For someone who was rejected in many interviews after returning from Australia, having done his MBA, doing something on his own appeared to be the only option available.
It was the power of the internet which began to unveil itself around the late 1990s and the entrepreneurial spirit of his father was just an inspiration to Satya Kalyan Yerramsetti in establishing 160by2.com, the free mobile SMS service.
“The business models were new, where every thing was offered free and the money was to be made from advertising. I thought that this was the opportunity of this century where a middleclass IT engineer can become a billionaire,” he reminisces, in an interview from Indonesia, where he is expanding his business.
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| Name of the Founder – Satya Kalyan Yerramsetti Co-Founder – Raju Kalluri Education – Bachelor of Engineering from Osmania University, Master of Business Management from University of Western Sydney, Australia Company - SMSCountry Networks Pvt Ltd Year of Inception – 2003 Products/ Services - Enterprise SMS Services and Mobile Advertising Media Key Clients – National Stock Exchange, Indian Railways, Cadbury’s India, HUL, Zee Television, Warner Brothers, Futures group, etc Motto – To reach `100 crore revenues in next 2 years Vision – To be the largest mobile advertising company in the world Topline – Rs17 crore Bottomline – Rs4.5 crore YoY Growth - 150% Investors – Friends & family IPO - Not until 2013 Expansion Plans – To expand in South Asia, Middle East, African markets. Biggest Mistake – Partnership with a company in Kuwait, which failed. Milestones: i) 10 million registered users for 160by2 ii) Sending 1 billion sms per month through smscountry gateway iii) Reaching 500 employees iv) Opening the 10th International office |
The company began its service first through the ‘free model’ which he likes to call the “Robin Hood Model” – giving the service free to the needy (users here) and taking money from advertisers. The model fetched almost 10 million users who kept using the FREE SMS service in which the company placed advertisements.
The company then moved to the pre-paid payment model where advertisers paid in advance to use the service, which helped in managing the cash flow better. Finally the company targeted the SME sector, where many small and medium enterprises used this service, which today has become a necessity for the sector to reach its target group.
Repeated rejection from venture capitalists one after the other did not become an impediment to growth. “I really think we were lucky and I have to thank God that we grew rapidly in spite of that,” he says.
Today the company is expanding aggressively in markets like South East Asia, the Middle East and Africa. In terms of technology too, the company has crossed many milestones with the recent launch of mobile applications for all smart phone platforms like Java, Symbian, iPhone, Blackberry and Android among others. These apps help users bypass the operator and send SMS from their phones for free.
The company is also working on voice SMS that helps users speak in their native language and send a voice SMS. Social networking features and functionalities have also been integrated with the “Free SMS’ service.
Kalyan is also working on technology that would serve his customers beyond the regulatory restrictions, for that always remains the Sword of Damocles hanging on the heads of bulk SMS-based businesses.
With innovation, adulation and recognition naturally followed. In 2008, 160by2 was identified by Deloitte as one among the top 50 fastest growing companies in India and top 500 in Asia Pacific. “The award was given at an event at Hong kong and it was a really proud moment for us,” Mr Yerramsetti gleams.
But the business is not without its challenges. “Margins are low in the SMS business, because of huge competition. With such low margins, investment in technology, infrastructure, people and future growth becomes tough. Not to forget raising capital from banks or private equity companies when the capital markets are not stable globally,”
he points out.
Looking back the MBA did not help him much in learning to start a business, he says. What helped instead was experiences like living all by himself in a new place like Australia, working part time to earn his living expenses and his desire and dream to build a global company.
“Coming from a middle class family must have also helped as it triggered the ambition to break free from the mediocre life and have an extraordinary life. The values inculcated by my family gave me the strength to take failures and difficulties that I come across in building a business,” he asserts.
With the strong brand and recall value that ‘160by2’ has built over the years, the investment in infrastructure over the years, the highest quality of service and the focus on only one line of business, the SMS service, will all help the company realise its dream of becoming the largest mobile advertising company in the world, Mr Yerramsetti says confidently.
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