Hi there,

Thought it was over? Terminator director James Cameron just weighed in on the AI debate with a classic "I warned you guys in 1984”.

In this Open Letter:

• Sharing economy: When hyper-local trumps global dreams.

• Retirees incoming, Starlink’s Kenya launch & world’s best vineyards.

• Target users: 5 Questions to reach a super niche audience.

• Insights: Bootstrapping one of Africa’s fastest-growing companies.

• Poll results: How we’re keeping the lights on.

TRENDING NOW

Putting the Hyper-Local in Your Global Shared-Economy

Cloud computing is one of the most enabling technologies of our time. And probably the most practical examples of how the shared economy can benefit an industry.

Pre-cloud computing, your web app needed its own server – pricey! And that server was almost never fully utilised. Enter cloud computing – share this piece of hardware among multiple users and charge them an operational fee instead of heavy capex.

Early pioneers of the web embraced and loved it. So it's no surprise the idea of sharing hardware or spaces spilt over into other areas.

The Uber of X

If you were involved in the startup scene 10 years ago, you would often meet a founder saying “My app is like Uber but for X”, where X refers to whatever industry they are targeting. Management consultants pounced claiming that the future is shared:

The problem with this is:

• Amazon’s e-commerce makes little to no profit.

• Uber is still not profitable and facing major challenges in various regions.

• Last week we highlighted how an EU court ruled Facebook makes 97% of its revenue illegally in our trend piece in Twitter vs Threads.

• And there are talks that Airbnb is facing major challenges from lack of demand due to prices surging, to local legislation banning or limiting Airbnbs.

The shared economy dream is shattered, or is it?

The biggest challenge for these global shared economy players is scaling context per country or sometimes even city.

The problem with Uber is not the tech or the execution, it’s that every country and municipality has its own laws, by-laws, regulations etc. And when each major city in the world has custom rules for Uber and these constantly change, it becomes a nightmare to scale efficiently – especially with centralised global operations.

Perhaps the share economy works, just not the way we thought. Hyper-local could be a great solution.

Think LekkeSlaap (which means sleep well in Afrikaans) which offers a similar booking service to Airbnb, albeit a bit more focussed on actual BnBs, resorts and hotels – so somewhere between Airbnb and Booking.com. LekkeSlaap being local (SA only or for a targeted SA Afrikaans audience) has benefited them in the following ways:

• You can use a name that rings with the local market, like LekkeSlaap.

• You can create locally flavoured content and marketing. Check out this great ad from LekkeSlaap – 9.6 million views.

• It’s easier to deal with local regulations and rules and make sure you comply. What’s more, being local you can engage authorities more efficiently and lobby for pro-business.

• You can offer a way better customer experience – phone local support.

• You might even set yourself up for a juicy acquisition (from the incumbent) once you have grown enough.

And it’s not only Airbnb facing local competition. Lula (who we featured on our podcast not too long ago), is also offering private transport services to rival the likes of Uber.

Often entrepreneurs avoid starting up where there’s already a massive, highly funded global player. But here’s a good case-in-point for why you should do exactly that.

Here’s what we’re pretty sure of: when you launch an attack to capture a big international industry player’s market locally, they will likely not have the agility to counter it. At least not for the southernmost country in Africa.

OVER TO YOU

IN SHORT

🍷 Fancy. 3 SA Vineyards have made it into the Top 50 of “World’s Best Vineyards 2023” list, including 1 in the Top 5. The list includes Creation Wines at number 4 (and Top Vineyard in Africa), Klein Constantia at number 32, and Delaire Graff Estate at 36. Benguela Cove and Tokara made the second half of the list at 53 and 94 respectively.

🛰️ Kenya believe it? Elon Musk’s Starlink now available in Kenya. The high-speed, low-latency broadband internet via a constellation of low-orbit satellites was just launched. Closer to home though, while Starlink doesn’t officially have a license to operate in SA, you can still access the services via third parties using its international roaming feature and it’s estimated that roughly 1700 people already do.

🏖️ Golden Years. SA (read: The Western Cape) is becoming a favourable retirement destination for foreigners from the UK, China, Germany, the USA, and Bangladesh. These countries make up more than half of the 3’645 retirement visa applications received by Home Affairs in the last 2 years.

😢 Feel the churn. Remember when we mused how people would slowly stop using Meta’s Twitter competitor Threads? It’s started. Threads users have dropped by half this past week.

💸 Breaking the Bank. Tesla’s Board of Directors have agreed to pay back a staggering R13.5 billion after shareholders claimed the Tesla board was massively overpaying themselves. Eina.

­BUILDER’S CORNER

5 Questions to Reach a Niche Market

Ok, so your product has a few users, and now you’re ready to diversify and maybe serve a larger audience. But some of your personas and potential target markets are quite niche and hard to pin down – like CEOs, high-net-worth individuals, board members to voluntary organisations like home owner’s associations, parent-teacher organisations etc.

You know, people that would cost a fortune to try and reach with blanket advertising…

First off, you’re not supposed to be in this situation – that’s what your concept validation, discovery, scoping and go-to-market plan is for. But do not fret, there is actually a framework for it…

Questions for pinning down a niche audience

1. Via the entry points

   How do they start in this job/membership?

   Where’s the entry point? How do they join or get appointed? There might be some more formal structures around how and where someone gets into the niche you’re targeting.

2. Via industry bodies or academic institutions

   Where do they get education on how to perform their duties?
   Almost every industry has bylaws and regulations that incumbents have to adhere to. If you can find out how and where the official overseeing structures communicate and educate your market, you might find a foot in the door.

3. Via another product

   What products/services do they already buy?
   And whom do they buy it from? How do they use it?

4. Via a co-worker

   Who on their team has the decision-making/buying power?

   Who has the final say in what products and services they should use?

5. Via a partner

   Are there any other companies already serving them? 

   Because the easiest way to reach a niche is to align yourself (i.e. strike a deal) with an existing player that’s already dealing with them on a day-to-day basis.

Bonus tip: Sometimes hiring some of their service providers (i.e. the freelancer that writes for them etc.) could give you goodwill with the service provider to do an intro. A word of caution, however, it’s not a guarantee.

Action plan: If you can’t find this information readily online, then approach a few of the niche people/organisations you can find in your area, and ask them those 5 questions. If you can speak to 5–10 people already within that niche target audience, you should get the info you need.

Then just repeat the process: align with others already serving them and boom, foot in the door.

Battling to infiltrate a hyper-niche market? Hit reply and let’s see if we can add some ideas…

THE THREAD

Have we romanticised venture funding? In this week's episode of How Would You Build It, we spoke to Stephen Osler & Martin Potgieter from Nclose about how they bootstrapped their business to become one of the Financial Times’ fastest-growing companies in Africa.

Or if podcast app is your vibe, catch them here:

Like our podcast? Remember to subscribe and never miss an episode.

THE RESULTS

A few days ago, we asked how you’re dealing with load-shedding. And would you believe that most of us in this community have only a battery to keep the WiFi going? Second is buying solar outright.

🟨🟨🟨🟨⬜️⬜️ 🌞 I bought my solar, baby (24.39%)
🟨⬜️⬜️⬜️⬜️⬜️ 🏆 Renting solar and it’s lekker (9.75%)
🟨🟨⬜️⬜️⬜️⬜️ 💪 A monster inverter, but still on the grid (14.63%)
🟩🟩🟩🟩🟩🟩 📱 Just a small UPS and inverter to keep the WiFi on (34.15%)
🟨🟨🟨⬜️⬜️⬜️ 🕯️ Candles, board games and gas stove (17.07%)