Building Smart Businesses on WhatsApp - Peter Adolphs - AskMandla

Greg Stewart: Welcome to No Free Lunch, freshest business and tech podcast. With me, your host, Greg Stewart. And with me in the studio today is a serial entrepreneur, somebody who's founded several tech companies and be involved in ⁓ whole entrepreneurial journey that we're going to hopefully dive into a little later. ⁓ with me, I'm very pleased to have Peter Dolphus.

And Peter is the co-founder and CEO of AskMandler, a South African fintech startup. Based in Stellenbosch. Welcome to No Free Lunch, Peter. Peter Adolphs: It's great to be with you, Greg.

Thanks so much for having me. Greg Stewart: So Peter, Mundler is a a really interesting business concept and I'm really glad that ⁓ we came across your company and it it with a segment of the marketplace that is is not often focused on. ⁓ And that is the domestic worker environment in South Africa, ⁓ well particularly the domestic worker environment. We'll we'll get into a discussion around that later.

But essentially you've developed a platform on WhatsApp. ⁓ And the WhatsApp as I understand ⁓ it, is offering full service ⁓ HR employment journey, with all of the legal requirements and bits and pieces, all built on WhatsApp specifically for the South African domestic worker market. And that's quite amazing. So welcome to No Free Lunch, and I hope we get to ⁓ Get some great insights for you along the journey.

Peter Adolphs: Absolutely, yeah. Greg Stewart: I'm gonna I'm gonna kick back there a bit. you're a serial entrepreneur, you've started several other fintechs along the way, you've had that old journey, and ⁓ I think the last one you had ⁓ you landed up selling to ⁓ a multi-choice or or something like that. and now into ⁓ a completely different market.

First of all, can can tell us a bit about your journey? ⁓ what drove you through all of those different things? Are you just a absolute entrepreneur nutter and ⁓ you know, always looking to build the the next best thing? What drives you in the morning?

Tell us a bit about that journey. That's important for people to hear. Peter Adolphs: Thanks, Greg. I think what's a big thing for me is that, ⁓ love ⁓ tell people this is, you ⁓ love this country, I love living here, and I love being involved in things that are ⁓ least trying to make a big impact in country and ⁓ hopefully us to continue living here, for my kids to continue living here.

It's a big driver in all ⁓ that involved with. So, 100 % correct. So a couple of the big initiatives that have been part of this previously are big wifi deployments up in Chwane, some with the likes of Eleanor Craig Jr. with the Chwane wifi project and also up in the Puyper with Facebook and those kinds of projects that really trying to make, have made a big impact on information.

technology and getting people access to information. And the next was, and that's just landed in my lap by chance, by being involved with those other project was Nomola, which is South Africa's largest safety application, which is trying to make a massive impact in the safety space, ⁓ keeping African space ⁓ safe ⁓ getting access to help when they need it. And I was there for about 10 years and it really showed me the ability that technology has these days to make a meaningful impact on the lives of ordinary citizens.

⁓ I mean, we went through the ⁓ struggles of any startup there. We managed to ⁓ up a massive following through just ⁓ freemium model and just ⁓ the fact that people are concerned about safety in South Africa. And, you know, I think it showed the potential, which is why I think it led to the successful sale to multi-choice back in 2022. And I worked within that space for a while and exited in March last year.

And I really had the intention of not, you know, I was like, you know, I'm an avid cyclist. was like, you know, I want to sit back, see what Greg Stewart: Yeah. Peter Adolphs: you know, what else is happening in the country? And I'm just going to go ride my bike for three months.

And yeah, that wasn't what happened. A very good friend of mine, now a partner in this Ask Man LaVenture, by the name of Samuel Clark, ex-CEO of Scanamo, said to me, look, there's two great people, McCain Berman's Janine and Roger, who've got this application called Shasha Loza, and it's there to try and bridge this. that lives in the domestic space because the numbers stack up, just about all domestic employment is very informal. And they've built this application and they're struggling.

They ran into typical building challenges, expensive, breaking whole time. Can you go and just have a chat to them and see if you can impart some wisdom on them? you now that you've got some free time. Anyway, we were both in, we were all in St.

Francis Bay, we happened to be there at the same time, went in and had a chat with them. And I was like, jeepers, these are great people. And this is actually the penny dropped, this is actually a massive opportunity because there are, you know, the number of domestic workers that in the lives that could be impacted with the solution that really as the mission of the business. what it is trying to bring this really informal employment sector and trying to pull it into the formal economy.

The light bulbs just went on for me. And that's what we started discussing. How does this really happen? Which I said to them, look, the first thing is apps are never going to, they're not going to get any cheaper to make.

And we really need to do something that takes this solution to the market where they are. And you know, Sam and I discuss this hard and we said, look, WhatsApp, everybody in South Africa, just about everybody in South Africa has got WhatsApp. If you've got a smartphone or even, you know, even some of the dumb phones these days all have access to basic version of WhatsApp. We've got to develop this thing on WhatsApp.

So that's kind of where it all started. And it's been a fantastic journey to date. Greg Stewart: Yes. So just in terms of that, mean, we you started off at something that would just provide a a solution for essentially a legal contract that is required.

and it's very difficult. I mean, people, you know, who hire domestic workers often have no sophisticated or or perhaps ⁓ limited ⁓ knowledge of HR processes and labor laws and all these sort of things. but it does create challenges. you've moved beyond that though, haven't you?

you've dipped into a bit of your fintech experience and and so on, and you've given that a much broader platform of products and services. You wanna tell us a bit about some of the other services? I believe there's like a a small a micro loan type facility and so on. Tell us about the other services that you add in on.

Peter Adolphs: So look, the compliance is very much the wedge. It's the thing that is obviously for everything else that we intend on doing, the requirement that we need to get in place. we wanted to make this as easy as possible. So if you can chat to somebody on WhatsApp, you can engage with AI Bot and it has the tool set to do everything from onboard you to set up your contract.

with you and your employer all through a WhatsApp conversation. There's no physical signing of any documentation. You're literally agreeing to a contract within the WhatsApp chat. what that does, it sets the basis for the legal requirements.

So if you employ someone for more than 24 hours in a month, you're legally required by the BCEA to have a ⁓ written contract. You're legally required to pay UIF and you should be giving them a payslip. ⁓ This solution and the compliance and HR component of it does all of that. So it sets up that contract.

It sets up the UIF or at least gets us to the place where we can start registering for UIF on your behalf. It sets up the payroll infrastructure, which we then facilitates on a monthly basis. So we ensure that your salary comes in, that we're paying it at the right time. And then very importantly, which is, you know, phenomenal for someone who's for an employee who's been out of the formal economy for their entire careers.

They get this payslip, they get this record of employment, the dignity to say, look, I can now go and apply for things like credits or a home loan or whatever the case may be, because I can prove to you how much I'm getting paid. And here are my deductions and I'm legally compliant. So that is the basis of the solution. And it's the part that we We charge a subscription fee for to the employer.

So that's our current revenue model. But what we quickly found out is that, we thought it would quite, you know, sexy for an employer and that, everybody would be flocking to this thing because, it's something that they're supposed to do. the reality ⁓ and this is potentially a bit of a shortcoming, that, you know, the enforcement there of Greg Stewart: Yes. Peter Adolphs: of thereof in terms of the compliance from a governmental level is not very high.

So we don't have this massive drive, you know, and it's a bit of an honesty code from our side. And we had to think about, know, what we've effectively actually got to employ two customers. We've got we've got the employer who is currently our primary because they're the paying customer. But we know the future of this business really lies in the employee being our primary customer.

So how do we get there? Obviously, Greg Stewart: Yes. Peter Adolphs: We need to start thinking about services and products that we can sell to them and make available to them that they haven't had in the past. And that's exactly what you were referring to.

Where we're dipping our toe in is within definitely not the micro loan space yet, because obviously we need to get our, you know, we need to give an FSP license in place and make sure that we've got all our checks and balances sorted out on that front. But what we are doing is a thing called earned wage access, which is not new in South Africa. There are some very successful companies that are currently doing that through mostly on a B2B level through applications, the likes of a Pay Me Now or a Gem or these other big guys, but no one on a consumer level to the domestic workers.

And so what we've done and what we're able to do is we know that they've got a payslip, they've got the contracts in place. The salary component is de-risking Greg Stewart: Yes. Peter Adolphs: the advancement of this cash and we're able to facilitate before the 25th payday or the end of month payday, we're for them to access some of their salary early in order to take care of things that traditionally they may have had to go to a loan shark, a machinista or a friend or family to go loan from, often at exceptionally high interest rates, almost between 50 and 100 % interest from some of these guys.

Greg Stewart: Yeah. Peter Adolphs: They now have the ability simply to send our WhatsApp bot a WhatsApp message saying, listen, I need to buy some school shoes. I mean, they don't have to tell us what they need the cash for. They simply say, I need 500 grand please.

And the system, know, intelligently goes and checks against the current status of their account, the employer status of their payments. And it goes, absolutely, here you go within 24 hours, or they can actually even request an instant payment. Greg Stewart: Yeah. Peter Adolphs: that cash is in their accounts and gets deducted properly against their pay slip at the end of the month.

So it's all recorded, zero hassle for both parties. So it's a peace of mind for the employer and access to quick cash for the employer. It's amazing. Greg Stewart: Okay.

Just the the whole setup of the structure to me a bit. in terms of the employee and the So the employer's paying the salary. I'm assuming that ⁓ this works then on some sort of a ⁓ a money wallet type situation. Or how does that work?

Does the salary get paid over to you or how how does the deduction work, et cetera, Just explain that process because I think that's quite important for people to understand. Peter Adolphs: 100%. Yeah. again, and this might change in the future, what we are doing is creating and providing an end-to-end payroll HR compliance service ⁓ the base.

So on a monthly basis as an employer, you register with us. All the paperwork, well, the contracts, and obviously our T's and C's are included within that ⁓ set up front. We then bill you on a monthly basis ⁓ everything. So that's your employee salary.

your UIF and COIDA and whatever other requirements are due at that particular time. And then that sits within your wallet infrastructure. And then on ⁓ any leave deductions or EWA deductions, et cetera, which are obviously recorded within the system and then on the payslip. And we pay the salary at the right time to do the right bank account.

⁓ Obviously, these all These are all batched and done so that they sit and engulf at exactly the right time. And then all the ⁓ requirements, ⁓ the ⁓ payments and all that are also done through us on the employer's behalf. So it's really ⁓ to be ⁓ simple for a super low price. ⁓ Greg Stewart: so in that ⁓ I'm assuming the the needs to have a bank account and it need they need to obviously have a form of identification and so on.

If they do not have a bank account, how does that operate? Is there a a money wallet type situation? Peter Adolphs: there's two parts to this answer. today, ⁓ ⁓ ⁓ the early stage of this business, we are pretty specific right now on who we can cater for.

So right now today, you've got to have a bank account. Well, first of all, you've got to be ⁓ either a resident or ⁓ could legally have to be able to work here. So even as a foreign national, as long as you've got a work permit, we can facilitate it because in both scenarios, you're still required to pay UIF as an example. So got to have a bank account, you've to be registered and have a legal ID, etc.

⁓ then ⁓ facilitated to a bank account. What we are very cognizant of, and as we are growing and engaging with more potential customers, ⁓ are spotting those gaps. So what we know is that there are obviously those that ⁓ unbanked. that either choose to be unbanked or choose not to want to engage particular tools and And we've got to start looking at a cater for those.

So we are in the process at the ⁓ moment. ⁓ are setting up a wallet infrastructure that ⁓ obviously house everything, the salary components and then also the give the customer on both ends, so the employer and employee access to the wallet to manage and then also access to the various products that we intend to look at offering in the future once we are able to offer things like microfinancing, microloans, looking into healthcare. We're looking into partnering with other organizations, whether it's the likes of an easy equities where we can actually offer microinvestments for these guys so that they can start.

Because something that we get on a regular basis is, why don't you just keep aside 500 around a month for me and then give that to me at the end of the year so that I've got a little nest egg at the end of the year, which is fantastic. the guys know they want to do it, but they also want to have and they've got the discipline, but they need the infrastructure. these are all things that we solutions that we are slowly but surely working into our development pipeline. So yes.

Greg Stewart: Yeah. Sure. Peter Adolphs: We are definitely looking at how we can cater for the unbanked as well. Greg Stewart: Okay.

and just interestingly, as we've been talking, my mind's been shifting to the fact that there's there's huge potential here for for s this product to be used for small businesses. and would there be any in terms of a small business using your operating system? It would provide exactly what businesses need, ⁓ in a one stop shop thing with full compliance, full registration, taking quite a lot of headache away from, you know, small businesses are the guys that are are starting off businesses are are already focused on trying to get their business going.

And so you know, often these things tend to eat into their time and focus. And ⁓ I I would imagine that the there's there's no reason why the system couldn't be used for small businesses. Peter Adolphs: 100%. So we're really testing that.

So the official answer is, if anybody asks, is we are focused on the domestic worker because we really do, know, we've, a fundamental goal of Ask Manley is that we want to bring the, what we believe. So the stats will tell you the 800,000 domestic workers in South Africa. Our numbers sit closer to double that. You we, Greg Stewart: Yes.

Peter Adolphs: I think there's a lot of domestic workers that are obviously unregistered or unknown of. So we know that we want to make that shift and get these guys contributing to the Friskas and contributing in a formal way. We've got cafes, when I say a cafe, we've got a paddle court, we've got a coffee roastery. all who are already utilizing our system and one or two others.

So we know that this is definitely something that is in demand for small business as well. What we find quite interesting, I had a great chat the other day at one of the events that I was at, is there are a large number of spousal shops in the informal settlements as well that employ up to 11, 12 additional employees. that they've got a great business. And, you know, we'd love to bring them, through this journey as well.

you ⁓ know, we start there or whether we continue down this road, once we have made a dent into the domestic market, we will be able to facilitate small businesses 100%. So we were thinking along the lines of, you know, even casual labor that you employ for, you know, building, ⁓ plumbing services, whatever the case may be, where guys are always on the move. Greg Stewart: Yes. Peter Adolphs: ⁓ You know, lot of your blue collar workers maybe where, know, a WhatsApp conversation would be the most convenient way for these guys to even short term contract the guys, you know, make the contributions that they need to make and then close it off when they're done.

So you're absolutely on the right track. Greg Stewart: Yeah, I think it's fantastic. And and this kind of innovation, obviously also has potential beyond the South African borders. You have very similar environments ⁓ right throughout Africa and and in other developing ⁓ economies, ⁓ where where there is such a great need for simple ⁓ tech driven that work on simple infrastructure like cell phones.

it's something that I I see great potential for right across Africa. So there's certainly opportunities there for Ask Manler. Peter Adolphs: Absolutely. We part of it a brilliant at the moment ⁓ an organization called Endeavour, whose ⁓ is very much on looking at the potential into the rest the continent as well.

mean, ⁓ promoting and helping ⁓ business small business in South Africa is obviously part of that. you know, so through those conversations. ⁓ we've started exploring what the potential does look like in both East and West Africa. And early predictions would suggest that the market is potentially double, if not even three times the size of what we have to work with within South Africa.

solutions within Kenya is potentially 2 million workers there. Definitely WhatsApp savvy. So... Greg Stewart: Mm.

Peter Adolphs: We're very excited about the potential of where this could go and make, you know, really impact across the continent. So it's a massive potential opportunity. Greg Stewart: Any last thoughts on ⁓ you know, we speak to a market where we support ⁓ business growth and entrepreneurship. Any last thoughts about taking on new projects and and and driving what is the secret source?

what do people really need to ⁓ tap into when they take on a new product, a new service like you have? Peter Adolphs: think it's key you often find this out the hard way is obviously making sure you understand the markets and ⁓ ⁓ of go headlong into developing the crazy ⁓ products and services before actually understanding ⁓ the customer needs and what they actually want. ⁓ when ⁓ did this, ⁓ I think ⁓ learned it the hard way through the other businesses I had. We set up a very MVP to start myself and my partner Janine.

It literally us sitting on a standard sort of WhatsApp solution pretending to be this big organization chatting between ourselves and copy and pasting chat GPT to make it look cool. ⁓ Really sticky tape and bubble gum. And slowly but surely worked out what resonated, migrated to third party solutions to stitch together a more ⁓ robust solution, which we worked with for about six to eight months, which is really great. to, you know, obviously continue that development.

And only now within the last two, ⁓ months, two, three months, have we really ⁓ expanding on the elements. Because key to this business is automating the process. It's got to be cheap and it's got to be quick and it's got to be easy. our, know, Stefan, our senior developer has done an exceptional ⁓ job of taking those processes that we've built, well, at least that we've tested and worked them into ⁓ this agentic solution ⁓ that into different tool sets when it needs to.

and literally automating the process. you know, we get our leads in at the top of the funnel. And our bot today has the ability to have a natural conversation with the potential customer, walk them through the journey, answer any questions, you know, take them through the entire onboarding journey, issue a contract to them, and that's all done. And then during the month, they'll come back and they'll get engaged.

to log their leave or come in for some earned wage access cash. it's, you know, we slowly but surely just adding on and adding on. But we didn't, you know, we didn't go dive in there and build all of that and then go and take it to market because, you you land yourself in a very difficult position where your overheads are massive and you've got no customers. And not to say that we're not sitting in it.

We have to scale this business is really about the numbers. We need large numbers, but Greg Stewart: Yeah. Peter Adolphs: At least we know what's resonating. We've got a fantastic, the customers that we have are super sticky.

Our churn rate's less than 2%, which is amazing for a tech business. And we are talking to them and asking them what's working, what's not working. So that's the kind of thing that I'd suggest any small business like this does in the early stages. Greg Stewart: It's good advice.

what the market needs and and even when you think you've really got a winner, even then, refine, check, refine, ⁓ make it make it viable for people. And and there's always that balance between cost and what it provides. And I think that's really wonderful advice for people who want wanting to start out new things. Peter, I I'm sure we could probably have another half an hour discussion on this stuff, but you know, the the people listening to the podcast get bored to to old guys like me talking all the time.

And so I to thank you for for joining me on No Free Lunch. It has been a great chat. I think it's provided some really nice insights. And I really want to wish you everything, you and your partners everything are the best.

I think it's a great concept and we'd love to see it ⁓ grow from strength to strength going forward. Period office, thank you very much. Peter Adolphs: Thanks, Greg. Thanks for having me.