Lead Generation on the WWW

Can Google Remain the only Game in Town?
Why only Twitter and facebook can challenge Google!

I am wondering since a substantial time if the global giant in Internet Lead Generation Google is going to remain the only game in town for the foreseeable future.
In general I doubt it, as any industry has in the long term seen a three way split and sharing the overall pie. Why is such a sharing of the overall marketplace so important for the evolution of the technology market space? Most of recent innovation on the web has been build around the advertisement driven industry enabled by Google. Ingredients of this drive between 2003 and 2008 have been quick setup and monetization, once an audience of size has been established.

Only now it is emerging that new online giants like facebook with very high daily re-login rates have a chance to change the status quo. Also facebook is still in need to find an appropriate business model, which cannot be the adaption of Google Search being build into Social Networks, as mySpace has shown in 2007.

Yes, I do agree the Social Networks have seen a tremendous growth, but demanding sky-high double-digit multi billon dollar valuation will need more than just subscriber growth. It will need a monetization engine independent of Google and something much better banners in smaller formats beside the website. This is where I like to start to look at what I call the Lead Generation Marketplace on the WWW.

While traditional media has been dominated by traditional advertising formats for as long as I can see, we have seen in the first 10 years of the Web a direct translation of such traditional advertisement formats into online via banners. The dominant player had been Yahoo with its massive audiences which are now reclining and only remain loyal on the mailing platform.
Lead generation as pioneered by Goto.com later called Overture and eventually taken to global dominance by Google is ultimately a new industry in a new technological enabled Internet based world. An industry, which is destroying the traditional advertising industry and therefore the established players unless they are able to change. The recession will most likely show that most publisher will never regain the same power base and advertiser base and most titles struck today from the lists, which have emerged in a last blip post the dot com bubble will never re-emerge. The reason is that we have entered a stage where lead generation will be king and traditional publishers understand very little, what this is, how to participate in it and how to turn the businesses around into a direction of survival in a lead generation driven world.

In the past 8 years while google with his simple advertisement format AdWords (three liners, 45 characters, followed by 160 characters), has grown from just $100m in revenue to having accumulated a cash pile of $14.4bn on its balance sheet within a very short period, it has remained the only dominant if not monopolistic player in lead generation.
In this analysis I am in particular do not differentiate between the per million advertising formats (CPM), the per click model (CPC, cost per click) mostly favored by google which makes a near 99 percent part of the Google income stream or the click per action (CPA), which we traditional call lead generation. All three models, CPM, CPC and CPA are lead generation if monetized on a performance base. Clearly google has favored to stay away from a total performance based model as generated leads can convert with different efficiency independent of Google’s or others influence. Google is driven mainly by CTR, click Through Rate for this reason to maximize revenue and profit for its on sake.

However it is clear that different leads have different values. A lead generated from a Search is different to a lead generated by a performance and behavioral placed banner or any new ad formats called AdImages™, which one of our portfolio companies Pixsta is proposing. AdImages are very attribute rich product pictures placed contextually into the right location at the right time, so the user can interact with them. However the underlying lead is all the same, only a global dominating standard can generate substantial cash for shareholders. Most startups do not understand that ultimately only an establishment of a lead generating standard can generate substantial income. Readers will now argue that MoneySuperMarket or Affiliate Networs and many other companies have shown otherwise. But I argue they have not, as they all have remained minor players on the sideline of a giant.
However what is clear is that different leads have different engagement matrix and values and the industry has shown very little differentiation between the leas generated to them. We have seen some differentiation but not to the level we could break down utilizing existing technologies.
Every owner of a product or service based website has seen such matrix if he observes the visitors not just by CTR or conversion rates but ultimately how engaged users are with the website and in particular the product displayed. Higher engagement must lead to a higher potential visit to purchase ratio.
Now massive lead generation potential resides not only within today’s comparison shopping engines of the like of shopzilla, ciao or ebay’s owned shopping.com or the newcomers like Pixsta, like.com, theFind, become.com, twenga or myDeco, but equally in the social networks and short message platforms like twitter. Most likely two of them facebook and twitter have the greatest potential of all as they start to engage very targeted and large audience.

If I would vote I would believe twitter also still relative small and only known in the tech world has the greatest potential to emerge as a new Giant in Lead Generation.
Why? Any timely interaction, location based, text readable and so simple in the form of 140 characters is ultimately powerful and what we have been waiting for such a long time. We have engaged in billions of these communications since SMS emerged about 15 years ago. But what is the same but ultimately different is an interconnected and networked IP driven 140 character string via twitter. The similarity of twitter strings and Google AdWords and SMS are obvious, but only emerge when put into this context of lead generation.

However it remains today’s dominant platform, the mobile phone followed by the laptop / PC as the perfect most powerful consumer device for such casual communications. Behind is the unlimited potential to generate a massive global lead generation engine. This has a potential to emerge as yet the most powerful lead generation engine we have seen, many times more powerful than google.

But going back to the more traditional lead generation, it is obvious that the web is yet in its early developments for product based lead generation. If you analyze the space numerous companies are fighting in comparison shopping for a meaning position. Nobody so far has been able to achieve a meaningful market share and brand loyalty like at Google is not existing. All of them are purely driven by short term and total google dependent search engine optimized traffic. The model is get in quick, build it quick and sell it as long as it last. Hopefully before Google regulates your traffic to the level where they believe it belongs. Mostly in the negligible 2 – 5% market share so no one is able to build an equivalent ad standard like AdWords into a challenger.
So far facebook or twitter have not been able to innovate in this field either and I doubt they can. The organizations of such companies are not able to innovate beyond the core DNA of the founders gene which are around functional drive for the existing social communication enabling platform.

Therefore companies with innovative ideas like our portfolio company PIXSTA, which is establish the AdImage™ standard will play an important role as an engine of monetization in a world in which lead generation will emerge in a three way split between giants like Google, Facebook and hopefully the soon largest player called Twitter.

truphone turns your ipod into a phone: ipod touch VoIP app launched today

Described by Apple itself as the ‘funnest’ iPod ever, the iPod touch may now be the ‘useful-est’ too thanks to FREE software – Truphone for iPod touch – that effectively turns one into a mobile phone.

Not only is the software free, but calls made using Truphone’s application for the iPod Touch are also FREE – just in time to save precious cash when making those Christmas calls to friends and family.

Once installed, and with the addition of microphone adaptor (Truphone microphone adaptor available soon)*, an iPod touch owner can make free calls – no matter where any are in the world – to other iPod touch owners, to customers of Truphone’s Internet telephony service, and to users of the Google Talk™ instant messaging service.

Truphone for iPod touch will become a one-stop-shop social hub with the following features coming soon:

• Making and receiving calls to and from landlines (PSTN) at low cost (simply set yourself up with a Truphone account)
• Instant messaging to Skype and MSN (free)
• Calling to Skype users (free)
• Calling to MSN users (free)
• Check and set facilities for Twitter (free)
• Check and set facilities for Facebook (free)

Truphone for iPod touch is easily downloaded from Apple’s App Store in exactly the same way as any other iPod touch application.

The software uses the iPod touch’s Wi-Fi connection to carry calls over the internet to its destination. There is no monthly line rental, no subscription or other hidden charges.

Mike from techcrunch seems to like it. Check out Alexander’s comment as well.

Stefan to speak at MediaTech 2008 conference, London

News:

Straub Venture’s Stefan Menden will speak among other web 2.0 experts in a panel discussion at the Essential MediaTech 2008 conference on 11th November in London.

truphone on the blackberry: Our comment

Indeed truphone on blackberry is a very exciting product launch and we are excited about this milestone.

One reason is that most people these days see the blackberry as a status symbol of employment in a senior position. The device is almost omnipresent in global cities like New York, London, Tokyo, Paris, Berlin, Bejing and Shanghai. Still it comes with VERY LARGE BILLS (VLB’s) attached. The VLB are a result of our use of the inbuild address book for calls which very well could be done on Skype, or via your landline. But studies show that even in the presence of a landline phone or a computer with Skype installed we tend to use our mobile for convenience. We are addicted to our smartphones – the modern replacement of cigarettes. These days you see more people playing with mobile phones (in particular blackberries and iphones) on the subway, railways into these global cities than inhaling blue smoke. (thanks god)

Why is the truphone blackberry launch so exciting, many analysts will ask , when it does not yet use the full IP communication capability of the Blackberry WiFi chipset to allow end to end mobile IP communication? Yes, you heard it correctly it currently relies on the ((truphone)) Anywhere product specs (also enabled on the Nokia series by truphone (but not yet on the iPhone), meaning it uses for the first leg GSM to connect to the truphone calling servers ((truphone cloud)).

Also many people have enabled pure IP calling with truphone, pure mobile IP to IP calling with your mates, friends and family members makes a lot of sense once they are all on ((truphone)), but in many cases WiFi will not be openly accessible. So even then it is hugely beneficial if one party is on IP and you call him on his truphone number, meaning the leg into the truphone server comes out of your bundles but the termination is provided free of charge by the truphone calling cloud.

A personal anecdote: On a recent trip to Silicon Valley I was stuck at San Francisco Airport. Already on the American Airline flight to Chicago I was unable to access the lounge or Airport WiFi as the cabin shielded the signal. Nevertheless I was able to use my AT&T bundled minutes to call my family via truphone Anywhere back in London, United Kingdom by just using the At&T bundled minutes. The calling leg from the US truphone servers to my home in London was all provided free of charge by truphone. Therefore a telephone call which would have just lasted 4 minutes before my minutes would have been spend lasted 45 minutes.

The essence of the story is that Blackberries like iPhone contracts with huge bundled minutes which are just as good as WiFi. (e.g. in the UK carriers like 3, T-Moile and O2 are fighting over who offers more minutes for 15 Pounds). In my experience 1200 minutes are almost impossible to use up, except if you have truphone Anywhere enabled on your Nokia or blackberry.

Mobile VoIP to IP on truphone is still the most crystal clear connection if the setup is correctly done, but GSM is almost as good as truphone on WiFi, as Om Malik reports in his article at the New York time and his own Blog.

Truphone launches low-priced international call service for BlackBerry® smartphones

truphone press release:

Global mobile network operator Truphone today launched a beta of its mobile internet telephony service, Truphone Anywhere, for BlackBerry® smartphones. Truphone Anywhere brings simple, easy and cheap international calling to up to 40 million BlackBerry users across the world.

Truphone Anywhere works in 33 countries worldwide. It saves BlackBerry users from those countries money on the international calls they make from their home country. The service works alongside domestic service providers, but reduces international call costs to as little as £0.03/$0.06 per minute.

Truphone works with the user to save them money. Instead of requiring the user to remember what to do, Truphone Anywhere simply asks whether he/she wants to make a Truphone call whenever an international number is dialled. The user simply accepts, and Truphone connects the call.

“There’s no GSM business tariff that gets close to the prices we can offer BlackBerry users with Truphone for international calling,” said Geraldine Wilson, new CEO of Truphone. “And in these days of financial belt-tightening, businesses are looking at every means of cutting costs, which is an opportunity for us. Truphone is a genuine alternative carrier for international calls, with the potential to reduce annual mobile bills for the largest companies by many millions of dollars,” continued Wilson.

Aaron Simpson is the BlackBerry-using chief executive of Quintessentially, a private members’ club that provides a 24-hour global concierge service and is part of the world’s leading luxury lifestyle group. He stated: “Quintessentially has offices all around the world and, as CEO, I’m in constant contact with all of them. I’ve been using Truphone on my Blackberry and its low call rates have enabled me to make those calls at a fraction of the cost of using my mobile provider.”

In technical terms, Truphone Anywhere works by connecting to a local Truphone server, which then connects the long-distance part of the call over the internet. Because most BlackBerry users are contract customers, the local connection to Truphone is, typically, free because it uses bundled minutes from the customer’s usual cellular service provider.

Truphone for BlackBerry smartphones is available to download for free from www.truphone.com/blackberry. Alternatively, Handango users may also download Truphone from www.handango.com. There are no monthly subscriptions or other charges.

truphone hires Geraldine Wilson as new CEO

truphone, the mobile internet network operator, is pleased to announce the appointment of Geraldine Wilson as CEO.

Geraldine joins from Yahoo! where she was VP and GM EMEA Connected Life, Yahoo!’s Mobile and Broadband division. She was previously with Vodafone where she held key board positions in the UK and Sweden, including CCO, MD UK Content Services and Director of Prepay UK. Geraldine is an INSEAD graduate.

The appointment marks a new phase of growth for Truphone, which will increasingly aim to attract ‘typical’ mobile phone users to its low-cost, mobile internet telephony service.

Truphone raised over US$30m in its 2008 B Round after having raised the largest European Series A funding of 2006 with support from Straub Ventures, Eden Ventures, Wellington Partners, Independent News & Media and Burda Digital Ventures, together with significant angel investors. John McMonigall of Apax is Chairman of the board.

About Truphone

The first true mobile internet network operator, Truphone allows users of Wi-Fi-enabled mobile phones to make and receive regular telephone calls, and to send and receive SMS [text] messages, using only a Wi-Fi connection and the internet. Although still in beta, it has already attracted tens of thousands of users in 149 countries. Truphone is the trading name of Software Cellular Network (SCN). SCN is privately owned, funded by both venture capital investment and angel investors.

For more information, please visit www.truphone.com

Interview with Stefan on German start-up blog

Stefan talks about his background as an entrepreneur and explains what Straub Ventures are seeking in young companies. As it is all in German, here are some of the main points:

- we look for real disruptive technologies and businesses

- we look for big market opportunities

- don’t copy something from the US

To get us excited and spend our time and effort on your company, it better follow these rules.

Here is the interview with Stefan Menden

Mobile operators: Increased competition brings opportunities for mobile VoIP

I just read the Q2 2008 results from Germany’s o2.

The average customer in Germany on O2:

• Voice 144 Minutes (plus 9 percent)
• SMS 829 (plus 12 percent)

Turnover development (weakening due to prepaid erosion) Contract customer: Euro 29.30 (plus 17 percent) – 6.7m customers – customer growth (17 percent) Prepaid Customer: Euro 6,10 (minus 9 percent) – 6.8m customers – customer growth (18 percent)

Total ARPU / customer (pre and postpay) / month: Euro 17,60 (minus 16 percent) (compared to Q2 2007)

My analysis:

While VOICE and SMS are growing quarter by quarter (annual growth between 10 – 12 percent) the business is under very strong pressure from price erosion in the prepaid segment. Contract customers are moving heavily to prepaid (mix now 50 / 50) (confirmed to me by CEO of Carphone Warehouse Germany). Therefore strong revenue and margin cannibalization from prepaid discounters for all mobile players (o2 is offering 9 euro cent / min), T-Mobile 8 euro cent / min which is about the termination rates in Germany. O2 discounters are Fonic, e-plus simyo, T-Mobile Maxxim, Congstar, Vodafone Bild, all of them at 9 cent / min except now Maxxim with 8 eurocent / min.

Clearly money is still being made as the small print reveals that special numbers like 018 (service numbers) are charged at very high rates, (example 69 cent / min at Maxxim) as well as very very high rates for prepaid for international Calls. We think this is a great opportunity for Truphone to act as an add on to millions of prepaid customers who don’t want nasty surprises when calling international. My personal experience has been that truphone saves 80-90% on international calls.

Conclusion:

While voice and SMS is dead (turnover wise), it is growing in actual volume at very healthy levels (not to dissimilar to the napsterisation of the music industry). Once a product goes free the volume explodes. See truphone to truphone usage (see what happens when you convert your near field into truphone customers, voice minutes and SMS goes up dramatically). If all your near field uses truphone (within your companies, your family and friends) your call pattern changes dramatically, plus productivity increases within corporations and individuals due to the added benefit of quick and simple person to person communication globally.

truphone is crystalizing itself as the global telecom operator of choice (for individuals and corporations) for the next century. The next century will be a support driven economy versus the managerial economy of the 20th century (mainly build via the models of entrepreneur Ford and managers like Sloan). So individuals and corporations can adopt by choice a platform like truphone to build a customized AT&T, Vodafone, Deutsche Telekom based solution in the IP domain versus the switched infrastructures of the telecom corporation of the 20th century.

Sim4travel at the point of sale in the carphone warehouse store in Notting Hill

This shows how we can improve our marketing. White text in front of Yellow just do not work

truphone on the iPhone versus Nokia

A short summary on where we are:
 Truphone launched almost 1.5 years ago an application on the Nokia E and N Series phones. We are now on 14 Nokia phones. The installation process is theoretical as easy as SMS to +44 7978881111 word TRU download app from WAP push. However here the striking difference between Nokia and iPhone starts. Even truphone being one of the highest quality providers we had in our best days hundreds of downloads globally for the app. iPhone in comparison has seen more in the range of thousands per day. As of yesterday tens of thousands of apps had been downloaded. However even more striking is success rate of app to completion ration: When downloaded the Nokia users are highly incapable to make the apps work on Symbian (because it is just to complex), most people do not even find the apps, while the success rate is about 5 – 10x higher on iPhones. All of this success on iPhone even the truphone Nokia app is capable of much more (receive calls, app is constantly running in background, Truphone Anywhere calling outside of WiFi (coming on the iPhone next), VoIP over 3G, SMS over WiFi, SIM updating for forwarding when abroad, etc). Nevertheless the user wants the app and can make the app work on the iPhone.
 
In fact I made yesterday my first FREE call between a Senior Yahoo exec (from US) using truphone on his iPhone to my truphone number running on my Nokia E51 (in London). All FREE of charge, a call which I normally would have done on GSM now went seemless over IP. In addition before getting to my home we had initiated the conversation with him on GSM. What was striking was that the WiFi bandwidth and IP connection was clearer and better to understand than GSM / 3G. I switched upon reaching my home in Notting Hill to the house IP / WiFi network and we continued for another 45 minutes.
 
Some background:
In theory truphone is capable to authenticate 40 million subscribers globally on IP offering and offer to the same group very high quality Voice and SMS over IP services. Something the traditional carriers like Verizon, AT&T, Vodafone, T-Mobile, Telefonica, China Mobile are offering now, GSM services to large subscriber numbers, using HLR’s costing hundreds of millions of dollars. However the per sub cost in all IP for truphone is 10 – 100x lower, provisioning is a software download, (a virtual SIM), network building has been done by the users (WiFi), truphone components are all taken from open source using some of the wolds best network engineers at truphone to build something so far away from the Vonage experience set on mobile. Nevertheless 40m mobile subscribers would be a sizable mobile company even in mobile VoIP, effectively a global carrier build out of software, with a very highly non country specific footprint, able to challenge incumbents everywhere. Clearly the question I am asking myself, was Skype only the first stepchild to the telecom industry challenging a low margin fixed line network. What is is going to happen to the mobile carriers once truphone takes off with growth rates we have seen in recent days on the iPhone. (a country like Germany  (80m people) signs daily about 3000 new subscribers, truphone has been signing 5000 – 6000 new subs per day globally.
 
 Let me give you several example of call patterns I encounter as an intense truphone user.
 
 My office at PIXSTA where I am the CEO is on a VoIP network. My Nokia E51 has a SIP number and I call 2464010@sip.gradwell.net to reach them from anywhere in the world FREE over IP using the truphone app, I call my wife or SMS her from my office to our home informing her about being late for lunch or dinner by dialing her Nokia E65 on her truphone number FREE of charge. I call my associate on Straub Ventures on his truphone number free of charge in his office. Clearly not all calls are yet within the IP network, however when I travel the truphone call forward finds me in China, Germany, France on my local SIM even when I am not in WiFi if my employees keep dialing my truphone number (which once in IP will follow me anywhere on GSM/ 3G). After 18 moths I have been able to convert my sister doing a PhD in Spain on truphone, my parents in Germany, even the great grandparents to take an IP mobile phone with truphone on it. No mobile phone people can still reach me using Google Talk dialing ext+447978800012@truphone.com or the facebook call me FREE button. So about 50 – 70% of my calls are now carried in the FREE IP versus the GSM domain. Even it is called mobile.
 
 As you know we have been live from day one on the iPhone and Steve Jobs has publicly said that WiFi calling will be allowed. I believe this represents a threat for incumbent carriers, but equally a fantastic opportunity for consumers to break free of a century of switched networks, moving the last frontier, the mobile phone on to IP networks (end to end) (handset to handset).
 
 I believe the iPhone not the cumbersome Symbian based Nokia E and N phones will the the catalyst. This is also heavy reflected in the share price when you compare Nokia previous 9 month tumble from 40 to 25, while at Apple it has risen from 120 to 180. Nokia has lost almost half of its value even they are selling more handset currently per day as Apple is selling iPhones in a year.
 
 I agree it is not the phone itself also it helps it is the Apps which will revolutionize the mobile industry. I predict 20 million iPhones to be sold by the end of the year, not 10 million.