
GroupMe Is Now Sending One Million Texts Every Day - jkopelman
http://techcrunch.com/2011/02/14/groupme-one-million-texts/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29
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akshat
Group SMS is a very interesting space but the economics are very difficult to
work with. At my first startup <http://inactiv.com> we had a very similar
product in 2006. We were seeing about 50-60000 messages a day and that was
limited only by our rudimentary infrastructure.

Over time we realized that those SMS costs add up so rapidly that you need a
very good monetization to pull it off. Recovering such high ad rates will be
very difficult. Maybe with Groupon/Foursquare like models, something more
substantial may be possible.

It will be interesting to see the direction GroupMe takes. Do wish them the
best though.

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muerdeme
1) Why isn't this feature built in to smart phones? I know it's a big pain
point for me on iOS. I assume it's not on Android if there is this much
uptake.

2) How on earth are they going to make money? Their suggestion for location
based sponsored group chat sounds terrible to me, because you'd be opting in
to miniature twitter feed that clogs up your text inbox instead of being able
to read it asynchronously.

~~~
saurik
iOS actually supports sending text messages to multiple people, and that
"group" is maintained in the SMS app for later broadcasts.

However, when you receive an incoming text message you don't know whether it
was coming to just you or CC a hundred other numbers, so there is no way to
Reply All.

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geoffc
America wants to group text. At GroupFlier.com we just reached 1M cumulative
texts in 12 weeks. The demand as very broad as we see traffic from just about
every age and activity group.

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dannyr
But does America want to pay for group text?

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geoffc
No they won't pay but if you shift enough of the traffic onto smart phone
clients and show mobile ads you have a killer business.

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iloveyouocean
I started withTXT in 2004. We had a group messaging product, GroupTXT, that
was marketed to Fraternities, Sororities, and other university student
organizations. The product was fairly successful, but even with the
organizations paying healthy monthly fees and some advertising revenue, the
messaging costs were eating us alive. At the time we had direct SMS agreements
with the major cell carriers. I havent kept up with the industry and with
costs, but every time I see a successful SMS messaging company sending
millions of messages I always have to wonder how much investment money they
are burning through.

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sudonim
It seems to me that the smart thing for GroupMe to do is to use push on smart
phones and sms on non-smart phones. If they aren't already doing this, it's an
easy win to reduce their volume over SMS.

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mckoss
I think this was the original value proposition behind Twitter. I would say
the only reason people were originally interested in it was that it could
enable SMS broadcast.

The main thing SMS has going for it is ubiquity. Too bad it is so expensive
for some people - there needs to be a replacement technology whose price is in
line with the costs of delivery.

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ludicast
What are the barriers for them to develop their own SMS infrastructure? Even
if they got a crazy discount down all the way to $0.01 per text, that's still
unreasonable for a message form that can fit in a single packet.

I heard somewhere once "if you own the infrastructure you can charge rent" :).
Maybe at their volumes it's time they stopped leasing.

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jiffylu
Does anyone know how much it costs them to acquire a new number? In other
words, every time a user creates a new group, they are assigned a number. How
much does that cost GroupMe?

~~~
ceelee
They're definitely getting the Twilio volume discount price. Probably paying a
lot less then the stated: <http://www.twilio.com/pricing-signup/volume-
pricing>

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quizbiz
I hope this company monetizes this quickly and is able to last because this is
one of those few apps that as soon as I saw, I utilized. GroupMe just got 10+
active users. Haha.

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EGreg
Wait a second. How are they paying for all those texts to be sent out if the
service is free? If they are using twilio or something similar, the costs are
2c per SMS.

Are they managing to send out the SMS for free somehow??

~~~
jimboyoungblood
Last I heard they were still using Twilio.

Do the math.. ouch!

