Schmooze

In our inaugural edition of Schmooze: Company, we really tested the bounds of social mobility by weaving together a number of technologies in order to interview Unwired Nation CEO C. Eric Smith. We conducted the interview while on board a “speeding” Amtrak sleeper car bound for Dallas. Eric was in his office. The problem was that the train didn’t have on-board WiFi, so we needed to tether our AT&T 8525 via Bluetooth to our Sony Vaio TX series ultra lite notebook. We managed to eek out 1mbps of bandwidth over a route that was quite frankly rather rural (read: MacGregor and Cleburne, TX were stops). We used the Meebo multi-IM platform to facilitate and log our chat.

Eric Smith: Let me first say that I’m jealous that you’re on a train to Dallas vs. doing the I-35 shuffle.

Schmooze: I’m a train guy. I’ve got a private room with meals included, cell phone and Internet service. What more could I want?

Eric Smith: Color me impressed! I am going to look up details on that.

Schmooze: I think it’s a great way to conduct the inaugural interview for Schmooze: Social Mobile News. Trains are a great way to get mobile and be productive.

Eric Smith: So what are we going to cover today?

Schmooze: The tagline for Unwired Nation is “Easy. Mobile. Revenue.” Revenue? What a concept. Tell me more about that.

Eric Smith: When we looked around at the telecom-as-service space, everyone was focused on two things; getting enterprise customers to pay large integration fees, and getting the most per-unit revenue from the enterprise that they can. We saw an opportunity to focus less on trying to squeeze as much revenue out of a small group of customers as we could, and instead bring out mobile-as-service features that help any customer build revenue-generating services for their end users… We hope that by focusing on what our customers ultimately are measured by (revenue), we will differentiate ourselves from our competition and maximize our chances for success. And I swear… I do not have a talking point list in front of me.

Schmooze: Interesting. It seems that so many social mobile companies aren’t really measured by revenue…or at least, not yet. Take Twitter for example. Hypothetically, how can Unwired Nation help a company like Twitter realize revenue?*

Eric Smith: Well, we all wish we could be Twitter, right?

Schmooze: (I swear, I don’t have a list of zinger questions in front me either

Eric Smith: The problem is that startups these days don’t typically have access to virtually unlimited funds and sky-high valuations for getting new investment, do they? There’s just a handful that do, right? Twitter, Facebook? Everyone else has to work much harder these days to attract investment and the best way to do so is to make sure that you don’t need it in the first place — i.e., being profitable. Our model allows company’s with large user bases to create differentiated mobile services and sell those services to their users. A company like Twitter with tens of millions of users could see significant revenue if they were to sell branded software or services based on the Unwired platform to just a small percentage of their users. But they’re pursuing a different model — by allowing 3rd parties that build tools around Twitter’s API’s to build those services and tools, and collect the revenue. It will be interesting to see if Twitter begins to compete with their developers when they ultimately begin to focus more on revenue, and less on growing 1700% a quarter.

Schmooze: It’s the classic tech game of aspiring to “be the platform.” Okay, so I think I get it. Let’s talk a bit about the 3 types of services UN provides. Voice sounds interesting. What are some examples of revenue-oriented voice services?

Eric Smith: Voice IS interesting. We started with voice. A great example of a revenue oriented voice service is a new customer we’re rolling out that’s licensing our eBay voice technology — Bidnapper.com. Bidnapper is a “Buyer Tool” for eBay, where folks name their max price and the system submits the bid in the last second. They are licensing our eBay voice service, and re-selling that into their half-million registered users. We’ve had the most success with voice with marketplaces. Marketplaces love the immediacy and urgency that voice delivers, and it really reduces transactional friction by driving people back to complete transactions, etc.

Schmooze: I’d like to know more about that. I tend to use voice when I can’t type–like when I’m driving. There’s a cool voice-to-txt service that I use called Jott. It’s a lot safer and convenient. So what are these eBay users doing that they aren’t in front of a keyboard? Are they literally walking down the street buying used comic books by yammering into their phones?

Eric Smith: In a way, yeah. They’re out there, living their life. It’s about being mobile, and not constrained to be at your PC on a given schedule. Services that allow you to tie into what’s going on with your online life, without tying you down to your desk– that’s what we’re doing with Unwired Nation. They’re not literally yammering into the phone — it presents an audio UI, and they navigate it with DTMF (touch-tone) in general. Voice input makes for a good demo, but in the real-world, people are often frustrated with the limitations of the technology, and the limited environments in which it makes sense.

Schmooze: Ah, okay. I was beginning to fear that the social mobile world of the future was going to be a lot noisier! There’s something appealing about the relative quiet of most mobile apps…particularly since we’re often using them in shared public spaces. Speaking of voice, Amtrak has a pretty good automated call response app that you can talk to when you’re bored. Her name is Julie and her number is 800-USA-RAIL. She never gets tired of listening. Okay, so let’s move on to SMS. I think I understand UN’s offering pretty well. Y’all help companies get into the texting business quickly and cost-effectively.

Eric Smith: Exactly. SMS’s impact on mobile web services hasn’t been as big as it really should be. For too long, SMS services were only being extended on a high per-unit fee through aggregators, or were very limited and bundled with 3rd-party advertising that distracted from a company’s message and brand. Unwired Nation is extending fully interactive SMS services to our customers and changing the business model from unit driven model to a revenue driven model, all without advertising.

Schmooze: Very nice. I recently got to play with Google Voice’s SMS feature (actually while on this train ride). I was surprised that when my friend replied it went both to my Google inbox and my mobile phone. I wasn’t aware that text forwarding technology had come to pass. Very excited about that. Are you able to provide text forwarding as well?

Eric Smith: If that’s something our customers want to provide to their users as a service, Unwired Nation’s API’s can be used to power that kind of feature.

Schmooze: Great. The great thing about texting is that it goes straight to someone’s phone. The bad thing about texting is that it goes straight to someone’s phone. Text forwarding allows people to protect their privacy a little by letting an intermediary service route the texts back and forth. I think it makes sense for social mobile companies that are providing meetup or mobile dating services, for instance.

Eric Smith: It’s an interesting phenomena, isn’t it? With number portability and the expansion of mobile service and technology, our mobile phone number is the new CompuServe UID or ICQ number, isn’t it? It’s that unique number that follows us and identifies us wherever we go. It makes us reachable anytime and anywhere, and the fundamental problem with that is that we can’t really control how a 3rd party uses it, or how people we trust disseminate it. The concept of permission-based communications layering on top of something like the telephone network is very interesting stuff. Right now, I think it’s a race to either back-port some of these ID management capabilities into the legacy phone network, or abandon the network entirely and move to a purely ID-based system over IP (Skype, etc.). The next five years will be very interesting in that regard. When power users have access to 4G broadband, will we be willing to truly cut the cord, so to speak, and go “data only” for mobile, eschewing legacy concepts like “phone numbers”? Or will spotty coverage and legacy billing system and user behavior (need to call Mom!) push off that transition for another decade or more? Definitely interesting. I think there’s going to be a market for services that bridge that gap and hybridize the network, like Google is doing… but it’s capital intensive. The business model for doing it is definitely not proven.

Schmooze: Well I guess that means there’s a sure source of problems for small start ups to keep scratching at for years! I know your time is valuable, so I’m gonna wrap up with just a couple more questions. Your email .sig includes the motto “Declare your right to life, liberty, and the pursuit of mobility. Unwired Nation.” That’s pretty strong stuff. Do you see yourself as a founding father of mobility? Also, when John Locke first penned the sentiment, the priorities were life, health, liberty and property. By the time Jefferson got a hold of it, he dropped health and property and added happiness. Are you suggesting that we should give up happiness for mobility? Can’t we have both?

Eric Smith: Can’t a guy just have a pithy signature to replace his default “Sent from iPhone” theme in peace these days? Seriously, I think mobility is a big deal, and I’m happy to play a role in bringing services to market that allow users to get away from their desk and still get things done. In a sense, I think mobility can help us get connected with the real world again, and away from the computer. That is, if people can look up once in a while. Have you noticed that trend yet? Everyone in public spaces staring at their phones? It’s downright creepy. I was at the hospital the other day, and there were 50 people in the waiting area, and the majority of them were not talking, or reading a 5 year old Better Homes and Gardens magazine. They were texting, or reading the web, or whatever… staring down at their handheld. Surreal.

Schmooze: One of things that helps many people cope with the loss of privacy or personal space in public spaces is technology that helps them create a virtual wall where they can become invisible to others bumping up against them. Mobile music (iPod) is a great way to build this wall, but it’s largely a solitary activity. The advent of texting allows people to be in the company of others not present while being surrounded by a completely different group of people. I agree it’s somewhat sad, but perhaps another way to look at it is that it helps us preserve the liberty of choosing who we interact with—the people we want, not necessarily the people who are coincidentally sitting next to us.

Eric Smith: I’ve heard it referred to as being present without actually being engaged. Or, put another way, it enables you to never have to choose where your attention is — it allows people to multi-task their social lives. I’m not sure that’s a good thing. It can be used for good… but in general, as a social trend? I’m not convinced. I see my 15-year old cousin’s Facebook page, and it’s filled with pictures of her at events with her friends… and in many pictures, tagged them as “watching a movie” or “at the game” — and in the pic, she’s staring down at her iPhone. Like Stan Lee says… with great power comes great responsibility. Mobile technologies are like that.

Schmooze: Last question: Of all the places to start a mobile services company, why Austin?

Eric Smith: I’d like to think that being mobile allows you to pick where you want to work. We’re applying that principle to our company. We love Austin. I was born and raised here, and it’s filled with talented people. Maybe I’m just a home-town kind of guy, but I wouldn’t want to live anywhere else. It’s not Silicon Valley, but it’s a great place to live, work and play.

Schmooze: So it comes complete circle then. You create a mobile service company to help you stay put in a place with a great quality of life, and in the process, you provide technology that helps others improve their lives, increase their choices, be happier and buy more stuff through improved mobility. I guess the ultimate mobility option is the power to choose not to move. Eric, I really enjoyed today’s chat. Get back to work! The world needs your stuff.

Eric Smith: Thanks, Rich. It’s been great. Have a good trip!

–Rich MacKinnon
CEO
Less Networks