Interview with Ravindra Kumar, COO of SMSCountry/160by2.com

SMSCountry is a 4+ year old startup based out of Hyderabad.

SMSCountry started as a short messaging portal and has expanded in other areas too (like Bulk SMS gateway/free SMS services, i.e. 160by2.com etc.)

Here is our interview with Ravindra Yerramsetti, Chief Officer at SMSCountry. If you have more questions for Ravindra, please leave them in comments section.

Please tell us more about SMScountry/160by2 and the founding team.
More than four years ago Satya and Raju (co-founders) formally launched SMSCountry as a short messaging portal, after a year of background work. Satya’s entrepreneurial spirit and Raju’s technology excellence ensured that the company survived incredibly tough first few years of its existence.
Today SMSCountry is among the leaders in providing effective, efficient and responsive two-way SMS text messaging software applications (desktop tools).
We are also a services provider (SMS aggregator) for wireless communication. SMSCountry’s Bulk SMS gateway services are integrated seamlessly with global mobile carrier networks and global mobile phone users around the world. We have an unmatched capability to deliver SMS’es to 550 networks in 200 countries.

SMSCountry is operating on wireless technologies since 2003 as a short messaging portal. We are already serving over 600,000 registered online users worldwide. A fast growing number of blue chip and high tech corporate customers in India, Middle East and rest of the world use our services.

Along with our excellent delivery capability our strength lies in the tools that we provide that allow our users to automate delivery of SMS text messages around the world. Our Microsft Excel and Microsoft Plugin, along with SMSCountry Desktop application are hugely popular amongst our large user base.

SMSCountry’s SMS Gateway is designed to integrate seamlessly into any software system or application within a few minutes. This is done via Application Programming Interfaces using generic protocols like HTTP, XML, FTP, SMPP and COM objects. SMSCountry also provide customized application development services relating to Mobile and SMS space.

Earlier this year SMSCountry conceived the business model around 160by2, and launched a beta service on 1st May 2007, after a hugely successful pilot in March-April 2007. 160by2 is the ‘Next Step’ in mobile marketing wherein the users themselves opt-in to carry advertisements in their personal SMS. Out of the 160 characters available for SMS, users can send Free SMS of upto 80 characters and advertisers can append a contextual ad in the remaining 80 characters.

What was the idea behind starting 160by2?
During the 4 years of running SMSCountry, we came across a huge number of customers who were asking for free SMS. Initially we ignored them but as the number increased we realized that there is a genuine need and developed following insights even as SMSCountry business was growing healthily:

  • Users find it easier to send Short messages from their PC as it is easy to type – easy on thumbs
  • Users are apprehensive about using their credit cards online fearing misuse – threat of fraud
  • Low credit card penetration and lack of quality payment gateways in India – eliminates large proportion of users

Brands & media companies are trying to reach their consumers on mobiles in mobile dense countries like India. These advertisers prefer targeted advertising capturing the users’ attention. Traditional advertising channels like TV, Radio, newspaper, billboards etc do not capture consumers’ complete attention.

Internet solves this problem to some extent when relevant ads are served in context of intent from the consumer in the form of search, but the problem is the Internet penetration in developing countries (predominantly Asia). Most of Asian countries have low Internet penetration but very high mobile penetration with high SMS usage.

Trying to address these problems & combining the needs of consumers and advertisers, the idea of giving half screen (160/2) to both parties, originated.

We are unique for both our audience groups:

  • The User: Clean, intuitive and fast service, with easy to use features (like intellitext etc)
  • The advertiser: The ads are powered by our Smart Match Ad Server Engine that appends contextual ad to user generated messages- based on profiling as well as context of conversation

Please share about the founding team/their work experience prior to starting up.
Please check http://smscountry.com/team.asp

How do you manage the operations across the several countries that you are operating in?
SMSCountry operates in a global operating model. We procure and service a large proportion of our business though our website www.smscountry.com. This eliminates the need to have physical offices in all the geographies that we operate in. We have a customer support team based out of our Hyderabad office in India. This team is available 24X7 on phone, email and chat to support our users all around the globe.

In early 2007 we set up a physical office and a wholly owned subsidiary in UAE. We have a business development team led by a Country Manager in the UAE. Overall operations are managed from our India office.
We are planning to set up similar business development and operator liaison offices in our focus markets like Hong Kong, China, Singapore, Malaysia etc. This strategy is working well for us in UAE resulting in explosive growth in our Middle East business.

It pays to be closer to our customers and partners like telecom operators.

If possible, please share some of the customer usage/numbers of 160by2 (esp. how are customers using the service?)
As of 15 July 2007, we had 22K plus users, with an extremely high proportion of active users. Right now we are adding more than 500 users per day.

We are quite encouraged and pleased about the way the customers are using this service. Almost 98-99% of our users are using 160by2 service to keep in touch with their families and friends.

Students are using our service to keep each other informed about impending quizzes, project submission or a last minute lecture. NGOs are using this service to inform their field staff about the venue and timing of the evening meeting. The usage pattern is that of typical sms conversations – sharing news, views, jokes, greetings and plans.

Are you guys planning B2B services as well?
Our SMSCountry’s flagship business is primarily B2B. This is a fully paid model. A vast majority of SMSCountry business comes form enterprise customers. We have banks, media companies, financial securities companies, retailers etc as our enterprise customers. This is a high growth business for us, and we expect it to grow at the same pace for next couple of years, at least.

There are no plans to offer 160by2 services as B2B service, as it does not make sense for B2B communication to be supported by advertisements.

You are focusing only on SMS services – Isn’t that a high risk? Or do you plan to move to other services as well?
What you perceive as high risk is actually our biggest strength. We have been in SMS business for more than four years now. We know the business and technology inside out. This is what differentiates us from the competition. We have the ability to develop simple technical solutions for complex business problems in this space. We know what works, and what does not. We are highly aware of issues and legalities of this space.

It is easy for us to diversify into related businesses like content, ring tones, games etc. But we deliberately avoided that path. We are in a high growth space.
We have two revenue streams to focus on: enterprise business –SMSCountry.com and retail business –160by2.com. Both these revenue streams are poised for explosive growth and demand management, technical and other resources.

In order to maximize return on our resources, currently we are focusing on these two revenue streams only, and doing what we do best!

Services like 160by2 tend to short circuit the operator channel -Do you see some backlash in the near future?
On the contrary, 160by2 is contributing to operator revenue. Most of the operators that we have talked to, expressed concern that while their voice revenue and infrastructure is maxed out, their data infrastructure is underutilised. Service like 160by2 is providing increased SMS traffic/revenue to the operators with no additional cost or effort for them.

We deliver SMS free for our users; the operators are still getting their revenue. We are paying for it, making our margins from advertisers.

But we have real big dreams. And those cannot be realized without actually partnering operators. We are in discussions with several operators. They are supportive of our business model, and have highlighted the areas they currently see as issues. We are working on those issues, along with proving the success of model in medium term.

Ultimately, for mobile-to-mobile free sms as well as any Location Based Services (LBS) operator cannot be bypassed. And operators are more than happy if we can help them get additional revenue without too much effort from their end.

For some reason a lot of people see operators as ruthless behemoths who do not care for customers, partners or innovations. We do not see it that way. We believe if we can show value to them they are as nice to work with as any other progressive business.

How do you plan to compete with biggies like way2sms?
Well, we would not like to comment on any competitor in specific. We believe that we are a clear leader in this space and will continue to do so. Some players may claim to have a higher user base than us currently.

But ultimately the quality of users, the pattern of usage, ease and quality of service, ability to interface and work with advertisers, and finally ability to lead and innovate will separate out leaders from the followers.

We are seeing an astonishing growth in our user base. We are quite pleased with usage pattern, and are receiving terrific feedback from our users. We will grow at a pace at which we are comfortable rather than being influenced with our competitors’ growth.

At this point in time we do not plan to grow in any way other than viral growth. We are about to reach a critical mass and we do not need to rush to acquire users faster than the speed at which we are acquiring them now.

We believe we have some of the inherent strengths in our business that will provide us a competitive edge:

  • Focussed Approach – We have a clear strategy to focus on our 160by2 and SMSCountry business. Without a clear strategy and much understanding of the space you can try to do everything. You can sell ring tones, bollywood content, mobile games and all kinds of stuff on the back of 160by2 model. But will this survive and provide a comparative advantage – definitely not – that’s what we believe.
  • Early Leaders – Mobile advertising is a nascent field all over the world. People are still trying to identify the winning trends. Everyone agrees that Mobile Advertising has a huge potential but no one has come across a model yet that effectively captures the advertising potential of this medium. Through first mover advantage we are aiming to develop a winning position in this industry.
  • Team – We have got extremely talented young folks who are highly motivated and want to make a mark in the industry. This we believe will separate us from competition in long term. Our management team consists of individuals with diverse experience.
  • Transparency and Honesty – The name of our service and homepage of our website is a testimony of our resolve to be completely transparent and honest to our users. We do our best to communicate to our users that our service is free to user as it is funded by advertisement. So before sign up they know that they would be sending an 80 character SMS where remaining characters will carry a commercial ad. There is absolutely no plan/intention to mislead the user.
  • Understanding of SMS business: By virtue of our SMSCountry background we have in depth understanding of SMS space – especially the user behaviour.
  • Technical Excellence – Again by virtue of our SMSCountry background we understand every bit of technology behind SMS. Unlike most of other SMS service providers our gateways are not bought off shelf but developed in-house. This allows us to be develop customized solutions for ourselves

Please share your funding status.
We have not raised any funding so far. We have a profitable business running at SMSCountry. 160by2 service is being totally supported through internal accruals from SMSCountry business.

Services like 160by2 are prone to abuse/spams. How do you take care of this?
Spam prevention is definitely a challenge in this space and we think we will face it soon. Spamming/Marketing through SMS is fast assuming a huge nuisance value. The USP of our advertising platform lie in the premise that ads are appended to the communication happening between two people who know each other. A free service can be an easy target for spammers.

That’s why we have a very strict anti spamming policy and are investing heavily to evolve our automated Anti Spam Purge System (ASPS) to make sure that no user is able to misuse the system.

ASPS flags potential spammers in real time. Our 160by2 support team accordingly analyzes the situation and acts on it. So far we have been highly successful in blocking the spammers in real time. We can proudly and legitimately claim that over 99.5% of messages served at 160by2 are not spam.

Our technology team has built quite a logic and intelligence in the ASPS. We are constantly evolving it as we go along. Our current focus and investment in ASPS is to ensure that it scales up big time before we see a huge growth in SMS volumes.

Please share some of the future services/features that SMSCountry users should look forward to.
First thing that 160by2 users can look forward to is a new look website. A lot of positive feedback that we have received is around the simplicity and ease of use of our UI.

But our UI designers were still not happy. In pursuit of nirvana they are redesigning the website as we roll out some new features like facility to schedule a message, reply/forward a message from the website, backup/archive your messages both on the website and mobile, Group SMS facility enabled both from website and mobile etc.

And this is the biggest challenge we have right now with respect to our users. How do we roll out new features without affecting the simplicity that users love! So keep watching the space for new look 160by2.com and let us know in plain and simple terms if we meet your expectations!

Also see: Permission Marketing – New mantra in mobile advertising.

tags: smscountry, 160by2, startup interview

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