SINGAPORE: Short Message Service, more popularly known as SMS, is considered by many today as an afterthought, an anachronistic function that should be consigned to the tech scrapheap along with outmoded innovations like the Walkman and CD player.
After all, with chat apps such as WhatsApp, Telegram and WeChat favoured by consumers, why do we need SMS?
Yet, Mr Kevin Yang has managed to build a business of sending SMS messages – and a sustainable one too – with Hello Technology founded in 1997.
The Singaporean entrepreneur's story is not one of immediate adoption, rapid expansion and large amounts of investment money thrown at his direction, as many start-ups and their founders have as their claim to fame. Rather, it was passion, perseverance and opportune timing that has helped in growing the company, which raked in revenues of above S$20 million last year.
In an interview with Channel NewsAsia on Friday (Jan 12), Mr Yang shared how the idea of receiving notifications was what got him started on his business, and it stemmed from his forgetfulness.
“I used to carry a physical notebook around with me that has all my meetings, and also a calendar on my computer to remind me of appointments,” he recalled. “And I was thinking: ‘What if I could send these reminders to my pager?’”
“I GOT TO SPEAK TO STEVE JOBS”
At that point in 1994, the software programmer had just returned from his stint in the United States, and specifically in Silicon Valley, where he worked for tech stalwarts such as Adobe and Oracle. He also has a Master’s degree in Computer Science from the University of Southern California and a Bachelor’s in the same field from the University of Texas.
And Mr Yang shared how meeting and interacting with iconic tech leaders at the “bleeding edge of technology” helped sharpen his passion for building things from scratch. “You’ve got people like Steve Jobs who started something in their garage, so it’s possible to start something in a garage and doing something successful, so that really inspired me.”
He even got to meet Mr Jobs on one occasion in 1989, when he went to NeXT to pitch a tool to create “nice” tables and charts on behalf of a start-up he worked for then. “I got to speak to Steve Jobs and his lieutenants; he was my hero so I was ‘ee’ and ‘ah’ … don’t know what to say.”
In another example, Mr Yang recalled how when he worked at Oracle, co-founder Larry Ellison would come by and check out his work. He also had a hand in recruiting Mr Craig Federighi – now Apple’s senior vice president of software engineering and overseeing development of the company’s operating systems and digital assistant Siri – while he was there.
But Silicon Valley experience did not guarantee success, and Mr Yang’s idea of creating a service where reminders are sent to people’s handphones or pagers didn’t fly. At least initially.
During Hello Technology’s early years, which coincided with the dotcom boom, the business model was to “get as many eyeballs as possible” on one’s website, with the service provided for free, the entrepreneur said. The more eyeballs one gets, the more funding money will roll in, but this was not sustainable, he explained.
TIMING IS EVERYTHING
So, when the dotcom bubble burst in 2000, Mr Yang knew he had to change his business model but he also knew he wanted to keep at the idea of providing SMS notifications as a service. He turned his attention to businesses, and reckoned that “if people didn’t want to pay for notifications, I’ll get businesses to pay”.
One of the early adopters of the service was Singapore port operator PSA, which used the service to notify its dock drivers on the location to go to pick up deliveries, he said.
But adoption was slow, and his fledgling business was further hit from 2001 to 2003, after the Sep 11 terrorist attacks in the US. It was “gloomy” then and companies did not want to spend money on new technology, Mr Yang said.
It was only towards the tail end of 2003 and into 2004 that there was an upturn in fortune, aided by banks coming on board to use SMS for their marketing efforts. Brokerages, too, used Hello Technology’s services to send out stock alerts and trade confirmation, he added.
Subsequently, the local banks also started using SMS for two-factor authentication through the sending of one-time passwords (OTPs) and this helped to create a foundation for the company to build on, the founder shared.
“It was a case of waiting until the market was ready for SMS notification services.”
SMS IS HERE TO STAY
Banks make up the majority of the company’s business today, but it also provides its service to the public sector, logistics, retail, technology and education sectors, Mr Yang said.
These include helping the military notify troops of mobilisation exercises, and creating a chat platform for schools to allow teachers to communicate with students and parents without having to reveal their personal mobile numbers, as is the case with services such as WhatsApp, he elaborated.
And the tech pioneer is of the opinion that SMS will remain relevant, even as technology evolves and needs change.
For instance, Mr Yang acknowledged that banks may cut down on sending SMS notifications for the purpose of authentication in the future, as the industry is headed towards software tokens on customers’ mobile devices.
This is why the company is investing efforts to create new products targeting specific verticals, such as the chat platform for schools, to mitigate the challenge of certain market segments that might shrink, he said.
He is also optimistic of the future, given that Google has put its weight behind the Rich Communications Service (RCS) standard, which adds features such as group chat, high-resolution photo sharing and read receipts, among others.
Google announced last February that telcos such as Orange, Deutsche Telekom and Globe Telecom have signed on to launch RCS messaging services and preload Android Messages as the native messaging app for their subscribers. It also roped in handset makers such as LG, Sony, HTC and ZTE to do the same for the devices they make.
This means allowing businesses and brands to continue the conversation with their customers beyond just the notifications sent out, Mr Yang said.
So while a bank could send a reminder to someone using its credit card service to pay his or her monthly bill today, with RCS the customer can pay the bill without leaving the SMS application.
“SMS is still the most ubiquitous way of reaching someone … it is right there (in your phone),” he said, and he believes RCS will prolong the longevity of a technology that many has shunted to the back of their minds.