*Warning: please have a nice hot cup of coffee for the read 
*
Hello all,
Took me a while to figure out where to post this lol. I would like to share with you my experience of a business I created back in 2011 and eventually stopped operation in 2014. My goal is to:
-Help you make better decisions
-How MJ's secret sauce formula (CENTS) plays it's role.
-My thoughts of this business and what to do if you're interested in it
- .... I'm sure more things will come to mind. If you want to skip this all, go to the conclusions at the end!
The word "failure" can be defined differently for everyone. Failure can be trying to build a business that never gets launched, or building a business that "has" launched but puts you in the negative every month where you need to close it down. The hardest thing for a business owner is to accept failure and try to open a new chapter.
Failure in my case was that I couldn't scale my business. Even though I was making profit each month, it wasn't enough for me to quit my day job and continue operating the business.
What was my business?
----> SMS Marketing aka Text Message Marketing
Most of you know what this is. For those that don't, it's basically marketing through text messaging via a "long code" or a "short code".
Ex: Text "SAVE" to 55222
User texts the word "save" to the number 55222 and receives an automated message back. I won't get into the flow of things and complete definitions (provisioning, aggregators, 2 flow opt-in, sweepstakes, rules and regulations, etc...).
The Beginning
In 2010 I had the idea of creating an sms marketing business. Due to the strict rules and regulations and the costs, I was only able to operate within Canada. If anyone has dared to get into this business you'll know what I mean.
For example, The Buffalo Bills had to settle a $3 Million lawsuit because they made one mistake.
After researching long and hard, reading on the bus to and from work, contacting many companies in the same industry I decided that I'd grow a pair and create a sms platform from scratch.
1). Creating an sms platform: Hired a programmer from Freelancer. This wasn't overnight btw. Many posted projects were closed and opened to find the right programmer with the right qualifications (track record, competent, excellent communication and required skills). Lots of noise you need to filter through. I believe it took me a month to find the right programmer who happened to be searching Freelancer jobs in the last week. Obviously feedback and prior work on Freelancer needs to be taken into consideration but won't get into detail there.
2). Finding the right name: In my opinion, every good business starts with a great name. Choosing something like "smsmarketingbusinessforyou.com" speaks for itself. If you think that's a good name then you'll need pm me telling me why. I was out to build a "brand". More companies take you seriously if you have an attractive "brand". Mine was short, sweet and perfect for what I was doing. I also had to buy the domain name for $200 on Godaddy since it was available (never hesitate to put a little money down for a GOOD domain name. Can't stress this enough). Also created a logo content in Freelancer and got myself one bad a** logo that even today I'm amazed.
Won't go more into detail, but there was a testing period, contacting the Canadian authority and carriers, making contracts, provisioning, bla bla bla...
Everything is in Life is Free?
No it's not! Very little things in life are free. And this is what most "BIG" companies wanted and everyone calling in. Yes, obviously anyone who understands business knows that you need to give "trials" for potential customers. But 90% of potential customers asked for this. I remember one company said "We see the value for this, but we want to get use to the platform". Giving free trials all over and nothing was paying the bills. Kinda hurts after a while but in the beginning you're doing everything you can to get clients lol.
CUT TO THE CHASE - The Problems:
1). Those who think they want to do sms for lead gen can think again. Rules and regulations were incredibly strict! (see Buffalo Bills link above). The rules themselves cast a dark cloud due to many restrictions which costs you more $$$.
2). To compete with my competitors I had to charge a cheap monthly rate which means I needed demand to survive.
3). Building my own platform, having more features than anyone else, having my own vanity short code, having a bilingual platform wasn't enough to have a competitive advantage.
4). The technology isn't hard to understand, but 80% of customers and clients didn't know how sms worked, how to send a blast and market the product. It seemed very complex to all the mom and pop shops where I had to do the work for them for free. Most didn't stay on too long because they didn't understand how to promote the shortcode even though I created tutorials, videos, marketing materials and idea generating emails for them.
5). Half the clients were French, I mean hardcore French. I live in the province of Quebec where you need to speak French here. My french is at par but I'm not bilingual, and your French needs to be 100%, and my business partner who wanted to do sales for this fulltime didn't speak French well. Despite the night courses he and I took to better my French wasn't enough. Although most clients were out of province (the big spenders), it was still a dark cloud over us because of the language barrier for French speaking Canadians.
6). The Programmer: very talented, excellent worker, always there from me. But some instances when I needed them, they took a long time to respond, and in the sms game there's no excuses. You need to jump on a problem asap. This added much more stress.
7). Unforeseen costs: Since I created everything from scratch and had to deal directly with the carriers, I was a hostage. When they decided to introduce a "management fee" of $500 a month, this added more costs that ate away from my profits making this game a lot harder.
LONG STORY SHORT
Seriously, I can write a book about my experience, but this is as short as I can get this thread to be and it's HELLA long now LOL. The fees, regulations, demand, language barrier, marketing costs, constantly paying programmer for upgrades and maintenance, time invested for clients due to lack of knowledge on the business, paying my partner for his work and so much more I'll leave out made me decide that it was time to close the chapter.
Yes, I did have big clients that paid on time. Yes, I was making a profit each month.
But it wasn't enough for me to quit my day job. And the time put in didn't equal the profits I made. The business was not sustainable.
N (Need) - There was very little need for sms. Mostly because many people didn't know about the technology here, and didn't see the need for it. People were using apps as a mobile marketing tool. SMS seemed so 2000 even though it wasn't used in Canada at the time.
E (Entry) - Barrier to entry was high. To build an sms company is no joke and involves a lot of work and technology. So not everyone was able to start their sms business in one day.
C (Control) - Due to the rules and regulations, I was heavily controlled by the CWTA (Canadian authority for mobile). Every message I sent out had to be compliant. If I wasn't there would be a suspension cutting off all my services and thus not receiving payments from customers.
S (Scale) - Very little scale. I wasn't able to add features or increase prices to bring up profits since competitors kept lowering their monthly charges. And operating in Canada also limited my scalability since going to the US and international required...a...l..o...t of money and work.
T (Time) - My time needed to be in the business almost all day. There was no way of automating the business because you always needed to be there for the client, send out their messages for them, and make sure the platform is functioning on a regular basis.
I failed BIG TIME with MJ's formula. I wish I would have found this book back in 2011. But sometimes even with the formula you could be blinded by the light, and only have tunnel vision for a goal of building your own business that you either ignore this formula, or perhaps make yourself believe that there is a "need" for your business, entry is high, can be controllable and scalable, and that time isn't an issue because you want to have your own business. This is what happens with no experience and understanding of what's to come.
Conclusion:
Learn from me. Learn from my mistakes of creating a SaaS product and working in the sms business (even though it's still used now). The sms model does not satisfy the CENTS model one bit. However, if you would like to use this technology and are interested, I can guide you to the right path. Just respond to this thread with your questions and I can share my knowledge and experience with you all. If not, I'm fine with you reading about my failure. However, please make sure you learn from my experience and always use the CENTS as your secret sauce!
Thanks guys
*Hello all,
Took me a while to figure out where to post this lol. I would like to share with you my experience of a business I created back in 2011 and eventually stopped operation in 2014. My goal is to:
-Help you make better decisions
-How MJ's secret sauce formula (CENTS) plays it's role.
-My thoughts of this business and what to do if you're interested in it
- .... I'm sure more things will come to mind. If you want to skip this all, go to the conclusions at the end!
The word "failure" can be defined differently for everyone. Failure can be trying to build a business that never gets launched, or building a business that "has" launched but puts you in the negative every month where you need to close it down. The hardest thing for a business owner is to accept failure and try to open a new chapter.
Failure in my case was that I couldn't scale my business. Even though I was making profit each month, it wasn't enough for me to quit my day job and continue operating the business.
What was my business?
----> SMS Marketing aka Text Message Marketing
Most of you know what this is. For those that don't, it's basically marketing through text messaging via a "long code" or a "short code".
Ex: Text "SAVE" to 55222
User texts the word "save" to the number 55222 and receives an automated message back. I won't get into the flow of things and complete definitions (provisioning, aggregators, 2 flow opt-in, sweepstakes, rules and regulations, etc...).
The Beginning
In 2010 I had the idea of creating an sms marketing business. Due to the strict rules and regulations and the costs, I was only able to operate within Canada. If anyone has dared to get into this business you'll know what I mean.
For example, The Buffalo Bills had to settle a $3 Million lawsuit because they made one mistake.
After researching long and hard, reading on the bus to and from work, contacting many companies in the same industry I decided that I'd grow a pair and create a sms platform from scratch.
1). Creating an sms platform: Hired a programmer from Freelancer. This wasn't overnight btw. Many posted projects were closed and opened to find the right programmer with the right qualifications (track record, competent, excellent communication and required skills). Lots of noise you need to filter through. I believe it took me a month to find the right programmer who happened to be searching Freelancer jobs in the last week. Obviously feedback and prior work on Freelancer needs to be taken into consideration but won't get into detail there.
2). Finding the right name: In my opinion, every good business starts with a great name. Choosing something like "smsmarketingbusinessforyou.com" speaks for itself. If you think that's a good name then you'll need pm me telling me why. I was out to build a "brand". More companies take you seriously if you have an attractive "brand". Mine was short, sweet and perfect for what I was doing. I also had to buy the domain name for $200 on Godaddy since it was available (never hesitate to put a little money down for a GOOD domain name. Can't stress this enough). Also created a logo content in Freelancer and got myself one bad a** logo that even today I'm amazed.
Won't go more into detail, but there was a testing period, contacting the Canadian authority and carriers, making contracts, provisioning, bla bla bla...
Everything is in Life is Free?
No it's not! Very little things in life are free. And this is what most "BIG" companies wanted and everyone calling in. Yes, obviously anyone who understands business knows that you need to give "trials" for potential customers. But 90% of potential customers asked for this. I remember one company said "We see the value for this, but we want to get use to the platform". Giving free trials all over and nothing was paying the bills. Kinda hurts after a while but in the beginning you're doing everything you can to get clients lol.
CUT TO THE CHASE - The Problems:
1). Those who think they want to do sms for lead gen can think again. Rules and regulations were incredibly strict! (see Buffalo Bills link above). The rules themselves cast a dark cloud due to many restrictions which costs you more $$$.
2). To compete with my competitors I had to charge a cheap monthly rate which means I needed demand to survive.
3). Building my own platform, having more features than anyone else, having my own vanity short code, having a bilingual platform wasn't enough to have a competitive advantage.
4). The technology isn't hard to understand, but 80% of customers and clients didn't know how sms worked, how to send a blast and market the product. It seemed very complex to all the mom and pop shops where I had to do the work for them for free. Most didn't stay on too long because they didn't understand how to promote the shortcode even though I created tutorials, videos, marketing materials and idea generating emails for them.
5). Half the clients were French, I mean hardcore French. I live in the province of Quebec where you need to speak French here. My french is at par but I'm not bilingual, and your French needs to be 100%, and my business partner who wanted to do sales for this fulltime didn't speak French well. Despite the night courses he and I took to better my French wasn't enough. Although most clients were out of province (the big spenders), it was still a dark cloud over us because of the language barrier for French speaking Canadians.
6). The Programmer: very talented, excellent worker, always there from me. But some instances when I needed them, they took a long time to respond, and in the sms game there's no excuses. You need to jump on a problem asap. This added much more stress.
7). Unforeseen costs: Since I created everything from scratch and had to deal directly with the carriers, I was a hostage. When they decided to introduce a "management fee" of $500 a month, this added more costs that ate away from my profits making this game a lot harder.
LONG STORY SHORT
Seriously, I can write a book about my experience, but this is as short as I can get this thread to be and it's HELLA long now LOL. The fees, regulations, demand, language barrier, marketing costs, constantly paying programmer for upgrades and maintenance, time invested for clients due to lack of knowledge on the business, paying my partner for his work and so much more I'll leave out made me decide that it was time to close the chapter.
Yes, I did have big clients that paid on time. Yes, I was making a profit each month.
But it wasn't enough for me to quit my day job. And the time put in didn't equal the profits I made. The business was not sustainable.
N (Need) - There was very little need for sms. Mostly because many people didn't know about the technology here, and didn't see the need for it. People were using apps as a mobile marketing tool. SMS seemed so 2000 even though it wasn't used in Canada at the time.
E (Entry) - Barrier to entry was high. To build an sms company is no joke and involves a lot of work and technology. So not everyone was able to start their sms business in one day
.C (Control) - Due to the rules and regulations, I was heavily controlled by the CWTA (Canadian authority for mobile). Every message I sent out had to be compliant. If I wasn't there would be a suspension cutting off all my services and thus not receiving payments from customers.
S (Scale) - Very little scale. I wasn't able to add features or increase prices to bring up profits since competitors kept lowering their monthly charges. And operating in Canada also limited my scalability since going to the US and international required...a...l..o...t of money and work.
T (Time) - My time needed to be in the business almost all day. There was no way of automating the business because you always needed to be there for the client, send out their messages for them, and make sure the platform is functioning on a regular basis.
I failed BIG TIME with MJ's formula. I wish I would have found this book back in 2011. But sometimes even with the formula you could be blinded by the light, and only have tunnel vision for a goal of building your own business that you either ignore this formula, or perhaps make yourself believe that there is a "need" for your business, entry is high, can be controllable and scalable, and that time isn't an issue because you want to have your own business. This is what happens with no experience and understanding of what's to come.
Conclusion:
Learn from me. Learn from my mistakes of creating a SaaS product and working in the sms business (even though it's still used now). The sms model does not satisfy the CENTS model one bit. However, if you would like to use this technology and are interested, I can guide you to the right path. Just respond to this thread with your questions and I can share my knowledge and experience with you all. If not, I'm fine with you reading about my failure
. However, please make sure you learn from my experience and always use the CENTS as your secret sauce!Thanks guys
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