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Google Sms Channels - A Threat Or A Boon For SmsGupshup & MyToday? Their Respective Founder’s Speak Out..
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So Google India launched Google Sms Channels (still in google labs) on 1st of October a product very much like our homegrown Netcore and Webaroo products Mytoday and Smsgupshup. In Short Google Sms Channels allows any one to create an sms group/channel and besides for sending group smses one even add one’s blog feed or any rss feed to it and updates can be sent to the subscribers after they subscribe to the group. The very fact that three prominent bloggers have already blogged about Google sms channels and also created their own channel indicates that the blog feed feature seems to be a great one. You can subscribe to the WATBlog channel here
Google Sms Channels - Validation OR Threat?
The question to ask here is that if google has entered a segment should it be seen as a validation of the potential of that segment or should it be seen as the threat by the existing players i.e. Webaroo and Netcore?
Well all said and done its google so expect nothing less it terms of product, marketing and free pr (from bloggers like me). While Smsgupshup and Mytoday have been evangelising this space for almost 2 years and have got it to this level google could take less than six month to take this market away? Right? WRONG! because smsgupshup and mytoday would be scaling at the sametime.
Infact I feel this move by google just goes to show that the model has tremendous promise and is worth google’s time and effort to get into this market. Google had done the same when it entered the video market with google video and the app platforms with open social.
One of our products Vs Our Company
What most people forget is that for Google this is just one of its product headed by a team while for Webaroo and Netcore this is their only product (flagship product). Their entire teams are focussed on this opportunity. Also they are ahead of the curve by atleast 18 months in this space. But one may still say its google! Well how can one compete with google? Well Youtube did.. didn’t it? Infact Youtube was so good that inspite of having google video Google had to acquire them.
I think the key is for these companies to be really good at what they do and they are already ahead of the curve by 18 months.
How can Smsgupshup and MYToday Survive?
The Sms groups business suffers from a cost increase with scale problem.which means the more you scale the more money you need. Think of it as the youtube of sms world with more videos to serve youtube had to increase its bandwidth capacity in this case for each outgoing sms smsgupshup needs to pay operators. Both Smsgupshup and Mytoday send about 10-12 millon smses a day and with their growth numbers it wont be late before they send as many smses as one of the big telecom operators do in India. Now thats a huge number of smses and even at 5-10 paisa a sms that they may pay to operators the total spend by these companies could be as high as 15000-20000 dollars a day which amounts to about Half a million dollars a month!
And assuming they continue to scale the same way they did for the last 18 months this would be atleast 1 million dollars a month to just send out the smses!
I think overtime it would be wiser for these companies to just build the network along with the operators i.e. bear the cost of network and get smses sent for free rather than pay for the smses or sell equity to Venture capitalists.
The problem is 1 million dollars a month is pocket change for Google hence from a scale point of view google is best positioned in the market. What both Mytoday and Smsgupshup have going for them is the early mover advantage and they can use that to get ahead of the curve by focussing on user delight by launching more features and adding further numbers to their userbase.
What Do Mytoday and SmsGupshup think of Google SMS Channels?
Here is what Beerud Sheth Co-Founder and President of Webaroo (which owns Smsgupshup) had to say about Google’s entry into Sms groups segment.
“Since its launch nearly 18 months ago, Sms GupShup has been a big believer in the power of sms based mobile communities for consumers to engage with each other and for advertisers to target them effectively. In that time, SMS GupShup has grown to over 10 million users, with numerous advertisers starting to take this medium seriously.
It is natural that large, fast growing spaces will attract large players, which will in turn lead to faster growth in this space. This launch by the largest media company only validates the viability of this emerging medium and should serve as a wake up call to more advertisers to explore and embrace this medium.
At SMS GupShup, our job is to continue doing what has worked well for us so far: obsessive focus on customers (not competitors), rapid product and business innovation as well as evangelizing the medium.”
Do check out our earlier interview with Mr. Beerud Sheth on the opportunity in this market.
Here is what Rajesh Jain Founder of Netcore (Which Owns Mytoday) had to say about Google’s entry into Sms groups segment.
So, a launch of a product by itself in no way guarantees its success - even for us, there are many things that have not worked in the past two years. What is needed to win long-term is a combination of multiple things: vision, understanding consumer needs deeply, strong focus, constant innovation, money and an ability to invest for the long-term, and an organisation completely aligned to the mission (which in our case is to “be the Genie that makes the Mobile Phone into a Magic Lamp” for people), and of course, some luck!
There are nearly 4 million MyToday subscribers with 11+ million subscriptions today for whom the service has become a habit with its excellent content and timely delivery. This is supported by a technology platform that can prioritise and customise each of the 12 million SMSes that we send out daily. And this is just the start. Competition helps bring out the best in all who are there in the marketplace hastening the pace of innovation, adoption and revenue growth. This is therefore good for everyone who has an intention of being a long-term player in the market.
We shall be posting an exclusive detailed interview with Mr.Rajesh Jain next on this Google move Mytoday’s startegy and more. So stay tuned to WATBlog.
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You guys are running a pretty coool blog here!! I’m on a mission to cover as many blogs that are run from India as possible over the next week!
Real competition up ahead for the established players. Google is famous for revolutionising any service that it enters. Let’s just hope it’s the customers who get the final benefit.