For those of you who are familiar with the muppets, I think it was Kermit the frog who said “It’s not easy making green”, when asked about small business revenues. The first association we get when we hear the words “small business” is, well, of a small place with a couple of people that in the best case scenario make a profit of a couple thousand dollars each month.
Jeff Judge and Chris Watland, founders of Chicago-based “Signal”, prove otherwise. The duo decided to start a company in the saturated world of text messaging (SMS), providing a platform to help firms manage their SMS campaigns. By keeping things simple, yet efficient, the company (with only 15 employees) now makes over 2.7 million dollars in annual revenues, with more than 200,000 campaigns for more than 1,000 clients across several types of media: text messaging; emails; social media; even coupons. All of that without getting financial help from even one outside investor.
Watland, an accountant, and Judge, a software engineer, met back in 2006 and started their friendship pitching business ideas to one another. They were especially intrigued by SMS alert from local bars in their area that were sent about drink specials. They saw an opening in the newly rising text advertising market and decided to fill that need for a self-service text messaging where a business could come in and get going right away.
A month later, Judge was already working hard on the software aspect of the business, building a basic SMS-messaging platform, while Watland did the leg work, i.e. gather intelligence on potential customers and customers’ needs. Their goal: Build a one-stop shop to manage and track digital campaigns. Judge estimates there were already about 200 SMS-marketing firms in the space, but no clear leader and very few offering the kind of simplicity firms were seeking.
From the beginning the pair decided to go at it alone. They both put up $35,000 apiece from personal savings and secured $100,000 in operating credit, which they’ve since repaid.
According to them, the timing for their business was ripe. Till then most of the market consisted of “garbage” content – pay to vote; pay to download this wallpaper; pay for this ringtone, etc’. At the same time, TV shows like American Idol have popularized text campaigns and introduced the method, or knowledge of its existence to many households. Yet, still, “Signal” got their start the old fashioned way. Their fast client was the business next door. More local businesses started coming after that and never stopped since.
For now, “Signal” focuses on continuing to refine its central service: a cross-channel marketing platform. But they are still looking for ways to expand, while the company has so far worked mainly with larger firms, it recently debuted a freemium model for small businesses.
The “Signal” story comes to show that even in a saturated, over-crowded market, in a matter known to everyone from their daily life, with the right idea at the right time there is a chance for success. Furthermore, it comes to show that being a small business doesn’t necessarily means small incomes as well; the money is there for the taking it. Just takes a little bit of courage and vision to get it.