The obvious answer to how to become a startup is to look at a problem and use technology to find a solution. Prabhu S N M, the 27-year-old founder of Street Smart Mobile Technologies, realised that 80 percent of India uses text messages and they have no way of telling whether their messages are important or not. The rest of them are using WhatsApp, Hike and Facebook Messenger and these younger Indians do not use regular messenger services. So he, along with Prakhar Dighe (25-years-old) and Sudeep Sesha (23-years-old) created an app that would work, even at 2G speeds, to pull relevant information for the customer from the SMS application and organise it into a calendar. "Today, an average person transacts at least two times on his phone, and he gets at least ten marketing SMSes a day. It can be a nightmare," says Prabhu.
The information on the app shows up like a dashboard based on your interest. It shows bill payments on one end and due dates on the other, with reminders. It allows the person to clean out spam SMSes. The game here is data; the app understands a person's usage habits and suggests the purchase of various products, from groceries to insurance to digital coupons. This seven-month-old startup has an investment of less than Rs 10 lakh so far, and is now scouting for business partnerships to cross sell services on the app. The Telecom Regulatory Authority of India estimates that the SMS market in India is more than 6 billion messages a day. On an average, a person gets 6 messages for transactions and marketing.
The founders met while working at a company called Base2Media Works in 2013, which is incidentally owned by Prabhu too. While theorising about the next big business idea, the three founders caught on to this idea and launched SMS Sunami. The app currently has 1,000 downloads. The founders all come from engineering backgrounds. Sudeep had worked with corporate groups like HCL and Allianz for three years before plunging into entrepreneurship in 2013. For Sudeep and Prakhar, this is their first venture, and they took the plunge thanks to Prabhu.
The business model
The business model entails offering SMS organising for free. The app throws in offers that are non-intrusive, which will be monetised with partnerships with businesses. "The technology is fairly simple, but it is our analytics engine that can throw in relevant offers to customers," says Sudeep. The company has tied up with 10 businesses to offer digital coupons. The company makes 20 percent on the bill value should the offer be accepted.
Eventually, the company plans to connect the offline world - by location - to the customer and then tailor-make offers locally. By then, the founders are betting on a chat bot and a strong payment engine to complete the loop for transacting on the phone.
There are companies like N2Manager, Gate SMS, SMS Guard and SMS manager that offer the organisation of SMS. Organising apps have not raised money at all in India due to the simplicity of the technology. This is because not all of them, globally, have figured out the closing of the transaction route to connect app users with shopping habits. The competitors of SMS Sunami are in the early stages of discovering a business model that works.
"These businesses work on scale and only time will tell if there is a business to business to consumer model that works in this country," says V Balakrishnan, co-founder of Exfinity Ventures.
These are companies that need enormous spending. Only 100,000 downloads could get them the funding required to take them to the next level, which is getting businesses to connect with customers. However, the three co-founders are confident that they have the analytics capabilities that can connect businesses to consumers just by organising SMS.