New project idea: Bringing back Twitter SMS - Silicon Beach Australia

Message from discussion New project idea: Bringing back Twitter SMS
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Date: Thu, 14 Aug 2008 17:09:48 -0700 (PDT)
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Subject: Re: New project idea: Bringing back Twitter SMS
From: Elias Bizannes <elias.bizan...@gmail.com>
To: Silicon Beach Australia <silicon-beach-australia@googlegroups.com>

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Adding Ivo's message which for some reason didn't post - Elias
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Hi Elias and Geoff,

I tried posting to the group but got an error message - maybe I'm not
allowed post. I've joined the group on google. Does someone need to
set me up to post?

Anyways heres my email.
Ivo


---------- Forwarded message ----------
From: Ivo Brett <ivo.br...@gmail.com>
Date: Thu, 14 Aug 2008 19:38:12 +0100
Subject: Re: [SiliconBeach] New project idea: Bringing back Twitter
SMS
To: "silicon-beach-australia@googlegroups.com"
<silicon-beach-australia@googlegroups.com>


Hi there,

Thanks for including me on this email and thanks to Elias for
introducing me2mobile.com. Premium SMS and bulk SMS is an area I know
quite a bit about after having struggled with many different business
models in this area. Its interesting that you've mentioned this as I
have spent the last couple of weeks looking into the area of SMS
enabling 'life streaming' services.

A few things I've learnt about running a premium SMS business that you
might not already know. Firstly, the costs for a shortcode with a
carrier is expensive to setup and maintain. The revenue share is
stacked in favour of the operators and they take a large share for no
risk. Secondly, you need to be doing a large volume of SMS for any
business case to pay off. This  means that the only people who make
money out of premium SMS are the companies that can afford massive
marketing (e.g. late night text for a babe type services). This has
resulted in premium SMS being considered a slightly "grubby" service.
For all these reasons me2mobile has moved away from premium SMS as our
core offering. We now make most of our money out of selling
interactive SMS services to businesses (i.e. SMS campaigns using bulk
SMS) rather than premium SMS.

That being said, I think that your idea has a lot of merit. Twitter
have done the hard work of creating a market for this idea (they've
just withdrawn their own heavily used sms service). There is also a
sizable and well connected twitter user base so it would be relatively
easy to get this service 'out there'.

Geoff and some of the other posters correctly pointed out some of the
necessary mechanics of how premium SMS works so I wont go over them.
But you thing that wasnt mentioned was the ability to send a low
charged premium SMS (MT) to each follower. This could be as low as 25
cents. I do, however, accept the point from Silky that its a pain to
have to pay for incoming tweets especially since you dont know how
many there'll be but as Elias says you can give people the option to
opt out (or set a daily limit on how many they'll receive).

Not too make it sound too trivial as I know there'll be some gotchas
but I reckon I've implemented about 75% of what needs to be done for
this project. I also have an agreement with one of the top premium SMS
and bulk SMS aggregators. I selected them after indepth selection
process and I reckon I have the best rates and revenue share that one
can get. The best thing about this aggregator is that they have
premium SMS connectivity in 28 countries so if this offering proven
successful in Australia it would be very simple to roll out
internationally.

I have a good premium SMS shortcode already set up (19961996) with
this aggregator (its 55 cents MO). Note: If you were to set up a
shortcode yourself it normally takes 6 to 8 weeks to get a shortcode
set up and sometimes operators knock back the applications.

To be perfectly honest - the most expensive part of my agreement is
maintaining the premium shortcode and I have been considering closing
this part down altogether. There is one customer using it extensively
but I dont push our premium sms offering anymore. Therefore, ne
possibility is that I share my current agreement with others that want
to take advantage of this shortcode. I'll be a transparent as possible
and even share the contract details I have with the aggregator just to
show that I wont be creaming any margin off the top. All I'd ask is to
be involved in the service and any revenues generated by it.

I'd like to be involved in this project as I think its got a lot of
legs. I'm back in Ireland at the moment but I can have a call with
others if that helps speed things up.


Ivo



On 8/14/08, Geoff McQueen <geoff.mcqu...@internetrix.com.au> wrote:

- Show quoted text -
> Elias,
>
> Sounds interesting. As someone who's messed around with premium SMS before,
> could I confirm the idea is:
>
> 1. A "short code" or 19 number be registered in AU
> 2. People who send to this number pay a premium to send their SMS
> 3. Some of this premium is revenue that goes to the "owner" of the 19 number
> 4. This revenue be re-invested in the community, in whatever form that is?
>
>
> If that is the plan, this would require:
> 1. Account setup with a carrier, which I take it you're suggesting mobileme
> (although [3] wasn't referenced in your post)
> 2. Some glue to tie submission posts to the short code as submitting to the
> Twitter API
> 3. Resolving who's going to pay for broadcast/outgoing messages from Twitter
> (unless people agree to cop a fee per message they get delivered a la late
> nite adult tv commercials)
>
> I see aspect 3 of the requirements above as the hard bit financially; this
> is why Twitter is removing support for international 'sending', and unless
> I'm missing something, the premium SMS creature is more to collecting a form
> of premium revenue on the user sending you a message, not the other way
> around.
>
> Of course, this AU gateway could truncate the messages and fund the outbound
> transmissions via advertising, but that might be a bit hard to swallow.
>
> Or, am I missing something really important here?
>
> Geoff
>
> -----Original Message-----
> From: silicon-beach-australia@googlegroups.com
> [mailto:silicon-beach-australia@googlegroups.com] On Behalf Of Elias
> Bizannes
> Sent: Thursday, 14 August 2008 9:46 PM
> To: Silicon Beach Australia
> Cc: ivo.br...@gmail.com
> Subject: [SiliconBeach] New project idea: Bringing back Twitter SMS
>
>
> Boys and girls,
>
> <rant>
> Since our discussions, things have predictably settled. It was never
> the intention that this mailing list becomes a 'chat' forum - there
> are plenty of other places for that. Instead, it's a way for us to
> have a central node as a community to collaborate on. I'm quite proud
> of what's become of it.
>
> One new initiate has been born - the distributed database - which
> several silicon beacher's having picked this up and are experimenting
> with now. It's going to be interesting to see what we can cook up for
> release later this year.
> </rant>
>
> But I've now got a new proposal. Building on some thoughts I tweeted
> before[1], I have a solution that will do three separate things that
> will help our industry.
>
> Background
> Twitter has become the most important social networking site for the
> Australia tech community. It facilitates meet ups, keeps people up to
> date, breaks news, and generally builds community.
>
> Today - news was announced that twitter would be shutting off its SMS
> service for international numbers because they now long can
> sustain[2] . This leaves Australian users completely out in the cold
> on one of the most valuable features of the technology. Separately,
> the micro-blogging revolution that Twitter has created is going to
> create transformative impacts on the industry. The embrace of Plurk
> and Identi.ca by Australia's twitter community to name but two
> examples, of how things are happening. However what these open source
> solutions lack is an SMS solution.
>
>
> The idea
> What I propose, is that as a community, we create a SMS solution that
> brings back Twitter to the phone for us as well as supporting other
> twitter clones.
>
> SMS gateways, including an Australian startup in Sydney, allow you to
> set up premium SMS plans. So for example, if people subscribe to your
> plan - it will cost you 55 cents. However, as the organiser of that
> plan, you get 18 cents for every message you get. It's an innovative
> revenue model, which I have explored in the past as part of my
> research into the mobile web opportunity.
>
> If we can hack together something that links the twitter API and a SMS
> gateway API like that of Ivo Brett's startup[2], we can restore SMS
> functionality. Oh, and make a bit of money.
>
> Sure, this is a market opportunity for a entrepreneur. I reckon you
> could make a quick buck, until a phone company or Twitter wakes up.
> But personally, I think it's too small scale an idea to launch a
> business, but too big an opportunity to pass up.
>
> So by building this service, as Silicon Beach - we've now got a
> revenue stream...for the comunity. The revenue raised, will be 100%
> reinvested into the community. Sponsoring conferences, meetups - heck
> wherever there is value to support effort in the community.
>
> Twitter becomes useful + we make opensource microblogging useful + we
> fund our community without realising it. Three bigs things, and all it
> takes is a bit of API hackery as some Jelly-a-thon.
>
> Thoughts?
>
> [1] http://twitter.com/liako/statuses/887005932
> [2]
> http://blog.twitter.com/2008/08/changes-for-some-sms-usersgood-and-bad.html
> [3] http://www.me2mobile.com
>