Amp'd is Going Down

It's been a long slow death, but barring a miracle, today is Amp'ds final day.

Here's the core problem; People don't live in verticals. People aren't only music fans or sports fans or whatever. People live in horizontals. An individual has a breadth of interests. The affinity groups a successful MVNO has to appeal to cannot be vertical interest based. Vertical interest credit card affinity groups work because people carry more than one credit card. People generally don't have more than one cell phone.

While MVNO's are an intrinsically broken model, I can think of some cases where they could work well. Being a "hip cellular carrier" is not one of them.

Tracfone (an MVNO for people with poor/no credit) seems to be doing just fine. If WalMart had an MVNO, I bet it would do well too. They could regularly push SMS or MMS coupons to users. They could trigger custom messages on in-store displays via bluetooth. The mind boggles at what WalMart could do with an MVNO.

Update: Amp'd users get to live for another week

Hire Fast, Fire Fast

I blog about start up teams quite frequently --- and poking through our logs, the posts about building start up teams are among the most searched for. The reason we talk about it is that there is nothing more important to success of a start up than having the right team. Michael Cerda at Jangl had an interesting post the other day on the topic. Dick Costolo at Feedburner hits it on the head.

Dick talks about a "hire fast, fire fast" approach and this great quote:

"The hire fast, fire fast approach basically can be boiled down to 'it's really almost impossible to understand whether a person is going to be a killer A+ match before they start working with you day to day, so best to find somebody that seems close enough, and then remove them quickly if they don't work out.'"

This is so true. Until you're in the start up trenches with someone, you don't know if they're for real or are just puffing. While you certainly want to avoid bad hires, it is absolutely essential that you also give yourself an out in case someone isn't working out.

What makes it harder is that the traditional metrics one uses in hiring for a big company don't apply when you're building a team for a start up. In fact, success in big companies (where office politics have set in) may be a contra-indicator for start up suitability.

Joe Kraus also has some great thoughts on hiring.

So Much for the CLEC Loophole Biz Model

Quest is suing a bunch of Voice 2.0 companies that have been terminating in Iowa and relying on the CLEC termination fees for revenue. There are a bunch of free long distance companies involved as well as a few of our direct competitors.

From GigaOm:

In a lawsuit filed Feb. 20, Qwest joined the list of long-distance carriers who are bringing legal heat on the Iowa-based “free calling” schemes. In its case the Denver-based Qwest alleges that the “fraudulent, unfair and illegal” free-dialing schemes had resulted in “millions” of dollars of increased expenses for Qwest, including monthly bills that were as high as $500,000 from one rural Iowa telco.

Like AT&T’s earlier suit, Qwest’s was filed in the U.S. District Court for the Southern District of Iowa, Central Division. It seeks to stop free-calling concerns as well as their rural Iowa telco infrastructure partners from continuing with the operations that use regulatory-fee arbitrage and VoIP to provide international or higher-service calls (such as conference calls or chat) for only the price of a long-distance call to Iowa.

Unlike AT&T’s suit, however, the Qwest pressure has not yet shut down operations of some of the named defendants, a list that includes Fonpods (dial-up podcasts), FreeConferenceCall.com and HotLiveSexChat (please feel free to find that link yourself), whose websites all seem operational. The free international calling service advertised by FuturePhone, an AT&T as well as a Qwest defendant, remains offline.

Foneshow considered going this way, but eventually decided not to. We were concerned by our main revenue stream being dependent on the whims of congress. We were concerned that the people paying the bills were not the people who were getting value from our product offering. It did seem like easy money, but we had a bad gut feeling about it.

Business Plan

Back at the end of August, when Nic and I started Foneshow, I wrote a business plan. It was PDOOMA, and I knew that when I wrote it.

All pre-beta business plans are a shot in the dark. Every VC in the world knows it. Most entrepreneurs know it. The point of writing the early plan is to see if you understand what the factors in your business are. The point is to see if you've got the right fields in your spreadsheet, not to pretend you're entering accurate values in those fields. The point is not to make revenue predictions and do break even analysis.

We didn't know enough then to write a business plan that was an accurate forecast of our business. Our assumptions were wrong. We hadn't talked to enough podcasters. We hadn't written any software yet (other than a quick hack demo). There was no back end at all. We had no idea what the operational requirements of the system were. We didn't know anything about the business realities of telephony or mobile.

Since then we've actually built a product (which is very different than the product we talked about in August). We've been talking to everyone we can to learn about the mobile world. We've talked to podcasters about their needs. We've launched to users, gotten their feedback and integrated the feedback into the product. We've watched how real people use the system.

Now that we have some empirical data it's time to take another crack at the business plan. I'll be immersed in Excel until the New Year.