“There’s Been A Lot Of Buzz About The Apparent Demise Of SMS.”

“There’s been a lot of buzz about the apparent demise of SMS. It’s all too easy to diagnose:
Alternative, IP-based messaging and price competition leads to reduced SMS income for operators. Most analysts agree: 21 years after its arrival, the days of the Short Message Service are counted. But looking a little closer at what’s going on in the Mobile and App industries, we need to add a major caveat to this argument: For consistent, affordable, fast and crucial communications, SMS is alive and well. Let’s mention that each German, on statistical average, sends 750 SMS per year. Have you heard of Riepl’s Law? It states that new media can never completely replace old media. We agree.

Here’s an example of how SMS keeps its importance even in a WhatsApp world: It involves two two of our Portfolio companies, Familo (from Hamburg) and GTX Messaging (from Cologne), so we’re not impartial. But based on what we hear from around digital companies big and small, it’s guaranteed to be relevant.

Let’s look at how the acclaimed startup Familo has incorporated SMS in a latest-generation app for Android and iOS. Familo is a social network application that offers families the option to enhance security and interact more comfortably based on mobile technology. It’s designed to simplify family communications and offers functions such as check-ins and alerts to family members. The Familo example shows how, even in a Mobile-Web and App-Based world, SMS keeps its role in crucial positions: 1) for user generation, 2) for conversion optimization; 3) for technical maintenance and critical IT communication, and 4) to support alerts in critical peer-to-peer communication.

Familo uses the service of GTX Messaging, a specialist from Cologne (and also a Venista Ventures investment). GTX allows to easily integrate SMS in all sorts of applications and get the SMS at a attractive prices. It’s key that technical integration is possible without complicated interfaces or expensive software applications needed.

For user generation and conversion optimization, here are some of the merits of SMS: Users that access the Familo website and wish to download the app don’t have to go through a complicated signup. They can simply type in their MSISDN in a field and click to receive a download link to their phone. This drives conversion in customer acquisition, which is a huge factor to increase marketing efficiency. Why? Because it’s much simpler than picking up a phone and typing in the name of the app, looking for the right entry on your app store and then downloading. Reducing the media break is a key factor of including SMS, argues David Nellessen, who’s CTO at Familo.

Since David Nellessen and the Familo tech team were so convinced by SMS integration, they wrote their own software that they now distribute as open source code, allowing other companies to implement it in their services and thus send SMS through GTX without much programming needed. This software is available for free at Github.

Another aspect of SMS’s productive role in user acquisition is that Familo is currently upgrading its registration process to enhance the role of SMS, e.g. users can recommend the app to other family members by sending out an automated text message. In registration, even the most IP-based services, such as WhatsApp and Snapchat, still trust only SMS.

This of course also has to do with the secure and guaranteed nature of SMS broadcasts. And that is why in many cases partners of GTX Messaging include SMS in the internal IT communications. For instance, SMS is helpful when systems send out alert messages automatically to IT staff if critical processes fail. In the case of Familo, the IT team also uses SMS to stay informed if urgent events appear. It’s still true: No other communications technology is as failure-proof when it comes to guaranteed transmission.

This is also the reason why in peer-to-peer communication just as in internal communication, SMS will keep playing a part. Familo have decided that SMS needs to be an option whenever a user needs to point his network to a problem. For example, if a child needs help and calls for it through Familo, sending an alert will trigger an SMS to the whole family in the future. This makes sure that everyone gets informed at the soonest possible point without any obstacles to sendout or reception.

These few examples show that, contrary to common perception, SMS still is very much a part of crucial business communication. It’s another fair point for Wolfgang Riepl.”