malls. Local proptech RE-TEC Solutions which has a platform that streamlines processes and connectivity between mall owners and tenants has received a strategic investment from REdimension Real Estate Technology and Sustainability Fund, a fund advised by local proptech investment firm REdimension Capital.

🌐 SITA’s Broadband. South Africa’s State IT Agency has announced its renewed plans to implement an R6 billion broadband project to reduce the cost and duplication of connectivity infrastructure across all government levels. Timelines TBC.

🔋 Eskom’s Battery Back-up. The largest battery energy storage in Africa has just won preferred bidder status under a government procurement programme. The Red Sands project is a 153MW/612MWh standalone battery energy storage system situated in the Northern Cape.

🚗 Mooving Overseas. Nigerian Uber vehicle financer, Moove, says rising transport costs make it too hard to become profitable in Africa, and investors (like Uber) are supporting it to look for profitability in places like Europe and the UAE instead.

BUILDER’S CORNER

How to Retain Customers with the Customer Sucess Model

OK, you’ve got a product, some adoption and the numbers are looking good until… CHURN she goes.

Now, I don’t use the C-word very often, because in startup, it's just a fact of life – there are seasons to everything, people grow, develop and eventually move on from basically everything at some point. But, still, there has to be a better way to retain more.

And then it hit me… Customer Service.

See, normally, customer support is a corporate exercise everyone hates – the business clearly begrudges the fact they have to offer support and the poor customer who has to try and get answers from someone who doesn’t really care.

But then I discovered the concept of Customer Success, from Nick Mehta and Dan Steinman’s book (which you can buy on Takealot), and it could be quite revolutionary.

The concept is simple: Instead of viewing customer support as a grudge service, what if you use it as an extension of your retention strategy? Like so:

• Don’t wait for users to contact you

• Actively contact them 

• And ask if they’ve achieved their goals with your product

• If not, you help them do it. Success!

It’s basically an extension of customer interviews. And what better way to ensure you keep customers than by helping each individual unlock value with your product?

OK, this probably doesn’t scale well in B2C, but if you have a high LTV or perhaps even B2B, it could work quite well. Let’s have a look…

4 Ways to Implement the Customer Success Model in Your Startup

1. Track Customer Journeys

Start with your product’s user journeys and use your analytics to identify which new users have or haven’t unlocked value with your product (yet). If you have 10 new users today but only 5 of them have actually achieved the first bit of delight with your product, this allows you to actively go and engage the laggers – find out if they’re struggling with your UI or why they haven’t used the app yet, etc.

2. Create a Proactive Engagement Strategy 

This is the tough-but-necessary part. If a user comes in and doesn’t reach a moment of delight, you have very little time to re-engage them. 

In a perfect world, you’d have an alarm go off and then you jump on a call with the person and straight-up ask them: “I see you haven’t done XYZ on our app yet; I’m the founder, can I help you get it done?” But outside of B2B, where you maybe have fewer high-paying customers, that doesn’t scale.

So it’s probably worthwhile developing something scalable that can proactively engage a lagging user and then help them get some delight out of your product. Maybe that’s where an AI chat tool can help, or some form of automated outreach that links to resources, if you can create some that can actually guide users to achieving their goals simply and effectively.

3. Establish a Feedback Loop

Just because you’re proactively reaching out, doesn’t mean you can’t have passive support. Still use your normal surveys, feedback forms and such to gather continual feedback – if only to train your proactive engagement system.

4. Build a Company-Wide Customer Success Culture

Passive customer support is often so bad purely because the person offering the support doesn’t know why they are doing it. (At least that’s what I tell myself.) So, making the process of helping every customer achieve success with your product part of your company’s DNA makes sense.

You can focus on only hiring people who accept and live out that ethos, for example, do all your company training around customer success and maybe even base your incentives on how many unsure users each team member helped turn into a successful user.

Got a startup hack or tips to share? Hit reply and let us know — you could be featured here next.

YOUR VOICE

We asked about your go-to news read, and though the News24s and Daily Mavericks win out, it’s not by much — The Open Letter’s right up there with the best (where it belongs)…

🟩🟩🟩🟩🟩⬜️ 🗞️ News24 / IOL / Daily Maverick (38%)

🟩🟩⬜️⬜️⬜️⬜️ 💻 BusinessTech / MyBroadband (16%)

🟩⬜️⬜️⬜️⬜️⬜️ 💑 Social Media (11%)

⬜️⬜️⬜️⬜️⬜️⬜️ 🍇 The Grapevine (0%)

🟩🟩🟩🟩⬜️⬜️ ✉️ I only read The Open Letter (24%)

🟩⬜️⬜️⬜️⬜️⬜️ 😎 All of the above (11%)

Your 2 cents…

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