“Former Mxit chief executive Alan Knott-Craig Jr has reflected on strategic errors, competitive pressure and business-model difficulties that contributed to the decline of South Africa’s once-popular mobile messaging platform. His latest venture, fibertime, illustrates how lessons from earlier setbacks can inform a new business model aimed at expanding affordable internet access in underserved townships.”
South Africa’s entrepreneurship lessons: Why Mxit’s decline matters for the next generation of technology founders
A defining moment for South African entrepreneurship
South Africa’s technology sector has produced ambitious businesses capable of changing how people communicate, work and access essential services. However, building a successful company requires more than attracting millions of users. Entrepreneurs must develop sustainable revenue models, respond to competition, make sound strategic decisions and build organisations that can adapt as markets change.
The experience of Alan Knott-Craig Jr, the former chief executive of Mxit and founder of fibertime, offers a useful case study in these challenges. In a Moneyweb report published on 12 October 2026, Knott-Craig revisited the decisions that contributed to Mxit’s decline and discussed his subsequent entrepreneurial journey.
His experience illustrates a central lesson for South African business owners: early success does not guarantee long-term survival, and setbacks can become valuable sources of knowledge when entrepreneurs examine them honestly.
Mxit’s rise and the opportunity in mobile communication
Mxit became a prominent South African mobile messaging platform during a period when internet access was more expensive and less accessible than it is today. For many users, particularly younger people, the service provided an affordable way to communicate digitally.
Its popularity demonstrated that entrepreneurs could develop technology products suited to local conditions rather than simply copying business models from international markets.
Mxit’s growth also highlighted the importance of understanding customers. Users wanted accessible communication, low costs and convenient ways to connect with friends. By addressing these needs, the platform built a recognisable brand and a substantial audience.
Nevertheless, an extensive user base does not automatically translate into a profitable business. Technology companies must determine how to generate sufficient income to cover operating expenses, maintain infrastructure, invest in development and compete for customers.
That challenge became increasingly important as international messaging services entered the market.
Competition and strategic mistakes
According to the Moneyweb report, Knott-Craig acknowledged underestimating the competitive threat posed by WhatsApp and other American technology companies. He also reflected on strategic decisions that prioritised the platform’s identity as a social network and on difficulties associated with an attempted prepaid-airtime business model.
These reflections demonstrate why entrepreneurs need to monitor competitors continually. A product that performs well in one market environment can lose its advantage when customer expectations, technology and competing services change.
International competitors may also have access to greater financial resources, larger development teams and extensive distribution networks. South African startups cannot always compete with these advantages through advertising or product improvements alone.
Instead, founders need to identify defensible strengths. These may include specialised local knowledge, lower operating costs, trusted customer relationships, superior service or a business model that international competitors find difficult to reproduce.
Mxit’s experience also suggests that strategy must be tested against commercial realities. A company can have a popular product yet struggle to generate sufficient revenue from it. Entrepreneurs should therefore examine customer willingness to pay, acquisition costs, retention and operating margins from an early stage.
Leadership, governance and shareholder relationships
Entrepreneurship involves more than developing products and finding customers. Founders must also work effectively with shareholders, employees, investors and business partners.
Knott-Craig left his position as Mxit’s chief executive in 2012 after disagreements with shareholders over the company’s direction. The episode illustrates how differences in strategy can complicate a company’s ability to respond to competition.
When founders and investors disagree about priorities, decisions can become delayed and management attention can shift away from customers. For a technology business facing rapidly changing competition, such delays can be particularly costly.
Entrepreneurs can reduce these risks by establishing clear responsibilities, transparent reporting procedures and agreed measures of success.
Investors should understand how management intends to grow the company, while founders should recognise that outside capital often comes with expectations regarding performance and accountability.
Good governance does not eliminate disagreement. Instead, it creates processes through which disagreements can be resolved without undermining the organisation.
Knott-Craig has described governance as an area of personal weakness. His subsequent decision not to serve as fibertime’s chief executive reflects the importance of recognising that different stages of a business may require different leadership strengths.
Learning from failure instead of abandoning entrepreneurship
The collapse of a business can damage a founder’s reputation, finances and confidence. Nevertheless, business failure can also expose assumptions that need to change.
Entrepreneurs who review setbacks objectively can identify mistakes involving pricing, customer research, hiring, marketing, partnerships and financial management.
For example, a startup might discover that customers enjoy its service but will not pay enough to sustain operations. Another might find that its marketing attracts attention without producing repeat purchases. A third could discover that rapid expansion has increased costs faster than revenue.
Each situation requires a different response. Sometimes the solution is a revised pricing structure; sometimes it involves targeting a narrower customer group or changing the product altogether.
The important principle is to distinguish between a failed strategy and an unsolvable customer problem.
Founders should collect evidence, identify the causes of underperformance and make deliberate adjustments. They should also establish financial limits that prevent an unsuccessful experiment from consuming the resources required to keep the business alive.
For South African entrepreneurs, where access to capital can be difficult, disciplined experimentation is especially important.
Fibertime and the opportunity in township connectivity
Knott-Craig’s more recent venture, fibertime, demonstrates how an entrepreneur can apply experience from one industry challenge to another.
Launched in December 2022, fibertime offers uncapped fibre internet on a pay-as-you-go basis, with access priced at R5 per day, according to Moneyweb. The model targets households that may find conventional monthly broadband subscriptions difficult to afford.
The company addresses a practical market problem: many households need reliable internet for education, communication, entertainment and economic participation but face financial or infrastructure barriers.
A pay-as-you-go approach can make the service easier to access for customers who prefer to manage connectivity expenses in smaller amounts rather than commit to a recurring monthly payment.
The opportunity extends beyond individual households. Affordable connectivity can support informal traders, home-based businesses, online sellers, tutors and other small enterprises.
For example, a township retailer may use internet access to communicate with suppliers, promote products through social media, accept digital enquiries and manage customer orders. A student may use the same infrastructure to access learning materials or develop digital skills.
However, a connectivity business must still manage installation costs, network reliability, customer support and infrastructure investment. Affordable pricing only remains sustainable if the business can deliver its service efficiently and retain customers.
Growth creates new management challenges
Moneyweb reported that fibertime had connected more than 600,000 homes and operated across 68 townships in seven provinces, according to Knott-Craig. These are figures attributed to the entrepreneur in the published report rather than independently verified measurements here.
Such reported growth illustrates the scale that a business can pursue when its offer addresses a clear customer need.
Nevertheless, expansion introduces new challenges. A company serving hundreds of thousands of households needs dependable systems for billing, technical support, network maintenance and customer communication.
Management must also ensure that growth does not weaken the quality of the service. Poor reliability can quickly damage trust, particularly where customers depend on internet access for income-generating activities.
Entrepreneurs should therefore measure growth alongside customer satisfaction, repeat usage, service availability and financial sustainability.
Expanding into new locations may create opportunities, but it also requires an understanding of local demand, installation costs and the practical conditions affecting customers.
What aspiring South African entrepreneurs can learn
Mxit’s history and fibertime’s reported progress offer several lessons for emerging business owners.
First, understand the customer problem before investing heavily in a solution. Entrepreneurs should speak to potential customers, test demand and determine whether people are willing and able to pay.
Second, build a realistic business model. Revenue must eventually support operating costs and future investment. Popularity, downloads and social media attention are not substitutes for financial sustainability.
Third, monitor competition. Founders should regularly examine changing customer behaviour and new products that could make their offerings less attractive.
Fourth, establish sound governance. Written agreements, clear responsibilities and transparent financial reporting can help prevent disagreements from damaging a business.
Finally, treat learning as a continuous process. Entrepreneurs should be prepared to revise assumptions when evidence changes, seek advice where their expertise is limited and recruit people with complementary skills.
These practices are relevant not only to technology startups but also to retailers, manufacturers, service providers and small businesses operating in local communities.
Conclusion: Building businesses that endure
The story of Mxit remains significant because it demonstrates both the possibilities and the risks of technology entrepreneurship in South Africa. A company can achieve widespread recognition and still struggle when its strategy, revenue model or competitive response fails to evolve.
Knott-Craig’s subsequent work with fibertime provides a contrasting example of an entrepreneur pursuing a practical infrastructure challenge with a different commercial approach.
For aspiring founders, the broader message is not that every failed business can be rescued or that every new venture will succeed. Rather, lasting entrepreneurship requires a combination of customer understanding, financial discipline, adaptability and capable leadership.
South Africa needs businesses that can create jobs, solve everyday problems and expand access to economic opportunities. Achieving that goal will depend on founders who learn from past mistakes while building organisations equipped for future challenges.
The next generation of entrepreneurs can draw inspiration from successful ventures, but they should also study business failures carefully. Ultimately, sustainable entrepreneurship is not measured only by how quickly a company grows. It is measured by whether the business continues delivering value to customers, supporting its employees and creating economic opportunities over time.
