An Interview with Satya Yerramsetti- CEO SMSCountry
Posted on May 26, 2008 in Technology by Annie
Satya got introduced to completely new world of internet during his stay at Australia. After coming back from Australia his passion for web based business made him start an online examination portal, A2Zexams, the first of its kind at that time. He then managed the Indian Operations of a UK based calling card company, Ekspertek. This experience and knowledge in the Internet as well as the Telecom domain was instrumental in carving out the current business of SMSCountry.
He strongly believes that spirituality, yoga, nature and natural food are essential components for healthy and peaceful living. He feels that India need better education for becoming Super Power. He spends considerable time researching on internet. He is a true believer of “The Free Spirit of the Internet” i.e. everything on internet should be free.
Education: B.E (Mechanical), Osmania University, MBA (Operations Management), University of Western Sydney Nepean, Australia.
Position: CEO, SMSCountry
Location: Hyderabad, Andhra Pradesh
1. What are the products from SMSCountry available now? Is 160by2 your flagship product?
SMSCountry is the name of the company and focuses on SMS Infrastructure business which is the base for 160by2 service. 160by2 is a brand which is a SMS advertising business offered by SMSCountry. In this interview we will focus on 160by2 which is a free SMS service offered to users and is monetized by advertising within the SMS sent by the users. 160by2 started just over a year ago and is now the driver behind the company in terms of revenue and focus. The complete management team and majority of resources of the company are dedicated to this service. We see this transform the company into a mobile advertising company offering other forms of mobile advertising like WAP, MMS etc and will be the future of SMSCountry.
2. How would you explain 160by2? What does it actually do? Give me an example of a situation in which it would work out well.
Every standard SMS is 160 characters in length as per global standards. We broke that up into 2 parts on for the user and the other for the advertiser. So 160by2 allows all our users to send Free SMS up to 80 characters long. Users can send Free messages either from our website or from their mobile phones. To send free SMS from their mobile phones they need to have subscribed to a GPRS or data plan from their operator (Airtel, Vodafone etc). Users can visit our site from their mobile phone browsers and they are automatically taken to our WAP site. They can also download our JAVA application which is very light and downloaded within a couple of minutes.
Advertisers are allowed to append a contextual advertisement to the SMS generated by the user, making up the rest of the 80 characters. This tagging of advertisement is done by the software automatically based on the time of message or location of the receiver of the message or the keywords in the message. Sometimes the advertisers ask for parameters like age, gender and marital status of the message receiver.
Couple of examples: Every SMS that has “Congratulations” or “Love” in them will carry “Ab Kuch meetha ho jaye - Cadbury” as the tagline.
A message being delivered in the Lunch time has a McDonalds Ad promoting their delivery number.
3. What led you to this idea? Was there a Eureka moment? What was the turning point when it stopped being just an idea and turned into something tangible?
We have been getting a lot of emails from users asking for Free SMS service as we were in the business of paid SMS for corporate customers. We also had big brands and other corporate asking us if we can push some bulk messages to our existing database with their promotions & offers. We were discussing one Sunday afternoon as to how we can address some of the issues or needs of our customers. Then suddenly one of us came up with this idea where both the above needs can be solved if they merge into one and bang came the idea of 160by2. That was the “Eureka” moment if you can call that. The management team(5 of us) could not sleep well that night as everyone were filled with excitement and ideas on how to take it forward and implement the idea.
We debated lot if the idea was feasible and played out various “what if scenarios” for the whole of following week and came up with a plan to implement it phase wise. We wanted to take it slowly initially and so introduced membership to the site via invitation only. Once we saw that users were coming back to us with great feedback we started incorporating that feedback into the product and started improving it to delight our users more.
We went to the advertisers with the concept and since the user base was small initially, we did a couple of pilots for them. They were pretty impressed with the results and started committing bigger money for this medium of advertising.
In October we got a 5 lakh cheque from Cadbury that is when it turned from idea to something tangible. We realized we need to build a sales team and so opened our Mumbai & Delhi offices hiring 8-9 great sales guys from the media industry.
4. Is there any existing format on which your product is based? If yes, which? How have you differentiated from that?
There is no existing format on the mobile but we kind of borrowed the idea from the email service providers. If you look at Yahoo you get a text advertisement after the email message. Similarly with Gmail you see a whole bunch of text ads on the right hand side.
We got this format from the web to the mobile. Even the contextual ad serving is new to the mobile world and so our core tech team had to build it from scratch. Improving it as, we keep serving more ads.
5. Tell me something about your core team — backgrounds (give me a link to this if there is one) and the story behind how you came together.
Our core team is a bunch of young guys in their early 30s with a drive to create a global mobile media company with roots in India. We got together and are linked by our education.
Profile of the team is available at the following Link: SMSCountry-Management Team
6. Who is your target consumer? How do you see them using this product?
We have 2 customers, first is the user who sends Free SMS and the second is the advertiser who pays for that message. The key is to keep the primary customer happy, so we work hard to take the user profile and incorporate back into our ad-serving engine.
We feel that the ads that reach our users should add value to their lives. For example if we understand that our users like movie the software servers a movie promotion or free tickets ad rather than a fast food ad.
7. Why did you choose the mobile platform for your product (as opposed to, say, the Web)? Do you feel the web space is getting a bit saturated?
India is going through a mobile revolution and is the same with a lot of Asian countries. In this part of the world (India) the mobile phone connectivity (250 million) is way ahead of the internet connectivity (40 million). We see that lot of functions that were once on the computer are now moving on to the mobile. So mobile phones are now multi-functional devices where cameras, watches & computers already moved on to the phone.
Looking at the future we decided that we have to work on the mobile platform and come-up with great applications that change the way we live our lives. 160by2 is a business innovation rather than a tech innovation, but is primarily driven by technology.
The web space seems to be saturated because there are lots of companies coming in to offer the same services to the consumers without any differentiation from the current offering. Look at all the companies that offer free email, job portals, online travel companies and social networking sites. Consumers would love companies if they bring in some innovation either tech or business innovation that solves their problem and makes their life that much easier.
8. How did you garner the finances to start up? Any funding since then?
We are self funded and the company runs through internal accruals. We are in the process of raising our first round (series A) of funding. We are in advanced talks with a couple of reputed global venture capital firms.
9. Who do you see as your competition (in the mobile platform or in totally different medium)? How do you differentiate yourself?
We have good amount of competition just from SMS advertising market. Though there are a few small players in the same model as us like way2sms.com, umint.com or indyarocks.com we consider other models of SMS advertising as competitors as well. Companies like mGinger, who pay their users for receiving the advertisements or SMSGupShup where users send group SMS and the SMS are tagged with ads. Similarly MyToday where users subscribe to SMS alerts like stock alerts, bollywood news, crickets alerts etc and each alert is tagged with an ad.
We are different because of the scalability and the reach of consumers and second is the technology strength that we have when it comes to timely delivery and fastest load times. The targeted ads tagging technology also gives us an edge with the advertisers. The great execution capabilities of the management team also gives us an edge when deciding on strategy and executing it perfectly to take the lead over the competitors.
10. Why did you decide to get into a start-up?
I strongly believe that India needs entrepreneurial capitalism to be the economic super power that it has the potential to become in 10-15 years time. Each successful entrepreneur inspires a lot more people to start up their companies and works as a virtuous cycle giving rise to more jobs and thus more opportunities to startup.
Today the highly educated middle class in India has tremendous opportunities in this knowledge economy where huge amount of money is waiting to be created and managed by this talented class of people.
I was inspired by our own business leaders like Narayana Murthy and Dr. Reddy. I want to in turn inspire a lot of young people to realize their dream and participate directly in the “Great Indian Economic Revolution”.
11. How big is the market for your product? What kind of growth have you been seeing, in terms of revenue, numbers etc? Where do you see this heading (in figures)?
The mobile advertising market is projected to be a $14 billion dollar industry by 2011. We have been growing consistently since the 1 year that we started 160by2 and reached over a million users in just 1 year. We are growing 40% month on month in terms of user growth. We project that we will be hitting 10 million users by end of this financial year. We have seen a lot of traction from big ticket FMCG advertisers like Cadbury, Sprite, Horlicks, etc. Now we are seeing lot of smaller advertisers and local brands calling us and writing to us to advertisers with us. We see that these small advertisers can contribute to a large chunk of our ad revenues in the future. I cannot discuss revenue numbers, sorry about that.
12. How are you generating revenue?
We generate revenue from advertisers paying for ads that are tagged within the SMS that users send to each other. We have a high end sales team that is split between Mumbai and Delhi who talk to brands and media agencies maintaining a great relationship with them. We also want to tie up with a few marketing agencies to sell our services on a partnership basis. We are also building tele-sales and online sales teams to address small advertisers and giving them 24 hr support over email and phone
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