How do mxit work

The average user now spends 85 minutes a week using Mxit and logs on up to four times a day. Knott-Craig says the statistics prove that the growing popularity of mobile internet has transformed the way people communicate across Africa. He added: "In South Africa 17 years ago, before mobile phones came along, there were five million phones out of a population of 35 million people.

Now there are 60 million phones out of a population of 60 million people. We have no legacy. You'll never build a big business by billing people via credit cards in Africa and probably in all emerging markets, and again that problem is being solved within an African context by trying to build the systems to sell prepaid airtime.

The next step is to unlock the economic grid via mobile payments. Read: Seven ways mobile phones have changed lives in Africa. So how does Mxit make money?

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But what lessons can your startup learn from its demise? Mxit was the pioneer globally in mobile messaging, that much is certain. But its initial success was based on usage of feature phones at a time when this was the norm in South Africa and elsewhere on the continent. It was woefully unprepared, it seems, for the swift uptake in smartphones, which has increased at exactly the same time as usage of Mxit has decreased.

On old Nokia mobile phones, Mxit was the boss. When it came to moving into the smartphone era, frankly, it stank. Though it eventually released Mxit 7, which aimed to bridge the gap between feature phone and smartphone, it was too late, as more recent entrants to the mobile messaging scene such as Facebook, WeChat and WhatsApp had already stolen its thunder.

This point is linked to the previous one, but there is more to it than simply being unable to move with the times sufficiently in a market where technology changes almost by the day. Mxit hit the market well before the major players mentioned above, but moved too slowly, and failed to take advantage of its first mover advantage.

While its user base grew to sizeable proportions in South Africa, it was ponderous in reaching other markets. Expansion would have obviously increased its user base, but also served as an excellent marketing strategy, increased interoperability between users in different countries, and boosted revenues. As it was, Mxit was far too late in making efforts to scale internationally — in Nigeria and India — and these efforts were in any case low-key and insufficient when it came to winning market share.

The result was it squandered its first mover advantage, and ended up losing ground to those that came later. The confusion is clear based on just a few numbers.