5M users in 4 months. How hike plans to win the global messaging space

And all this with spamming!

No offence with them but I've been spammed like anything by them. It has happened with lot of my friends. When they install app, it sends texts to ALL contacts without permission prompting to install the app!

And this has been #1 reason I did not install it.

What makes it more shady is that they are funded by Bharti Softbank. Bharti manages Airtel, one of the big telcos in India. So maybe, they want more people to use Hike and maybe sell over some data to Airtel. Since they are spamming, their privacy policy needs to be combed over too. Also, the article looks like a PR piece for SF expansion, and to generate American funds.

My experience with Airtel has been good till now. They provide good service and in fact are the best network providers in my area. But the tactics are very shady of course.

However, I don't think they will get much users. Most of people around me are entrenched in WhatsApp and those who want to try something new get Cubie(I use it as well, it does not spam!)

Here's our privacy policy - hike.in/terms. I'd love for you to go through it line by line. The invites sent when a user launches the app is user initiated. The UX built wasn't great clearly so we removed it.

On Data and Airtel, can't blame you for thinking that way. Most of the industry is filled with those kinds. Airtel and BSB are different companies. No such thing happening.

(Creator @hikeapp)

Thank you for replying. Good to know Airtel and BSB are separate enterprises. I went through the terms.

"Hike TOS:

hike may receive data whenever You connect with an application or site through hike (such as during status update, when You connect to other sites and in which case hike posts to these sites on Your behalf ). This may include date and time You visit the site, the web address, IP address information, browser and if You are logged into hike and Your authentication tokens used on such sites. Your authentication tokens may be saved on the server for the sole purpose of seamless posting to the same site by You in the future through hike.

We may share non-personally-identifiable information (such as anonymous user usage data, referring / exit pages and URLs, platform types, asset views, number of clicks, etc.) with third-parties to better understand usage patterns for certain content, services, advertisements, promotions, and/or functionality related to hike application."

So you store "authentication tokens", and maybe FB and Google+, twitter data interactions....I think you are aiming for this goldmine, since normally this data through Airtel's network will be encrypted. Pardon my skeptic viewpoint, but it looks you are not aiming for directly monetizing this app itself but are building a satellite platform based upon this app.

1. "Authentication Tokens" are stored only with user permission. Why? So we can seamlessly allow the user who gives us permission to post to FB, Twitter. Its standard industry practice.

2. non-personally-identifiable information is something every app collects and should do so. It helps us understand our how to serve our users better. With respect to 3rd parties - see 'Kontagent' for example. They're a super smart data analysis company. Why re-invent the wheel. Again, a standard industry practice.

Hope that puts your skeptical viewpoints to rest :)

I can testify to this as well. The irony is that they're using Whatsapp to spam me :D

The intention was and is never to spam at all. There are a couple of screens that allow you to invite your friends. It's pretty clear that users don't pay attention to this, so we've decided to remove this completely.

We learn quick :)

(Creator @hikeapp)

Curious about this line from the article: "128bit encryption over Wi-Fi." Why only when using wifi? I'm not aware of too much bandwidth overhead involved in exchanging public keys and using AES in some kind of stream-emulation block mode.

My cynical side worries this is some kind of concession to the wireless carriers that want to easedrop on traffic easily. I hope that's not the case! Anyone know?

Oh, there were some genuine technical limitations in implementing it over carrier networks. I'll check the exact details with the team and get back to you. (Most of them are sleeping, it's 3AM here in India.)

No ulterior motives. :)

We've built SSL on our HAProxy boxes. The concurrent load one can handle with SSL on one of these boxes is significantly less than without. Applying this to mobile traffic further reduces the average concurrent load we can manage on a HAProxy box. Given how quickly we've had to scale up its a technical decision we've taken.

Eventually we'd like to have it all across.

(Creator @hikeapp)

Business model: cover the cost (a loss) of sending SMS, and sell advertising once it is big enough.

Not really. We don't believe ads are the best way to monetize. And anyways, why create a beautiful UX and then plaster ads on it?

We'll start looking at that once we hit a certain critical mass, but in much smarter ways. Right now, all focus is on growth and engagement.

PS: I'm the growth hacker at hike.

Growth hacker, eh? Tell me one thing: how do plan to recover the cost of sending the sms? You cant really call it growth when you are losing money on every user.

Well, to enter and grow so fast in such a competitive space, you've to differentiate yourself from your competition.

Our differentiators are: 1. A beautiful UX/design 2. The ability to message everyone through hike/SMS

#1 works everywhere and has driven growth for us globally. #2 combined with #1 gives us a compelling proposition for Indian users, the first market we intend to dominate. It's very powerful for a market like India where more than 80% mobile users have yet to experience data.

The unit economics in the long term are quite favorable and we expect to have a positive average LTV across the user base.

It's going to be tough, but we're betting we can do it. Just wait and watch. ;)

All the best!

Whatsapp doesn't do sms. Users who receive hike signed smses might eventually move on to hike. So eventually more users will mean less costs for hike. That sounds like a viable business model.

The sms differentiator is good. All hike has to do is bear the costs of smses until most users are on hike and hope that the competition does not start offering the same service. Do you have any patents which can help you?

Spot on. Thanks.

We do have a pending patent application for the same.

I think we must include where you are growing as a factor of the discussion. The Indian consumer does not have a very high purchasing power. This means that the average Indian must focus on covering his/her basic needs, rather than buy luxury items. Your app falls manages to squeeze in by allowing Indians to send SMS without incurring into any cost. You are simply buying your way into their phones in order to get a fair amount of downloads in a short time. The issue with this tactic is that you can only spend so much. Time will come for you to stop paying for the SMS. By then, your funds will not increase. The rate at which you are spending them will only decrease by n amount. You cannot count on an UI to battle this issue. A pretty UI is nice, but doesn't matter if your users cannot use your app. I do reason that you will start advertising in order to level out the financials a bit. Something that wont really do a lot for you, due to the low purchase power of the local consumer. On the other hand, this seems like an app built to be acquihired. Something with which I have no issue. Companies engineered to be acquihired solve a problem, and are a fair way for another company to simply buy researched and developed products.

Anyhow, I'm just talking business. I wish your team good luck. I really want India to move forward in tech. This might help achieve that.

Well let me tell you something: The creator of this app (Kavin Bharti Mittal) is son of the guy (Sunil Bharti Mittal) running one of the big telco company (Airtel) in India. I think he sure has something up his sleeve, and this is why the investment of 7M sounds disingenuous and misleading, given that the VC company is just another venture of Airtel.

I got interested as to what is their value proposition and why are they doing it. Then I came upon this information. Here is the nitty gritty.

From their TOS:

We may share non-personally-identifiable information (such as anonymous user usage data, referring / exit pages and URLs, platform types, asset views, number of clicks, etc.) with third-parties to better understand usage patterns for certain content, services, advertisements, promotions, and/or functionality related to hike application.

hike may receive data whenever You connect with an application or site through hike (such as during status update, when You connect to other sites and in which case hike posts to these sites on Your behalf ). This may include date and time You visit the site, the web address, IP address information, browser and if You are logged into hike and Your authentication tokens used on such sites. Your authentication tokens may be saved on the server for the sole purpose of seamless posting to the same site by You in the future through hike.

They store the "Authentication tokens"...

I am Kavin Mittal and you can point all your questions to me.

On Data and Airtel, can't blame you for thinking that way. Most of the industry is filled with those kinds. Airtel and BSB are different companies. No such thing happening.

1. "Authentication Tokens" are stored only with user permission. Why? So we can seamlessly allow the user who gives us permission to post to FB, Twitter. Its standard industry practice.

2. non-personally-identifiable information is something every app collects and should do so. It helps us understand our how to serve our users better. With respect to 3rd parties - see 'Kontagent' for example. They're a super smart data analysis company. Why re-invent the wheel. Again, a standard industry practice.

Have a skim through any other messaging apps terms and I'm sure you'll see nothing different.

Anything else?

Almost every consumer business in the Internet space loses money initially on every customer no matter how small or big. Else there wouldn't be a need for VC industry now would there? :). Having a viable business model is important and we have a few that we believe will work well. Time will tell (Hint: Not ads)

(Creator @hikeapp)

Maybe having a viable business model should be a top priority from the start. The only way this approach to starting companies makes sense is if you're aiming to get acquired from the very start.

We do have a lot of ideas in mind, but in a space like this, you can start looking at monetization only after you've hit a certain critical mass in terms of user base.

Ultimately, it's going to be a "content and connections" play, but the initial focus has to be on growth, otherwise you're just putting the cart before the horse. :)

Tell your marketing team that your home page video is hilariously lame, and unrealistic.

Whatsapp was created because telecom operators have crazy pricing for SMS (5000% profit margin last time I heard). So, people saved on money and limitations (India has a 100 message limit/day) with their data pack.

Hike wants to create an app that goes back to the SMS model where they pay the charges, not the users. They use a mass SMS gateway which is much cheaper. Using mass gateway also means the users must opt out of "Do not disturb" registry, which opens gates for more spam.

Interesting part is, it's backed by a large telco in India[1].

[1] "a 50:50 Bharti Softbank joint venture"

We would ideally love to have all users connect through data, but more than 80% of the 900 million mobile users in India simply don't have a mobile data connection.

Hence, if we are to achieve our goal of enabling universal communication among all our users, we have to offer SMS as a fallback channel.

And it also gives us a massive differentiating edge over other apps, so why not.

The whole "users opting out of the DND registry" is something that's controlled by TRAI, the Telecom regulatory body of India. We have no control over it.

It's not the ideal flow we'd like to offer users, but we've to work with what we have.

We're funded by the group which also backs a large telco in India, but we're separate companies.

Ads destroy the experience. No point spending so much time on design and then shoving ads in there.

Short answer: No. We won't monetize through ads

(Creator @hikeapp)