Jason Devitt

For-side.com Stock

What remained of my first company, Vindigo, shut down yesterday. 30 people lost their jobs. It was a sad end for a company that built some of the first popular applications for PDAs and cell phones in the US.

I sold Vindigo to Japan’s For-side.com four years ago, and left a year later because I disagreed profoundly with them about what the company should do next. That year (2005) Vindigo was on track to do over $10 million in revenue and our sister company Zingy, which For-side had acquired at the same time, was heading towards $50 million. The plan was to combine the two US companies and take them public.

Six months after I left, most of my executive team had quit too. Vindigo and Zingy merged. The company went through four CEOs in three years, all of whom disagreed with For-side about what the company ought to do next.

It wasn’t just the CEOs. Of the 30 people who lost their jobs yesterday, only two were part of my original team.

And in three years, somehow $60 million in revenue fell to zero (or close enough to zero that the company had to shut down).

In June 2004, when For-side acquired both Vindigo and Zingy, the stock peaked at 231,000 Yen. Today the stock closed at around 1,400 Yen, down 99.5%.

It’s been several months since my last post, because Skydeck has been all-consuming. (I have been blogging over there.)

But I’m glad to say that Skydeck is no longer a secret. Today announced that we’re working on an online service which will help consumers take control of their cell phones and their cell phone bills.

For more, check out this blog post and the rest of our brand new site.

More about how we got here and what we plan to do next when I get the chance.

I was genuinely honored to be invited to testify before Congress on some of the issues surrounding open access and the 700 MHz spectrum auction in the US. More thoughts to follow when I have time; for more context on this piece, visit SaveTheInternet.

Update: more about this on the Skydeck blog.

As promised, I’ve stopped writing about the mobile industry here and moved that to Skydeck’s blog. But there’s an issue of public policy relating to the wireless industry that I’d like as many people as possible to know about it.

I believe that we’d all be better off if wireless carriers were required to let us use any device on their networks, so long as it causes no harm and we pay for the bandwidth. It’s a very simple idea that has applied to landline networks for years. Without it, many inventions would never have come to market because the telcos weren’t interested or it didn’t fit their business models: the fax machine, the modem, the Internet itself.

Today on Skydeck’s blog I wrote about a useful mobile device that does not exist, because of the rules of the industry. I call it the xPhone.

I recently filed comments in support of the Skype petition, together with my friend Ram Fish. He’s written about that experience here and here. The xPhone was inspired by those conversations, as well as conversations with Tim Wu and Brad Burnham.

More urgent than the Skype petition perhaps is the battle over the rules for the 700 MHz spectrum auction. This is the most valuable chunk of spectrum that has gone on sale for years. If you support the principles described in my xPhone post, please sign the MoveOn petition.

As you can see, I have been busy building my new company.

OK, we spent a weekend with my wife’s family in Oregon and my father-in-law let me dig big holes in the ground. Try it some time.

But I have been building a company. It has a name, a logo, a co-founder, a first employee, and a first round of financing, and naturally it has its very own blog, where I’ve been moonlighting for the last week or so.

The name is Skydeck. Like it? I do. It is almost but not quite a real word - widely used but not in any dictionary I can find. It means a high platform from which you can see a great distance: the Sears Tower, the roof of an Airstream. So it’s aspirational. But those hard twin Ks make it sound dependable and familiar, like Kodak… I’ll shut up now. The logo was designed by Summer.

My co-founder is Mike Wells, who quit Google in December to work with me on this. Our first employee is Jake Donham, who was either employee number one or two at my last company Vindigo, depending on whom you ask, and who thought Skydeck sounded more interesting than the PhD program he was in at Carnegie Mellon.

More details on our financing later.

Brash.com [update: now JasonDevitt.com] remains my personal blog, and this is where I will write about the trials and tribulations of being an entrepreneur, moving to the Valley, and digging holes in the ground. But I will be writing about the mobile market in general and Skydeck’s plans in particular at our company site, and so will my colleagues. If that is what interests you, grab the feed here.

And finally, we’re hiring. We will happily pay referral bonuses of up to $5,000, so don’t be shy.

Guy Kawasaki calls Spinvox "utterly indispensable." Fred Wilson calls Simulscribe "life-changing." David Pogue says that about both of them. So why have so few people heard of them?

I’ve been using Spinvox for two months. Spinvox replaces my carrier’s voicemail system. For callers there is no change, but Spinvox converts their voice messages from speech to text and sends the transcript to me via email and SMS. It is so good that I haven’t listened to a voicemail since and with any luck I never will again. Now it takes seconds to check my voicemail, I can do so during a meeting, I know which messages are important, and if the caller leaves a number I can just click on it instead of scrambling for pen and paper and then typing it in. If voicemail is a big part of your life, then Spinvox is indeed life-changing.

So much for the iPhone’s ‘visual voicemail’, the feature that allows you to see who has left voicemail messages and to listen to them separately. Steve Jobs claimed that this required tight
integration with a network operator, justifying Apple’s
exclusive relationship with Cingular. Spinvox is far better than random
access to your regular voicemail and far more deserving of the name
visual voicemail. And like every other great idea online, it works just
fine at the edge of the network.

Spinvox was founded in 2003, won several awards in 2005, and won a major innovation award at 3GSM last year. But they did not announce their first carrier customer - Vodafone - until 3GSM this year. Why aren’t they bigger than Elvis?

The problem is that carriers charge us for voicemail by the minute. Lots of companies waste our time. It usually costs them money. Only mobile carriers charge us for wasting our time. In the US we spend almost 100 billion minutes each year leaving or listening to voicemail.

The European market is more complicated. Charges for voicemail vary from one carrier and country to the next. On average mobile phone calls are much more expensive. Only the calling party pays: incoming phone calls are free. Since it costs nothing to receive a call, but it costs
money to return a voicemail, a lot of people would rather
miss a call - betting that the caller will try again if it’s
important - than activate their voicemail and be expected to return messages. Hence fewer than 50% of subscribers activate voicemail.

It never seems to occur to zero-sum minute-pinching carriers that if voicemail were more efficient, we might make more phone calls.
Since I started using Spinvox I return voicemail messages more often
because I get to check them before they’re stale. If everyone else had
Spinvox, I would be more inclined to leave voicemail messages,
confident that they were going to be returned. (Today when I
reach voicemail I usually hang up and write an email instead. You pay
to listen to the date and time that I called, a click, nothing, and
then the sound of me hanging up.)

Maybe carriers won’t make
back from increased call and text message volume what they give up in
voicemail minutes. Here’s another idea: they should adopt
Spinvox just to make their customers happy.

Sadly, that is not how the telecom industry works. Mobile carriers have no idea how to retain subscribers: they grew so fast that they didn’t need to worry about it. If a new service doesn’t pay for itself, it
doesn’t get launched. Don’t expect your carrier to launch Spinvox or Simulscribe anytime soon. But you can sign up for either at the companies’ web sites. Spinvox is offering a free trial in the US; Simulscribe charges $9.95 per month for 40 messages and $0.25 per message after that.

Your carrier will happily charge you for forwarding your calls.

Carry Two Phones Into The Shower? Not me.

One of the more interesting mobile startups in the Valley, Talkplus, went live today. (They had a private beta before this.) Talkplus makes phone numbers virtual, breaking the link between a phone number and a specific handset. Instead a phone number becomes more like an email address or IM account; just another online identity that I choose to adopt for communicating with certain people.

Let me stop speaking in Powerpoint and give some specific examples. Many people carry two phones, one for personal use, one for business. (In countries where extended families are very important, some people carry multiple phones for talking to different family members.) The main reason we do this is to separate our professional and personal lives, the same reason that most of us have at least two email addresses. But you don’t need two computers to answer your email, so why do you need two phones to answer all of your calls?

The Chinese company whose booth I photographed at 3GSM in Barcelona is one of many that offers dual-SIM phones to solve this problem. But that’s a crude approach, akin to having one modem in your PC for each email account. It makes the phone fatter and more expensive too.

Talkplus can assign multiple phone numbers to one mobile phone. You can have one number for work and one for your friends; a few disposable numbers for companies or people that you are not sure about; one number that your company reimburses you for, and another that is your responsibility; one number for life, and one for the weekend.

Soon Talkplus promises to let you spoof Caller ID from your mobile phone for other numbers that you control. A doctor, say, or a lawyer will be able to place a call to her client from her mobile phone and make it appear that the call is coming from her office. The goal is not to mislead; the goal is to keep the mobile phone number private and confidential while still communicating the identity of the caller.

See what I mean about phone numbers being separated from physical devices - both handsets and SIMs? Calls can be made to or from multiple numbers on multiple handsets. Talkplus goes further, promising a lot of the functionality that we take for granted online but that we never get on our phones. Right now they let me can screen calls automatically, blocking calls from some numbers, and sending others to voicemail.

And yet … when I tried Talkplus tonight my experience was very disappointing. Setting up an account and choosing my first number was easy, but here’s what I had to do to make a call from that number on my Sony Ericsson K800i:

1. Launch the wap browser.
2. Go to m.talkplus.com/l. Bookmarked, but still several clicks.
3. Enter a username and password! Every time! They are numerical, but one of the weak points on my Sony is that I have to go through a couple of menus to switch from alpha to numeric when I enter text, so that doesn’t help.
4. Enter the phone number that I want to call.
5. Wait a few seconds for Talkplus to setup my call.

Talkplus has great potential, but I hope that they are planning to offer a J2ME application for my handset soon. Right now I’d have to be desperate to conceal my phone number in order to use it.

A few months ago I wrote a series of rants about the future of the wireless market in the US. I devoted the last of those posts to my least favorite subject, regulation. Mainly I was surprised at how little attention had been paid to wireless during last year’s debates about net neutrality, since wireless carriers block content providers and services all the time.

It seems that Columbia law professor Tim Wu was paying a lot of attention (to wireless net neutrality, not to me). On Valentine’s day he presented a paper about it to the FTC. And yesterday Skype filed a petition with the FCC demanding that mobile operators carry Skype calls over their networks.

The head of the CTIA, the wireless industry association, was terribly upset:

"Skype’s self-interested filing contains glaring legal flaws and a
complete disregard for the vast consumer benefits provided by the
competitive marketplace," said Steve Largent, chief executive of the CTIA
in a prepared statement. "Skype’s ‘recommendations’ will freeze the
innovation and choice hundreds of millions of consumers enjoy today.
The call for imposing monopoly era Carterfone rules to today’s vibrant
market is unmistakably the wrong number," Largent said.

"Unmistakably the wrong number." Now there’s a ringing phrase. I wonder what he is so hung up about. Ahem.

It’s been a while since my last post, but attending two conferences (one in Barcelona), moving to San Francisco, and starting a new company chewed up a lot of time.

I couldn’t resist posting about this article in the Washington Post, an overview of the ringtone industry. For all the excitement around full-track downloads, mobile TV, 3D games and the rest, ringtones still account for roughly 70% of mobile content revenues. Yet the companies that dominated the business just a few years ago are all suffering, because the music labels are doing direct deals with mobile operators and cutting them out. I’ve written about Infospace’s problems before.

This paragraph about my first company Vindigo jumped out:

Some, like Dwango, went out of business. Others reinvented
themselves as technology and service providers. Zingy, for
instance, merged in 2005 with Vindigo, which offers mobile
information services like MapQuest and The New York Times.
Personalization services like ringtones, video and wallpaper
images now make up less than 50 percent of the company’s
revenue.

I knew that ringtone revenue had declined while revenue from Vindigo’s products had continued to climb, but this is a surprise.

The writer missed what I believe to be the most successful ringtone vendor in the US today: Thumbplay. Thumbplay markets ringtones directly to consumers rather than through the carriers and has built an independent distribution channel that the music labels value. More mobile companies should be following this strategy.

Full disclosure: Thumbplay, like Vindigo (and Ztango, also mentioned in the article), is backed by iHatch Ventures, where I am entrepreneur-in-residence.

Another round-up of interesting posts about the mobile industry at this week’s Carnival of the Mobilists,
hosted by TomSoft.