A clash of ideologies

The stuff here at eTel gives me mixed emotions. On the one hand, I say welcome to the party. Aptela and a small handful of firms have been delivering “Phone 2.0″ with a “Web 2.0″ philosophy since before they coined the Web 2.0 buzzword. The old telco’s aren’t going to educate the market to the real benefits of __________ (what’s the right buzzphrase? Next Gen Communications? Phone 2.0? Phone 3.0? We need something better!). So the more people who come to the party, the better.

Then again, callback buttons as cool and new? Damn, we built one of those at Proxicom 10 years ago! But then I think of the old telco curmudgeons who told me how they tried to market unified communications in the early 90’s and nobody cared. Well duh! When about 10% of the world used email or cell phones, and you only got that email at work, and you got those messages via green screens, who the hell would need or care about unified messaging? Times change, and it’s not the concept but timing, execution and the usability. So, cool, easy to implement callback buttons? Rock on!

On the other hand, there is a serious clash of ideology here that will need to be reconciled and navigated for “Phone 2.0″ (I’ll use this for now) to be successful. Web 2.o is about open and accessible and widely released extended betas that morph into next generation betas. Phone 1.0 is about closed and and secure and beating things up in a lab for 6 months before they even get to beta and then 6 months more after that. We’re web guys too, and we used to scoff at the Phone 1.0 ways. Figured it was monopolistic thinking. Some of it is. But then we actually started selling the stuff. And once you have thousands of customers, you realize alot of that thinking is about reliability. We’d like to think that cell changed the equation and people will deal with a dropped or crappy sounding call here and there. Consumers do. Particularly when its cheap or free.

But I’m just not seeing it with businesses. The concept that goes hand in hand with Web 2.0 in the Valley is “consumerization” of businesses – that decision makers in Enterprises will start using consumer technology and then integrate it into their business environments. I buy that. But I don’t any evidence of relaxing demand for the pinnacle of Phone 1.0 fabulosity – 5 9’s. I wish it wasn’t the case. We have a product roadmap a mile long that we could roll out in 1/3 the time if businesses would put up cell-like availability, and the pace of change. But businesses used to Phone 1.0 won’t. So who wins the clash of ideologies.

Web 2.0??!!

I just sat on a panel at a local “boot camp” event for entrepreneurs; probably about 250 attendees. Our panel topic was “Opportunities in Media and Telecom Convergence” with myself, an exec from a prominent local company that provides mobile phone & app distribution, and 2 VC’s. The VC’s were pretty well versed in the space and had about $300 Million between them; at least one was of the sort that might actually invest in a very small deal. And there was at least one more VC in the audience, who does only small early stage deals. Definintely a TRE for an aspiring entrepreneur.

The market opportunity around this topic is, to put it mildly, ENORMOUS. US telecom spend is about $875 Billion (!!) a year, and the media market is so large it’s undefinable. Both markets are being transformed by convergence and new technologies and concepts. Tens or hundrerds of billions in spending will be redistributed in this space before the end of the decade, and who knows how many billions in wealth will be created.

And …….We had maybe *3 dozen* attendees in our room. (!!!!!) Meanwhile, a session next door entitled “Opportunities in Web 2.0″ was overflowing. The panel had nobody in particular on it, and with all due respect to those guys, nobody who would be of any real help to a startup.I challenge them (or anyone) to define any tangible market for “Web 2.0″ – it’s a buzzword, and an old one at that – O’Reilly picked up the phrase about 4 years ago to define concepts born years before that. But like lemmings they flocked to seek out fame and fortune in a buzzword. And ignored one the largest market opportunities in history and a room flush with expertise and dollars to chase it.

I learned a lesson today about the power of a buzzword that people think is cool. I think PT Barnum must have had a similar epiphany.