📜 Wills of The People…

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Note: We’re giving your inbox a break this Good Friday (29 Mar 2024), but don’t get too lax — we’ll be back with awesome business ideas and insights next Tuesday.

In this Open Letter:

• Business of wills: Industry to end 510k family feuds a year.

• Towers for sale, Trump’s Truth & water outages — there’s an app for that.

• African dream: How to build a profitable do-good startup.

• How you repay your debt: The results are in.

• Share this: And get free business tools.

TRENDING NOW

An Industry to End 510k Family Feuds a Year

What happens when you die without a will in South Africa?

Well, for one, your estate probably won’t be divided like you want(ed) – the Intestate Succession Act 81 of 1987 says it’ll be split between a surviving spouse(s), children, parents or siblings according to a set formula.

This is fine in some cases where life is simple. But our lives today are anything but simple.

More importantly, the estate needs to pay Estate Duties, whether you have a will or not.

And, if you didn’t make provision for those fees and duties (which is part of what the will is for), they’ll sell off assets to pay for it – and that’s when families lose their homes and circumstances become unpleasant.

Surprisingly, 2022 data from the Master of the High Court of South Africa shows less than 15% of South Africans who die have a will in place — leaving the government to appoint an executor on their half and distribute their estate in gov’s default, one-size-fits-all manner.

The business case

Banks and other providers typically offer to draw up a will for Mahala. 

Then, when you die, the executor appointed in your will (as defined in your will) performs the execution of your estate for a fee typically between 1.5% and 3% of the estate value, payable on completion. This is where they make money for the free work they did for you.

But that’s not all.

What’s interesting is the mere act of that “free will” consultation could help so many people realise better financial planning opportunities:

• Like if they need life insurance

• Insurance to cover executor fees

• Or can benefit from a sophisticated Trust setup.

Now think: Generating a single lead for life insurance is very expensive. 

On Google, for example, bids for “life insurance” are anywhere between R150 CPC and up to R307.13 per click. Say 5% convert, it could cost as much as R3’000–R6’000 to sign someone up for life insurance online. Pricey.

But the max bid (CPC) for a will on Google is only a tenth of that at R31. Even if 1 out of 100 end up buying, it’s still cheaper. It's a great lead mechanism for life insurance and other products.

The Plays

Capital Legacy, has almost 600’000 wills that they’ve drafted – with the largest portion of its wills book for estates R2.5 million and under (most below R1 million, actually).

And with insurance plays at hand, it makes sense then for them to be backed by insurance stalwart Sanlam Life, which has a 26% interest in them. They for one offer a variety of solutions including wills, trust management, life insurance and education cover. 

Old Mutual also has a play in this space via their Venture Studio Next176. They bought QuickWill in 2023 after seeing how the platform managed to finalise more than 10’000 wills in just a few months.

And it manages to do so because of a web and mobile platform where users can quickly draft a will using a guided wizard. No appointments, no commute, all digital, online and fast. 

It's likely still early in the wills space in SA, especially doing them digitally, but this space is heating up for sure and we are watching it.

IN SHORT

🫗 WaterWorksSePush. SA’s favourite loadshedding schedule app EskomSePush is branching out into water. The app now delivers real-time water outage alerts via the “area alerts” function. And by sounds of recent headlines, watershedding is now a thing.

🗣️ Cough App. Scientists from Stellenbosch University are putting the coughs of TB patients to good use. They’re developing a screening tool, Cough Audio Triage for TB, to fast-track a TB diagnosis.

💇‍♂️ Big Dues. Donald Trump could be $3 billion up should his merger deal with a SPAC go through. This will pave the way for Truth Social to IPO which could go a long way in helping him deal with his recent astronomical fine.

🗼Tower Power. Telkom is selling off its tower and mast assets under its Swiftnet subsidiary for R6.75 billion to TowerBidco. Swiftnet currently operates over 4’000 towers in South Africa.

🇳🇬 Pocket Pain. Despite strong revenue growth of 6.8% and a 2% increase in subscribers in 2023, MTN’s profits were wiped out as a result of the devaluation of Nigeria’s Naira to the US dollar.

BUILDER’S CORNER

How to Build for Doing Good & Being Profitable

It’s the ultimate SA (OK maybe African) founder’s dream: To create a business that uplifts society, creates a massive positive impact AND still makes money.

‘Cos let’s face it, it almost feels like it has to be either/or sometimes…

But that’s exactly what we’re doing at Next 176, and here’s how we are approaching it.

Building for Both Benefits

1. Build solutions that impact a billion(s)

You can’t think small if you want to make a change in Africa. No matter how powerful the impact of your product, if you have too little reach/adoption, you have to raise costs to make enough money, and that’s always a problem…

The average African has low spending power, so a truly impactful solution will need to have low margins and super high volume. And that needs hyper-efficiency – something tech is ideally suited for if you start with the intent of impacting a billion lives from the onset. 

2.  Focus on reach & value

You have to build in spaces with intense need, high adoption and growing interest. Things that unlock huge value as early as possible for the user, but also allow and incentivise them to share it with others, quickly and easily.

Whether B2B, B2C or B2B2C, the game is the same – build for a big market and offer amazing value that’s clear from the start and almost intuitive to unlock. 

3. First national, then continent-wide

It’s OK to start in SA and then aim for continent-wide. At Next, we look at potential African solutions and start building and refining them right here in SA.

The key thing is to be clear about your intent from the start: you’re gonna build with the view of taking it far and wide, but you’re focusing locally to refine your solution until you’re ready to take it to the next level. 

4. Back yourself

Thinking at that scale might be a bit scary at first, but remember that you’re surrounded by people and companies who want the same thing – to develop Africa.

That means you can go and pitch your ideas and look for funding/help with corporates or a VC. Just be clear that you are the best for this opportunity – show why you can do it faster, better or more efficiently than anyone else.

And don’t be afraid to reach out to your fellow startup community – most of us founders are building unique solutions, setting up our own channels for distribution etc. And almost half the time you’ll find your market overlaps with someone you know’s market. 

Reach out and solidify partnerships, we’re all in this together.

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

THE RESULTS

We asked about your go-to debt repayment strategy, and debt-free seems to be the trend…

🟨⬜️⬜️⬜️⬜️⬜️ ⛄️ The Snowball (14%)

⬜️⬜️⬜️⬜️⬜️⬜️ 💨 The Avalanche (7%)

🟨⬜️⬜️⬜️⬜️⬜️ 🎒 Debt Consolidation (11%)

🟨⬜️⬜️⬜️⬜️⬜️ 🤷🏽‍♂️ There are debt repayment strategies? (14%)

🟩🟩🟩🟩🟩🟩 💪🏽 I don't do debt (54%)

Noteworthy contributions from our readers re last week’s post on savings and debt-management tech opportunities:

Dane Viljoen, Founder of Troygold, noted that Franc and EasyEquities aren’t genuine savings products as investing in stocks does come with risk (think Steinhoff). Dane notes:

Another reader, David O’Brien, Founder and CEO of Meerkat, notes that moving people from debt to savings is their sole mission. David notes:

Thanks for the contributions, gents! And for keeping us on our toes.

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