SMS Privacy

James Stanley describes the challenges behind building, maintaining, and growing his anonymous SMS business to $600/mo in revenue.

Tell us about yourself and what you're working on.

My name is James Stanley. I live in Bristol (England). I spend 2 days a week working a day job as a software engineer, and I'm also currently working on SMS Privacy: it's a service offering online SMS-capable phone numbers, with completely anonymous signup, and payment in Bitcoin. The most popular use case is to sign up for accounts with services that use phone number verification in an effort to deanonymise users.

I launched the service a little over 2 months ago, and in the past month it's made £500 in revenue, and is growing 50% month-over-month.

How'd you get started with SMS Privacy?

About 3 months ago I got interested in online anonymity. I had this idea that I wanted to create a pseudonym to use online, that nobody would be able to trace back to me, and I'd just use it as if it were a completely normal person. I experimented with TOR, came up with a pseudonymous name, etc, and had all these grand plans of operating a secret blog. However, I was stumped when I tried to sign up for Gmail: they needed me to verify my phone number. And it's the same story at every major email provider. And the same on Twitter, Facebook, and even Telegram. I couldn't find a way to "verify" my phone number without revealing some of my identity (e.g. by paying with a credit card).

So I started building SMS Privacy. In hindsight I should have validated the idea first, but halfway through building it I asked a handful of TOR users what they thought, and the feedback was mostly positive, so that spurred me on to continue. The service was pretty simple to implement, it's just a user interface to an SMS API (e.g. Twilio) and processing Bitcoin payments.

The first hurdle came when I found that my API provider was blocking messages of the form "Your Google verification code is 123456". That was a surprise. Even when sending a message like that from a handset, it just silently disappeared into the ether instead of getting delivered to my application. I tried a lot of different SMS services and all but one had this problem. The other one was extremely expensive and required me to physically call them up if I wanted a new number.

So my next idea was to use cheap Android phones and cheap SIM cards and write an Android app that would simply forward SMS to my server – kinda like my own mini-Twilio service, but with no message filtering. And any time a user releases a number, that phone starts vibrating and I have to change the SIM card, at which point the new number becomes available for purchase on the website.

This system works great! But there is still value in having a much cheaper fully-automated system using the API provider, so I offer users the choice.

How'd you find the time and funding to build all this?

Earlier this year I decided working a day job wasn't what I wanted to do with my life, so I asked my boss if I could drop down to working only 2 days a week. That is just about enough to pay my expenses, and leaves me 3 days to enjoy my life and to try to build some sort of business. He agreed (he's a great boss), so I just work on SMS Privacy 3 days a week.

It took about 5 days' work to go from the initial idea to launching. Also, funding has never been an issue for me – it costs almost nothing to start a business like this.

How have you grown your traffic and revenue so far?

This is the big one. Even if you identify a problem, come up with a solution, and implement it well enough to get to the point where you can actually ask people for money, it's never going to make any money if you can't get it in front of the right people. Growth is the only aspect of the business I still have to work on.

I lurk in the r/Bitcoin Reddit community and have noticed a few Bitcoin-related businesses launch there, so I decided to just post it and see what happens. It was a big success (by my standards): I had 3 paying users within 24 hours, which has never happened to me before, and it stimulated some discussion. User signups continued to trickle in for the next few days, but it quickly dropped to almost nothing. At this point I knew the product worked, and I knew users wanted it.

My next idea was to take a leaf out of Patrick McKenzie's book and try to add pages to the site that would match common keywords and search terms. I'm not sure how well this has worked for SEO purposes, but it has meant there is a wealth of information for potential users to look at before committing to sign up, which can't be a bad thing. Also note that as the service is privacy-centric, I considered it a little unethical to use Google Analytics, so I don't use it for SMS Privacy, although in normal circumstances I would.

I also started running a lot of A/B tests, and got some pretty surprising results. For example, I tried replacing a cartoon of a spy with a cartoon of Kim Jong-Un, and it doubled the conversion rate. I still don't know why.

I tried out some Bitcoin-oriented advertising networks, but I'm not sure how much of a return I got on that investment. I did add tracking code to the URL, but it seemed that while the ads were running I got a lot more visits from non-tracked users. I think I'll need to do some more experimenting to work out what the value of the advertising is. I think privacy-conscious users are more likely to type the domain name manually than click on the ad, which makes it hard to track ad performance.

There are now a little over 400 user accounts, and payments total nearly £800. I've spent about half of that amount on expenses, including 5 ad campaigns, 3 Android phones, about 40 SIM cards, and a couple of hundred pounds on SMS API usage.

What are your goals for the future?

In the short term, I'd like to continue to increase revenue by 50% monthly. In the long term, I'd like to grow the business to the point where I can pretty much ignore it for a week and not have to worry about whether it's making enough money. (At the moment I occasionally have a day or 2 where there are no payments, and it drives me crazy wondering if I've done something wrong or if it's just natural variation.) I would also like to be able to offer Android phone numbers in other countries.

The biggest challenge I can foresee is having to manage a large number of physical devices. At the moment I have to swap 1 or 2 SIM cards each day, but that would become a real pain if it was 100 or 200. Although at that point I'd be making enough money that I could probably tolerate it.

If you had to start over, what would you do differently?

It took me quite a while to actually bother to do A/B tests and automate the conversion funnel tracking. I now have a script I can run which, given a date range and a list of A/B tests, shows the total users + conversion rate for each step of the funnel, segmented by A/B test variations. This is super useful in analysing both overall usage patterns and the effects of A/B tests. If I started again, I would be doing this stuff from the beginning.

What do you think your biggest advantages have been?

I already had some familiarity with Bitcoin, and enough confidence to take payment in it. I don't think the service would be anywhere near as popular if it only took credit card payments. People who want complete anonymity don't want a payments processor to know who they are, on principle if nothing else.

Also, I already had some familiarity with an SMS API service from a previous (failed) side project.

What advice would you spare with aspiring indie hackers?

"It takes years of work to become an overnight success." I've been trying to come up with a profitable side project for probably 3 years now, and none of them have ever made any money. But with each project I've learnt something, and this project was profitable from day 1. And hopefully it won't be the last.

It's better to let a project die than to continue working on it past the point that you know it's not going to work. Learn your lessons from the project and move on. I have a handful of projects that I tried to make work long after I lost confidence in them, just because I couldn't bear to admit that I was wrong, and I think that's a big waste of time and mental energy.

I also think it's useful to be generally curious, and not to spend too much effort trying to suppress that curiosity in favour of productivity. This whole project started because I was curious about setting up a pseudonymous identity, and in pursuing that curiosity I came across a problem that I could solve for others.

Also: read Patrick McKenzie's blog. His writing is as entertaining as it is informative. I can't recommend it highly enough.

Where can we learn more?

I have a blog at http://incoherency.co.uk which is about 50% technical content and 50% whatever else I'm doing with my life. Email me at james@incoherency.co.uk if you want to talk about anything at all. In particularly I'm happy to talk people through accepting payment in Bitcoin.

Or, if you leave a comment below, I'll try and get back to you:

Loading comments...

Subscribe for new interviews every week! 🤗

Courtland here! I regularly interview the indie hackers behind profitable apps and side projects like SMS Privacy. Enter your email below, and I'll send you new interviews once a week! Feel free to unsubscribe whenever you want.

Share this interview: