Group SMS is a very interesting space but the economics are very difficult to work with. At my first startup http://inactiv.com http://inactiv.com we had a very

Group SMS is a very interesting space but the economics are very difficult to work with. At my first startup http://inactiv.com http://inactiv.com we had a very similar product in 2006. We were seeing about 50-60000 messages a day and that was limited only by our rudimentary infrastructure. Over time we realized that those SMS costs add up so rapidly that you need a very good monetization to pull it off. Recovering such high ad rates will be very difficult. Maybe with Groupon/Foursquare like models, something more substantial may be possible. It will be interesting to see the direction GroupMe takes. Do wish them the best though.