Building the next Mxit: where is South Africa’s next big mobile business?



Isn’t it a sad indictment on everyone involved in the tech/mobile/start-up industry in South Africa that the most exciting mobile business to emerge from the country is roughly a decade old (in its current incarnation as messaging app)? A decade?!

I look at list after list of startups to watch and there’s nothing that stands out as ‘wow’.

There’s the inevitable grouping of half-baked clones of services and products that exist in foreign markets. Is copying and pasting an idea from the US going to make you wildly successful and able to cash out and hardly ever work again? Probably not. There are a couple of best-case exits, but the obvious one is being caught up in established players flinging mud at walls trying to see what will stick. For them, spending a few million on a ‘head start’ is easy. (There’s also a never-ending obsession — not unique to South Africa– with solving mobile payments… I’m not sure that it’s a problem that actually exists, not in the way most are approaching it.)

There are (easily) 16-million smartphones in South Africa. Sure, some are (increasingly) stretching the definition of what a smartphone is. But, even without a chunk of BlackBerry OS 7 devices, there’s still a market… There are 5-million or active Android and iOS devices in the country. Still not a market? And it’s a market that is almost wholly mobile. For the great majority of South Africans, the ‘internet’ is mobile. Facebook is mobile (in fact millions of South Africans have never used on a PC).

Why then are people in the country seemingly so preoccupied with starting online and moving to mobile? “We’re going to provide an efficient/easy/effective way of doing this (insert established ‘web’ service here) on mobile” is something you hear far too frequently. Why is the mobile paradigm which smartphones offer not the point of departure?

I’m talking about big, disruptive ideas. Like the flood of innovation in Asia in messaging apps… WeChat? Line? This is not about messaging. If you think WeChat is about sending emoji to each other, you should probably do some more reading… These are entirely new platforms with potentially disruptive business models. Wonder why the Chinese authorities are paying a lot of attention to all sorts of mobile payment methods (payments initiated via QR codes, virtual credit cards)?

What about Uber? Massive game-changer. And made possible only by smartphones… a mobile paradigm which brings together identity, location and payments, in a completely frictionless way. These are big, obvious examples.

PriceCheck is often celebrated in this market. Is it the next great mobile business? I’d argue not. It’s a price checking and comparison engine.

Takealot, with Tiger Global’s war-chest, has done one or two interesting things, most notably solving the delivery conundrum by taking out Mr Delivery. Is this even vaguely game-changing? Probably not. Mobile first? Nope. Anything more than a responsive website? Nope. Plus there are many more questions than answers around how a US-based hedge fund exits its investments in South Africa…

Don’t get me wrong. There are thousands of tidy, profitable online and mobile businesses in South Africa. But profitable and tidy isn’t great.

Should one of Africa’s leading economies be content with celebrating mediocrity? Should it be content with nothing more than the good “execution” of copycats?

Perhaps I’m completely out of touch with reality.

Prove me wrong.



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