This blog's focus is the emerging communication space, its many entrepreneurs who are changing telecom and more specifically business development and related strategies in the space. In keeping with this, I recently posted about Jajah's and ooma's deployment of distribution channels as a way to market - and specifically of how they act as data points among many suggesting a trend of launching an emerging comm business first as a direct (or consumer) offer, then leveraging that activity towards a successful platform business for long term scale. I can add others to the list, including Mobivox (who I am proudly associated with) which in the last year successfully vectored its voice activated services business towards platform, and continues to actively deploy partners around the world.
Since the post, interpretation - both on and offline - about some of things I said lead me to realize again just how much the voice platform business has proliferated and segmented in such a short time. Not long ago, many if not all emerging comm business came under the same moniker of Voice 2.0. Then, all were painted with the same vague Voice Platform brush. No longer.
To the credit of the many innovative entrepreneurs in this emerging comm space - the Voice Platform business has proliferated and is increasingly segmented. Jajah, Ifbyphone, Voxeo, Mobivox - just to name a few of many - can all be considered voice platform businesses or plays, but are not necessarily direct competitors of one another.
Mobivox (which delivers market leading voice activation applications from the cloud) and Jajah (a leader in IP network infrastructure services) share some elements in the offerings, but chose to partner last year in an effort to take advantage of their complementary strengths. And by visiting the Voxeo and Ifbyphone websites, one could interpret a similar services set, yet they are great business partners.
These examples serve as proof points to two conclusions: one, we are in a world of co-opetition, where an overlap of services offered is often an opportunity to partner for success, rather than a calling to compete. And two, the voice platform business is maturing nicely with niches being carved to respond to growing demand.
Thursday, July 9, 2009
Monday, June 29, 2009
How the Cloud is Changing the SMB Equation
Selling to small business has always been considered costly. If one assumes that the sales effort was similar to the one required to make an enterprise sale (consider that for the SMB buyer, buying telephony was a big investment - to them), then quick math suggests that the return just would not scale.
No doubt times have changed - and continue to. The cloud (formerly known as SaaS, ASP, Hosted, etc...) is to thank for this. Innovation can be done with less CapEx, making the equation for developing services targeted exclusively at the SMB more compelling.
This leaves just the small issue of go-to-market to solve. It still doesn't pay to put a rep on the road - short of selling to the 'M' in SMB - and building OEM channels takes time and money (see below). Enter the new 'direct' channel (online), coupled couple with lower cost inside sales people - and the formula starts to improve. This can work particularly well for very sticky services, and for those for whom the ARPU is beefy enough to incent said inside sales people. Don't discount the value of the live body on the phone. The SMB appetite for mission critical services is high, but their ability to set-up and manage a service is not.
The SB is much bigger than the MB
Keep in mind that while the SMB universe in the US is huge, the great majority of these companies have under 5 employees. This great post from GigaOM over the weekend, complete with pyramid charts tells this story very well.
Yet even the one-person shops should use many of the emerging services to improve their productivity, create the image of a larger company or just to cut costs. The hybrid direct channel discussed above is one key to growth in this segment; the other is packaging. Build easy to understand packages for the buyer and where possible, make them flat rate (or such that the buyer can predict monthly costs). Bundling, while abused by some larger companies, can also be effective.
OoVoo Bundles Up
Take OoVoo, a neat video conference start-up that serves consumers and increasingly, the SMB. They've recently bundled voice services into their video offering so that their SMB user can use them as a one stop shop. And they went a step further and separated the pricing by how many people can conference at one time. This way the buyer can quickly bucket themselves and accelerate their buying decision.
Imagine a sales rep going on the road to sell a small business on 3 way video conferencing? Never. But with the cloud firmly in place, small business can use big company services. And with an optimized direct sales channel, startups like Oovoo can grow nicely.
Package well. Build traction in a live person-backed online channel. And keep an eye on the OEM channel for long term scale.
No doubt times have changed - and continue to. The cloud (formerly known as SaaS, ASP, Hosted, etc...) is to thank for this. Innovation can be done with less CapEx, making the equation for developing services targeted exclusively at the SMB more compelling.
This leaves just the small issue of go-to-market to solve. It still doesn't pay to put a rep on the road - short of selling to the 'M' in SMB - and building OEM channels takes time and money (see below). Enter the new 'direct' channel (online), coupled couple with lower cost inside sales people - and the formula starts to improve. This can work particularly well for very sticky services, and for those for whom the ARPU is beefy enough to incent said inside sales people. Don't discount the value of the live body on the phone. The SMB appetite for mission critical services is high, but their ability to set-up and manage a service is not.
The SB is much bigger than the MB
Keep in mind that while the SMB universe in the US is huge, the great majority of these companies have under 5 employees. This great post from GigaOM over the weekend, complete with pyramid charts tells this story very well.
Yet even the one-person shops should use many of the emerging services to improve their productivity, create the image of a larger company or just to cut costs. The hybrid direct channel discussed above is one key to growth in this segment; the other is packaging. Build easy to understand packages for the buyer and where possible, make them flat rate (or such that the buyer can predict monthly costs). Bundling, while abused by some larger companies, can also be effective.
OoVoo Bundles Up
Take OoVoo, a neat video conference start-up that serves consumers and increasingly, the SMB. They've recently bundled voice services into their video offering so that their SMB user can use them as a one stop shop. And they went a step further and separated the pricing by how many people can conference at one time. This way the buyer can quickly bucket themselves and accelerate their buying decision.
Imagine a sales rep going on the road to sell a small business on 3 way video conferencing? Never. But with the cloud firmly in place, small business can use big company services. And with an optimized direct sales channel, startups like Oovoo can grow nicely.
Package well. Build traction in a live person-backed online channel. And keep an eye on the OEM channel for long term scale.
Thursday, June 25, 2009
Distribution works. With Funding.
Invariably every business plan I see - or every pitch I make to a VC - includes an element of 'channel' in it as a means of getting to market. But equally, the response is increasingly the same: We love the channel, but the capital to do it can be immense and hence the risk equation is uncomfortable. And they're right on all accounts. Right to love the channel because ultimately that is the way the company will truly scale. And right that it will be costly - and will take time. Lots of it. Yet it can work, and two recent announcements in the emerging telephony space validate this:
ooma raises another $18M: ooma has been at it a long time. But when you're trying to disrupt the oldest business out there (home land line), it's going to take a while. Yes this round came with valuation reset, but this is just a reality for companies who raised money before the crisis. More importantly is the confidence the investors are showing in what ooma has accomplished to date and in what's on tap. And that includes - in no small way - distribution. Ooma will tell you that a combination of the scale of the Best Buy channel and a pricing reset is what finally put enough wind in their sails to see a bright future. Since then other critical mass distribution like Radio Shack have joined on. With surely more to come. Distribution - setting it up and supporting it - is capital intensive. But in ooma's case, it's the only way to execute on their dream to disrupt.
Jajah eclipses a billion calls: The once cheap-calls-for-anyone provider announced this milestone this week. But read carefully. Where they once spoke loudest about the 10 million customers in their consumer business, the message has shifted (rightfully so) to a platform and partner deployment theme. And it's working. Jajah lists Yahoo, Plaxo, eHarmony and others as those large communities using the Jajah platform and network to power their voice applications. This did not happen overnight. A large consumer play and $20 million or more VC dollars fueled this success. But now with partners in play - both for revenue and credibility purposes - Jajah is perhaps better positioned than anyone in its market to really scale to the next level.
One lesson that is becoming clear and represents a departure from telecom business plans of the past: Go consumer first (or in parallel to a channel offer), build a brand and a service that works, but keep your eye on the prize - large distribution. Actually this is a trickier balance to strike than most believe. But when executed well, with a little timing or luck thrown in, all's well that ends well.
ooma raises another $18M: ooma has been at it a long time. But when you're trying to disrupt the oldest business out there (home land line), it's going to take a while. Yes this round came with valuation reset, but this is just a reality for companies who raised money before the crisis. More importantly is the confidence the investors are showing in what ooma has accomplished to date and in what's on tap. And that includes - in no small way - distribution. Ooma will tell you that a combination of the scale of the Best Buy channel and a pricing reset is what finally put enough wind in their sails to see a bright future. Since then other critical mass distribution like Radio Shack have joined on. With surely more to come. Distribution - setting it up and supporting it - is capital intensive. But in ooma's case, it's the only way to execute on their dream to disrupt.
Jajah eclipses a billion calls: The once cheap-calls-for-anyone provider announced this milestone this week. But read carefully. Where they once spoke loudest about the 10 million customers in their consumer business, the message has shifted (rightfully so) to a platform and partner deployment theme. And it's working. Jajah lists Yahoo, Plaxo, eHarmony and others as those large communities using the Jajah platform and network to power their voice applications. This did not happen overnight. A large consumer play and $20 million or more VC dollars fueled this success. But now with partners in play - both for revenue and credibility purposes - Jajah is perhaps better positioned than anyone in its market to really scale to the next level.
One lesson that is becoming clear and represents a departure from telecom business plans of the past: Go consumer first (or in parallel to a channel offer), build a brand and a service that works, but keep your eye on the prize - large distribution. Actually this is a trickier balance to strike than most believe. But when executed well, with a little timing or luck thrown in, all's well that ends well.
Saturday, June 20, 2009
The Wide(ning) World of Telephony is alive and well.
The recession continues. Notwithstanding the green shoots of better news of late (not including this week's upward revision of the California unemployment rate), times are difficult - with gusts up to miserable - for many. Yet one of the unsung joys of my work routine is that I often get to meet very entrepreneurial people; they offer me a regular reminder that no matter how bleak the news continues to be, the pace of innovation - combined of course with sheer determination - speaks well for the future.
Just in the last few weeks, I enjoyed meeting and talking with three emerging communication start-up CEO's (two of them Canadian of course) each after separate segments of their market, with their own twists. Here's a note on each:
Fonolo: Shai Berger of Toronto founded this young Canadian company set to change the way people connect to - and be served by - large call centers, and their notorious phone menus. As a lifer IVR person, what I find remarkable about this offering is that no matter how many technologies we throw at this problem (voice mail, IVR's, speech interfaces, ACD's, call analytics and even outsourced agents) there always seems to be a better way. Fonolo's approach is truly disruptive.
Oneeko: Since 2001 I have been using web conferencing in its many iterations yet I still regularly meet people who either don't use it because of cost and complexity, or who barely know what it is. Opportunity knocks for the company that can make it dead simple, affordable and then get it into the hands of the right audience. Oneeko could be this company. Its one-download approach and true real time architecture makes its ideal for spontaneous sharing of all kinds. And they're working on something that could radically reduce the cost for small business to help their customers online. And they're from Quebec - even closer to my heart!
Sabsebolo: Yogesh Patel is a true serial entrepreneur. One of those guys that after a lunch with him makes you want to start another company yourself! His group recently acquired Jaxtr as piece of the grand puzzle they are building. Starting with the classic yet effective point solution of conferencing, Yogesh and company are building a telephony-as-a-service provider to enable carriers around the world to more easily serve and profit from the SMB segments. The boom of earlier this decade has opened telephony but at the same time created too many point solution providers - and carriers can't do business with them all. Putting them all one platform is not easy, but Yogesh certainly has the energy and drive to do it.
Without question, this is but a sample of what's going on out there. That's the good news. Stay tuned.
Just in the last few weeks, I enjoyed meeting and talking with three emerging communication start-up CEO's (two of them Canadian of course) each after separate segments of their market, with their own twists. Here's a note on each:
Fonolo: Shai Berger of Toronto founded this young Canadian company set to change the way people connect to - and be served by - large call centers, and their notorious phone menus. As a lifer IVR person, what I find remarkable about this offering is that no matter how many technologies we throw at this problem (voice mail, IVR's, speech interfaces, ACD's, call analytics and even outsourced agents) there always seems to be a better way. Fonolo's approach is truly disruptive.
Oneeko: Since 2001 I have been using web conferencing in its many iterations yet I still regularly meet people who either don't use it because of cost and complexity, or who barely know what it is. Opportunity knocks for the company that can make it dead simple, affordable and then get it into the hands of the right audience. Oneeko could be this company. Its one-download approach and true real time architecture makes its ideal for spontaneous sharing of all kinds. And they're working on something that could radically reduce the cost for small business to help their customers online. And they're from Quebec - even closer to my heart!
Sabsebolo: Yogesh Patel is a true serial entrepreneur. One of those guys that after a lunch with him makes you want to start another company yourself! His group recently acquired Jaxtr as piece of the grand puzzle they are building. Starting with the classic yet effective point solution of conferencing, Yogesh and company are building a telephony-as-a-service provider to enable carriers around the world to more easily serve and profit from the SMB segments. The boom of earlier this decade has opened telephony but at the same time created too many point solution providers - and carriers can't do business with them all. Putting them all one platform is not easy, but Yogesh certainly has the energy and drive to do it.
Without question, this is but a sample of what's going on out there. That's the good news. Stay tuned.
Sunday, June 14, 2009
Like good wine, telephony innovations need time.
Recently I read an announcement from Ribbit about a new partner in the online marketing arena, that will enable marketers to deploy web telephony to better 'engage' online visitors.
The announcement - to me at least - is remarkable not so much for the technology deployment itself but for the reminder it offers us that telephony applications are getting ahead of the appetite businesses have to actually buy or use them. No doubt that elegantly integrating functionality like click-to-call, SMS and even call transcription into a variety of online marketing campaigns is no small feat, particularly when you make it easy for the average Joe to do across multiple platforms.
But the technology itself is not new. Nor is the concept. But the fact that it took until mid 2009 to push a meaningful deal across the wire should remind us start-up folks to focus on the apps and services that people are ready to buy. When I worked with Ifbyphone back in 2007, we identified that click-to-call and call tracking technology could change the way internet marketers engaged their audience by directing leads straight into the hands of an agent rather than to another abandon-able landing page. Ribbit and others probably did the same, but the buyer wasn't ready. Sometimes that's hard to accept as the sales guy.
Examples like this abound in telephony. Mobile VoIP - essentially a commodity to us in the know - still has plenty of market penetration ahead of it.
Net-Net: Some say - many say - 'sell what you have'. 'Sell what they're ready to use' might be as, or more important.
PS. Early or late, telephony integrated successfully into online marketing is a win for the voice industry, proving yet again that voice services can do more than carry a simple conversation. And in doing so, generate revenue for the many great voice innovators in the market today.
The announcement - to me at least - is remarkable not so much for the technology deployment itself but for the reminder it offers us that telephony applications are getting ahead of the appetite businesses have to actually buy or use them. No doubt that elegantly integrating functionality like click-to-call, SMS and even call transcription into a variety of online marketing campaigns is no small feat, particularly when you make it easy for the average Joe to do across multiple platforms.
But the technology itself is not new. Nor is the concept. But the fact that it took until mid 2009 to push a meaningful deal across the wire should remind us start-up folks to focus on the apps and services that people are ready to buy. When I worked with Ifbyphone back in 2007, we identified that click-to-call and call tracking technology could change the way internet marketers engaged their audience by directing leads straight into the hands of an agent rather than to another abandon-able landing page. Ribbit and others probably did the same, but the buyer wasn't ready. Sometimes that's hard to accept as the sales guy.
Examples like this abound in telephony. Mobile VoIP - essentially a commodity to us in the know - still has plenty of market penetration ahead of it.
Net-Net: Some say - many say - 'sell what you have'. 'Sell what they're ready to use' might be as, or more important.
PS. Early or late, telephony integrated successfully into online marketing is a win for the voice industry, proving yet again that voice services can do more than carry a simple conversation. And in doing so, generate revenue for the many great voice innovators in the market today.
Saturday, June 6, 2009
Can I Start Blogging Again?
Good question.
It's a sunny morning here in the supposed heart of it all, San Francisco. A sunny Sunday morning is not something to overlook in a place where fog sticks like glue all summer long. And instead of basking in it outside, here I am somehow thirsting to blog again while at the same wondering if it will stick. A quick look at my roll reminds me that while I had a good run - July/07 through July/08 - blogging tanked with the economy last Fall. No relation though, I assure you.
Actually I like blogging, notwithstanding the fact that I only have (had) a handful of loyal readers. But - thankfully - my business (and family) schedule got the better of me in the last year. With maybe a little writing apathy thrown in.
In my absence, a gabillion blogs have been launched (and many since aborted) and micro blogging (Twitter) has reached critical mass to the point where some are asking what role conventional blogging still plays. And of course the economy has...well, I'll leave that one alone.
But the telecom space - my passion (work version) - has marched on in the last year. More than marched on actually, it has paraded forwarded in this time of innovation like never before. The mobile world has continued to have its model flipped on its head, video and other communications-based collaboration is having its best year yet and traditional voice telephony seems to announce something new every week. Skype is like Kleenex; landlines are being challenged by more than just the mobile (see ooma) and business telephony continues it evolution into the cloud.
So there's plenty to talk (or blog) about. Will it last this time for me? And does it matter? Not sure. But I'm back to try it again.
It's a sunny morning here in the supposed heart of it all, San Francisco. A sunny Sunday morning is not something to overlook in a place where fog sticks like glue all summer long. And instead of basking in it outside, here I am somehow thirsting to blog again while at the same wondering if it will stick. A quick look at my roll reminds me that while I had a good run - July/07 through July/08 - blogging tanked with the economy last Fall. No relation though, I assure you.
Actually I like blogging, notwithstanding the fact that I only have (had) a handful of loyal readers. But - thankfully - my business (and family) schedule got the better of me in the last year. With maybe a little writing apathy thrown in.
In my absence, a gabillion blogs have been launched (and many since aborted) and micro blogging (Twitter) has reached critical mass to the point where some are asking what role conventional blogging still plays. And of course the economy has...well, I'll leave that one alone.
But the telecom space - my passion (work version) - has marched on in the last year. More than marched on actually, it has paraded forwarded in this time of innovation like never before. The mobile world has continued to have its model flipped on its head, video and other communications-based collaboration is having its best year yet and traditional voice telephony seems to announce something new every week. Skype is like Kleenex; landlines are being challenged by more than just the mobile (see ooma) and business telephony continues it evolution into the cloud.
So there's plenty to talk (or blog) about. Will it last this time for me? And does it matter? Not sure. But I'm back to try it again.
Monday, May 26, 2008
ShoreTel's Long Road to Green UC.
Some memories are clearer that others. Perhaps fewer of them as years go by, but some nonetheless. One for me dates back to very early 2000's if not the very late 90's.
At the time, I was building distribution for a company named LocusDialog - a first mover in speech-enabled auto-attendants. And in cruising one of the last CT Expo's, I stumbled upon a start-up then named Shoreline. To begin with, it was not yet in vogue to start a telecom company and it didn't help to call it something abstract like Shoreline, but this little company was determined to take on the giant - Cisco - in the then emerging wars of IP telephone systems. Note that it was still a time of PBX's and for that matter not necessarily ones built purely for IP networks.
Back to my memories. I remember two things vividly about my brief discussion with the Shoreline folk in their booth. One that were not ready to look at integrating my speech application (it was my job after all) and two; they were headstrong on selling direct only, as they saw it as the only way to compete with Cisco (who conversely had the best distribution in the market).
Since then, a few things have changed. Shoreline became Shortel, and today are in every conversation that Cisco is in. And they're public. An amazing story, really. But they didn't get here on their 'direct-only' high horse. In fact, today they sport a much envied distribution network (in no small thanks to my friend Sandy Hill) and won't sell direct to anybody! In retrospect, they probably needed that initial direct push just to get them started and to build traction in the market. But to scale, they had needed partners all over the world and credit to them, they have done it well.
Now another evolution at Shoretel is underway. After such a pure play at the IP-PBX vendor, their messaging has shifted distinctly to UC, as evidenced in this recently release. See if you can find the little, green-friendly reference they snuck in...
More later.
At the time, I was building distribution for a company named LocusDialog - a first mover in speech-enabled auto-attendants. And in cruising one of the last CT Expo's, I stumbled upon a start-up then named Shoreline. To begin with, it was not yet in vogue to start a telecom company and it didn't help to call it something abstract like Shoreline, but this little company was determined to take on the giant - Cisco - in the then emerging wars of IP telephone systems. Note that it was still a time of PBX's and for that matter not necessarily ones built purely for IP networks.
Back to my memories. I remember two things vividly about my brief discussion with the Shoreline folk in their booth. One that were not ready to look at integrating my speech application (it was my job after all) and two; they were headstrong on selling direct only, as they saw it as the only way to compete with Cisco (who conversely had the best distribution in the market).
Since then, a few things have changed. Shoreline became Shortel, and today are in every conversation that Cisco is in. And they're public. An amazing story, really. But they didn't get here on their 'direct-only' high horse. In fact, today they sport a much envied distribution network (in no small thanks to my friend Sandy Hill) and won't sell direct to anybody! In retrospect, they probably needed that initial direct push just to get them started and to build traction in the market. But to scale, they had needed partners all over the world and credit to them, they have done it well.
Now another evolution at Shoretel is underway. After such a pure play at the IP-PBX vendor, their messaging has shifted distinctly to UC, as evidenced in this recently release. See if you can find the little, green-friendly reference they snuck in...
More later.
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