Before Netscape was founded, building a consumer software application usually meant building a Windows (or DOS) application. Windows had 85%+ desktop market share at the time and Web applications did not exist. If you wanted to reach the masses, Windows was the only game in town. Then Netscape showed the world the power of interconnectedness + open standards.
Standards adopted by the Navigator browser like HTML/CSS allowed developers and designers to quickly and easily build information-based front-ends to databases. In the past you may have purchased Microsoft Encarta on CD-ROM, but now you could visit Yahoo’s directory to find thousands of places where you could go to get so much more. In the past, if you wanted access to news or email you probably had an AOL client for Windows with dial-up service. Now, all of a sudden, you could get your news from CNN.com and your email from Yahoo! Mail courtesy of the same client through which you collected your encyclopedic information. Even if you had a Macintosh or UNIX box sitting on your desk. Unfortunately, dial-up connectivity and HTML/CSS meant that for applications (like Microsoft Excel, PowerPoint, interactive games, and instant messaging), you still needed standalone applications on your desktop.
The universal adoption of Javascript and XML (in major browsers) and cable modems (in the home) led to the widespread use of AJAX. This finally allowed browser-based applications to deliver “good enough” application performance in the browser to compete with standalone applications. Web office applications like Google Documents, web-based instant messaging sites like Meebo, and interactive maps like Google Maps offered performance comparable to standalone clients. On the video side, the ubiquitous deployment of Flash and cable modems is what enabled YouTube. Without the ubiquitous deployment of Flash in the browser, YouTube would have been a failure.
If you wanted to develop consumer applications for the desktop computer before AJAX, you had to develop for Windows. Now you need to develop for AJAX. While Windows wasn’t necessarily the best OS, it was the most pervasive. While you may be able to develop a better stand-alone web client that can do everything that AJAX can do and more (not hard), chances are that your client is not and will not be pervasive. The only time it makes sense to develop a client is when you are doing something outside the browser security model — controlling PC hardware like a webcam or microphone, for example. Or tracking a user’s surfing patterns and making recommendations.
So what does all of this have to do with SMS? While Apple is about to launch their developer platform for iPhone, it will capture a tiny fraction of the 3.3 billion mobile subscribers worldwide — even if Apple hits their goal of 10MM units sold by the end of 2008, that is a drop in the bucket compared to 2 billion SMS enabled handsets in the market today! Potential mobile entrepreneurs would be well served by learning from the PC and web revolutions — build your service on the back of a ubiquitous technology.
The only ubiquitous technology on mobile phones today is SMS. Yet, with the exception of Twitter, most firms are building solutions that are leveraging “superior” technology that lacks anything close to ubiquity. That’s a big mistake.
Idea: Build third party consumer services based entirely on SMS.
I will toss out a few ideas on how SMS might be leveraged, but I’m sure that there are much better ideas out there. I would love to hear from you have any ideas or know of companies doing something interesting with SMS (in the comments or directly at mike [at] shv [dot] com).
1. SMS Groups.
Today, more people use SMS to communicate than web-based email. SMS is already email and IM all in one, so let’s focus on a different component of communications… One significant source of web-based email traffic today is group mailing lists. Yahoo! Groups, MSN Groups, Google Groups — these products are basically very simply systems to manage communications (often in email). Twitter is going after the status-casting opportunity, but why not create an extremely simple SMS Groups product?
On registration, have users import their address books WITH mobile phone numbers. Have them group their friends into “family”, “theguys”, “jacksfriends”, etc. This weekend I went to the playground after I hit Starbucks with the kids. It would have been great to be able to send an SMS to some number with “jacksfriends going to the playground now, see you there.” Instead I had to call each person and have a discussion about the fact that I was taking the kids to the playground. A simple groups product with a total focus on SMS could be very interesting.
2. SMS as Command Line Interface (CLI) for the Web.
Back in the DOS days, you would ask your computer to do certain tasks with very specific commands from a command line interface. Why not build a web services abstraction layer with short SMS commands and SMS delivery? Once a user learns basic commands, she could use SMS to browse the web for content much as users previously used commands to browse a hard disk or control an application with DOS.
For example, we could aggregate information on local restaurants from various services through web services. We would then allow users to invoke these services by training them on how to use very simple commands over SMS. This approach is similar to what Google SMS does, but the idea is to do it for more than just Google search. And to have a common SMS interface through which users could interact with the entire web.
I’m a big fan of Twitter and I would love to see much more innovation around SMS. The iPhone is great and, as a consumer, I appreciate that Steve Jobs is pushing the industry to move forward. But between today and the day when the iPhone is ubiquitous (if that day ever comes), SMS is a good place to start when thinking about building a mobile startup.
14 Comments
May 28, 2008 at 6:51 am
Presumably you saw mixd.com before Yahoo shut it down… Also both Yahoo and Google already provide more than just search over their SMS interfaces, try 92466.
May 28, 2008 at 6:52 am
Here is the link for mixd: http://www.techcrunch.com/2006/11/29/yahoo-launches-group-texting-site/
May 28, 2008 at 9:41 am
The problem with this is the UK is the cost of providing the service. To send free messages to users costs between 1p and 5p (about 2c to 10c USD). You could make money by charging for incoming (or a nominal fee for outgoing), but I don’t think that would work as a ‘free’ service.
I remember reading somewhere that Twitter is using a lot of it’s VC cash to pay for SMS’s at present.
May 28, 2008 at 4:46 pm
Sam,
I didn’t see Mixd. I think the “experiment” was concluded before I started at Yahoo! A bunch of people told me to research it while I was there and I didn’t — my bad. Was it a version of SMS groups? Why did the experiment fail? Was the team given enough time to iterate? I agree with Calacanis — it’s not where you start, it’s where you end up. If you kill something just after you start, the probability of success approaches zero… Will check out more on Yahoo! and Google SMS programs.
The cost of trying to crank out an idea a day (and write about it) between 10pm-12am is that I don’t do any research. Hopefully I will come up with something good one of these days, even if by accident ;–)
Steve,
Very good point on the international bit. However, the US is a huge market. If you can make something work in the US, I bet you can strike deals with international carriers based on that success of your US proof point. And, if not, you still have an SMS installed base in the US that is larger than the installed base of consumer PCs.
-Mike
May 28, 2008 at 4:50 pm
On the point about Twitter and SMS costs… I’m a very bullish on Twitter. People said the same thing about YouTube’s bandwidth costs. Just before the nearly $1.75 billion acquisition, I remember many “smart” people saying that YouTube was spending all of the Sequoia’s money on bandwidth. If you build a killer service that attracts [through organic means] tens of millions of people (in the US), a good team will find a way to make the revenues line exceed the expenses line.
May 28, 2008 at 5:03 pm
Just removed the Mixd link from the Akismet spam filter, so didn’t see it until just now. Disregard my comment on finding out more about Mixd. Thanks Sam. -Mike
May 28, 2008 at 5:47 pm
Hi Mike,
Nice blog.
For SMS groups, check out - SMSGupShup at http://tinyurl.com/5u7p5g . It’s pretty cool.
I totally agree that SMS is the major enabler for services, especially for India, where I believe most of the mobile phones are SMS enabled, but not GPRS/EDGE enabled.
It would be nice to see SMS services such as “search restaurant chinese Pune 56789″, converts into a query such as “http://pune.burrp.com/search.html?q=chinese&n=pune” and sends me the result in a 140 character format. I would also love to have “search dvdrental action Pune 56789″. BookEazy.com is already providing “MOVIE ” 56070″ - see http://tinyurl.com/5tq5nw .
Thanks,
Mukul.
May 28, 2008 at 10:46 pm
Mike,
Great blog. Already passed your Free Idea slide deck on to a few people. RE: one of your quotes above: a good team will find a way to make the revenues line exceed the expenses line.
No one has figured out yet how to make You Tube’s income exceed it’s expense. Same with Twitter. At some point (hopefully before the VC owns the company) you have to get someone to pay for something. Right now the telco’s get rich of SMS not the customer and not the “other” service.
The problem with Twitter and YouTube is that while providing incredible value - they just don’t generate measurable, sustainable, profitable revenue from volume. Free is still free.
Twitter is even more of a problem because of the character limit. Sure everyone loves to be bombarded with Tweets - but no is willing to pay for them. Why not? Probably because it doesn’t solve a meaningful problem - it’s more of a vitamin issue than morphine.
Great companies have large markets, lots of customers and they pay for the value they receive. Anything else is still a “Free Idea”… Twitter will be (maybe) great with Execution. Now all they have to do is find a customer willing to pay for it. So far no takers.
Cheers,
Peter
May 29, 2008 at 2:52 am
Thanks for the thoughts Mukul!
Thank you for the kind words Peter. And better yet, thanks for being critical. That’s how okay ideas become great ideas.
On that note… I don’t know whether YouTube is profitable today, but I’m 100% sure that they could become massively profitable in a nanosecond. They have made the choice not to run pre-roll, mid-roll, or even post-roll video advertisements. I know for a fact that there are advertisers who could pay in the tens of millions of US dollars for the right to do so (at healthy CPMs). With the cost of CDN networks dropping (everywhere but in China) and with something like >200MM viewers, these guys could flip the switch and make serious cash money in no time.
Because they haven’t simply suggests that they think that waiting to do so or trying to find a better way to do advertisements in video is a better NPV decision. But that doesn’t mean that the fundamentals couldn’t look really good. And it doesn’t mean that they won’t change their mind in the future when, let’s say, they hit 500MM global uniques per month and haven’t found a better way of turning eyeballs into dollars.
That said, I don’t know the data on Twitter. I don’t know how they will make money. And I don’t know much about SMS costs. My point is that two years ago people said the same thing about YouTube, and I’m sure that it’s a massively valuable business. YouTube is likely worth more than what Google paid — but with the looming legal issues, selling was a good idea. On Twitter, my ill-informed hunch is that it will be a very valuable business. Probably not on the level of YouTube, but who knows. I sure don’t
May 29, 2008 at 5:22 pm
Hi I am from india,
SMSGupshup (i.e. sms chit-chat) (told by mukul)
One very much interesting site [developed by 2-3 folks] using python is all about SMS-Community. its Vakow !
http://www.vakow.com
-Raxit
May 29, 2008 at 8:25 pm
You should definitely check out clearTXT (www.cleartxt.com). They do a lot of group sms stuff for schools, but I hear they’re expanding to do more mainstream stuff, plus mobile marketing - sort of a mix of twitter for people (groups) and businesses, with some mobile marketing mixed in. Anyway, great post.
May 29, 2008 at 8:44 pm
Very interesting post. SMS is definitely ubiquitous these days and a popular way to communicate. In terms of group sms, most phones allow you to send an sms to multiple people - kind of group creation on the fly.
Otherwise were you thinking of a mobile app or something that can be set up on the web and then texting a special number with the group name and information to send?
http://www.chatterous.com allows for group communication, including sms, haven’t used it much myself but seems to work fine.
Just started reading the blog, very good stuff. tx.
May 30, 2008 at 5:25 pm
SpinVox has put their own “spin” (pun intended) on group SMS through their “Blast” service (found through BGR this AM):
http://www.spinvox.com/blast.html
Unfortunately, you can set up only one contact group for the moment… Cheers, Jeff
May 31, 2008 at 9:24 am
Here is some text from my (now offline) personal wiki. I hope it can serve as a comment here. And to add to the list of existing systems: http://www.dodgeball.com/ (acquired by Google long time ago).
There are uses for SocialSoftware in public places. With the spread of programmable mobile devices all those applications are just waiting to be written. For some time allready I am contemplating how SocialSoftware can be used in bars, clubs, pubs and all the other places where people go to meet strangers and have fun together.
Here is a list of applications for such software:
0 Where are my friends? You’d like to know where your friends are having fun today (or even this hour). The advantage of mobile technology here is that the information is updated in real time - so that people changing bars can find each other.
0 What club is the most popular today?
0 Who is here? People can leave some advertised information about them (it might be anonymous), which would be sent to everybody who is in the same bar as they.
0 Chat with someone in the bar. After choosing some advertisement you could exchange messages with the person owning it. The advantage over traditional online chat is that you know this person is in the same bar as you.
0 What is the music there (in real time)?
0 Bar owners could use this system for advertising happy hours etc.
0 Who goes to the same clubs as I? The application could instantly identify people that like the same places as you. See [http://berkeley.intel-research.net/paulos/research/familiarstranger/index.htm Familiar Stranger]
== Interface ==
The mobile devices interface has very limited capabilities and can not be used for more sophisticated tasks. I propose to give the system two interfaces - mobile and internet. The internet interface would be used for more complicated tasks (like setting up lists of friends, or typing longish advertisements) that don’t need to be done in real time.
== Business models ==
In constrast to internet people are accustomed to pay for mobile services. Telecoms offer some share of their income to application operators, this share is rather small (less than 30% for SMS based applications last time I asked) - but the cost of running such a system is not big. So the business model seems to be sound to me.
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