Let’s GupShup

Since 2004, the founders of SMS GupShup had been struggling to find the right product for the mobile platform

Post launch, there was no money for big marketing gimmicks. The team did not even have a winning business model. However, this unique product did its own talking. It got mobile users hooked. The result – in less than two years, GupShup has a user base of 15 million and some cool funding in its kitty.

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 organization 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 per cent 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 per cent of the entire SMS traffic in the country,” says Chirag Jain, VP (India operations).

“Initially, we focused on the smartphone market. But as we spent a couple of years developing that product, we realized that the market was not as developed and the device capabilities were limited,” says Sheth. But basic phones were the preferred by the masses. “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.

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. Now 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 where they can share all sorts of content.

The only problem was that GupShup didn’t have much money to spend on advertising. The company had to upgrade its infrastructure to carry more traffic and also pay telecom carriers for every SMS sent by them. Revenue was scarce, 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 realize that every brand can have its own community on our platform”, asserts Sheth.

In message ads, paid interactive services, and leasing their infrastructure to firms – are their main revenue streams today. “We hope to break even this year,” adds Sheth, confidently. “Monetization 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 every day: one SMS at a time.

What you can do on GupShup
  1. Start/join a group
  2. Invite your friends to join a group
  3. Build a community
  4. Play teenpatti and another card game
  5. Develop and launch a card application
  6. Solicit feedback
  7. Hold an opinion poll or survey
  8. Start a loyalty programme
  9. Send an update
  10. Ask a programme

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