This month ‘Branch Out’ chats to Lungisa Matshoba, co-founder and CTO at Yoco, a Fintech venture developing mobile solutions to help small businesses grow via their card readers, app and business intelligence portal. Together with CEO and co-founder Katlego Maphai, CFO Bradley Wattrus and CBO Carl Wazen, Lungisa and the Yoco team have crossed the hurdles of getting a tech start-up off the ground, and 3 years on they are going from strength to strength.
How did you and the other co-founders meets?
I met Katlego first. He introduced me to Carl Wazen who he worked with at Delta Partners, a telecoms advisory and investment firm, as well as Bradley Wattrus who he worked with at Rocket Internet, a German incubator for online startups. Katlego and myself first met as children in Cape Town, and later reconnected at UCT where we both studied Business Science.
What was the toughest part about starting a tech venture?
Yoco is a business that operates at the intersection between technology and banking, and in many ways the hardest parts of Yoco have been related to this. We could have taken many shortcuts along the way, but in the end we decided we wanted to be able to contract directly with our customers, and this meant that we needed to have a very unique relationship with our banking partner. It took us a year to get this relationship, and the uncertainty of this year was probably the toughest part, because we had to keep our eyes on the prize with a very uncertain future.
The mobile payments space has become quite competitive. How does Yoco stay ahead of the rest?
We focus on the customer and what the customer needs. Everything else is just noise, and I think we have gotten very good at avoiding the noise. This has allowed us to build a business around the fundamentals, and these fundamentals matter to customers.
Can any business use Yoco?
Yes, indeed any business registered in South Africa can sign up for Yoco, and further to that we also allow private individuals to sign up and use our service as sole traders.
How do you deal with fraud/security to ensure safe payments?
This is an area that has been one of the key focus areas of our data and product teams. Together they have created some innovative solutions that have allowed us to stay ahead of would-be fraudsters. Yoco has a view that fraud is not something that you can vet out, but rather something you have to use good data and algorithms for to detect and prevent on a transaction-by-transaction basis.
What channels are key to your marketing strategy?
We make strong use of digital media to reach specific segments of our customer base, and offline channels to reach others. This is based on a strong understanding of the communication needs of businesses at different stages and of different sizes. To date social advertising has proven to work really well, specifically when supported by other more conversion-centric channels. Building strong brand awareness and pairing that with a good supply of opportunities that allows our target base to convert.
How do you work with performance marketing?
We try not to make any assumptions but rather focus on experiments designed to understand how best to optimize our ability to reach customers. We also pay special attention to keep our strategies fresh and constantly review what the data is telling us to better understand the nuances that it reveals.
Any advice for aspiring tech entrepreneurs?
Understand your customer, and build solutions that fit their needs – this is a minimum requirement for building a great business. But also remember that on it’s own that is not enough. The best product without a good distribution and marketing strategy is not likely to crack the market. Further to this, you are not likely to reach this strategy without a fair degree of effort, time and some carefully learnt lessons from the mistakes you will make along the way. Innovate not only in your product, but also in how you sell it.
To download the Yoco app: