my eternal caveat with most of my thoughts/posts, lest i repeat it over and over, is that most of the time they take birth in this innate gut feeling i get about things. my gut feelings are usually based on two things: (1) common sense – something surprisingly underrated and sadly, underutilized; and (2) being in the trenches for three years now. so today, a few gut checks on smsgupshup, funded partly by good friend and highly respected mentor ashish gupta at helion ventures (a la rakesh mathur/webaroo/junglee/ashish gupta connection? just calling a spade a spade, buddy).
smsgupshup is a group sms messaging service that allows users to basically create reply-to-all interest-based sms groups. so yeah, it’s along the lines of twitter, but less of a micro-blogging platform, more of a group messaging platform. the platform has boasted amazing growth, and claims to capture a significant chunk (4% – 5%) of the total sms traffic in india. the business model is basically ad-supported smses. recently, the company claimed to be doing about $150,000 (or about 75 lacs) per month in topline revenues. great. now what could be wrong with a business like this? well, in india, many things.
first of all, my sense is that smsgupshup probably suffers from the ‘garbage in, garbage out’ syndrome: basically, while we may question the numbers, it’s the content that i am wary of. most of the messaging must be promotional spam, semi-porn, bollywood, or cricket related crap; basically, a dirtier, sms-based ‘ebay india’ (excuse the analogy; only meant that today ebay india is not a true p2p exchange forum; more of a b2b, or b2c at best).
secondly, let’s analyze the revenue figure. today, a bulk sms purchaser, by promising volumes, can purchase smses at about 5-6 paisa per sms. from my discussions with other platforms trying to monetize sms traffic, they claim it is in fact smsgupshup’s pricing that has killed the market; so i’m assuming they’re charging the dirt lowest rates in the market. if we assume 25 paisa to be the charge per sms impression to an advertiser, at a revenue number of 75 lacs per month, this assumes that the company is monetizing 30 million smses per month. not impossible, but i scratch my head a bit…
lastly, twitter. need i say more? it works everywhere across the world, is the flavor of the year, and doesn’t seem to have any intentions of slowing down or being gobbled up (yet). getting stiff competition in a market where very few differentiators can actually be built is a tough game to play.
i could be dead wrong about most of this stuff, but again, i’m just listening to the gut.
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