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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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