BY POOJA KOTHARI
Rajasthan Royals, one of the eight teams in the IPL cricket league, wanted to build a community around its fans for the upcoming season. So, in January, it signed up with SMS GupShup to create RR, a group for its fans. Those who join this group get to stay in touch with the team, interact with the players, and even vote for its cheerleaders; all this through a mobile phone.
Similarly, when not-for-profit organisation PRS India wanted to use the mobile platform to launch its “No criminals in politics” campaign, it logged on to GupShup. Subscribers to its group could send their pin codes and get information about local MPs with a criminal past.
Not to be left behind, corporate India too is waking up to the potential of this new networking tool. Unique in its ability to deliver content “anytime, anywhere and to anyone”, GupShup has also managed to attract firms such as Nokia, PVR Cinemas and Pepsi.
Its growing user base is testimony to the fact that the product has caught people’s fancy. When it was launched in April 2007, GupShup had 100 users – mostly the family and friends of its founders, Beerud Sheth and Rakesh Mathur. “By December 2007, GupShup had a million users and was, at times, growing at 1% a day,” says Sheth.
Today, the service has more than 15 million users, of which nearly two-thirds are active on a monthly basis. It generates nearly 12-15 million messages a day. “That’s 6-7% of the entire SMS traffic in the country,” says Chirag Jain, vice-president, India operations. |
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And to think that GupShup almost didn’t happen. Its founders had been struggling with their second entrepreneurial venture since 2004. Their first one, online services marketplace Elance, was a global success. Now they wanted to repeat the feat on the mobile platform. After all, India has more than 300 million mobile subscribers, but only about 30 million internet users.
“Initially, we focused on the smartphone market. But as we spent a couple of years developing that product, we realised that the market was not as developed and the device capabilities were limited,” says Sheth. They looked around and the penny dropped. While they were looking for applications that would suit the smartphones, the world around them had got busy with the lower-end device market. These were the most basic phone models that did not support any feature, other than the SMS.
“We realised that the first version of our product didn’t really work. So we could either sit back and feel disappointed that it didn’t work, or we could move forward,” he recalls.
Thankfully, they did move on. “We turned our focus to figuring out an interesting application for lower-end devices,” adds Sheth.
That’s how GupShup came about. In late 2006, the prototype of SMS GupShup was tested at an IIT alumni event. The participants were sent a message, which required them to share the name of the campus they attended and the year of graduation. The response was to be sent in a specific format. GupShup would then tell them who else from their batch was in the gathering.
The replies made them sit up. These were the brightest minds in the country and they didn’t just follow the format. “We got replies of all sorts, instead of getting the format we had asked for,” recalls Sheth. The team was stumped but learnt an important lesson: keep things simple and don’t ask too many questions.
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That turned out to be a smart thing to do because its simplicity became its USP. Using their mobile phones – and thumbs – alone, users can do everything: from creating a group to inviting others to join, joining an existing group, and even leaving a group. Once created, the group is a social networking platform |
for its members: they can interact with each other, send jokes, low-resolution pictures, issue warnings about surprise tests, send financial advice, and so on.
It is this simplicity of use that has made them grow fast without spending big bucks on marketing. “For
the first time in India, the success of fast-growing online communities was being replicated on the mobile platform; and mostly, by viral marketing,” says Arvindra Singh Kanwal, who has recently joined the GupShup team as chief revenue officer.
The only problem was that GupShup didn’t have much money to spend on advertising. They were burning cash just to keep pace with the growing base of users. The company had to upgrade its infrastructure to carry more traffic and also pay telecom carriers for every SMS sent by them. There wasn’t much revenue coming in either. So, word-of-mouth was the only way to grow.
Luckily, their business model made sense to two venture capital firms. Last September, GupShup received $11 million in funding – the ultimate dose of confidence in their business plan. And they intend to invest more in sales and marketing, as well as in the product. They also hope to develop a revenue stream.
“The opportunities for growth are enormous. We have six lakh communities across categories. We realise that every brand can have its own community on our platform. So you will see more of brands and celebrities on Gupshup in 2009,” asserts Sheth.
The team’s figured out a three-pronged strategy for getting the moolah in - they insert paid advertisements at the bottom of messages before forwarding them to users; they make users pay for interactive tools, such as games, quizzes, polls, surveys, prediction games, etc.; and they allow other firms to use their infrastructure to send messages and pay them on a per SMS basis.
“We hope to break even this year,” adds Sheth, confidently. “Monetisation takes time on a new medium. Even Google, despite its rapid growth, took a few years to figure out what its business model should be.”
For him, getting a loyal user base is the harder part. And he’s cracking that everyday: one SMS at a time.
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