The GPRS Wall

For most of my years as a Venture Capitalist, I rejected mobile deal after mobile deal. I was the "Mobile Bear" at my former firm and also when I arrived at Benchmark. My core fear: carrier control. The carriers have always controlled the choke points to access mobile subscribers so building apps or services based on mobile was a perilous financial endeavor. If you made too much money, the carriers stuck their hands in the pot for more.

Conversely, the internet was a much more open platform, one where you could reach any user simply by providing the best services and products and making them available. A user paid one fee to the ISP and could access and try any service. If you wanted better access, pay a little more for higher speed but the entire platform was at least accessible from the get go. This accessibility ultimately increased innovation on the internet, increased needs for bandwidth and increased the rate of broadband penetration that carriers could charge for. Look at the growth of Verizon's FIOS service now.

Well I broke down about a year ago and invested in my first Mobile start up, Zlango. This has been a heckuva education in the mobile world: A world that is chock-full of different protocols, non-standard interfaces and implementations in the carrier engine rooms. However, by far, the biggest impediment to growth is the penetration GPRS, UMTS, or any other data service. GPRS or other data services are now an all or nothing proposition and I think the carriers are now shooting themselves in the foot by keeping it closed.

Om, had this to say recently about Sprint:

"Under siege from Wall Street investors, and facing competition from other potential wireless networks (700 MHz), Sprint Nextel (S) has a new-found appreciation for the need for openness. And its executives are taking every opportunity to extoll the virtues of open networks, especially xOHM."

"Rick Robinson, VP of products and services of xOhm, told attendees of the Play conference in Berkeley, Calif., that xOhm will tear down the walled gardens and do away with restricted access to the mobile Internet. “Xohm will tear down this wall. We will provide complete access to Internet from a WiMax enabled device,” he said."

Over in this part of the world, Europe and Asia, many of the interesting applications and reasons users will buy a GPRS (or other data service package) come in the form of client downloads that require a GPRS connection to get them down and loaded. Even Zlango which does not require GPRS for its operation, needs it to get the client down via GPRS. So here is this great catch 22 where the services needed to drive usage of additional applications and GPRS, in fact need GPRS just to initiate them. Zlango is growing phenomenally despite this but our estimates are that with open GPRS we would grow 6 fold as fast.

However, the vast majority of subscribers do not have GPRS so they cannot get access to these new services which generate revenues (in Zlango's case from messaging) for carriers and hence stagnate carriers' growth. In my opinion, this is opening the gate for WIFI and WImax to mobile which will be open (witness the Iphone which I see many people using simply to access their web mail). WIFI on phones will be uncontrollable by the carrier and their stinginess on GPRS is pushing more consumers to WIFI. The conundrum exists because carriers fret that users will use the data channels for voice as well and cannibalize their revenues. While this may be true in the short term, in the long term consumers will get what they want either from WIFI or GPRS so the carriers are better off capturing that user now rather than waiting for him to escape via another port.

What should the carriers do? Here is a practical suggestion that I think they can live with: Open GPRS for free for a limited number of Megabytes so that it is enough to use apps a few times and experience them but not enough to do voice on a regular basis. They should upgrade all phones to be GPRS enabled as this will drive the next generation of services and revenues and then suggest an upgrade to a premium package of GPRS services thereafter.

I know this is wishful thinking but maybe just maybe....

Fake Out!

Rarely do I talk about my kids on this blog but I had to share this ( a little bit of basketball nachas). I went to my son's basketball game last night where they got blown out. In the last quarter, the team got some energy. My son, playing point guard, started putting on some moves and really dishing the ball around effectively. On one run down court, he pulled off a wild "whole-body-fake" and beat his man, dished the ball inside for 2 (Basketball genes are from his grandfather and not his father). I caught the fake (a little dark) on camera and thought it made a great picture to share. So here it is - mouth open but the tongue is not out.

Button 2.0

With the US Presidential race in full swing, candidates have been availing themselves of all of the latest social this and social that, virtual this and virtual that. Candidates in Second Life, Blogging Candidates and YouTube Debates. MySpace Profiles, Facebook Walls (at least they graduated college which is more than we can say of some candidates in Israel, and Paypal tip cans.

However, all of these "web 2.0" environs were akin to the town hall or whistle stop, somewhere you needed to go to pay homage or show support. Sure you could friend a candidate in Myspace and tell the world you were supporting a given candidate. Missing for me was the good old fashioned button; the one you installed on your lapel and told the world you were drafting Ike or publicly pulling for the youthful catholic JFK. That I think was the first thing one adorned when supporting a candidate (in Israel it is the ubiquitous bumper sticker).

But now I found it, not just any button but a tunable customizable one. In fact this button will be ever present in front of you and installed for all to see. Ironically, the 2.0 button is on Ron Paul's website before there is a website. Yup, get it here now, the Ron Paul Toolbar. Sport it on your browsers lapel. Ron Paul's is a bit bland with links to YouTube (Videos of Paul I am sure) and what is sure to be a scintillating RSS feed. Since this is customizable I wonder if you will get the Bill & Hillary Buy One candidate toolbar Get One Free husband ToolBar when it comes? The Rudy Law and Order Bar with Extra links to 9/11 records ToolBar? I bet Fred Thompson's comes with a TV Feed. I am thinking of getting My Orthodox Jews For Mormon Businessman ToolBar for Mitt Romney. Come on, shout it out loud and wear it proudly on your Firefox's lapel.

Best Tidbit from Zuckerberg at Web 2 conference

"I ran the company at breakeven from day 1. Even in my Harvard dorm room when it cost $85 for server costs, so I sold $85 worth of ads to cover the costs."

Note to entrepreneurs: If you want to strike it big, it is always best to take money from customers and advertisers than from VCs! Get to revenue as early as possible. It is fantastic discipline in building a start up and it helps the big VC money flow which then helps refine the model even more. Witness Facebook!

The Importance Of Blogs and Citizen Journalism

Nice mention by Lorelle VanFossen of my blog. Many Thanks. The diversity of blogs she mentioned from the Humus blog to Allison Kaplan Sommer's unsealed room to my own sixkidsandafulltimejob is a great testament to the vibrant life Israel has to offer.

It also made me think some more about the power of the blogosphere and citizen media in general. Except for Allison, I do not think any of us would have an audience for our thoughts were it not for the advent of blogs (maybe we still don't deserve an audience :) ). bloggers provide a window on the a world or society that would not otherwise be seen on CNN or the NYTimes. Bloggers for the most part are not headline makers. we are concerned with the salient issues of everyone's everyday life, the matters that comprise 90% of what we all care about and take 90% of our time and attention.

In fact, most news outlets are topsy turvy in forcing us to spend time thinking about and debating sensationalized topics that sell papers and attract viewers. They are as shallow as they are impersonal. As I think about a future of bloggers and citizen journalists i think about returning a sense of prioritization to our lives and media consumption. Creating an agenda more in synch with our true interests and needs and that excites me.

P.S. I never got to mention the blog that Scoop, my favorite Citizen Journalism project filed a law suit with Israel's Supreme Court last week which challenged the basis on which the Government Press Office gives out press badges. We picked up a lot of press on the topic (here and here examples in Hebrew) and I think it is a critically important topic. Bloggers and Citizen Journalists should be heard everywhere, not just where the stumble but also in the halls of power and press conference so we can reorder that agenda.

An Ode To My Amazing Wife!

New Way To Recruit Execs To Israeli Internet Companies

I am trying a new method to recruit executives to an internet company of mine. I have a fast growing (users and revenue) internet company in need of a COO in Israel. Whereas Israel has a plethora of telecom, software and semiconductor management talent, Internet executive talent in Israel is still hard to come by.

So I am looking for a senior executive who has run part or all of an organization that includes R&D, Product and Ad sales. I will settle for two of the three. You will be expected to drive R&D and the Revenue side of the business (mostly ad sales for now). Here comes the rub: I am looking to relocate this candidate to Israel. That is right, a free ticket to the Holy Land. This can be a one way ticket if you want to make Aliya (move to Israel) or a round trip if you want to relocate to a wonderful country for a few a years and a gain a great experience for you and/or your family.

So if you are interested, please send me a CV/Resume to [michael at Benchmark dot com] and let your adventure to the Holy Land and road to internet success begin.