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Jajah acquisition by Telefonica shows how to make money in VOIP

December 24, 2009 Leave a comment

Daniel Mattes - Jajah foundersToday’s announcement that Telefonica / O2 is acquiring Jajah gives hope and renewed strength to all entrepreneurs interested in the voice space. You can read about the deal in TechCrunch and Gigaom and also check out Larry Lisser’s and Andy Abramson’s (quite implicit) post. My key takeaways from this deal are:

  • The voice space is starting to get the heat and attention that it deserves. As Lee Dryburgh would put it, we are “experiencing the drastic change of the multi-trillion dollar telecom industry (a death) and for portraying an equally big new opportunity space (a birth). I sincerely believe that over the long term the underpinning (i.e. telephone calls, termination fees etc.) of this multi-trillion industry will seep away.” The smart telcos are noticing this and becoming the acquirers… great, but I am hopeful that we will see 1-3 companies over the next 5 years make it through an IPO and use their liquidity to truly disrupt.
  • The original approach of VOIP companies like Vonage and Packet 8, while interesting, is not going to lead to massive change or disruption. These companies focused on selling a familiar product (dialtone, Netcentrex style PBX) powered by VOIP as a way to lower the price point. Instead, companies like Ribbit, Grandcentral/GV, Voxeo, Twilio, Nimbuzz and now Jajah deconstructed these old fashioned products and rethought what could be done in telecom when you mixed the web and the phone. Each of these companies has a shot at true disruption.
  • The true value of VCs comes from their ability to produce bidding wars among rich giants. This is why a first-tier VC is worth much more to the entrepreneur than any other tier. It’s the VC’s job to sell the business. It’s the entrepreneur to grow it and make it all shiny before the sale.
  • Somebody always gets screwed, and the techie takes more chances. As a CTO type, I hate to see Jajah’s CTO and his team get a different deal. As Martin Varsavsky recently blogged (sorry, in Spanish), sometimes investors get together with one founder to boot another, but I don’t really know what the answer to this is, other than pick a cofounder with morals.

Congratulations Jajah team!

Categories: Telecom Tags: , , , ,

Plan B for Telecom

November 21, 2008 Leave a comment

Telecom companies are desperate to find a next-generation service offering that replaces their dwindling fixed line revenue.

As new challengers enter a market traditionally conceived as a monopoly, telcos are struggling to discover sources of innovation within their organizations to help them fend off potentially lethal threats from the competition.

While some postulate that a telco’s central asset is their backbone, a more savvy observer would find hidden gems waiting to be exploited in less conspicuous places, such as:

  • Long-established reputations for reliability
  • Well developed billing relationships
  • Reams of data about their customers usage
  • Tremendous expertise around running complex infrastructure
  • Widespread retail presence
  • Directories of digital identities
  • Marketing muscle

How could all these be better leveraged to generate new revenue?

Jeff Pulver talks about Purple Minutes. As opposed to black and white minutes, purple minutes are those that deliver something more than just connectivity.

That ‘something more’ carries a premium that can be priced according to value delivered. It’s an easy way to escape discount pressures such as those experienced in long distance.

But, how to offer purple functionality —with all its inherent complexity— in a way that scales to hundreds of thousands or millions of business customers?

Surely, there must be a better way than to hire large consulting workforces.

Enter Plan B.

The big idea? A set of killer voice automation applications and corresponding tools that empower end users to self-manage their solutions.

Not just customer self-service, but provisioning, configuration, and reporting self-service.

Community-based issue resolution.

In a nutshell, The Long Tail of voice applications, hosted by telecom.

A high-margin business in a box.

Plan B enables telecom to offer highly targetted vertical voice automation applications to narrowly defined market segments without having to re-create complex infrastructure to deliver each application.

It’s all about repeatability.

Shorten the cycle between voice application creation and monetization. Remove all human chokepoints by building a platform that automates provisioning, instantiation, upgrades, and provides all common services, such as as account management, reporting, monitoring, and data management.

Put application configuration in a domain-specific context that a business user can understand. Make customization possible in way that enables them to deploy their expertise without requiring them to learn about voice automation.

What’s a voice automation application? It’s a solution that uses IVR, ACD, PBX, Call Recording and Reporting technology to solve a particular problem for a particular company that either saves the company money, enables them to make money, or provides an increased level of customer service all through the phone.

It’s not just about talking computers. It’s more about Voice CRM, or how to use a computer’s amazing memory to make sure that each customer gets the most relevant, most personalized and most efficient treatment every time they call.

Voice automation can empower marketing, customer service and sales managers at small and medium size companies to get a handle on that old-time medium: the phone. In the age of the Internet, when web analytics provides unprecedented insights into what visitors are doing on your website every minute, those pesky customers insist on calling over the phone.

And most busineses are stuck with no phone feedback mechanism. At best, a business will know how many people called. Interesting, but of little use if it cannot be correlated to anything else.

Instead, Plan B shines a light into phone traffic. It puts reporting in terms that make sense for business.

For a telco company, Plan B becomes a voice application marketplace management tool. A way to offer hundreds of distinct voice applications in an economic, highly scalable way.

How can one entice an unsophisticated business customer to try voice automation?

It’s all about meeting the customer where they’re at.

What are small businesses used to when buying telecom? Land-lines, hunt groups, NetCentrex.

Give them that, but better. What’s better? More to come…

Categories: Telecom Tags: