Starting a Group Text Messaging Company
Interview with Tatango Founder Derek Johnson
Ever wanted to send a text message to fifty people at the same time? It's simple functionality, but it took the team at Tatango to solve the problem. Now, they are growing fast, reaping the benefits of solving an important consumer problem.
This business, like many businesses, started as a result of a conversation between two friends, discussing something they wanted to do but that wasn't easy to do.
Talented entrepreneurs can transform those conversations into vast empires. Indeed, Tatango founder Derek Johnson took that conversation and has transformed it into a booming business with half a million users.
Derek, tell us about Tatango. What are you doing exactly?
Tatango is a very simple platform that allows any group to stay connected through text messaging. Tatango allows any group to collect, manage and mobile message all of their group members both from a computer and mobile phone.
Tatango was born from the promise of giving groups the ability to stay connected anytime, anywhere.
Tatango is permission-based, spam-free and cost-free to consumers. The Tatango service doesn't require any special phone or its users to download any software to use the service.
The service is ad-supported. Tatango places 30 character text ads at the bottom of group messages, costing you no more than a standard text message to receive a group alert. However, the ad can be removed from the bottom of group messages for more commercial uses at a low monthly fee.
Tatango is located just outside of Seattle, Washington in Bellingham.
Group mobile messaging seems like a great niche. When did you start the business and how did you get the idea for Tatango?
The idea came to me in 2007 while I was having lunch with a friend and she was telling me the troubles her sorority was having with getting a hold of everyone in her chapter to let them know about meeting times, event locations, etc.
I thought group text messaging could be the answer to their problems so I went home to look for a solution for her chapter. The surprising thing, I couldn't find anything online that was perfect for a group like a sorority. That's when I had the idea to build my own website that allowed groups such as a sorority the ability to blast out a text message to all their members at the same time.
The website was launched in October of 2007, and has since grown to almost half a million users and 25 million text messages sent to a wide variety of groups, including college clubs, religious organizations, non-profit associations, athletic teams and businesses.
What were you doing before this, and is this your first business?
Before Tatango I was a college student at the University of Houston. I dropped out after my Junior year to focus full time on the company -- best decision I ever made. I've always had the entrepreneurial spirit, starting companies in high school and college, but none that have grown to the size of this company.
Where did you get the startup money?
I was 22 when I started to look for the initial funding to get my idea off the ground. I quickly came to the harsh realization that at my age, it was going to be hard.
Banks wouldn't touch us and Venture Capitalists and Angel Organizations said we didn't have enough experience. This left us pitching family and friends that we knew believed in our idea, but most importantly they believed in us personally to succeed. It took us about a month, doing over 20 presentations in my basement to raise our initial seed money.
Once we knew we had something and we had started to gain traction, we needed additional capital above and beyond the limits that our friends and family could invest, so we presented to the Bellingham Angels and with their help raised our second round of capital.
With the growth we keep seeing, we have been recently speaking with several different venture capital firms that have shown interest in our company.
Who are your main competitors? How do you compete against them?
We have a few competitors including Textmarks, 3jam and txtblaster, but from my personal viewpoint, I don't see these websites being a threat to our market share.
Tatango is constantly on the leading edge of group communications, while our competitor's continually play catch up to us. Compared to our competitors, Tatango has designed an extremely user-friendly interface, allowing any type of group, with any level of technical expertise or lack there-of, to utilize the system.
In addition, I challenge any of our competitors to post their CEO's personal contact information, and be as available to their users, as we are to ours. I'm always taking feedback and suggestions, if you have any, feel free to call me anytime on my personal cell phone number: 206.334.4012.
How has your experience in running the business been different from what you expected?
If I look back to when I was starting Tatango, I don't think anything was unexpected to me as it grew. I think from the outside though, people find it very unexpected that when you are the CEO of a company it's not all golf and long lunches, I work my ass off 7 days a week to get where I am right now and I will continue to do so until I get to where I want to be.
Is there anything you wish you had done differently?
No. You have to have 100% confidence in the decisions that you and your team are making, and you can't look back and dwell. As long as you learn from your mistakes, just keep moving forward.
What have you done that has been very effective in helping to grow the business?
Hands down, we owe the majority of our success to our team members. We have created the dream team at our company and daily I'm amazed at their hustle and commitment to the company. These guys are machines really, releasing new features and marketing campaigns faster than other companies with at least three times as many resources as we have.
What advice would you give to somebody else who wanted to start a similar business?
I have five key points of advice I give to anyone I meet that wants to start a business.
- Start small and you will be able to quickly see if you have something interesting before you look to expand. Don't think you're going to go to a bank at our age and get financing. We started Tatango with almost no money in my parent's basement, with borrowed desks and our computers from college, you have to start small and you need to stay focused and work hard to prove to others that you have something worthwhile. Young people have dreams of starting off big, but it takes time to build something of quality.
- Always be available. The whole Tatango team is available and taking calls 24 hours a day, seven days a week. In an age where a lot of other companies just aren't there, that sets you apart. And listening, our users have given us a great amount of feedback, and are the sole reason why we keep launching features that users love and our competitors copy.
- Our generation hardly ever asks for help, but in our company, we thrive on advice and feedback. It's easy when you're our age, everyone wants to help and lend you a hand, which makes it a no brainer not to ask for it," he said. In addition, we have an advisory board of nine volunteer members that advise us on legal, accounting, business, and marketing and have been a great asset to the company.
- Don't waste time in getting rid of employees that aren't working out. I find it's relatively easy to find employees that have the needed skill set to get a job done, the real challenge for us is to find employees that fit within the culture that we have created at our company. Be extremely picky and focused in hiring, and this will lead to a strong core team.
- No matter what problem you are experiencing or challenge you have in front of you with your business, you aren't the first person. Seek out advice or guidance from someone that has gone through the same thing you are going through, this will save you from making a lot of costly mistakes in the future.
Those are five excellent tips for new entrepreneurs, Derek. Thanks so much for participating in one of our entrepreneur interviews. We will be tracking Tatango's rising star as you grow the company to the next level.
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