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Entrepreneurial Dominion
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Neville Street |
Catching the Next Wireless Wave InphoMatch has found a niche transferring text messages between wireless carriers with incompatible networks. Now it's gearing up to do the same for photos and streaming video. | |||||||||||||
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by James A. Bacon
Serious
people seem to think there is a market for a cell phone
service that allows you to tap out text messages --
hunt-and-peck style with your index finger -- and send
them to someone else’s cell phone. Does this make
sense to you? We’re talking phones, here. Does it
occur to anyone that leaving voice mail messages might make more sense? And how likely are people to pay money for the
privilege of using their cell phone to snap a digital
photo and blast out a cock-eyed photo of their own
grinning mugs to one another? Yuk, yuk, here we are drinking beer. Come join us, man. C’mon, the
novelty will wear off in days! Text messaging, swapping ring tones, streaming video
– oh, sure, I can’t
wait to watch
moving pictures twice the size of my thumb nail – is
all quite incomprehensible to people like me. As a
middle-aged, American male whose middle-aged, American male buddies don’t engage in such
nonsense, I wouldn’t have anyone to send this stuff to
even if I wanted to. But what do we
know? We might think differently if we’d observed
wireless telephony in Europe and the Far East, where,
thanks to common technology standards, markets have
evolved much faster than in the United States. It just
so happens that Neville Street, CEO of Chantilly-based
InphoMatch, Inc., and a middle-aged, English
male, has built a career in the European wireless
industry. He’s convinced that wireless transmission of
digital content is the wave of the future: an emerging
multi-billion dollar market. And he’s positioning
InphoMatch, which already provides a platform for
wireless text messaging, to send the other stuff zipping
around the airwaves as well. Founded in 1999, InphoMatch has
found an intriguing way to ride the wireless wave. U.S.
wireless companies use four different technology
standards, so their subscribers can’t send digital
content to one another. That means Verizon customers can
interact only with others on the CDMA standard, Nextel
customers with others on the IDEN standard, and so on.
InphoMatch provides a platform that allows Verizon
customers to send text messages to subscribers of Nextel
or any other carrier. Thus, for a modest fee paid to
InphoMatch, Verizon vastly expands the value of its text
messaging service. InphoMatch shuttles more than one billion messages a
month between carriers on a network spanning five
continents and 31 countries. Street says he’s signing
up business not just in the U.S. but around the world
because foreign carriers all want to interconnect with
U.S. subscribers. The logic of mobile messaging is to
create a network global in scope. “International is
the fastest-growing area of our business,” Street
says. “I have a friend [on the West Coast] whose
brother is in New Zealand. They text each other all the
time.” InphoMatch has run in the black for the last six
quarters and, after a recent round of venture capital,
has stashed $15 million in the bank to expand its
infrastructure and finance a push into next-wave
technology. Earlier this month, the company hired a
senior executive to manage relationships with Hollywood
and the music industry to deliver their content to the
global mobile community. U.S. carriers are behind the curve in developing
wireless markets. They thought that keeping subscribers
on their proprietary systems would yield a commercial
advantage, but truncated networks diminished the value
that carriers provided their customers and slowed the
introduction of new products and services. Once
InphoMatch began inter-connecting them, Street says,
U.S. carriers found that 50 percent of their text
traffic went outside their networks. With InphoMatch enabling interoperability, text
messaging is taking off. And old guys like me assuredly
are not leading the way. “The U.S.
market is following the same trend as the European
market," says Street. "It’s primarily a youth consumer technology.
The big texters are the youth, the 12- to
20-year-olds.” Cell phones have reached 50 percent penetration in
the U.S., and they have another two years of phenomenal
growth, Street contends. Meanwhile, cell phone
technology continues to advance. Trends in Japan, which
arguably has the most developed cell phone market in the
world, are instructive. Japanese subscribers are taking
advantage of superior wireless bandwidth to send each
other an increasing volume of digital content. The
marketing challenges are pricing, finite battery life
and a limited number of early adopters. “I might have
the capacity,” says Street, “but if I don’t have a
buddy I can send it to, what’s the point?” Still, it’s clear to Street where the market is
heading. It’s only a matter of time before the
technical and pricing hurdles are beaten down. And
he’s racing to beat the competition to market with
technology that provides interoperability for photos,
ring tones, stream video, the works. Launched with angel capital in 1999, InphoMatch
signed up its first customer, VoiceStream, in June 2001.
By the end of the year, the company was bridging one
million messages per day. Growth has followed an
exponential path since then. The company signed Verizon
in March 2002, then started bringing European and Asian
carriers on board a year later. Messages hit the
billion-a-day mark late last year. Street came to InphoMatch with abundant experience
in wireless telephony. He’d served as CEO of
Macrobridge, a strategic consulting firm for
international wireless carriers, as International CEO of
OmniSky, a company that went public on the NASDAQ, and
as a senior executive for Palm Computing. To build
InphoMatch, he hired several protégés from previous
ventures, including CTO Derek Tam, and
Vice President-Business Development Jörgen
Nordin. Northern Virginia was as good a place as any in the
U.S. to build the company. With its cluster of
telecommunications firms, the region is a great place to
recruit employees who can help build telecom
infrastructure, Street observes. “Virginia works well
for us,” he says, speaking for himself and other
European executives he’s recruited. “It looks like
Europe – but more humid. It’s a pretty nice place to
live. People like it here.” As the company grows its mobile content business
unit, IMi (InphoMatch Interactive), InphoMatch will have
to expand beyond Northern Virginia. It will be crucial
to establish a presence where the content is created –
in other words, Los Angeles. And make no mistake about
it: Interactive content is what will launch InphoMatch
into the big leagues. Enabling TV viewers to vote for their favorite
performers helped the Fox television network transform American Idol into the year’s biggest hit. Street sees big studios
like Fox creating entire promotional campaigns around
interactive media. Just imagine movie fans registering
on the Web to receive text messages at each stage of the
build up – take a sneak peak at the previews, download
movie theme ring tones, watch the leading actor
interviewed on the Jay Leno show. Street will need every bit of his European marketing
savvy. The market potential is enormous but the industry
landscape can change overnight – or, indeed, within a
couple of hours. When I interviewed him last week,
Street highlighted the opportunity to integrate
integrating wireless text messaging with the instant
messaging (IM) on PCs. As of 11:00 a.m. Eastern Standard
Time, America Online, Microsoft and Yahoo all had IM
services that couldn’t talk to another, much less to
wireless subscribers. At 1:16 p.m., AOL, Microsoft and
Yahoo jointly announced their intention to provide
interoperability between their networks. That still leaves an opening for InphoMatch to
connect the wireless world with the PC world, but a big
chunk of the value proposition disappears if the
Internet companies get their act together first. It also
raises the question, what if Microsoft tries to extend
the IM platform to wireless messaging? Squaring off
against Bill Gates has never been a winning business
model. InphoMatch’s advantage is speed to market. Sending
a streaming video through a cell phone requires complex
technology, Street says, but the company hopes to be the
first to create an interoperable platform. The company
is engaged in commercial tests for the product and hopes
to roll out a product by Christmas. “We’re the one
company that can show we can do it.
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Find Out More...
July 13, 2004 Brand
Specialist Michael Kurtzman to Spearhead Hollywood
Growth of InphoMatch's Mobile Content Business Unit, IMi
July
7 , 2004
May
18 , 2004
If you would like to sponsor a profile of your company on VA Newswire, contact the publisher at jim@vanewswire or by calling (804) 873-1543.
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