Alan Knott-Craig is likely the most talked about local Internet entrepreneur at the moment. After his tenure as MD of wireless Internet provider, iBurst, Alan moved to Stellenbosch and started a mobile applications investment company. Enter World of Avatar, consisting of approximately 14 mobile related businesses, some of which were launched and incubated from within WOA while others were acquired.

Then Alan made his boldest move yet – he met with Herman Heunis, founder of South Africa’s most popular social network, MXit, and convinced him to sell. The acquisition was widely covered and the price was said to be a massive 9 digit number.

Some say Alan bought a technology past its prime with the likes of BlackBerry’s BBM and Whatsapp enjoying huge growth on smart phones. Alan saw it differently. With the next billion or two of the African population not even connected to the Internet yet, there is huge scope to provide communication tools to ‘feature’ and ‘dumb phone’ users. However, they aren’t overlooking MXit for smart phones and will aim to release a new version – said to be a game changer – in April 2012.

Alan Knott-Craig is a deal maker and with a huge community as bait, has set out to close several deals that will continue to drive MXit’s growth and revenue. Recently he setup an embed deal with Opera and has several similar deals in the pipeline. (more…)

As more and more popular Internet verticals move into Facebook – like gaming (Zynga), instant messaging/email (Facebook Titan), music (Spotify) and shopping – the next logical step is payments.

Two South African entrepreneurs have done just that. Rob Sussman and Lance Fanaroff, founders of Integr8 – the largest privately owned ICT Company in Africa, have launched ZunguZ.

By connecting banking systems to the social graph, ZunguZ simplifies the process of transferring money and is the fastest and simplest way for users to transfer money to their friends. The social graph confirms the relationship between contacts in order to simplify money transfer. Users no longer need to use cumbersome banking applications to load their contact’s banking details. Instead they simply load the ZunguZ application within their social network, click on their contacts and send money. The recipient does not even need to have an account, as they can create one as soon as they wish to access their new funds. This allows the ZunguZ user base to grow virally via the Facebook social graph.

Rob Sussman says of the service that “ZunguZ has the potential to influence the purchasing decisions of over 850 million users across the world. And while we gear for the release of the second tier of the platform, we are intercepting the unbanked and low banked population at the point of purchase. We have been overwhelmed with requests from some of the largest banks in the world, as well as the most prominent SA banks, to leverage our platform to deliver their services.” (more…)

Local entrepreneur, Joe Botha’s TrustFabric has received an investment from World of Avatar. WOA recently made headlines with their acquisition of MXit, and this seems to be one of their last investments for a while.

TrustFabric, which was founded in 2010, will integrate closely with WOA companies, including MXit to provide anti spam measures and child protection services. The child protection service, which is a new addition to TrustFabric, lets parents associate a date of birth with the mobile phone number and email address of their child. This helps protect children from inappropriate content such as adult SMS services, alcohol marketing, tobacco, gambling etc. brands and with MXit in mind, it can prevent adults interacting with minors for the wrong reasons.

MXit’s active South African user base enables TrustFarbic to profile a big portion of internet users in South Africa and then eventually provide that data to third parties via an API. These third parties can then check if they are allowed to send marketing content to specific numbers.

We reached out to Joe Botha for comment and he had the following to say:

TrustFabric is based in Stellenbosch from today. We’re happy to be a part of
the World of Avatar group and it made sense to be close to all the
action in the next few months.

We’re going to be integrating our TrustFabric Connect service and Child
Protect service with MXit, and we have a nice roadmap of related services.

The deal made a lot of sense for us: big user numbers in MXit, solid people
to work with and for me personally – an opportunity to move back to
Stellenbosch and get on a mountain bike more often.

TrustFabric is Joe’s 8th startup. He’s been a co-founder of Frogfoot Networks, Amobia Communications and South Africa’s first vendor neutral data centre provider: Teraco Data Environments.

With MXit’s past with inapproriate content being sent to underage individuals, TrustFabric is a great idea to prevent this in future. Another smart move by World of Avatar and Alan Knott Craig – look out for our video interview with Alan later in the week.

Apple has shared a TV ad on their Youtube channel about their new iPhone 4S. The video features Siri, the personal assistant technology Apple acquired last year and rolled into iOS5 enabled 4S iPhones. In typical Apple fashion, the TV spot avoids listing technical specifications in favor of highlighting the personal element to the device.

“You speak. Siri helps. Say hello to the most amazing iPhone yet.”

via Scoble

Group buying has exploded in South Africa and shows no sign of slowing. Although some of the smaller ‘fly by night’ players have come and gone, there are plenty local group buying sites that are carving out a market for themselves. We are also seeing lots of international players entering our small local market with Google Deals, Facebook Deals, etc.

Jess is an entrepreneur who has profited from the global group buying craze. He started Ubuntu Deal late last year and within 6 months was acquired (100% acquisition) by local internet giant, Bid or Buy. International player Groupon also entered the market several months back with an acquisition of local player Twangoo. You can watch the Twangoo interview here.

I chat to Jess about his acquisition, subscriber and revenue growth post acquisition, which cities they have expanded to in South Africa and what his take is on the big international players entering the market (see below). I also asked if there is a market for group buying in Africa, his take on group buying on mobile, the Groupon IPO and the issue around group buying’s low barrier to entry. (more…)

Guest Post:  Antonio Petra is Head of Insight at NATIVE and has worked in the digital environment for the past 15 years, with experience in online marketing, strategy, brand building, and analytics. His focus is developing and implementing measurement frameworks and diagnostic tools for large companies to assess their digital platform value and performance.

The future of the web is connected platforms. This is a bold statement, I know, but it is human nature to need parameters whilst at the same time revolt against institutions whose parameters are too onerous. No one platform can ever be an entire digital experience for users, for many reasons, aside from the one I’ve stated above.

What Google+ aims to do is create a layer on top of the internet, a layer which incorporates the connectedness of Facebook while simultaneously breaking down the walls that social platforms require in order to curate the experience of their users. In a sense Google+ is simply a situation where you can have your cake and eat it. Your cake is the connectedness of social media combined with the great experiences on the web you still love (like your favourite news sites) but are outside of the walled garden of social media websites.

You could argue that Facebook Connect gives you this, but Connect is really a way of pushing experiences or content back into Facebook. This, admittedly, is actually an effective way of sharing content. The fact is though it is more biased towards keeping you within the eco-system of Facebook. This is one of the many reasons big brands have simply given up the fight and have shifted their presence into Facebook – it’s really to avoid a conversion hurdle of getting people out of Facebook and into their websites.

In a sense it’s pretty easy to build a Facebook, several clones exist, however the biggest challenge that Google+ faces is in attracting users, and it is an incredible challenge when users are spoilt for choice. It’s why all the clones never amount to Facebook’s success – they may have better features but they can’t attract the audience. I’m not undermining how brilliant Facebook actually is, it has been incredible in terms of foresight into the human need to connect and be heard, and first to market with many features we take for granted today. What I am saying is that all the current criticism over Google+’s obvious Facebook-type features are actually pointless, they’re a ridiculous feature comparison which is biased by what the authors know and are used to versus what is new and maybe a little threatening.

START UP THE MARKETING MACHINE

So basically Google will need to drive users to Google+ in order to make it work. They know now that the subtle coolness of simply putting the product out there for people to discover won’t work (see Google Wave), they also know that simply opting in their entire Gmail user base will also not work (see Google Buzz). Hopefully they have realised it’s a combination of good, old-fashioned marketing and a dose of coolness – and omnipresence doesn’t hurt either.

Google has recently woken up to the power of marketing the brand. The success of Google’S $5-million Super Bowl advert (broadcast in February 2010) has had an impact on the way Google thinks about brand advertising. In a recent interview Eric Schmidt, Executive Chairman of Google, actually said that the ad paid for itself. “We turned a Super Bowl ad into a ROI phenomenon,” he said.

Just to emphasise this point, + is actually a part of a wave at Google which includes a major re-design of all user interfaces, along with the rebranding of two of their major products. For a company of Google’s size, with its user base, that is a big statement to make. It means they’re taking the comfort of their users very seriously.

WHY GOOGLE+ HAS TO WORK

• ·        REASON #1: THREE STRIKES – YOU’RE OUT!

This is a pride issue for Google. As every tech journalist has pointed out, this is round three of Google’s social media experiment. They have failed rather spectacularly before so I believe this is the make or break and they will throw whatever their $65-billion dollar machine has to throw at it. If they don’t succeed the only way they could get into social media is to buy into the competition, and this would probably prove more expensive a strategy than throwing a bunch of cash at making Google+ work.

Also, the competition is a complex arrangement of competitors, so it may not even be an option. At the moment the stakes seem high, several articles in the months leading up to the launch of Google+ asked whether Google is actually just a search company. I often express my irritation with this statement, because even if Google is just a search company, it’s a damn profitable one. This statement is akin to saying Coca Cola is just a sugary beverage. By making this statement, journalists are ignoring the true money machine behind Google. Google is not a search company – its money spinner is Pay Per Click (PPC).

• ·        REASON #2 – THE GOLDEN AGE OF SEARCH

This brings me to the second reason Google needs to make Google+ work. The day the PPC model is threatened is the day Google will shrug its shroud of apparent complacency and become more aggressive in its approach to social media.

Frankly, I think that day is dawning. The reason for this is that we are experiencing a third fundamental shift in the way we “discover” content. The first phase in the early nineties was when we used to browse around for content. The second phase came in the mid to late nineties when search engines began helping us find content and the third phase began a few years ago with the arrival of social media.

This phase is predominantly a referral phase and PPC revenue can only be negatively affected by a referral-based community. Search has essentially become pretty cluttered and the race to ensure that search results are relevant is being closely run by Google, Affiliates, and Content Farms. However, if Google+ is actually successful it will give Google the opportunity to prolong a PPC-type system.

Because of this we are still to see the Golden Age of Search. Machines and the people who craft the Google Algorithm both seem to be getting smarter every 18 months.

Brands and agencies are scrambling to determine exactly how Google+ will affect their digital presence. I have already received countless emails from clients asking when we’re going to integrate Google+ and when we can show them the new Social Analytics data from the Google Analytics dash that has just been released. It’s not surprising considering Google+ gained 10 million followers in just 16 days, compared to Twitter’s 780 days and Facebook’s 852 days to reach the same amount. Google is indeed a force to be reckoned with.

Russell Perry, from his days as CEO of 123People, photo © 123People

Russell Perry was the CEO of the internet’s biggest real time people search engine, 123People. Bandwidth Blog takes you inside his tenure as CEO from when he joined as employee number three – taking the company into 13 countries, available in 11 languages, reaching 50 million unique visitors per month and fighting off competition from big US based rivals like Spock.

You started 123People, the biggest online people search engine. When did the idea come to you and how long did it take to get the first product up?

In fact, I was NOT one of the founders of 123people, I was “merely” the startup-ceo. The idea to create a people search engine was born by Markus Wagner and Martin Stemeseder who had sold their first company 3United (a Vienna based WASP) to Verisign (USA) and in 2007 started to look for new ideas. They were looking at the overall online search landscape and saw that there were some players such as spock.com in the USA and another German vertical search engine focusing on publicly available personal information.

However, it was more an aggregation of data (USA) and a link compilation (Germany) but no real-time search for this vertical.

So both set out to build the protoype and launched the website end of January 2008 out of their New York City apartment. I happened to be in NYC that week and I had been working with Markus and Martin for nearly 10 years – they used to build the stuff for online gaming and also the first mobile gambling platform while I was at bwin.com

I liked what I saw and I was asked if I wanted to build the website into a company. Over the next few months I followed their progress and joined them in the fundraising pitches for series A. In July 2008 we closed the first funding which was contingent on me coming on board as CEO.

The first few months were pretty rocky as we had a business plan but an unusable business model and the product was still in beta. There were no revenues, but there was growth. So I set out to get my A-team together and revamp the business model. Despite the opposition of the main shareholders and the VC guys to take a – what I call the 33-1/3 approach – and split revenue sources into display advertising, affiliate revenues and premium/charged services, we went ahead with it – thanks to one of the smaller strategic investors – and continued to grow the traffic and after six months – July 2009 – we actually broke even. By then we had a commercial product, were active in 8 countries and 6 languages, two of the three revenue streams where generating enough revenues to grow the business even further to about 50mln unique visitors per month by the end of 2009. This made us the most profitable and largest people search site globally.

Did you operate 123People from Austria? Do you believe you can truly build a global internet company from outside of Silicon Valley. Did you have a small presence in the valley?

Due to the fact that that there were several US players we decided to focus on Europe which also was supported by the fact that we had a Austrian VC and a German strategic partner. 123people was HQ’d in Vienna which was a benefit due to the proximity of our initial markets and also advertising partners.

Yes, I do believe that you can build a truly global internet company outside of SV – just look at Skype (Estonia/Luxembourg), and the Chinese online mega-players (though China is a whole market it is’s own, of course).

The only difficulty is that the VC money and a lot of the dumb money is in SV – in Europe there is less risk capital for startups, ample amount for expansion financing, but there is a clear focus on fundamentals of the business model – in SV a lot of dumb money goes to ideas, not fundamentals.. But, in SV the idea creation allows for mega companies to be build much more rapidly – look at FB with nearly USD 2bln in funding. THAT – would not happen in Europe.

No, we didn’t have any presence in SV or even in the US, only some PR support through an agency.

Was partnering with an incubator like i5invest, to gain access to their resources, critical to 123People’s success?

Yes and no, the incubator itself was not really instrumental in the success, it was actually due to the network the CTO (one of the founders) and I had and the people (A-team) we brought on board. What was beneficial, though, was all the back-office resources like accounting and finance that allowed us to manage our costs through being associated with i5invest.

While you where in charge of 123People what was the peak audience number?

Just above 50mln unique visitors per month. An “actual” and audited number since we were listed in the official audience tracking in all countries. Always have to laugh about this, because we didn’t inflate out numbers since we had to deliver to the advertising customers..

If we had been a company without revenues, my answer would we Silicon Valley-eque – 200mln visitors!

How did you beat rivals like Zoominfo and Spock to become the largest online people search?

Spock had really great technology, but they were focused solely on aggregating and creating new profiles of people and making them searchable – but they didn’t have a business model, no revenues and put 100% on product instead of taking a 33-1/3 split in market approach as we did. They burnt through something around the lines of USD 12mln in just a few years without revenues.. Clearly, not sustainable. They also had major issues going into new markets, especially Europe since they didn’t have the legal know-how – which we did.

Zoominfo – we actually partnered with them for a while until they change their focus to only sell their data instead of utilizing the vast database they had to generate traffic on their own.. I had long talks with them that I thought that was not the way to go and clearly 123people, being the startup, wasn’t in the position to pay upfront for data – and that wasn’t our overall business and traffic model. Also, their international efforts changed and they focused only on the US, if I remember correctly. (more…)

This Just In: SA to get iPad 2 on 29 April!

Well this is great news – last year South Africa only got the iPad in November, some six months after the rest of the world. Well it seems Core or Apple have been listening to our complaints of getting the iPad late. It looks like SA does not have to be treated like a second class tech citizens, and we will be getting the Apple iPad 2 very soon!

Bandwidth Blog has already reviewed the iPad 2 (twice), finding it to be a great device which refines on all the features which has made the iPad a success worldwide. If you have been holding off on getting iPad 2, now might be the time to take the jump. Only question now is to see what Core’s interpretation of the official pricing is-if it continues the pricing trend until now, I expect it to be a very popular device in SA. Will this drop the pricing of iPad 1 even more? Will there be a blown out sale?

Update: Official pricing has been released by Core, and it looks pretty good! Have to commend Core for keeping the pricing competitive! So lets see: (more…)