Miss Calls is in business now : For every entrepreneur

ZipDial a really cool home-turned-office in Bangalore, a team of brilliant people have turned a phenomenon that is unique to the country into a booming business. That phenomenon is missed calls.

While that might not sound like big business, once you realize why this is a prevalent behavior in India, it will make perfect sense. Basically, a lot of residents in the country use prepaid cellphones. Each connected call and sent text costs money; therefore the missed call was born. If you were to drop your friend off at their house and head home, you would call them and then hang up, as to signal that you’ve arrived safely. This way, nobody is charged for the call.

It’s kind of like the behavior of paging someone with “911” back in the day, as if to say “call me immediately.” While the pager behavior never turned into a business, the missed-call behavior most certainly has, and ZipDial owns the space.

The service that the company provides is provisioning a phone number that advertisers and companies like Disney and Gillette can plaster on billboards and newspaper ads, allowing people to call the number and disconnect without getting charged. After that, the person is sent a text message with communication about deals, coupons or any other messages that the business wants to convey. This is important because incoming text messages are free for prepaid cellphone users. The telecom companies in India love it, because it’s creating traffic that never existed before.

These companies can learn more about their “followers” by sending them surveys, which we’re told that many folks participate in. In many cases, these campaigns have outperformed those taking place on social networks like Facebook and Twitter.

Why Twitter Bought Bangalore ‘Missed Call’ Startup ZipDial

In India people make cellphone calls to each other, letting phones ring once or twice and hanging up to escape the call charges. This clever “missed call” behavior, second nature to Indians, is used to convey some predecided message such as “I’m there.”

Valerie Wagoner, an American, set about precisely to tap such ingenuity. And in January her missed call startup ZipDial in Bangalore was acquired by Twitter for a reported $30 million.

For many in India (and other emerging markets) for whom the first online experience is increasingly through a mobile device, the cost of data impinges on the Internet experience. Via ZipDial, Twitter gets access to those with erratic Internet access or with skimpy data plans. “Twitter in partnership with ZipDial can make great content more accessible to everyone,” said the San Francisco acquirer in a postdeal statement.

In emerging markets like India, although smartphone penetration is rocketing, only one in three smartphone users have a data connection, says Wagoner. The average Indian mobile data user uses only 60MB of data a month compared with 1.38GB by the average American. This curbs downloads of apps such as Twitter.

Valerie Wagoner

Wagoner, 31, a California native, studied microfinance in graduate school at Stanford and got interested in emerging economies. She worked briefly with eBay international marketing team and then moved to Bangalore in 2008 to get closer to emerging market problems, “which are more about ‘need to have’ than ‘nice to have,’ ” as she describes them. At mobile payments startup mChek, where she worked with entrepreneur and venture capitalist Sanjay Swamy, she was taken by the missed call phenomenon. Brainstorming with Swamy and a third founder on monetizing the tactic, they created ZipDial in 2010.

Through missed calls the service connects product brands to their target Indian consumers. There’s no consumer cost for incoming texts. So far Indians have missed-called ZipDial’s numbers over 1 billion times to access promotions and such from the likes of confectionary multinational Mondelez’ Cadbury’s chocolates and Unilever Dove soap.

ZipDial assigns companies a special phone number which the brands display in their ads or packaging. Disney India, for instance, has 2 million ZipDial missed callers who preview Disney content 13 times per month on average. (If the caller has a mere feature phone, he only gets text replies.) “It’s an insane level of engagement,” says Wagoner. By comparison, on Twitter, Disney India currently has 18,600 followers.

When the horrific New Delhi rape case erupted two years ago, Gillette launched a massive missed call crusade via ZipDial, asking men to pledge respect for women. Gillette ran the pledge in newspaper ads along with the ZipDial number to “missed call” if they took the pledge, after which Gillette responded with another ZipDial number to refer friends to take the same pledge.