Word of Mouth

Zimkhitha (26) is an informal female entrepreneur (Member), who like a third of her peers working in the informal economy, can’t access critical resources to earn a sustainable livelihood, grow her business and reach her potential. Our on-demand marketplace, exclusively for informal settlements, has unlocked the potential of her business and nearly 100 Members like her, doubling and/or trebling their income every month. This is made possible by our technology. Our online marketplace organises the informal economy, connecting Members with customers who couldn’t previously find or trust them. Members can also access formal supply chains, ordering parts online not available in informal settlements, and sign-up for training so they can grow with their businesses. But we don’t want to stop here. We want to scale our platform so that every marginalised informal entrepreneur can reach their potential, creating a more resilient, inclusive future for everyone.

Zimkhitha (26) is a female informal entrepreneur, who lives in informal settlements. She has been running an informal nail business from her shack for the last two years, after learning her trade online. She dreams of owning a salon, of growing her business, of employing her local “sisters”. However, the odds are stacked against her. She lacks business acumen, has no savings, and can’t serve the suburbs as she doesn't have the qualifications or resources, yet can’t grow her business locally, as without a container, there is no way for customers to find or trust her. Her business is limited to her network of friends and family, and even if new customers could find her she doesn’t have the capital to hold stock, and the nearest suppliers are over 50 km away. Furthermore, she is only paid in cash so has no proof of income, making access to finance to fulfill her potential impossible.

Zimkhitha  is not fictional. Zimkhitha is not alone. Her story represents the one in three women in South Africa reliant on the informal economy for their survival. The one in three, unable to reach their potential, grow their businesses and earn sustainable livelihoods.

WOM has helped double and/or treble nearly one hundred informal micro-entrepreneurs income every month. Tapping into the potential of chronically underserved informal settlements to create strong, resilient, and prosperous businesses. Our technology and business model does this in three ways.  Firstly, our on-demand services marketplace, the only one to exclusively serve informal settlements, organises local informal markets. This enables new local connections between residents of informal settlements (Users) and female led informal micro-enterprises (Members), who couldn’t previously find or trust each other. Secondly, our Members benefit as they can order supplies, not available in informal settlements, that are critical to growing their business. Ordering is done online, and delivered to their door. By purchasing on the Members behalf we are able to pass on discounts, created through collective bargaining, and ensure our Members can meet the additional demand without having to travel 50km every time they need to restock. Thirdly, Members can access training on budgeting, and stock management which provides them with the skills and mindsets to save for the first time. Finally, WOM is excited to use its data on the cash-economy, to support our Members to access formal finance and inform and advocate for policy reforms.

As an online marketplace WOM serves two groups, female informal micro-entrepreneurs (Members), and residents of informal settlements (Users). Our Members are typically women between the ages of 18-35 who live in informal settlements. They rarely have formal qualifications, and often have learnt their trade online or/and through practicing on friends and family. They lack transport, a physical location to work from, and typically support between 2-5 individuals with their income. We know our Members intimately, and hold monthly feedback sessions where we discuss ways to continually improve the platform. In July, we will also be launching a Member technical advisory group that reports to the board of directors. This will give them a platform and voice to inform the organisation's direction, and ensure we meet their needs around income, access to supply chains and training.

Our second group, Users, are typically women between the ages of 20-40, are employed, and want to purchase services locally they can trust. They currently can only rely on their social network to find services, and this often results in them paying a “poverty premium”, including: long search costs, extensive travel to urban centres, and/or accepting sub-standard work that breaks or needs fixing.

WOM’s work closely aligns with the goal of the challenge and challenge dimension(s). WOM partners with female informal entrepreneurs. These women are marginalised and face systemic challenges that directly impact their ability to access good jobs, or maximise their livelihoods opportunities. These challenges include access to capital (finance and human) and networks (supply chains and markets). WOM uses technology to bridge these challenges, tapping into the potential of the untapped informal markets, while also creating an enabling environment, so that female entrepreneurs can prosper, creating good jobs, locally for themselves and their communities.

WOM does not have any direct formal competition. Previous approaches and competitors working with informal and marginalised business owners have focused on formalising them through policy or legislative changes, providing access to formal middle-income markets, or focusing solely on financial inclusion. WOM’s approach and position is different. We focus on stimulating the informal economy from within, using appropriate technology to unlock the potential of local markets, and empowering informal entrepreneurs with access to critical resources and networks so they are able to grow with their businesses. This position is powerful for a number of reasons. Firstly, we are able to work with the most vulnerable female informal micro-enterprises who are unable to serve middle-income markets. Secondly, we have rich and valuable data on the cash-economy which can be used to help inform and improve policy and better their financial inclusion.

This unique position is only made possible due to our differentiated product offering and business model. Our online marketplace is cash on delivery, doesn’t require a physical address, is available in local vernaculars, and is data light. The Members listed set their own rates making it affordable for everyone, and have had their skills verified by WOM before joining the platform. These internal assessments, developed by WOM, are crucial to ensure quality service on the platform, especially in the absence of formal qualifications.

Appropriate technology is at the heart of WOM’s solution, and enables every part of our business model. Users download the App, visit the mobile responsive website, or make requests via WhatsApp. During the online booking process Users are provided with Members available in their geographic areas, and are provided with live pricing for their selected service. These requests are then processed and stored in our back-end, before being uploaded into our cloud based customer relationship management software and online calendar system for booking support, after care and technical assistance. The booking logistics and management are then tracked real time in our fleet management software, which notifies the Users and Members via SMS. After every job is completed the reviews and feedback are stored on the Members digital ID. Technology also enables the supply ordering process. Members can make orders online via an online form or WhatsApp. Once orders are received they are processed and shipped, with stock management administered in our cloud based accounting software and logistics managed through our fleet management software. We are also currently in development of a WhatsApp bot to automate the supply chain purchasing and User support, with v2 of the App scheduled for release on the 1st of August 2020. V3 of the App scheduled for release in October will also include a Member login area, with dashboards providing Members with all the information they need to run their businesses, from sales values, to stock management.

In South Africa, the most recent study by Independent Communications Authority of South Africa's (ICASA's) found that smartphone mobile penetration rates are estimated to be as high as 81.72%, doubling in the last two years. WOM’s solution uses widely available and accepted open web technology that is accessible on any tablet, smartphone and/or computer.

The platform itself is built using Ionic hybrid mobile app framework (HTML5), which has enabled us to build and deploy a mobile responsive App quickly and efficiently using one code base. Using a web-based framework allows WOM to also run as a mobile progressive web application (PWA), which is beneficial working in low-income communities where storage can be a barrier to use. The development approach taken by WOM is increasingly becoming common practice, with a study by Forrester showing that over two thirds of developers are using web-based or cross platform solutions. Notable examples  of companies who are using web-based cross platform solutions like WOM for low-income countries and communities include: Spotify, Starbucks, Pinterest and Uber.

Please find a product demo of the technology here: https://www.youtube.com/watch?v=aThGBNo1OLk.

WOM addresses the challenges faced by informal micro-enterprises (Members) and individuals from informal settlements (Users) through DFID’s Sustainable Livelihoods Framework. This framework identifies the following five assets as critical levers in creating sustainable livelihoods that are resilient to shocks: human capital, social capital, natural capital, physical capital and financial capital.

WOM focuses on improving the social, physical, human, and financial capital of Members and Users to create long-term change. Our on-demand marketplace provides a platform where informal economy actors can register their micro-enterprises, and local customers from their community searching for their services can book them. By organising the local market and network online and verifying skills, we are able to create social and financial capital for both our Users and Members.

Users benefit from the marketplace as they are provided with more choice and reduced search cost. As WOM assesses all of its Members skills before joining the platform, and takes reviews after each job, which are stored on a public profile, Users are also less vulnerable to scams that affect both their wellbeing and financial security.

Members benefit from the marketplace as they are connected with more jobs, improving their financial security, and are also provided with access to training. By providing them with new skills, in areas such as budgeting and stock keeping, we are able to improve both their human capital and their financial capital, as they are more likely to save income earnt with WOM. Members also gain access to formal supply chains, improving their financial capital and social capital, as they gain access to new networks but also benefit from reduced prices made possible through collective bargaining.

Over the next 5-7 years, we anticipate that the improvements in the Members' assets will have a significant impact not only on their income but also on their vulnerability to shocks, and sense of empowerment due to improved economic contribution, and perceived status. An impact we are already seeing through anecdotal evidence with Members stating they feel “important for the first time”, and that they “are only now in place they have always wanted to be”. 

We currently have over 10,000 Users signed-up for WOM. These Users have made thousands of requests for services, resulting in over 3,000 completed bookings for our Members to date. In fact the platform’s revenue was growing at over 30% month-on-month for the whole of 2019. During this time WOM has signed-up hundreds of informal micro-enterprises, often doubling and or trebling their income. In one year we want to have signed-up over 1,000 female led micro-enterprises and more than 80,000 Users. In five years time, we want to have signed-up over a million Users and have the largest network of female led informal businesses on the continent, supporting over 15,000 informal micro-entrepreneurs.

In the next year, WOM wants to scale up the platform’s impact growing horizontally into new informal settlements in both the Western Cape and further afield to settlements in the City of Johannesburg. We also want to test new applications of our technology including bots for WhatsApp, while improving on the technology base already developed to further automate processes. In addition to scaling up horizontally we will also pilot additional services delivered by women, for women. Services we have already identified are tailoring, tutoring, and catering.

In the next five years we will apply the lessons and learnings from the first three years of operation and aim to have replicated the platform across South Africa to become the digital marketplace of choice for all residents of informal settlements. We will have made millions of connections, supporting tens of thousands of micro-enterprises while also piloting the platform in key expansion countries, such as Nigeria and Kenya, to provide micro-enterprises and communities across Africa with the opportunity to reach their potential on a platform that is built with them, by them, and for them.

Now we have found market-fit and have a proof of concept, capital for growth is one of the key barriers to achieving our goals in the short-term (next year). In addition to capital constraints, it will be critical that WOM is able to maintain the quality of service provision as it scales the platform, as this will heavily influence retention rates of Users on the platform. 

In the long run, WOM may need to avoid/overcome the following challenges. We will need to ensure that the platform stays in line with developments in labour law, also affecting similar business models. We anticipate that as we scale we will need to look at ways to make the platform increasingly accessible, reducing the cost of use, such as data (although currently data use has not been a problem). Finally, as WOM grows and the exposure of our work increases, there are risks presented by new ventures entering into the market, absorbing market share, and eroding the sustainability of the platform through price-competition.

WOM will address the issues of trust in the following ways. Firstly, we will continue to build key relationships with trusted organisations in the location, such as churches, stokvels and clinics and key opinion leaders. Secondly, we will build trust by continuing to strengthen and expand our Member onboarding process, and add additional features to improve our review and customer feedback loop.

We will mitigate longer term challenges related to data use by exploring the opportunity to zero-rate the platform (so Users do not require data), building dumb technology options, and setting-up third party sponsorship where WOM covers the data use for the domain. We will ensure that we keep on top of legal developments through our board composition and through relationships with pro-bono legal organisations. 

WOM cannot stop new entrants entering into the market, however, the risk can be mitigated if WOM can take advantage of its first mover advantage and grow the platform rapidly, building a strong brand, and a platform that benefits network effects, creating high switching for Members and Users.

WOM has four directors leading the strategic direction of the organisation, six full-time staff, and two contractors running the day-to-day operations.

Over the last two years we have built a team with the perfect mix of industry expertise and local knowledge and ownership. We have a board of Directors who are responsible for setting the strategic direction, and have over 45 years of experience developing scaling programmes for low-income groups in Africa. Sonja Kotze is a CFO, and South African national, with a wealth of experience in finance, governance and IT systems. Robrecht Vanrijkel, originally from Benoni, joined to help us build and facilitate our training programmes, utilising his 15 years spent experience in the training space. Thuleka Duze (pending board resolution) is an experienced entrepreneur and influential figure from Gugulethu, an informal settlement outside The City of Cape Town. In addition to her work at WOM, she runs a successful design and fashion boutique and logistics company. Simon Barson is a specialist in start-up and strategic planning with over eight years working with the senior management team of global health organisations and Rehema Kahurananga is a Kenyan national who joined the Board of Directors to provide marketing and communication leadership. 

These directors are supported by a small operational team. All operational staff hired for the roles have lived or are still living in the informal settlements. A hiring strategy that has been critical to our success to date. It has provided the organisation with local ownership, connections, partners and product insights that have ensured that we meet the needs of the community and the micro-enterprises we support.

WOM has built partnerships with local and national institutions. At a local level, we have built strong relationships in the informal settlements with churches, stokvel’s (community saving groups), and clinics. These local institutions have been critical in raising awareness of the platform with potential Users and Members, while also building trust and local ownership of the brand. At a national level, we have built relationships with other civil society players and corporate partners. Examples include implementing partnerships with Harambee (a youth unemployment accelerator), The Amy Foundation and The College of Cape Town both, beauty training schools that act as referral networks for Members, Barneschone, a legal firm, who provide pro-bono legal support and Planet Nails who provide us with preferential rates on supplies for our Members.

In addition to these partnerships WOM has also built a community of technical experts who provide insights, advice, and connections as we explore new technologies further. Our technology experts include: Monique Heyden, Product Director at The Training Room Online, and Owen Smith, Product Director at Spotify.

As an online marketplace WOM provides value for both sides of the market, the User (customer) and Member (informal micro-enterprise). Both sides of the marketplace we target reside in informal settlements. The value we bring our Users is that we save them time, money, and provide them with trusted services they couldn’t otherwise find. The other side of the marketplace, the Members, benefit as they gain extra income through the platform, group discounts made possible through collective bargaining, access to the formal supply chain and training so they can grow with their businesses.

The key activities involved in providing the above value are: User and Member acquisition, platform and booking management, Member screening and onboarding, platform development, partnerships and supply chain management. We currently acquire Members and Users through a mixture of offline and online acquisition. Our online activities are focused on two key channels Facebook and Whatsapp. Our offline acquisition is led by a sales team (previously unemployed youth) who sign-up Users at offline events held at churches, stokvels, clinics, and malls. These partnerships have been critical to our success, as have partnerships with key suppliers such as Planet Nails, and other non-profit organisations who will provide training services for our micro-enterprises as we grow the platform. A growth that will be dependent on resources such as the organisations brand, technology, and relationships with donors, investors and stakeholders.

WOM is a hybrid social enterprise, with a for-profit based in the UK and non-profit based in South Africa. The UK company has been set-up as a vehicle to raise funds from social impact investors, with a focus on technology development and innovation. The non-profit based in South Africa leads on operational delivery and will continue to raise funds from traditional philanthropic funding, such as corporate partners, foundations and individual donors. Funding raised through external sources will fuel growth until the platform is fully sustained by the revenue it generates (currently projected for 2023). The platform currently generates revenue through a monthly Membership fee (the equivalent of approximately 20% of total earnings in the given month) and a mark-up on supplies sold to our Members. As the platform grows, it will also look to explore additional commercialisation opportunities presented by the consumer data* collected through the platform and online advertising opportunities that could be sold to corporate partners, and/or through paid for features sold to Members such as profile boosting.

Note: *WOM is committed to the data protection of our Members and Users, and would never sell-on data to third parties.

I am applying to Solve, as I believe that becoming a Solver Team could be pivotal for WOM and for me personally, as it would come at a critical time for us both. For the organisation it would be invaluable to associated with such a prestigious network and brand, while also creating an unparalleled opportunity to raise funds, build partnerships and raise awareness of our success and work-to-date. These benefits will be crucial for WOM to take the next step in our journey and move from proof of concept through growth to scale.

For me, as a relatively young sole Founder, leading an organisation for the first time, it has been a challenging journey and I would relish the opportunity to have additional support and mentorship. Mentorship that would be particularly impactful as we move into a new phase of the business cycle. I would also be excited to be connected and collaborate with like-minded entrepreneurs across the globe, as my network is limited to the South African context, and I believe I could learn and grow from being exposed to ideas from other Solver team’s entrepreneurial efforts in differing geographies and cultures.

As a mobile technology solution, working with low-income groups, one key partner that Solve could connect us with to accelerate our growth and maximise our impact would be mobile phone operators in South Africa, such as Vodafone. A relationship with a mobile phone operator like Vodacom would provide an unparalleled distribution channel for WOM, while also providing a value add for Vodacom’s customer base, helping them further penetrate low-income markets. Beyond distribution, mobile phone operators are a key stakeholder as we explore zero rating our various product offerings, such as our website. Zero-rating would be invaluable as it would reduce the barriers to entry for new Users. 

In addition to mobile phone operators, we would love to partner with national South African retailers such as Pick n Pay and Shoprite. The benefit of partnering with such institutions would be two fold. Firstly, they would make ideal partners for our loyalty programme, with the potential of providing exclusive benefits for our Members and Users in exchange for WOM Points. Secondly, they typically are one of the largest employers of our target User demographic, women between the ages of 20-40 living in informal settlements. Partnerships could therefore open up a new channel of User acquisition for WOM while also providing a great employee value proposition for their staff. 

Beyond retailers WOM would also like to build partnerships with wholesalers and distributors of parts and materials used by our Members, so that we can provide them with better prices and group discounts.

The UNHCR estimated that there were 89,285 refugees in South Africa in 2018. These refugees often find themselves living in informal settlements, locked out of the formal economy. However, they are 50% less likely to be able to start a business. This leaves them excluded and marginalised from economic opportunity, despite them being four times more likely to want to start an enterprise that contributes to the development of South African society and their integration within it. With support from the Andan Foundation, WOM would want to make those dreams a reality by providing marginalised female informal micro-enterprises with everything they need to start, run, and grow their businesses. We would achieve this by running outreach campaigns for our online marketplace, to engage and sign-up refugees living in informal settlements. As part of this outreach we would partner with Scalabrini, a leading refugee and migrant agency based in Cape Town. This outreach would be coupled with the launch and scale-up of new and current services on our digital online marketplace, that are typically delivered by migrants and refugees. In South Africa this includes services such as hairdressing, nail technology and tailoring. Once the services are online WOM would also launch a dedicated peer-based learning programme for refugees. A programme where female micro-enterprises come together once a month to share learnings and experiences. As part of this fora, we would provide them with the opportunity to meet key business leaders and key stakeholders to raise up their voices.

WOM has spent the last two years dedicated to improving the quality of life for women and girls through innovative use of technology. We have supported hundreds of informal businesses and female informal entrepreneurs (Members) to double and/or treble their income every month. With nearly all of our Members, being mothers, and often being the sole breadwinner, the income they earn with WOM not only impacts the mother but also impacts the quality of life of their children, often young girls. If we were to be successful in winning the prize then we would further scale-up our on-demand digital marketplace, to support an additional 200 Members. The marketplace works by unlocking the potential of the local informal economy, connecting Members with customers who couldn’t previously find or trust them. WOM would also support these women with its supply chain initiative that allows Members to order supplies not available in informal settlements. Orders are made online, and delivered to their doors, saving them time and money, as they no longer have to travel long distances (+50 km) and we are able to negotiate group discounts on their behalf. In addition to the supplies and market access, WOM would also launch a peer-based learning programme, called Abafazi Abazimeleyo (the women who own who they are). In this programme female micro-enterprises would come together once a month to share learnings and experiences, while also providing them the opportunity to meet key business leaders and key stakeholders to raise up their voices.