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Thursday, January 08, 2004
Toral: From service to product
By Janette Toral
Digital Filipino
SURVIVAL. As the market becomes more competitive, a major challenge among entrepreneurs is the survival and continuity of the business. Last Monday, I got the chance to meet with Erick Kalugdan of GiveMe Unlimited.
Erick is known in the IT industry for being the technical guy who built the agricultural portal B2BPriceNow.com (http://www.b2bpricenow.com).
With the encouragement of friends, he decided to establish his company in October 2001 and get four part-time employees. Despite his Web developmentexpertise, he chose to make his niche in the area of wireless value-added services as he finds it easy to sell short messaging system (SMS) and wireless solutions and sees that the Philippines has a competitive edge in this area.
Erick’s prime product is Infotxt, which won the E-Services Philippines Award in 2003. It was first offered as a service to companies. This is where companies can post useful information about their products and services that customers can access anytime, anywhere, with a mobile phone using a three- or four-digit number. Cell phone owners pay P2.50 each time they access. GiveMeUnlimited earned 50 centavos for every text message accessing this service.
After a few months, Erick decided to give up this service as it did not click in the market. Consumers did not find it attractive to reply to three- or four-digit numbers, recognizing that these cost more than regular text messaging at P1 per message.
He decided to convert Infotxt from a service to a product. Companies who buy the software and GSM modem (and add a SIM card) will be able to broadcast messages to its customers at the regular text message rate of P1. With this, customers are no longer worried that they have to pay more for the information they need or in replying to special corporate offers.
More and more companies now are seeing the value of text messaging as a local and international advertising tool. It is instantaneous. Marketing campaigns can be measurable and accurate, therefore cost-effective.
The probability of a text message being read is high. It also has high location reach as the person with a phone can receive a text message regardless of where he or she is, for as long as there is a signal.
The disadvantage is the limted amount of information that can be squeezed into a text message. There is also no opt-out functionality if owners do not want to receive future messages.
There is a growing number of companies establishing themselves as SMS or wireless service providers. According to Erick, in terms of technology, it is quite easy to learn. However, setting up and managing the business is quite hard. He encourages entrepreneurs to outsource time-consuming and non-revenue-generating processes to those who do it best at reasonable cost like accounting and messengerial services.
The most important thing in Erick’s story is being able to adapt and switch your services in response to market needs. Some services, no matter how good, may not necessarily click with the customer. But many refuse to respond to market demand, innovate, and this results in closure of the business.
(Janette welcomes comments at janette@digitalfilipino.com.)
(January 8, 2004 issue)
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