Entrepreneurship is a Lifestyle

And What A Wonderful Lifestyle It Is!

It is not very often that I come across a quote that literally changes the way I think about who I am and what it is that I do. I caught this little 5 minute talk by Skype co-founder Niklas Zennstrom about entrepreneurship; what it is, what motivates him as a serial entrepreneur, and most importantly, that entrepreneurship is a lifestyle, not a job, or a career. It is a 24/7 365 passion that you can’t escape.

For me, being that I am now part of a third start-up in four years, Sayers Media Group, this talk put into perspective something I have been trying to explain to all of the people who say I am crazy for doing what I do. Entrepreneurship is a lifestyle. It is how “I live” and I could not imagine living life any other way. Thanks Ben, and Cory for helping to make this lifestyle a possibility.

Marketers, Engineers, Online Distribution, and Retail VoIP Oh My!

Marketers Create Products, Engineers Build Them

Andy Abramson has an excellent post on innovation and why some companies fail. I find that the number one problem with most technology start-ups is that they are started by engineers, not marketers. Engineers are wired differently and because of this they encounter many of the issues you describe above.

No offense to any engineers, but if you take a true look behind why “big” companies do a better job of marketing products, is because they follow a different process. For these larger companies, the marketing department, through r&d, and product development create the new products, not the engineering team. The engineering team is there to execute on the product the marketing team wants. They simply “build the product” to the exact specifications. It is then back to marketing for launch and then finally sales.

With most tech start-ups, there is a good idea, a product is built, and then it is dumped in the lap of a marketing person and agency, with a “go market and sell this.” The product is usually something that creator thought was great, but quite possibly is missing much in terms of the functionality and user experience. Something a marketer who is “in touch” with the intended user(s) would have pointed out and would have been corrected at larger firm.

Use Your Money to Build a Great Product Then Sell It Online

I disagree with Andy’s assessment of the internet as a poor distribution medium, especially for a start-up. Now much of this is dependant on the type of product or service, but one of the reason retail distribution is so expensive is that unlike online, there is a finite amount of shelf space. That shelf space has a hard cost, and brick and mortar retailers have to make sure that before opening up the shelf space to this new product, it has the potential to sell well enough to cover that cost and turn a profit. Because of this factor brick and mortars are extremely cautious as to what they add to their shelfs (just look at all of the people who have great products, but never get in Wal-Mart).

Online, once a basic website framework is constructed, the cost for me to add a page, or even replicate that site is nothing more then the cost of man hours. For a start-up that means more dollars to allocate to other channels (like making a good product great).

For Retail VoIp The Numbers Don’t Add-Up

As for retail VoIP, I have a bit of experience from the retail kiosk project that ran with Vonage here in Buffalo and I can tell you that there are some fundamental problems preventing the further growth of this channel.

1. Consumers who are attracted by the “save money” pitch (which is the one that was/has been picked by VoIP providers) typically attracts consumers with low levels of both knowledge and experience of the internet. Sure, most of the people who actually use VoIP are college educated, and well paid, but that is because they can fully comprehend the technology. The vast majority of consumers you will encouter in a mall kiosk setting (or even at radio shack) just are not able to comprehend the technology. Not that it is that hard to comprehend, but from my own “market research” during the kiosk trial you wouldn’t believe how many people think AOL “is the internet.”
2. Finding staffing that has the ability to effectively comprehend the technology and the ability to transfer that knowledge to a consumer, for say $8-$10 per hour plus a modest commission is difficult. Good luck finding enough individuals to make this happen on a large scale.
3. Subscriber commissions. In the cell phone business, the average rate per user (arpu) is around $34-$40/month (and rising). Given that cellular companies force a one or two year contract, they can project “guaranteed” revenues of $400 – $500 per year from that new subscriber. There customer acquisition costs are based on this and retail partner commissions are calculated. These (from my friends still in that business) tend to range from $150 to $250 per subscriber, plus bonuses for other add-ons (like text, video, ringtones, etc).

For VoIP providers, the arpu has to be a tad below $24 per month, and given that none are currently requiring a one or two year contract, their customer acquistion costs need to be a bit more conservative and because the arpu is 30-40% less then that of cellular providers, they in turn are not able to offer the same sort of dollars for activation of new subscribers.

Why give shelf space to something that is harder to sell, harder to staff for, and is less profitable?

Hello Direct Selling Customer Data

A bit off topic, but I was reading the latest edition of DIRECT, a direct marketing publication, and found an advertisement by a company that is selling the customer data of Hello Direct, an online retailer/cataloger of telecommunications equipment. Now I find it a bit odd that a company that is still in business would open its customer database to competitors, but my many concern was with customer privacy. With my curiousity peaked by the ad, I decided to take a look at Hello Direct’s privacy policy:

What Our Privacy Policy Covers

Our Privacy & Security Statement describes the information we collect about you, as well as why and how we use it. We also explain the choices you can make about how we collect and use your information.

Hello Direct, Inc. respects your privacy and recognizes your right to protection of all personal information you share with us, including your name, address, e-mail address, telephone number, etc. You are welcome to visit HelloDirect.com anonymously. Personal information will not be collected. Your internet address (IP address: the address of your computer) will be logged so we can learn which parts of the web site you visit and how long you spend on individual pages; however we will not link your IP address to any personally identifiable information. Your browser automatically informs us of its name and version number; but again, no personal information will be gathered.

As a part of our continued commitment to your privacy, Hello Direct rigorously supports and follows the guidelines and practices adopted by the Direct Marketing Association (DMA). We have agreed to notify you of your right to opt out of information rental, sale, or exchange between Hello Direct and other marketers, and to honor your requests that we not share your information with other marketers in any way. In addition, we honor your requests to not receive mail, telephone or other solicitations from Hello Direct.

I am not sure when or where they notify you of your “right to opt-out”, but I have to imagine, with the type of numbers the advertisement was touting, many Hello Direct customers are going to be receiving their fair share of un-solicited emails. Not that I have never sent an unsolicited email, but to be proactively selling data, seems to me a little extreme.

I have two questions I would like to hear your opinions on:

1. Why would an active, visible, online retailer/cataloger actively sell their customer data, leveraging their brand name?

2. If you were a Hello Direct customer, would this type of activity upset you?

Post your thoughts below!

VoIP Blog Tag: I’m it!

Jeff Pulver started a little game of VoIP Blog tag, and it took but a day for someone to tag me. Thanks to Leanne of The VoIP Girl, I am obligated to tell all of you 5 things (you probably do not want to know) about myself that you would never know, unless, well, you knew me.

Here goes:

1. I was ranked 8th in the nation my senior year of high school in the Indoor Weight throw. I even got to compete at the Nike Indoor Nationals!
2. I played college football, starting 44 of 45 games in my college career. I was 2 days away from making a CFL team (last man cut). Not making the team actually changed my entire life, and shortly after I started working at VoIP Supply.
3. I am an avid roller hockey player. I play a few times per week. It definitely one of the coolest sports out there.
4. I am obsessed with search engine optimization and search engine marketing. I have been involved with both to some compacity, personally and professionally, for the last two years.
5. Unlike most of my fellow bloggers, I did not get my first computer until I was almost 19. I am making up lost time though, as I now have three home computers, servers, VoIP phones, and other gadgets filling up my office at home and work.

So now it is my turn, I tag my pals over at TMC Greg Galitzine and Rich Tehrani, TrixBox’s Kerry Garrison and Phil Wolff and Jim Courtney of Skype Journal.

Will Video-Calling Decrease Home Movie Making?

Back in the early 1970s, when 8mm and super 8mm “home” movie cameras became really popular, a tradition started where families would document their lives, often focusing on the kids. Reels would be processed, and copies sometimes sent off to grandparents, etc. Just speculating, but I’m wondering if, with the increasing use of free video-calling software such as SightSpeed and Skype, whether the need for home movies will decrease.

If grandparents and other family members can easily see each other, why spend money on videocams, even with their decreasing price? What might happen to fill the vacuum is that more families will document themselves using websites, with rich media content including podcasts/ audio, photos, and even recorded videos – just taken from a webcam rather than a videocam. So in essence, home movies will still be part of the tradition, but their form would morph into the blogosphere.

The Top 30 VoIP Blogs Continued…

Wow! I could have never imagined this type of response to my Top 30 VoIP Blogs post. One blogger, Luca Filigheddu has created a Top 30 VoIP Blogs list using the Technorati rating system. In his post, Luca asked,

“what criteria had been used to create the (Smith On VoIP) list?”

Here is my response to his post.

Another great way to look at this, but the largest problem with using only Technorati as a source of data, is that the longer a blog is around the more links it will have. So it is safe to say that older blogs rank better in Technorati on the account that links take time to build. This definitely puts great new sites at a disadvantage.

In addition, many of those sites regularly cover topics outside of the VoIP industry which allow them to garner more links then sites specifically devoted to VoIP. The more topics and industries you cover, the more realistic it is to have links from numerous different industries.

What makes a blog is not the links and traffic, but the quality of the posts and the insights they provide. Although I did not write this in my post, I did take into account Technorati rankings, Google page rank, and Alexa ranking, but the most weight was put on innovative and thought provoking insights and what percentage of the blog is devoted to covering VoIP. How I used each of those rankings to come up with a score well that is subject to interpretation and debate. It is definitely not fool prooff or back by scientific research.

I simply created the Smith Blog Rating System. This same formula can be applied to any niche and is the basis of a project I have been working on over at a site called Screen Glare (under construction). All I can say is look out Nielsen Media Research… LOL.

The Golden Rule of Blogging

This is a bit outside of the direct context of this blog, but the ideology surrounding this post applies to every blogger. Fellow VoIP blogger Jon Arnold wrote an interesting post earlier today on a blogger named Genius Boy, who has been “leaking” information about RIM’s next product “Pearl” and the ethics surrounding using a blog as a tool for good and evil.

Personally, I feel it is up to each and every blogger to set their own ethics and then let them be known to all. I think where problems may occur as this medium grows in it’s effectiveness as a marketing and public relations tool is when individuals and corporations decide to “mask” their true intentions. But, even if a blogger or corporation decided to mask their intentions, the “social” nature of the medium allows for community policing. As quick as you built the community and your loyal readership, these same individuals can destroy the community and your creditability if they find the you or your corporation to be a fraud.

So with that, let me introduce the Golden Rule of Blogging:

Be as open, up-front, and honest with your sources and readers as you would want them to be with you.

If you follow this rule, I am positive you, your blog, and or your company will never run into the myriad of issues that could arise with the capitalism meets this medium.

Fellow bloggers and blog readers, what do you think about the topics of blogging ethic and blogging for good or evil?

Disclaimer:
Taking my own advice, from time to time I will be posting anouncements, product reviews, etc that will be sponsored. Whenever this is done, I will make sure to alert you.