At the end of 2002, during the time of the text parties, I discovered a now defunct company in London, Satellite-b, who developed a really innovated racing game. The game was played out on screen, with people texting to pick a horse to back.

The horses would race round a track then when the race ends, the winner got a text message with ways to claim a prize. We had some fun trying this out with different bars and clubs, watching how consumers interact with it and their perceptions of what to expect.

This lead to our first real business model. The plan was to take games like this to bars and clubs, who use it to collect customer data for marketing purposes (using an opt in procedure). In return for getting the service at minimal cost, we would push out drinks promotions to their databases.

This meant we could have a number of bars collecting data, who at the time did not have much in their budgets for such a service, then make our money from the drinks companies who try to sell to the same people. In effect, consumers would receive a text message co-branded with a drinks sponsor.

The downside of this model, which we found out much later on, is the critical mass required to make money. We needed a minimum of 100,000 people to gain interest from drinkco’s, but bars and clubs tended to hit a ceiling of data they can collect around 1-2,000 people. This means we needed at least 80-100 bars to just get to a starting point!

Not that this was a problem, merely the challenge. As with any challenge the key is to break it to smaller bite size parts. For us, we started with a few bars we knew, turned that into a pitch to an area manager, which lead to 35 bars in total on board.

A few months later and we started to realise there was just as much money to make from the bars, who initially not seen the benefits. We decided to go with that, drop the drinkco’s co-branding and focus on the bar market. The real value we soon realised, was helping them collect as many opted in customers as possible.

The lesson we learned in this story is to continually review what you do. If we never deviated from our goal of 100 bars, we would not have listened to our clients, or start ed to charge them for a service. Ultimately, this left us in better shape for the future, with fewer people to please and better money for our efforts!