A recent New Yorker article by Atul Gawande discusses the lack of major changes needed to fix the healthcare system in the US through the ongoing reform process. The bill has a number of pilot programs, but nothing drastic to fix a clearly broken system. He argues that this might not be such a bad idea and provides the analogy of the agricultural sector in the US and the process it went through in the early part of the twentieth century to achieve major improvements in efficiency. While the Soviet Union tried forced collectivization, which failed drastically, the US started small. By running pilot programs, they were able to learn what worked, earn trust among farmers and then scale as the process was perfected.

In startup land, that’s pretty much one of the key aspects of customer development. Figure out the market or business model first – experiment and iterate to identify a replicable, scalable revenue model before stepping on the pedal. Chances are quite good that a product is world changing only in the entrepreneur’s head. It doesn’t matter if it was agriculture a hundred years ago or high technology startups today, some basic concepts remain the same.

Of course, the customer development methodology is a lot more than the one analogy I described above. I heard Steve Blank’s first class was standing room only last week! But, it’s possible to find lots of resources on the web. Here’s a good video series – part1, part2.

In a purely SMS based service, it goes without saying that the end users should be able to reach the service reliably via the same medium. Making that happen isn’t very easy. At MyToday, most of our approx. 4 million users interact with our services via SMS. It is through the usual short codes and virtual numbers, more commonly called long codes. Long codes are 10 digit numbers similar to our phone numbers and make it cheaper for end users to reach us and are more popular. It’s understandable as most people wouldn’t want to spend Rs. 3 sending an SMS to a short code, especially if a service involves sending lots of messages.

Our growth has been mostly via word of mouth. So, when users like our service and want to tell their friends and family about it, having a non-changing long code is very important. But, it’s something we haven’t been able to ensure. Not because of lack of effort, but due to circumstances beyond our control. All short and long codes are owned by operators (much like our phone numbers) and leased to service providers. Though our services are opt-in, our long codes have been blocked multiple times by the operator we had leased it from. I’m not sure what the reason for the latest blockage is or if it has even been communicated to us, but, it is sometimes because of complaints from a few users that we are sending them unsolicited messages.

The obvious question is how that can happen when we claim to be an opt-in service. The problem is with the churn that happens in the operator’s user base. If a user with a particular phone number belonging to operator A subscribes to our service, and then migrates to different operator B, stops paying his bill etc. after some time, he stops being a customer of operator A. The phone number will now be assigned to a new subscriber by operator A within a short period of time. This new user hasn’t subscribed to our service and thinks we are spamming him when we continue to send messages. The ideal solution is that service providers need to know when a phone number is assigned to a different user, but there haven’t been reliable ways of getting that information. With churn rates at 6-7% among GSM operators as per an article from Mint, and overall churn rates of 3-5% (a number quoted by a speaker at MoMo Monsoon), and with the growth rates we are seeing in India, I imagine the operators are under pressure to reuse numbers as and when they become available, but there has to be a better way to share that information.

The partial graph above shows what impact a blockage can have. Our then popular long code 9845298452 was blocked some time late on 8th Oct or early in the day on 9th Oct and our users could not reach us at all and there was a massive fall in incoming messages. We got a new number immediately and started using that. One of the first things we did was to inform all our users that they could stop receiving our messages if they so wished using the new number. Some of them did and that is what the spike on the 16th represents. As we are an opt-in service, users opting out is generally a very small number compared to our overall user base, but something they can always do. Now, we are actively losing new users as they can’t reach our service using the popular long code. We have to start the process of making new long codes popular among our user base from scratch, not to mention handling all the support requests.

This may stop being an issue once number portability comes in, as users will retain a number once they get it and re-assignment of phone numbers won’t happen that often. The real solution though is better regulation and dispute resolution mechanisms. There is no incentive for operators to create an ecosystem which promotes innovation in the mobile space and neither is it their job. Unless they are forced to do it, smaller players who are trying to build services that end users want will spend more time dealing with issues like these and engineering their way around the latest obstacle rather than focusing their energy only on what is good for the user. Till that day comes, the cat and mouse games continue!

Google just launched a labs project called SMS Channels. Seems very similar to what we’re doing with MyToday. What a coincidence…

I think it had to happen at some point considering the numbers we have. But, I wouldn’t really conclude that Google is taking on MyToday with this labs launch. My guess is that this is a 20% project and not a “let’s crush these midgets” type strategic move. Many Google products are born from 20% projects, so you never know how far they’ll take it. Either way, competition is always good and the attractiveness of the space got validated some more. Of course, whether competiton from Google is good is open to debate.

Update: Rajesh has posted an interview he gave on the competition from Google.

I’ve always been very interested in the history of the technology industry. An integral part of that history are the stories of the entrepreneurs who have successfully built the companies whose services we use or have heard about. Founders at Work is the first book in the “how they did it” genre of books that I read. There is a lot of wisdom to be gleaned from the experiences of people who have been successful at something, and Founders at Work did not disappoint. Though each journey is unique in its own way and there is never a recipe for success, irrespective of how one might define it, some qualities do come through. Some of my take aways were the perseverance, never give up attitude and realisation that one needs to constantly put themselves outside their zone of comfort to achieve something out of the ordinary. If it was easy, everyone would do it. Of course, some luck helps too.

I read Founders at Work some time last year, but pulled it out again after I came across two books in the same genre today. One is Entrepreneur Journeys by Sramana Mitra, and the other is Stay Hungry Stay Foolish by Rashmi Bansal. I’ve been reading their blogs for a long time now, and should enjoy the books too. But, they aren’t available on Flipkart (my online bookstore of choice these days), or a few other online stores I looked at. I’ll definitely keep an eye out though.

A globally successful site built out of India in the last few years we can all be proud of (apart from Zoho) is SlideShare. It does one thing really well. Sharing slide shows. But, it looks like Google has taken a first step in competing with them. Of course, SlideShare does so much more at this point, but with a lot of Google products becoming “social” (like Reader), you never know. I guess it’s time for the SlideShare guys to put their heads down to out-innovate them, because there is no way a 16K people company with all their bureaucracy is going to keep up with a motivated start up. All the best to Amit and team.