Former Mxit CEO Alan Knott-Craig said misunderstanding what Mxit really was, and not building a modern smartphone app from scratch, resulted in the demise of the messaging platform.
Launched in 2003 by Clockspeed Mobile, Mxit offered an affordable alternative to costly SMSes for people to communicate over mobile networks.
The application was particularly popular among teenagers and for most of them it was their communication platform of choice.
Described as Africa’s largest social network, it attracted the interest of large investors, including Naspers which acquired a 30% stake in the company in 2007.
Mxit experienced explosive growth in the 2000s. By 2012 the platform had over 10 million active users and between 35,000 and 50,000 new registrations per day.
The majority of Mxit users were between 13 and 24 years old. In fact, only 10% of users were older than 35.
World of Avatar, backed by former FirstRand executives Paul Harris and GT Ferreira, acquired Mxit in 2011 with big plans to create a world-class social network.
Mxit was headed up by Alan Knott-Craig Junior, the founder of World of Avatar and former iBurst managing director.
While the growth following the acquisition remained strong, Mxit started to face increased competition from BlackBerry Messenger (BBM) and WhatsApp Messenger.
Another blow for the company was Knott-Craig’s departure in October 2012 due to a “difference in strategy with the company’s shareholders”.
Francois Swart assumed the role of interim CEO at the company and Mxit started to retrench employees due to lacklustre financial performance.
Former FNB CEO Michael Jordaan was appointed as chairman of the Mxit board in September 2013, but by then the platform’s fate was sealed.
WhatsApp and BBM gained rapid adoption in South Africa while Mxit lost users. Independent research showed the number of monthly active users on Mxit had fallen to 2.7 million by 2015.
In October 2015, Mxit announced it was shutting down commercial operations and donating all of its intellectual property and technology assets to The Reach Trust.
Mxit’s active monthly users had dropped to 1.2 million when it closed its doors. At the time, WhatsApp had 10 million users in South Africa, and Facebook 13 million.
In a statement regarding its decision, the company said the success of cheap smartphones put Mxit, which did not have a decent version for smartphones, on a downward spiral that was impossible to come back from.
Knott-Craig confirmed it was a mistake not to develop a modern smartphone app in a recent interview with WorldView.
Speaking about the decline of Mxit, he said they saw WhatsApp coming, but tried to evolve the feature phone app into a smartphone app.
“We should have started from scratch to build a world-class Mxit smartphone app,” he said.
Another problem was that they did not realise wat Mxit really was – a place where people met others.
“At the core we just did not understand what Mxit was,” Knott-Craig said.
“It was a true social network in the way that it let people meet one another. You had chatrooms where people met each other and take it offline.”
In retrospect, Knott-Craig said Mxit was a dating app. “Mxit was a way for people to meet people.”
People could be whoever they wanted to be on the platform by using an anonymous name and an avatar of their choice.
“You met other people on the same basis and did not judge one another on your appearances,” he said. “Through Mxit, people became friends and fell in love without any preconceptions.”
“It was most probably the first version of Tinder, and we did not understand that properly.”