Hotxt Goes Down Free Route

Back in April, I posted a review of Hotxt, a downloadable Java application that allowed you to send all the sms-type messages you wanted for £1 ($1.79) a week. This concluded with the view that:

So, is Hotxt hot? To be honest, I’d go for lukewarm with lots of potential. If they sort out their usability/copy writing issues and went for a free service at the core, I think they’d be red hot.

While I’m sure that¬†my review¬†didn’t have anything whatsoever to do with it, I’m delighted to say that the site is hugely improved in terms of usability and clear copy and today, they announced that they’d be going free.

Today I met with founders Doug Richard (famous for his role as a panelist Dragon’s Den - a TV programme where wannabe entrepreneurs pitch their wares to VCs) and David Whitewood and had a good chat about the industry and a briefing about the product, company and new direction.

The free strategy seems to have evolved as much to overcome cumbersome ICSTIS subscription regulations introduced as a result of errr….over-enthusiasm by certain ringtone companies, as well as the ability to offer the service globally from now on. Billing still remains a core competency of the company and will be able to be utilised when selling the premium products that they’ll now have to introduce to be part of their new business model.

A business like Hotxt has 3 main challenges (if we ignore that porting Java applications across many handsets is, and will remain, a nightmare):

1. Get people to want to download in the first place – what I call, putting your product in danger of being sold.

2. Getting them to download the product once they’ve expressed that interest. I’ve written about this before¬†on a widely commented post about how difficult this is. Maybe 50% – 75% of requested WAP Push messages are never responded to. Don’t forget, at that point, the user has requested details of how to download and then, for whatever reason, simply does click on the link to complete the install process.

3. Getting them to use the product once it’s downloaded. You’d have assumed that if users had jumped nimbly and knowledgeably through the first two hoops, they’d gracefully dive through the final one, wouldn’t you? Well, my friends, “never assume” is the lesson here.

Doug and David weren’t prepared to discuss numbers at each of these stages and understandably. But if they’re following anything near industry averages, there is a significant and intensely frustrating drop off at each stage. This is caused by issues such as WAP Push not being delivered, the message arriving but storing somewhere other than the Inbox, download issues, handset compatibility, the application being filed in a less than obvious/obscure place. I could go on (and on) with this list and it’s sadly typical for any company trying to operate in this kind of area.

My experience, for what it’s worth, is to send a WAP Push and if it’s not clicked within an hour, send the same link embedded in an sms. While some might be tempted to abandon WAP Push altogether, I’d say, the double whammy approach gives the best results. But that’s not the overall solution – lots of experimenting and tweaking each part of the process is essential.

Hotxt clearly have a smart team and are very focused on the various metrics I’ve described above. If you’re in this kind of business, you just have to be obsessed with making incremental improvements at every stage of the process and to develop an internal best practice process, in the absence of any available industry standards.

Speaking of which, if you are UK based, run this kind of business and are interested in sharing learning (as opposed to nicking other people’s ideas – give, then take, please) drop me an email using the link above. I’m thinking about getting a small group of non-competing companies together to see how they can improve their results by applying the wisdom of crowds.

So, back to Hotxt. They still face considerable challenges, as any entrepreneurs do, as well as the issues I’ve outlined above. But now they’ve (inadvertently) taken my advice, I have to conclude that, yes, they are¬†now Red Hot. Moreover, the new strategy¬†means that¬†the answer to Doug Richard’s own¬†catchphrase “Where’s the exit?” now has many potential responses, with the proviso¬†that they execute well.

Finally, on a personal note,¬†it’s rather nice doing a Doug Richard on Doug Richard. Ha.


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