Kyle: The story of TxtCart started way back in 2019 when I was still in college. Previously I had been running a drop shipping brand, which gave me some experience in the direct-to-consumer space prior to exiting. One of the significant challenges I faced with that brand was not only getting people to visit the site but also getting them to convert. Like many brands, we had a lot of customers abandoning their carts and checkouts. This was my first realization that cart abandonment was a problem that needed solving.
At that time, the App Store had around 1,500 apps, compared to about 9,000 today. There were fewer options for SMS companies or cart abandonment solutions, and none of them seemed stellar. I believed this was something we could build, driven by my passion for tech and entrepreneurship I decided to start TxtCart aimed at serving the SMBs and dropshippers like myself.
My co-founders and I built out the MVP in about three months, submitted it to the App Store, and launched the initial project, focusing on cart abandonment through 2-way SMS. Our unique approach was using conversational AI, which acts as an extension of support and sales and back then, was far more limited than what we have today with the introduction of GenAI. Essentially, when a customer didn’t complete their purchase, we’d capture that info and automatically reach out as someone representing the brand.
This approach would build a better customer experience, where customer questions would be answered and they’d ultimately convert, a win-win for both parties. We quickly saw how much better the ROI and conversion rates were using a conversational platform over traditional 1-way SMS solutions, and knew we had something special here.
Kyle: TxtCart has evolved significantly since we built our MVP. Initially, our unique approach was leveraging conversational AI for cart abandonment through SMS. This AI was an early version, open sourced via Facebook, and to even call it AI compared to what we have today is a stretch. We have made several iterations of progress over the original conversational AI and are actually wrapping up our GenAI LLM currently which is super exciting. However, over time we as a company have expanded on the foundation and doubled down on SMS as our core focus.
We have added new features, and are building out a full-service SMS revenue generating platform. What this means is we’re taking our winning formula for checkout recovery flows, and applying it across all automations and flows that customers would typically receive from an SMS Platform. On top of that, bringing in Popups to our offering will allow us to take our flagship checkout recovery product, and now offer it at the cart level while capturing about 35% more subscribers for our brands. One thing remains true though, while we've seen many ESP’s tack on SMS, we are SMS first and will never stray from that, meaning no Email Marketing from our platform.
I believe strongly in specialization being greater than generalization and while ESP’s and SMS can have synergistic relationships, I believe the best SMS and customer experience comes from a platform dedicated to that one thing.
Outside of our core offering being performance based conversational flows, we’ve been looking upstream, talking to our customers and talking to prospects that are at that $5M-$50M GMV level, and have realized that we need to take another look at our campaigns product. With smaller brands, they tend to only send campaigns around peak busy season and holidays, so this may be 3-4 times a year. What we see with mid-market and enterprise brands, is they leverage campaigns far more frequently, often resulting in 2-4 campaigns per month. So internally, we’re expanding our offering and product capabilities to better support bigger brands on their campaigns, while keeping the conversational aspect they know and love.
Kyle: In general, I would assume two things to be true over the next two to three years. Firstly, I believe SMS and the use of AI within that will be vastly different as more legacy competitors and SMS companies lean into AI. From a cost savings perspective, AI will play a huge role in transforming the landscape. Secondly, I think that it’s important to remember that AI is still relatively new and a very buzzword. People are somewhat apprehensive, and with new technologies, further regulations also come. It wouldn’t surprise me that as AI becomes a larger component of many brands' strategies and marketing, that we see more regulations and crack down across the board.
Overall, I think TxtCart is well positioned to lead this change as it’s part of our core offering and by continuing to develop our generative AI capabilities. Our goal is to provide brands with an AI agent that ties sales and support under one roof making SMS crush in both revenue generation and customer experience. By focusing on enhancing our AI-driven features and expanding our product to cover all aspects of SMS marketing, we aim to stay ahead of the curve and provide the most advanced and effective solutions for our clients.
Kyle: Top D2C brands on TxtCart excel by being data-driven and continually testing and optimizing their SMS campaigns. They send significantly more campaigns compared to smaller brands, often conducting A/B tests and experimenting with different versions of copy to see what works best. These brands lean into creative testing, especially with MMS, although traditional SMS campaigns remain highly effective.
On the checkout recovery side, we generally push brands to stick to our proven formula, but larger brands sometimes request custom messaging to better fit their brand's tone, voice and delivery. Typically they are open to trying new verbiage and copy to see how it impacts customer engagement. Additionally, they experiment with various discount strategies, tailoring offers such as free shipping or percentage discounts to see which resonates most with their audience and leads to the highest conversion rates.
Kyle: One thing I didn't expect to be true about building a SaaS tool in the Shopify world is the importance of talking to customers, especially as you move upstream. When we first built TxtCart, we primarily served SMBs and drop shippers, relying on our own experiences and observations of competitors to guide product development. For this segment, extensive validation wasn't as critical. And we were able to achieve high levels of success for both our customers and our business.
However, as we started working with larger brands and moving more upstream, it became clear that understanding their specific needs and gaining insights from CMOs, founders, and other individuals in these large brands given their experiences was way more crucial than I originally thought. Conversations with these folks have been eye-opening, revealing unique ways they use products and their specific requirements. This has shifted my perspective on the importance of customer feedback and has influenced how we build and iterate on our solutions moving forward. Blending data and feedback from customers/prospects is how we’re going from 1 to 10 as a company.
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Kyle: The primary difference between what nine-figure brands and seven-figure brands look for in an SMS solution is the level of service and integration. Seven-figure brands, such as drop shippers, prioritize ease of use and setup. They appreciate simple onboarding processes and are mainly focused on the revenue generated by the SMS tool. For these smaller brands, an extra $10,000 to $40,000 a month can significantly move the needle.
In contrast, nine-figure brands seek more white-glove service and guided onboarding, including calls for migrations and list uploads. There’s generally more of a stigma of migrating to a new platform being hard (it doesn’t have to be) and they tend to often care less about the incremental revenue and more about the quality of interactions and customer conversations. The ability to capture their tone of voice and ensure accurate, updated information is crucial for these larger brands. Lastly I would say that many of these brands also place a far higher emphasis on integrations, such as with Klaviyo or Gorgias, and expect the SMS solution to fit seamlessly within their existing tech stack which is more complex than that of a 7 figure brand typically.
Kyle: Building a tech stack from scratch for a brand, I would include several essential tools.
Kyle: In the next three years, my dream for TxtCart is to triple the number of customers we work with (currently 2,500 Shopify stores) and achieve a similar growth in our ARR (Annual Recurring Revenue).
As a bootstrapped founder, working with a small team, I see the potential for TxtCart to be acquired by a strategic investor or competitor in the future. However, I am passionate about building and working with our customers, and I enjoy tackling the daily challenges that come with it.
As an entrepreneur, we tend to love goal setting and delayed gratification, and once one goal is achieved, we move that goal post to the end of the next field. It's a never ending battle, but we love it and if you don’t love what you do, you won’t last. When we reach that level, there is a part of me that would be eager to take on the next challenge and push TxtCart even further but I guess time will tell, I’ll know when the time to sell is, and right now we’re just getting started.
Ultimately, I want to establish TxtCart as a leading player in the SMS marketing space, known for our innovative use of AI and our ability to help brands create highly personalized and effective marketing campaigns that resonate with their customers in a way not previously done.
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