0 Interview of Raju Vanapala - man who wrote the success story of way2sms.com

Raju Vanapala, founder and CEO, way2sms.com has big ambitions, he wants to take his business global. He has already reached at a 20 million subscribers in India and has done revenues of Rs 12 crore. This site has a heavy traffic during New Year and all festivals as all the mobile service providers cost 1 Rupee per SMS where as way2sms has all for free.

Raju Vanapala
After a masters degree in computer applications, Raju Vanapala decided to take the entrepreneurial route with the business low on investments and high on returns. After studying various opportunities, he decided to bet on the mobile internet space and found his way to success.

Founded in 2006, way2sms.com is India's first free text messaging portal that also allows you to chat, get email and social media alerts. With over 4 million page views every month, Raju believes way2sms could be India's answer to Google.

Below is the edited transcript of his interview. Also watch the accompanying videos.

Q: You are the first web portal in India to introduce free SMS. How does the platform operate? How are you providing these free SMSs? How easy is this for a user to just log on to way2sms and enjoy the experience?

A: It's a risky to start such kind of a business model of giving SMS for free because I was buying a message at Rs 0.27 from the telecom operator. And I am giving it for free to the user. That's a big risk.

Nobody has tried. I started analysing why nobody has started anything of this kind. The only reason is because balancing the cost as against the revenues is a big challenge there. But somehow I took the risk.

It's a runaway success for us. Soon after we started way2sms, I started getting somewhere around 2,000 users per day within three months of launch.

We made the user experience very easy. User can just register his mobile number, we send a password to him just to authenticate or just to check the ownership of his mobile, then he logs into way2sms and he can start sending messages. You can add contacts and you can start pushing messages to other friends.

Q: Apart from SMSs, what are the other features that you provide?

A: The moment the user lands on our site, he can start communicating in multiple channels'SMS, chatting, and emails. He can receive alerts, he can be in touch with his inbox anytime.

Q: What is the kind of traction you have created for the business?

A: We have grown in Silicon Valley style with zero advertising budget, focus on viral marketing and word of mouth and online. We have a 20-million registered profiles right now.

According to comscore, around five million users are visiting way2sms every month. We are generating close to 400 million page views. That's a big number in the Indian context. I think we could be one among the top five portals in the country in terms of page views.

When it comes to mobile, currently we are reaching around 55 million unique mobiles every month. Our contacts are big asset to us. So, we are managing 365 million contacts in our data base. That's almost half of our Indian mobile subscriber user base.

Q: While mobile users are on a rise, do you really think that people in India are realising the potential of connecting via SMS, especially through the web? What is the kind of potential that you see for your business?

A: People prefer sending messages through way2sms. The reason is we are adding tremendous value to consumer; we are saving cost to them. We are saving close to Rs 10-15 crore SMS cost every month to our consumers.

We are still adding around 23000 new users everyday. We are adding close to 7 lakh users every month. We are growing the same pace. Our growth is still increasing month-on-month.

Q: You have already gross revenues of Rs 12 crore. What is the revenue model? How are you sustaining yourself today?
A: We are monetising on the web. We have partnerships with all the digital agencies and also the large ad networks in the country. We are generating revenues only through online advertisements at this movement.

 We are not spamming anybody and we are not reaching with advertisements on mobile, we truly respect the privacy of the users. We are planning an innovative advertising platform around way2sms, click to call advertising platform and click to message advertising platform. So, those are coming up. That will turn way2sms as an advertising powerhouse in the Indian context.

And building this advertising powerhouse way2sms today has capacities to deliver over 2,000 messages every second. Having already partnered major telecom operators like Tata Indicom, value first and Loop mobile, Raju feels catering to this wide range of operators is a big challenge.

The biggest challenge is being managing the multiple relations with the operators with different cost structure. There is no standard cost structure between the operators. In case of one operator we are paying around one paisa, in case of another operator we are paying around two paisa. So, it depends on the volume as well.

We are in dynamic business model. So, we have to keep on innovating in order to ensure that the user is staying with us. We have to come up with new features or new communication modes. Pleasing user every three months is the biggest challenge.

Q: Internet security is very critical. What are you doing for your users to give them a spam free experience?

A: One is we are educating our consumers on the best practices to use our platform. We have a privacy team at the backend which is continuously monitoring the activity on way2sms because it's a communication platform. There is also a scope for exploiting the platform. So, we keep monitoring all these activities and we keep responding timely and we keep blocking so many accounts.

Q: So you have reached around 20 million users across India, what's your target audience and how are you planning to increase this number?
A: One is going to geographic, second is growing in India. We are sitting on a subscriber base. We are thinking about ways on monetising the user base. So, we probably may be entering into different online businesses very soon.

Reaching out to over 55 million mobile phones every month, way2sms.com is amongst the 25 most visited portals in India and the top 500 in the world, according to alexa.com. Raju is now looking to float other consumer internet brands under his parent company way2online.

We are planning to launch a crowd deals platform wherein user can launch his own deals to run; he can sell it to his contacts via social media. That is something very new in India.

Q: And how soon do you hope to launch this?

A: We'll take another 45 days. We are actually like doing the trial run. Probably in the next month I think its coming up.

Q: You also have a vision to create a USD billion company in the internet space. How do you propose to do that?

A: We have two ways of doing that. One, expanding horizontally in the country. Two, vertical play in the global scenario. One positioning way2sms has skype for messaging. Skype goes for calling and they reach to all corners. Same way we may be positioning way2sms across the world as a power house for messaging.

Q: Also, do you plan to take you brand international and what countries would you be looking at?

A: There are similar telecom eco-systems across the world. Around 12 destinations, we have identified right now, which includes Singapore, Malaysia, Vietnam, Saudi Arab, Bahrain, UAE, Sri Lanka, Bangladesh and few other small countries in Africa.

Q: And would you take the inorganic route or you plan to grow organically?

A: Right now, we don't have any plans towards the inorganic growth. We believe we have so much to do on organic side of the business. First, reaching the geographies and then building the advertising model around it and foreseeing the strong revenue models around way2sms business model.

Q: What are the kinds of investments that you are looking at putting and how are you planning to get onto funds?

A: We are not hurried in fact for raising funds. But as we go globally, I think we probably may go for a first round of funding in next six-eight months.

Q: What are your future plans, also do you hope to go for an IPO?

A: Right it's on the card in fact. Three years from now, we are planning a blockbuster IPO in the country. The way we are moving and the way we are growing, I think we truly deserve a blockbuster IPO in the country.

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