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The rise of SMSPortal has been nothing short of astonishing. It had its origins in a garage in the Eastern Cape, where it was launched as a rudimentary SMS gateway aimed at letting students know what was happening in the club scene but quickly evolved from there.
Once co-founders James Pearce and Charles Stretch started focusing on this potential, the business took off. And it took off in rather spectacular fashion. “When the company started out, it was sending 30 000 messages a month. I remember us saying that if we could get to 500 000 a month, we’d really have it made. Now we send out 150 million a month,” Stretch told Entrepreneur back in 2013. Today, the company sends 400 million messages a month, and it has upped its turnover from R300 million in 2013 to R700 million in 2016.
But while the growth SMSPortal has enjoyed has certainly been rapid and significant, it has also been carefully measured and managed. Cognisant of the dangers associated with growing too quickly, Pearce and Stretch made sure that the company didn’t grow so big so fast that they no longer had a handle on things.
“We realised pretty quickly that the system held potential,” says co-founder James Pearce. “Especially for businesses that were looking for an instant and reliable way of communicating with customers.”
Even when they recognised the massive potential in their idea during the early days of the business, they made the decision to start small.
“In the beginning, we just targeted SMEs in Port Elizabeth,” says Pearce. “Keeping things small early on meant we didn’t need to build a large-scale gateway early on. Also, we could find our feet and test our systems thoroughly before we scaled to a point where any glitch or hiccup would mean disaster.” A great example of a company that scaled way too quickly was Pets.com — one of the most infamous casualties of the dot-com bubble.
Pets.com — which, as its name suggests, sold pet supplies online — was founded in August 1998. It was quickly identified as one of the hottest tech companies around and attracted very significant venture funding (about $300 million). For a while, Pets.com was everywhere. It spent a lot of money on marketing, including a spot in the 1999 Macy’s Thanksgiving Day Parade in New York, and an advertisement during the 2000 NFL Super Bowl. (The $1,2 million Super Bowl ad, by the way, was a huge hit. USA Today ranked it as the best ad of the Super Bowl, and the tagline: ‘Because pets can’t drive’ was seen as a brilliant bit of marketing).
In February 2000, Pets.com listed on the Nasdaq. A mere 268 days later, it was liquidated. So what went wrong?
The company had grown too quickly. It had spent millions to capture the market and build brand recognition before it had really established whether its business model actually made sense. When those in charge did stop to take stock, it quickly became apparent that Pets.com was a house of cards built on a shaky foundation of assumptions.
Its marketing budget alone far outstripped the revenue it was generating, and people were not spending the sort of money online that the company had been betting on. Pets.com, for example, was offering free shipping, but customers weren’t spending enough to justify this.
On 6 November 2000, Pets.com announced that it was closing its doors. When it listed in February of the same year, a share in the company had been worth $11. By the time Pets.com decided to liquidate, a share went for $0,19.
As mentioned earlier, SMSPortal’s turnover has gone from R300 million in 2013 to R700 million in 2016, and it handles about 400 million text messages a month (an increase of 300% in three years).
Now, considering the above, it’s perhaps surprising to discover that SMSPortal only employs around 50 people. Sure, the staff complement has increased quite a bit since 2013 — when the company had a mere 20 employees — but 50 is still a very small number for an organisation that is turning over R700 million a year. One of the chief characteristics of an eminently scalable business is the ability to reduce its marginal cost to virtually zero. Just consider Facebook, Dropbox or Uber. These tech companies could scale quickly because adding a single extra user cost them virtually nothing in terms of money, time and effort.
SMSPortal is another good example of a company that has managed to scale without allowing size and complexity to overwhelm the organisation. Some of this has to do with the nature of the business, sure, but Pearce and Stretch are quick to point out that the right employees are just as crucial when it comes to scaling.
“We spend a lot of time on recruitment,” says Pearce. “We never hire quickly. We spend time looking for the right people and put everyone through rigorous testing.
“We also make sure that there’s culture fit. It’s important that any new individual fits in with the rest of the team.”
“The IT space is a particularly challenging one,” adds Stretch. “There is huge demand for great engineers and software developers, so you’re competing with lots of large companies. Because of this, we put a lot of time and resources into recruiting the best people.”
SMSPortal also takes on interns twice a year. While interns obviously need a lot of supervision, an internship programme is also a great way to identify young people with excellent potential.
“It’s really worked for us in terms of identifying promising talent,” says Stretch. “We’ve hired quite a few people permanently who started out as interns.” As SMSPortal has grown from 20 to 50 people, the founders have also put senior managers in place who manage the various teams.
“You can’t try to manage 50 people personally,” says Pearce. “You need to put competent managers in place who can take over the day-to-day management of certain key areas so that you can spend your time doing other things. As a company grows, you have to let go of certain responsibilities and trust that the people you’ve employed will be able to do the job. Your aim should be to empower them and not complicate their lives with red tape. Their focus should be on doing business — not dealing with bureaucracy.”
According to Stretch, it comes down to hiring people who can do the job better than you can.
“A business can’t grow very much if you’re only a handful of people. If you want to scale significantly, you need a larger team. The important thing, though, is to hire people who are very competent and highly skilled. We’ve certainly hired people who are better at their specific tasks than we would be. So we know that they can be trusted with making the right decisions. We know that the business wouldn’t be where it is today without them.”
Since SMSPortal was last featured in Entrepreneur, the company’s international operations have increased massively. At the moment, the company delivers messages to roughly 700 networks in 150 countries.
How have Stretch and Pearce managed to establish SMSPortal overseas? “One of the strategies that has worked best for us has been to grow alongside our clients,” says Pearce. “Many of our clients have ventured into foreign markets, and we have joined them in these endeavours — providing our services to them in these new territories.
“Once we’re operating in a new territory, we can then start building relationships and gain an understanding of how things are done in the region. Eventually, we can start working with foreign clients.
“To an extent, this has been a bit of a ’do or die’ strategy. We realised that if we didn’t grow with our clients and offer them our services in other regions, someone else would jump in and do it. It’s been difficult at times, but we’ve learnt a lot through the process.”
“It all comes down to having great relationships,” says Stretch. “We have very good relationships with Vodacom and MTN, for example, and since these companies are very active in other countries and regions, we have been able to expand because of these relationships. So when going into other regions, it’s worth considering how you can leverage existing relationships to do it. Just going into a new region on your own can be very hard.”
The founders also warn against entering markets that are far away from South Africa and in a different time zone. “We are especially active in southern Africa, the UK and Australia,” says Pearce.
“And there is no doubt that it’s easier to manage operations that are in a similar time zone. So trying to enter a territory on the other side of the world as your first form of international expansion is perhaps not the best idea. You’ll be surprised how much easier it is when the time zone is similar.”
To find the official article please visit: www.entrepreneurmag.co.za
Just like any teenager, they dreamt of making it big in the world. To them, their age of 19 was just a number as they pursued their dreams.
Today, James Pearce and Charles Stretch can laugh about their humble beginnings – a garage in Port Elizabeth that used to be their office.
The two met at Nelson Mandela Bay Metropolitan University and their first project was a website called BlueWorld, which focused on taking photos of people at night clubs and bars.
In turn, patrons at the establishments would register their details so that they could access their photos from the website.
This was in an era before smartphones and being able to get hold of photos of yourself was a big deal, says Ryan Louw, brand marketing manager of SMSPortal, which is owned by Pearce and Stretch.
Pearce and Stretch had built up a database of these people, which was a valuable asset to club and bar owners.
When the club and bar owners showed interest in the database, that was the beginning of their bulk SMS idea.
The bars and clubs, says Louw, needed a way to market their weekly specials and events and that saw the birth of SMSPortal in 2002.
“Charles and James saw this opportunity and began their journey as SMS gurus. They started small, focusing on the bar scene and slowly expanded into the Port Elizabeth area,” Louw says.
All took place in a small garage at the back of the Pearce’s house. “That was SMSPortal’s headquarters in the early years. Many big deals would be done over the phone … with massive companies unaware of their humble beginnings,” Louw says.
Today, the pair runs a company with a turnover of R700 million and with growth of 50% year on year.
Among their 38 000 clients are Anglo American, Sanlam, Eskom and schools. SMSPortal has connectivity in 150 countries and currently focuses on Africa, Europe and Australia.
Stretch says many people own mobile phones, but do not necessary have postal addresses.
So, the aim is to help their clients, for instance big retail shops, to SMS statements to clients when they cannot use mail.
Stretch says his company’s recent acquisition of Ireland’s biggest bulk SMS company, Bulk Text, was a huge move in their quest to grow their brand, continentally and globally.
He says though SMS traffic between people and friends has decreased with the popularity of social networks, SMSing between businesses was still on the increase worldwide.
Stretch says they were still humbled by where they started and try to keep their business in touch with their roots.
Pearce is based in their office in Cape Town handling the technological part of things, while Stretch runs the day-to-day affairs from Port Elizabeth.
To find the official article please visit: www.news24.com
South African company SMSPortal has acquired Bulktext.ie, Ireland’s largest bulk SMS provider, to increase its European footprint.
The purchase makes SMSPortal one of the world’s largest bulk SMS providers.
SMSPortal started in a garage in Port Elizabeth in 2002. MD Charles Stretch says he began the company with R20 000, and mostly sent SMSes to PE nightclub goers.
It now has a presence in 150 countries, with access to 700 networks.
“Through various acquisitions, we have ballooned globally since 2013,” says Stretch.
“We’re proud to have begun in Port Elizabeth, and fly the South African flag on our overseas visits.
“The messaging forecasts for application-to-person communication is predicted to rocket to over $78 billion by 2022, so this acquisition comes at a critical time for the business.”
SMSPortal sends over 400 million SMSes a month, has a turnover of R700 million, and experiences growth of 50% year-on-year.
The company says it will continue to invest in South Africa, despite expanding globally. It has an internship programme for South African software development graduates.
To find the official article please visit: www.itweb.co.za
Leading software house, SMSPortal, implements microservices to keep the client experience seamless.
Over the past few years the term “Microservices” or “Microservice Architecture” has emerged to explain the certain way of designing software applications as smaller automated deployable services.
SMSPortal has been implementing these microservices for the past couple of years.
We caught up with Brett Skinner, SMSPortal Software Manger, to better understand their use of microservices within their software design.
“We have over the years been writing increasingly finer grained services,” explains Skinner.
“We didn’t realize it, but we have slowly been moving towards this architecture for a while.”
“But now it is more formalized and we can look to the wisdom of the industry on this topic to accelerate our adoption of this architectural style.”
The adoption of microservices within business is an area that has shown unbelievable benefits to both software applications and the end-user.
“Microservices help us to form software engineering teams around similar business lines. Studies show that software aligned with business is more successful.”
What makes microservices adoption so important is the ability to focus on certain problem areas and expend energy where it is needed.
“Microservices allows us to answer scaling problems in very focused ways,” Skinner adds.
“If a specific part of the system shows signs of being slow, we can either start more instances of just that service or we can scale up the virtual machines that they run on.”
Downtime is a word that most software houses would like to eradicate from their vocabulary.
SMSPortal with their implementation of these microservices achieves just that.
“We have been looking at providing a platform with zero downtime,” says Skinner.
“By having a microservices architecture we can take down an instance, apply our upgrades and test it without ever switching off completely and without interrupting our client experience.”
Adopting a microservice architecture isn’t an overnight endeavour. There is a lot of upfront investment in architecture and standards at an enterprise level
SMSPortal with its rapid growth over the past 15 years has focused on building a world-class team of software engineers to better attend to these development needs.
“I cannot stress enough how important good software engineers are to our business, we are always on the lookout for top talent as we continue to grow our team,” concludes Skinner.
To read the official article please visit: mybroadband.co.za
When you receive SMS spam and want to stop receiving these messages, you can reply with the word “STOP”. This message should be free.
The Consumer Protection Act (CPA) requires direct marketing companies to provide a mechanism for recipients to opt-out at no cost from these direct marketing messages.
The WASPA Code of Conduct states that “a member may not charge a consumer a fee for processing an opt-out request or for registering a pre-emptive block”.
It is therefore of concern that many companies which use SMS marketing do not offer consumers the free opt-out SMS.
Sending a STOP SMS will typically cost subscribers between 50c and 80c per SMS, which is in contravention of the CPA.
WASPs (Wireless Application Service Providers) do have the option to use a reverse-billing channel, which means the company instead of the consumer will foot the bill for an opt-out SMS.
These reverse-billing channels are seldom used, though, and the reason is simple: companies don’t want to pay for the SMS.
Many industry players have spoken out about this practice, which should come to an end in South Africa, they said.
SMSPortal CEO Charles Stretch said free opt-out SMS messages are not only best business practice, but are a WASPA, CPA, and POPI requirement.
“At SMSPortal we continue to encourage our clients not to bill users for opting out of SMS,” said Stretch.
Please read the official article at mybroadband.co.za
