Wednesday, May 31, 2006

Vonage - The Saga Continues

I mentioned it would be a light blogging week, and I just wanted to share a couple of Vonage posts that continue show how hard a road they have to make a go of things.

First, Andy Abramson - and others - have picked up on today's New York Times article about how things seem to be going from bad to worse. Unless you're a NYT subscriber, this link won't get you to the article, but the story has been widely covered in the blogs.

The basic idea is that Vonage is getting into hot water with its share purchase program for existing subscribers. With the stock down some 25% from issue date, Vonage is offering to make up the difference to brokers whose clients balk at paying $17 when it's trading way lower and no end in sight. It's a really messy situation on many levels, and the bottom line is that it's not good business to think of customers as shareholders. If/when things go bad, this is a disastrous recipe for giving customers a really good reason to leave. In essence, this puts Vonage on the ropes, and if the competition wants to do the rope-a-dope, they'll keep slugging away with price cuts, making it an even easier choice for borderline subscribers to leave. I really want to see Vonage succeed, but this share purchase program seems to be backfiring, and adding fuel to the fire. And we're not even talking about the potential legal and SEC implications. There are so many ways this can go wrong, and it's starting to look like these problems will keep compounding. Not good.

The fun part of the NYT article is the end - which is what Andy's post fixes on - that Vonage is looking more and more like an acquisition target. It's a provocative comment, but certainly not out of line based on how things are unfolding. I said something to similar effect on my guest post that ran on Om Malik's blog last week.

The second item come from a post Mark Evans ran last week. He did some nice digging through Vonage's S1 filing, and concludes that Vonage Canada has only about 52,000 subscribers. It's always been a closely guarded number, and if correct, confirms what most people suspect - for all their marketing efforts, Vonage Canada hasn't grabbed much market share. Andy wisely picked up on this post a few days back, and I'm glad he's helping get the word out. Thanks for paying attention to Canada, eh!

So, this isn't newsworthy, but I wanted to bring into the mix here as another example of the challenges Vonage faces in building a sustainable business.

And now for the teaser... I have another motive here. Tomorrow I'll be posting about another Vonage-like operator who's just going IPO. It's a great story, esp in the wake of how Vonage's IPO went. There's more than one way to do a VoIP IPO, and this is one that's going to work. Hang in there...

Technorati tags: , , , ,

Tuesday, May 30, 2006

Globalcomm Next Week

It's going to be a light blogging week for me. Got a heavy workload to get through in advance of Globalcomm next week. Have a bunch of interesting meetings lined up, and will be moderating a VoIP session on Tuesday at noon. It's part of a series called Telecom University, put together by Telecommunications Magazine. Catch it if you can!

Otherwise, I'll be doing my best to attend as many receptions, etc. as time allows, and if you're looking for me, I shouldn't be hard to find. Except Wednesday night - got a date with the ChiSox and Tigers. Gotta fit baseball in whenever there's a chance!

Friday, May 26, 2006

Telus - Doing Just Fine

As noted yesterday, I attended a Telus event here in Toronto called The President's Symposium, and I wanted to share the key messages. This event is part of their Consultant Liaison Program, and it's a chance for consultants, analysts, etc. to hear management's latest thinking. This particular session focused what they're doing in the business market as well as mobility.

Joe Natale is their President, Business Solutions, and he gave a good 30,000 foot summary of how Telus has successfully transformed their business to focus on today's growth areas.

In 2000, their revenue mix looked like this:

Voice 49%
Long distance 23%
Wireless 18%
Data 10%

In 2006, the mix looks like this:

Voice 29%
Long distance 11%
Wireless 41%
Data 19%

This would look more dramatic with a pie chart, but you get the idea. Big shift into wireless and data, and a clear move away from local and LD. One of the reasons why Bay Street favors them so much among Canada's incumbents is that they have the most exposure to wireless among their peers. You can easily argue that they overpaid to acquire Clearnet, but just think where they'd be without them. They had a chance to acquire Microcell last year, but it's harder to tell how much further ahead that would have put them.

Regardless, Joe stressed the bottom line. Over the last 3 years, according to the Morgan Stanley World Teleco Index, Telus has outperformed its peers more than 4:1 - 135% growth compared to 30% for the group.

A few other points of note from the session:

- IT is playing a more important role as an influencer and decision-maker in enterprises, and Telus has been learning more about how to tailor their messaging and value proposition to this group

- Enterprise customers are becoming increasingly demanding, especially since there are more alternatives to choose from. As a result, margins are getting leaner, and this market has become "fiercely" competitive. That said, Telus has held its own, at least in their home turf of Western Canada. Joe noted how Telus has won back their top 12 accounts there from Allstream.

- SMB market - no surprise, but he talked about how it's just a matter of time until the cablecos - namely Shaw and Rogers focus on this space, which will add another layer of competition to the business market

- Vertical markets are a key strength for Telus. 60% of their business revenues come from 4 verticals - Healthcare, Financial services, Public sector and Energy/Utilities. Joe gave some detailed examples of applications and solutions Telus has developed for each of these.

There were additional good insights from Joe and the other presenters, but I'm going to stop now. The overall messaging was positive, and the event was a good example of the outreach Telus is doing to develop a healthy ecosystem of partners, especially in Bell's back yard. As their marketing tagline goes, the future is friendly, and that's a good thing. To finish off, a few photos from my Nokia N90...

Welcome sign, Joe Natale


Finally, just a quick comment on the venue. The event was held in what used to be the Toronto Stock Exchange. It's a classic Art Deco building, now used to host corporate events, especially AGMs. Basically, once the TSE went electronic, as with most exchanges, the physical trading floor became obsolete. While the facility became outmoded, the building is too precious to demolish, so what did they do? They built an office tower around it....


So? Well, I just can't help but think what happens when the new replaces the old. When the telephone replaced the telegraph. And when VoIP replaces PSTN. Will the PSTN be considered a "heritage" property, too sacred to tear down? Or will it be dismantled and disappear, as I assume happened to the telegraph infrastucture? The setting of the Telus event raised those thoughts for me - what will we do with all that copper infrastructure once fiber and coax take over? It works too darned well to just trash it, and I'm sure someone out there is thinking about what utility these networks will/might have 10 years out. Ideas anyone?

Technorati tags: , ,

Vonage Wrapup

Am sure you've been Vonage'd to death at this point, but for completeness, I just wanted to tie up some loose ends on coverage from various sources and voices.

First, my guest post just started running on Om Malik's blog , and there are comments there already. You can read it here. Thanks, Om! Gotta get to those comments now...

Second, three Vonage IPO stories I was cited in since my last post...

National Post Mark Evans and I are both wondering why this went so wrong. Still are. Maybe the market is just plain right, and wants no part of a business based on a business model they don't think can ever work. On that note, Mark makes a great comparison to satellite radio, which is a very similar situation. Lots of hype, cool service, affordable, but a money pit. And their ARPUs are way lower than Vonage, with little room to grow, esp since most alternatives are free. For them, it's even more of a numbers game. Imagine Vonage trying to enter the market 5 years from now, when voice calls will probably all be free, and it will be a lot like how radio is today. - what traders think. Two articles:

Today - a very interesting piece from Jonathan Berr about how AOL customers cannot get Vonage, and some of the issues around that. A good read, and another interesting angle on how life is not easy for Vonage. Am not sure what the issues really are there, but would welcome comments from those who do.

Yesterday - wrapup from Jonathan of Vonage's day 1

Of course, there has been lots of commentary elsewhere. Aside from the blogs related to the above items, Jim Courtney has a nice wrap up of interesting posting on yesterday's Skype Journal. I particularly like his reference to Andy Abramson's thoughts, esp his view that Vonage's poor showing does not sink the VoIP market for future IPOs. I've been very concerned about this, and I sure hope Andy is right. So, hopefully the market will look at other companies differently, especially those with very different business models and expectations. On the vendor side, several companies seem ready for IPO, such as BroadSoft, Sylantro, Acme Packet, NexTone and Veraz. These aren't household names of course, but anyone following this space knows these are quality companies going in the right direction.

Another tangent is the Jeff Pulver connection. Jeff is a Vonage founder, so has a lot at stake here, albeit just as an investor now. It was nice to see some posts recognizing his contribution and vision here, as Vonage is just one of many, many things Jeff has had a beneficial hand in. Alec Saunders has a nice wrap up here, with the gist being that Vonage may have turned out differently has Jeff had remained more involved. How's that for a "what if?" Well said Alec - and Andy.

As a last word, I just wanted to note the irony for Vonage going public the same time as MasterCard. Their IPOs have gone in different directions, and it really makes you wonder. Vonage is in a business that is delivering cheaper, faster, better service to consumers, who stand to benefit from all the wonderful things that IP has to offer. It's a good news story. I'm suspending disbelief for a moment here about the bad stuff, but it's a bit troubling to see them tank while the market rewards a company that helps consumers go even deeper into debt as our economy bumbles along on out of control debt and deficits. Is it just me?

Technorati tags: , , , ,

Thursday, May 25, 2006

Canadian IP Thought Leaders Podcast - Stephen Marshall, ZoneZ Wireless

I was offsite most of the day at an event put on by Telus, so I haven't been able to track much of the Vonage buzz. I'll have a few post-mortems to add on this tomorrow, along with my guest post on Om Malik's blog, and Mark Evans's piece in today's National Post. Sounds like things went from bad to worse today, down another $1.85 to close at $13.00. Oooooh. Will there be a bargain-hunting bounce, or is the stone still sinking? Tune in tomorrow....

Tomorrow I'll also have a brief post about the highlights of the Telus event. It's been a long couple of days, and it will just have to wait.

The main event for this post is today's podcast that I did with Stephen Marshall for the Pulvermedia Podcasting Network. They had a hiatus last week as the PPN crew were in Stockholm doing pods at VON Europe. But I'm back on track now, with lots of new and interesting companies to podcast about in the weeks ahead.

Zonez Wireless is an interesting company that I've known about for a while, and got to know a little better at the Canadian Venture Forum earlier this month.

Today's podcast was with their President, Stephen Marshall, and he talked about why cablecos are keenly interested in wireless broadband, and how they're finding all kinds of neat applications most of us probably don't think about every day like RV trailer parks and landing docks for cruise ships. You can tune in to our chat here, as well as read up more about Stephen and Zonez.

Technorati tags: ,

Wednesday, May 24, 2006

Vonage IPO - On Second Thought....

Well, I never said I was a good stock picker. I really thought demand would have been stronger for Vonage. On the other hand, I wouldn't say it's a total disaster, and there could well be a bounce tomorrow or in the days ahead. So many variables here, and there's no one right answer.

Just wanted to share some links about my media encounters today. More are coming, including a post as a guest blogger on Om Malik's blog.

First, this morning's spot on Bloomberg Radio. It's in two files - runs around 12 minutes or so. You access it here for Part 1, and here for Part 2. Mr. Citron - if you're out there, you'll be glad to know I did this interview over Vonage, and pointed this out to the interviewer, Charlie Stein. I loved his response - "well, you sold me".

Second, a print story from Bloomberg News. Among other places, this story was picked up in the globally-read International Herald Tribune.

Third, ROB TV. I was on Pat Bolland's afternoon program. The link is active for a week, so have a look now before it's gone! Scroll down to the 3:15pm time slot, and you'll see the link there.

Technorati tags: , , ,

Tuesday, May 23, 2006

Touchtone a Feature Still - Only In Canada?

This is a pretty simple post, and I just wanted to share it - the lighter side of telecom.

Bell Canada still breaks out Touchtone service as a line item in our phone bills, charging us $2.80 a month for the privilege. As if we had a choice? It's like one of those silly questions I always wonder about, like how do they get the stripe in Stripe toothpaste? Or, where does baby oil come from? Groan....

Fellow Canadian blogger Mark Goldberg read the same story as me about this in the weekend Globe & Mail, and I'm just going to steer you to Mark's post. I really have nothing to add, but in this day and age, it's one of those things that looks so anachronistic.

The article (it's really an opinion piece) mentions how other Canadian ILECs have managed to get it off their billing, and you can be sure it doesn't show up on the bills from alternate providers for dial tone. But for Bell, it's all about "clarity" as the article states - they just want to be sure you know you're getting touchtone - and that you're paying for it whether you like it or not.

It's a small thing, and I'm sure lots of other ILECs still do this - and worse - but y'know, it's also one of those things you remember when you seek "clarity" to remember why you left your telco in the first place. As we teach our kids, if you don't have anything nice to say, keep it to yourself!

Vonage IPO - Everybody's Talking At Me...

If you're old enough to know how that song goes, you'll be smiling too. Can't get that song out of my head now....

Vonage trading starts tomorrow. I hear it's oversubscribed, so maybe my prediction will come true after all. The power of the brand goes a long way, even if you're losing money. Most industry insiders are scratching their heads wondering why anybody would buy Vonage - and in many ways, I agree with them. Main Street is a very different place, however, and all they really know is that Vonage advertises everywhere, and they have that goofy, but catchy "whoo hoo, whoo hoo hoo" song you can't get out of your head!

I've been talking to the press a lot today about Vonage, and more of the same tomorrow.

FYI - I'll be on Bloomberg Radio at 10am, should you care to listen. You can pick it up off their site, or on AM 1130 in NYC, or on satellite radio (not sure which stations). Here's the guest roster, and if you scroll down, I'm there for 10am.

Om Malik was nice enough to cite me on his blog earlier today. He's even nicer, by having me guest blog later tomorrow about the IPO. Thanks Om - and you can guest on my blog any time!

Hat tip to Mark Evans on Om's post, who's also following the story closely. We spoke earlier today, and I'm sure he'll have something running in tomorrow's National Post.

On the home front, I'll be on ROB TV tomorrow at 3:15, speaking with Pat Bolland about the IPO.

To complete the media triple play - radio, TV, print - I was cited in TechNewsWorld this afternoon.

Busy, busy, busy...

Technorati tags: , , , ,

Monday, May 22, 2006

Tomorrow is V-Day - Vonage's IPO

It's Victoria Day here in Canada, and I'm quasi-working. However, there are two things very much on my mind today that I need to post about, if not just in passing.

1. Tomorrow is Vonage's IPO. Predictions, anyone?

2. Tonight, the Yankees are at Fenway again, as the battle for first place continues.

I'm just going to muse about Vonage here. The blogosphere has been quiet about this today, and maybe it's just a non-event, esp for those in-the-know. I did a story with Reuters earlier today about the IPO, and it's just run now. Kudos to them for looking at the story before the IPO launches tomorrow. I would have thought there would be a lot guessing/wagering as to where the pricing will fall.

The other day, I commented about Vonage's IPO roadshow, and building on this, I think their IPO IS an important event. Tomorrow, of course, I suspect the media will be all over this, and I hope to hear from some of them, regardless of how my prediction turns out!

I'm not much of a stock picker, but my guess is that the IPO will be well received, and the opening price will spike in the area of 25% to 50%. Keep in mind, existing Vonage subscribers are already entitled to shares, so that's 1.7 million people who don't have to rush to be first in line.

There are a lot of pros and cons to Vonage, and it really could go either way. However, with such a dearth of IPOs in the VoIP market, the huge premium Skype garnered from the eBay deal, and the recent consolidation moves by big name carriers, I think there are enough positives here to warrant a good offering. There simply aren't many places for investors to put their money into VoIP, especially for pureplay exposure to this exploding market.

If Vonage has done one thing very well, it's build a brand. They are the Kleenex of VoIP, and nobody comes close. The company is far from perfect, and short-term, is a basket case financially - HOWEVER - if they execute well, stick to their plan, and find a way to add value to what is rapidly becoming a commodity item, they can make this work.

I think a lot of this lies on where you believe the market is going. If you believe that there's still a strong market for using landline telephony (which there is), then there's plenty of room for Vonage to grow. Maybe not forever, but at least 5 years.

On the other hand, if you believe landline is so Voice 1.0, and the future totally belongs to PC-based telephony, then Vonage is toast, and Skype will - or may - inherit the earth. Of course, the latter is where Google/AIM/Yahoo/MSN all think the world is going, and if you're under 25, that's probably true.

Of course, both hold true, and that's why I think Vonage will do ok tomorrow. Longer term is harder to tell, and all the recent moves by AIM, Verizon, Yahoo/AT&T, Comcast, etc. will do nothing but make life harder for Vonage. But that's not our concern for tomorrow - one day a time.

Bottom line, whether you care for Vonage - or not - it is in the interests of the entire IP communications sector for their IPO to succeed. There is an awful lot of money looking for homes in this market, but until there is some track record of IPO success, that money will stay away. Several companies who entered this space around 2000 are primed for IPO - they've survived a downturn, and have matured to the point where they're ready for IPO. One could argue that if Vonage can't make it work , then nobody can. So for all of those IPOs-in-waiting out there, I'd say let's all hope things go well tomorrow!

Technorati tags: , , ,

Friday, May 19, 2006

AudioCodes Acquires Nuera

Just a quick post to acknowledge this acquisition. Nuera was one of the very first companies I followed when I started with VoIP in 2001, and they truly are one of the last independents from that time. I've always wondered why they weren't acquired sooner, especially now that they've built up such a nice business in red-hot cable space. I've known for some time that they were open to being acquired, so it's not that surprising.

Much like the recent Comverse/NetCentrex deal, this is another sign of consolidation in the VoIP market, as small and mid-sized vendors bulk up to keep pace with the incumbent vendors, who are all trying to sell into a carrier market that itself is consolidating.

In this case, however, the companies have more common ground in terms their product mix. Maybe for AudioCodes, the $90 million investment is a price worth paying to have one less vendor to compete against. On a business level, as the Light Reading article notes, the move gives AudioCodes a nice entree into the North American cable market, which has lots of room to grow.

Nuera has always remained small - only $16 million in sales - which seems to have been the fate of many nextgen vendors who have been acquired recently, such as VocalTec, VocalData, Jasomi and Kagoor.

Just a quick aside - it's interesting to note how this is another case of an Israeli company growing through acquisition, just like Comverse.

Web 2.0 - Send Money Please, I Can Do This

Mark Evans is coming off a career week with the success of Mesh on Monday and Tuesday here in Toronto. The conference has been amply covered, and this posting only has a modest tie-in. In his day job, of course, Mark covers tech for the National Post, and does a great job there. On his blog today, he referenced an article of his that ran in today's paper that I wanted to share here as well.

It touches on one of the stronger themes coming out of Mesh. There are a lot of smart people out there, and there are lots of fundable ideas for Web 2.0 businesses. Mark's article talked quite a bit about Rick Segal of J.L. Albright Partners, and his open enthusiasm for the talent pool we have here in Canada. Canadian VCs have generally been more cautious than Amercian VCs, but the article cites Brightspark and Growthworks, along with Albright as being the most supportive of Web 2.0 in Canada. So, without talking up the merits of Mesh, Mark does a nice job to objectively draw attention to the fact that in Canada we have all the ingredients in place for a thriving Web 2.0 community, including ideas, talent and capital.

Adding to the capital needed to make any Web 2.0 venture fly is good management. To that end, I wanted to quickly reference a nice article that ran in our other national daily, the Globe & Mail. It's by Sean Wise, and I posted about it earlier today.

Put these two articles together, and you've got a pretty good blueprint to build a business around. Now all we need are some good ideas - anyone?

Technorati tags: ,

Aspiring Web 2.0 Companies � Listen Up!

If that�s you, I�ve got a great article for you to read that ran in this week�s Globe & Mail Small Business section.

It was written by Sean Wise, and is a timely follow up to the Mesh conference that ran this week here in Toronto. Sean is the Managing Director of Wise Mentor Capital, a unique practice based in Toronto that has a lot of experience helping tech startups. There's another thread here as well. Sean is very active in the VC community, and was a major force behind last week's Canadian Venture Forum, which I attended last week here in Toronto.

The premise of the article is the importance that VCs place on management capabilities when considering funding a company. Based on some extensive research conducted by Ernst & Young with over 500 companies, the article distills some key competencies successful startups have.

At the most basic level is the Talent Triangle � Business acumen, operational experience and domain knowledge. All of these elements are critical, and the article does a nice job to articulate why each is so important. This forms the base of a broader model of business success titled BODCAT, which layers three things on top of this triangle � Consultation, Authority and Trust. For management to be effective, there must be consultation among 3 functional areas that essentially reflect BOD � business acumen (CEO), operations (COO), and domain expertise (often CMO or biz dev). On top of that, each must have authority and trust. Otherwise, good decision-making will be very hard to come by.

I wish there was more discussion about the importance of financial management in the mix. After all, the VC is giving them gobs of money to make their business grow! However, good management is at the heart of any successful business, and Sean�s message is a good one for anyone thinking of jumping into the Web 2.0 milieu thinking this will be easy.

Technorati tags: , ,

Thursday, May 18, 2006

Vonage IPO Roadshow - Would You Buy a Telco From This Man?

Had a chance to see the roadshow video for Vonage's IPO. This is Jeff Citron's Hollywood moment, and he sure looks ready for the part. First off, they've done a spiffy job to update their logo, with a friendly orange and blue color scheme. When Jeff welcomes you at the start of the presentation, you can't help but notice how perfectly his orange tie and blue shirt matches their colors! Small detail, but, hey, we're talking about the most important IPO in the history of VoIP. It's no understatement to say that the collective health of this sector rides quite a bit on how Vonage fares next week - at least for anyone with hopes of going public.

Jeff does a great job telling the growth story of both broadband and VoIP adoption, not just for the US, but globally. Vonage just closed out their best quarter ever, market penetration is still very low, and the annual growth rate for VoIP (CAGR) is forecast at 52% out to 2009. So, lots of upside to grow, and Vonage is ready to claim its share, as VoIP is forecast to be in use by 23% of the world's 185 million broadband subs in 2009. That's a good base to build a dream around. So far, so good.

He goes on to talk about Vonage's strength as a company, with over 300 engineers and developers. This provides assurance they are trying to do a lot of their own innovation, and comfort that not all of your investment dollars will be cycled out for advertising and marketing. Phew!

From there, some discussion about their home and small biz offerings, emphasizing they have the best voice bundle in the industry, with a mix of PC, wireline and mobility-based solutions. To drive home the point, he contrasts this to the cablecos, who "handcuff" you by tethering your phone subscription to your TV subscription. Vonage has long advocated they are the best pureplay VoIP offering, and that there will always be a market for best-of-breed, so to speak. There is truth to this, and I for one am not convinced the bundle is the be-all and end-all to winning this game. So, I give Vonage credit for sticking to their game plan. Of course, with the IM players adding voice, it's getting more complicated, but that's another story.

He talked up their WiFi phone, and how it plays in nicely with the muni WiFi projects that are popping up across the US and elsewhere now. For the business market, he noted their Office Anywhere service, where your vital data is stored on a USB stick, and you can set up your business anywhere there's a PC-based broadband connection. I thought that was pretty neat.

Following Jeff, their new CEO, Mike Snyder spoke a bit, followed by long-time CFO, John Rego. It was important for them be part of this since Jeff stepped down from his CEO role at the beginning of the IPO process (that's another story). For investors to buy into Vonage, the story can't be just about Jeff Citron, and both Mike and John did their jobs.

Mike talked about how Vonage will keep its brand strong, build out their channels and retain their customers. He noted 3 ways they will achieve this last item - improve the network (80% E911 compliant), improve the customer experience (new features), and improve support (over 2,000 agents). He cited one thing in passing that blew me away. To date, Vonage has spent over $500 million to build up the business. I'd sure like to have a piece of their ad agency. That's an incredible marketing spend to get 1.7 million customers - you can do the math.

Finally, John Rego did a great job to explain how Vonage is building a business that has compelling economics and will be very profitable at some point. First, he showed how customer acquisition costs have held steady in the $200 range, and that includes a CPE subsidy of about $20. Sales have been growing at a healthy clip - a 31% quarterly compound growth rate, which is putting them on track for 2006 sales of over $400 million.

The most interesting numbers to me were ARPU and unit costs. Current ARPU is $25.97, and their operating cost per line is $8.74, leaving them with a "service margin" of $17.23. This is pre-marketing of course. He spoke about churn and how this is improving, and using a few assumptions, concluded that they are on a trajectory for an average customer lifespan of 5 years. I couldn't quite follow the math, but it looks like if they can keep their customers this long, they will make money. That's a tall order in this industry, and I'd say that everything in the presentation leading up to this is designed to convince you that they will achieve this. Otherwise - well, we all know what happens when you spend more than you bring in.....

Before signing off, I should mention that Mathew Ingram of the Globe & Mail had a nice article about Vonage today - just to add another voice to the mix.

Technorati tags:

Today's Concall from Save the Internet and Moby

Yesterday I posted about this concall, which took place earlier today. I listened in, and just wanted to share some thoughts.

The concall was a well orchestrated effort to keep pace with the telco lobby in their efforts to influence the Net Neutrality debate. On the call was Tim Carr, who coordinates the STI coalition, recording artist Moby, and Congressman Ed Markey (D, MA), who has been championing this issue.

I'm not a regulatory expert, so I won't go too deep here. The speakers on the call all took turns to state their case, which is basically that the Internet should remain free and open, and we should not let big business take ownership and become the gatekeepers. It's a familiar story for those following Net Neutrality, and there are plenty of blogs that get into this in great detail.

Tim set the stage, talking about the importance of preserving Net Freedoms, and how over 700,000 Americans have signed the petition (myself included), making this a bona fide grass roots effort to get our voices heard. He explained this is a necessary response to counter the "disinformation" being put forward by the big telcos to strengthen their case to defend a dual-tiered Internet. As such, he's urging Americans to "learn the facts" and don't let big biz hijack the Internet. Setting up for Moby, he added that the Internet has become the "medium of choice" for independent artists, and they risk losing this if the telcos get their way.

Moby added his piece, saying that "Internet freedom is under attack", and named some recording artists who have just joined this coalition, such as Trent Reznor, and yes, the Dixie Chicks! He noted the importance of mobilizing citizen support since midterm elections are coming, and this is worth making an issue over. Moby also pointed out this is not just an issue for artists - it was mentioned that both the Christian Coalition and gun owners were onside here as well. When you can get all these people to agree on something, there must be something to it! He ended by making an appeal to support Representative's Markey's proposed Net Neutrality amendment and keep the Internet free.

Representative Markey was the last speaker, and he talked about the issues and challenges around getting his amendment heard. Interestingly, he dropped off the call just when we needed him most! Bizarre. The cynics out there have to wonder if the concall was being hosted by a big telco, and someone decided to mess with the call just to make it interesting. Who knows???

As mentioned, this was a well-orchestrated event, and you can pick up all the pieces from the various posts that followed the call:

Press release about today's call

Text of Moby's statement

Text of Representative Markey's statement

I just wanted to add my overall take on this call. I'm all for Net Neutrality, and nobody really wants to see an "Internet tax" that would ulitmately stifle innovation, creativity and choice (well, hopefully nobody!). And Congressman Markey's efforts need to be supported. I should also add you won't find a more fervant advocate from the IP world than Jeff Pulver, and he's as active in this space as anyone.

My concern is the black and white, good guy/bad guy scenario this call was painting. It's very easy to make the honest efforts of artists and creative people looked oppressed by big business. To some extent that's true, but the scenario being painted is just as fear mongering and self-serving as the telcos. The telcos are entitled to make a fair return on their investment, so there is some basis to their take on Net Neutrality. The bleak world portrayed on this call is not good for anybody, and I don't think the public will tolerate paying twice for Internet access - once to get the basic broadband we get today, then the second charge to ensure QoS for high bandwidth content. I guess I'm not convinced the telcos are that evil and will go so far as to make life impossible for artists who depend on the Internet for their livelihood.

I guess what I'm getting at is a need for clarity and a framing of the issue in a context that is not about winners and losers. We should - and can - all come out winners if this is done right. As Moby noted, the Internet today works pretty well, and as it continues to get better, and as more people continue to use it and benefit from it. it's really our game to lose and screw up.

The tenor of the call suggested an all or nothing outcome, and I'm just not so sure that's what will happen. I tried really hard to ask a question on the call, but couldn't get through. They also didn't leave much time for Q&A, and seemed in a hurry to end the call. Basically I wanted to ask if they could see a middle ground, where there's a distinction made between charging a premium to ensure premium quality access, and the telcos hijacking the Internet to suit their own ends. Or, as Tim Carr called it "economic censorship".

I'd like to think a middle ground can be struck. It's fair to say that nobody should "own" the Internet, but I also think it's a bit idealistic to expect it to be totally open and free to the point where those who have invested in the networks are reduced to being providers of fat, dumb pipes. I didn't get a sense there was much distinction made here on the call about this, and I came a way with the feeling that this call was every bit as orchestrated as anything the telcos would do. I guess that's just the way it is on Capitol Hill, but it didn't leave me with the impression that this coalition has all the answers either.

Wednesday, May 17, 2006

Join Moby and Me on a ConCall to Save the Internet!

For those of you wrapped up in the Net Neutrality debate, and happen to be passionate about music and artistic freedom, you probably know about Save the

Got an email late today about a concall being hosted by Moby - yes, Moby - Play, 18, etc. - about how musicians are banding together in an effort to keep the Internet open, accessible and democratic.


Pretty interesting stuff, and I'm sure we'll be seeing more voices like this from other corners of the arts world. Digital media is so disruptive, and Net Neutrality speaks to the essence of how important the Internet has become as a distribution channel and vital link between recording artists and their audience. Nobody has got this figured out yet, and much like what we saw with Napster, this is another step along the way to how IP is redefining an industry faster than anyone can comprehend.

Anyone who saw Michael Geist speak at the Mesh conference this week in Toronto will understand this totally.

The press release isn't up on their website yet, but here's the gist of it....

R.E.M. and Moby Speak Out for Internet Freedom, Against Corporate Web Takeover
Musicians band together to demand Net Neutrality with congressional showdown over the future of the Internet imminent

WASHINGTON -- Rock group R.E.M. is joining Moby and a growing list of musicians pushing Congress to protect the Internet from corporate takeover by AT&T, Verizon, Comcast and other telecommunications giants.

Major artists and musicians are signing the "Artists and Musicians for Internet Freedom" petition -- joining Internet advocates, political groups on the right and left, consumer advocates, and more than 600 diverse organizations on the Coalition. This coalition is uniting Internet users against a congressional proposal to gut Network Neutrality -- the Internet's First Amendment.

"This is yet another attempt by corporations and their congressional buddies to pull our society backward rather than moving us forward," Michael Stipe of R.E.M said. "These corporations are trying to set up tollbooths on the information superhighway. We need to keep Net Neutrality so the Internet remains a free and level playing field."

R.E.M. also blogged about this issue as the top item on their Web site,

Net Neutrality ensures that small music blogs and independent news sites open just as easily on people's computers as large corporate sites. Companies like AT&T are spending millions lobbying Congress to let them decide which Web sites work best based on which corporations pay them the most.

"If Congress guts Net Neutrality, independent music and news sites would be choked off, consumer choice would be limited, and the Internet will be become a private toll road auctioned off by companies like AT&T," warned Moby. "We need to stand up for Internet freedom now. Congress must uphold Network Neutrality."

Moby will join Representative Edward Markey (D-Mass.), ranking Democrat on the House Subcommittee on Telecommunications and Internet, for a Net Neutrality event Thursday in Washington.

The Save the Coalition -- an alliance of organizations from across the political spectrum, consumer groups, educators, small businesses and bloggers that have joined together to protect Internet freedom -- has galvanized support for Internet freedom from artists, musicians and hundreds of thousands of average citizens who will hold Congress accountable on this issue. Nearly 700,000 people have signed an Internet Freedom petition to Congress on the site, more than 7,000 friends have joined's MySpace, and thousands of blogs have linked to the coalition.

R.E.M's announcement: Coalition:

RSVP for Thursday's conference call with Moby to

Date/Time: Thursday, May 18th - 12:15pm (EST)/9:15am (PST)
Participant Dial In: 1-800-905-0392 - Password: Net Neutrality

Tuesday, May 16, 2006

Mesh Conference - Final Thoughts

Have had a bit of time to reflect on the past 2 days, and am trying to conclude if we really meshed or mashed up. Putting a lot of good ingredients together that sound good doesn't always guarantee a successful recipe, but I'd say on the whole, Mesh was a success.

I wanted to share my final thoughts on Mesh, really for 2 reasons. First, the analyst in me compels me to look at the big picture and try to explain what I think it all means. Not sure if I'm right, but that's for you to decide. Secondly, I've had a look at a lot of blog posts from those attending Mesh, and most of it is just reporting of what went on. There's a lot of that in my other posts about Mesh, but I haven't seen much in the way of a critical analysis of the overall experience. And I mean critical in a good way!

Let's look at that logo again. I think it's one of the coolest things about the event - it's a very engaging image, and I think there's a lot of good design going on there.


Did I connect at Mesh? Yes.
Did I share at Mesh? Yes.
Was I inspired at Mesh? Yes.

Well, if I'm a PR guy, I'd say mission accomplished! In large part I'd agree, but still, I'm left with some questions, both of the conference itself, and where we go from here.

There was lots of good content and obviously some great energy. I'm sure the successes of the show were a happy mix of good planning and putting everyone together to share and feed off each other. I definitely learned a lot, but for someone who is on a steady diet of VoIP and telecom conferences like VON, Internet Telephony and Globalcomm, this is a different world in many ways. Didn't hear much talk about VoIP or podcasting or SIP - stuff like that. But that's ok - Web 2.0 is about so many things.

And that's where the challenge lies for me. A lot of great perspectives were put forward at Mesh - both from the speakers and the attendees. However, there wasn't a lot of connecting the dots - maybe by design - but I'm left with the feeling that for as much as I learned, I still don't have a sense how these things fit together.

This actually brings me back again to the Mesh logo. You can't help but be drawn into that image and the energy it seems to radiate - which is exactly what happened at the show - so, kudos for the logo designers. The energy was there alright, but like the logo, I didn't really feel that all the strands - yellow, blue, green, etc. - connected. They're oscillating around each other, and bumping into each other a lot, but never really intersecting or truly meshing into a unified form. At the end of the day, much like Earth at Creation, I'd like to see this humming mass of energy and chaos sort itself out and unravel nicely like a ball of yarn.

My conclusion is that this did not happen, and I'm concerned that for some, the conference was just a blur, like this....


Or, that people become blinded by the light (as the Boss would say) of Web 2.0...


Can you guess what this is a picture of? Big prize if you can...

Am just saying these things as food for thought. As I mentioned yesterday, I think the guys behind Mesh are on to something, and they've done a GREAT job on many levels. Just like with a lot of things in Web 2.0, sometimes you need to start with a clean slate to get it right. None of these guys are from the conference business, and the "unconference" approach was edgy, but it was just right. Having been involved with so many conferences, I can think of a million things to consider if/when there's a sequel to this.

Mesh can go in many directions now, and the founders have probably made a nice profit from which they could bankroll the makings of a pretty exciting business opportunity. What I'd like to see next is something - maybe a conference - maybe something else - that helps make this nascent community more real. And from that, those oscillating rings of energy and great ideas will have a better chance of truly meshing and turning into that ball of yarn that makes sense for everybody. I can sure drink that Kool Aid!

Mesh - Day 2, cont. - Reviews, Photos, Videos

This is part 2 for Day 2. I blogged earlier this morning about Steve Rubel's session. Haven't been able to blog since, so this post is my wrapup of the day.

I also have some postmortem thoughts to share on my overall impressions of Mesh - that's coming right after this post.

So, after Steve, Mathew Ingram had a Keynote Conversation with Dr. Paul Kedrosky, a well known VC and blogger - who happens to be Canadian. Paul was very forthright about the nature of the VC business, and I thought Mathew was a great foil. He said all the right things at the right time, and kept the conversation moving along at a crisp pace.

The main takeaway for me was the idea that the tech bubble is alive and well � it's not a mirage - but we need to make these mistakes along the way as we figure out how make money with Web 2.0 (whatever that really means). Paul was also very direct in saying if you don't need VC money, don't take it. He joked about how prestigious it sounds to say "I got funded by Kleiner", and turned it around saying it's actually better to say you DIDN'T take their money. Well said - if you can make it on your own - do it.

The good news is that with the costs of entry being so low, you don�t need that much funding in the first place, and it's actually easier to enter without much of a business model. Mathew then asked if you really can just build something and make the business model later � Paul said that�s what Google did � so, the precedent has been set. To make this work, Paul noted that your business has to be able to scale real well, and operate economically.

Some other comments of note from their talk:

- Last 6 months, there has been a shift is to business apps for Web 2.0 � it�s now 60/40 biz/consumer, whereas before, he was seeing 90%+ being consumer.

� Subscriber-based business models can work, and he cited a Canadian company - Dabble. They make shareable databases easier to use, and help people stop using Excel as a database as a default since Access is so hard to use.

- For Toronto-based startups, Paul advised looking for funding from Boston, not Silicon Valley. It's closer and more accessible for them. He noted 2 VCs - Polaris and Kodiak - who invest in Canada.

- Final advice to finding the best VC � think creatively � VCs are more open to creative exits, especially with there being so few IPOs now

Tara Hunt was the next speaker I saw, and she was a mixed bag for me. A Toronto girl-made good in Silicon Valley, she has fantastic energy, passion and presence. Lots of good ideas there (esp the bowiechick clip from Youtube), and she was really great about engaging the audience and getting them to be part of the session.

Being so audience-friendly cuts both ways, and a few people challenged her assumptions and ideas - rather effectively, I thought. There was some very lively discussion about the thin line between real community and marketing, and it's getting harder to tell when people are talking, blogging, podcasting, etc. about stuff that's real or when they're getting paid to do so. This theme came up several times during Mesh, and it's certainly key to how much staying power Web 2.0 will really have.
The only other session I had time to see today was one hosted by Mark Evans - more stuff about VCs and Web 2.0 funding. Panelists were Rick Segal and Jason Fried, and they were just great to watch. Rick is very candid and supportive of Web 2.0, and basically gave everyone an open invitation to pitch him for 30 minutes any time. What was really nice to hear was his enthusiastic endorsement of the talent pool we have here, and how we should take more advantage of the universities which produce so many top people. Rah rah - but still a good message.

Got 2 video clips for you, and then some photos from my N90...

First, a 3.5 minute clip of Steve Rubel, and then a shorter clip of Paul Kedrosky. I wanted a longer clip for Paul, but my memory maxed out. Doh!

Steve Rubel/Stuart MacDonald, Paul Kedrosky/Mathew Ingram


Tara Hunt, Jason Fried/Rick Segal


Breakout session - nice fishbowl effect - or are they in subway car?, myself with Mike McDerment, one of the Mesh guys (and the developer of my website!)


Skype - Free Outbound Calls - Good Deal Gets Better

Skype's move to offer free SkypeOut calls for North America is pretty compelling, and is a great way to make their platform more sticky, and to rachet up the adoption of their PSTN connectivity service. Most of their SkypeOut takeup has been outside North America, so this is an effective way to get this market more engaged on this level. To me, even though no money is really changing hands, SkypeOut users are more valuable than Skype-to-Skype users. They may be giving up some short term revenues, but I'm sure the hope is once they revert to a paid model, SkypeOut users won't balk too much. It's all about changing behaviors and keeping your customers with you. There's just so much pressure and competition from the other IM platforms, esp Yahoo/AT&T and AIM Phoneline that this is just the cost of doing business.

This story got some good press coverage, and both Business Week and Light Reading were nice enough to cite me - here and here. It's nice to see as I'm in the thick of the Mesh conference now here in Toronto.

Note - the link to the LR article may not work. If so, just go to their site - it will be there in today's stories.

Sidebar to the LR article and the writer, Mark Sullivan. Mark reports that both Andy Abramson and I are at VON Europe in Stockholm. Andy might be, but I'm here in Toronto - I'd love to be there, but not today!

Mesh - Day 2

Am blogging in real time now. Steve Rubel of Edelman is the first speaker today, and Stuart MacDonald is doing a great job to cover the broad topic of PR and how it fits into the Web 2.0 world. Steve is one of the most widely read bloggers out there, and has been talking about how PR is adapting to this new world.

For Steve, blogs "further the conversation", which is a great way to look at things. The big issue for him is how it's getting harder to trust people in our scandal-ridden society, and Edelman's research has found that peers are one of the most trusted sources of all. That's where the Internet comes in, as it creates so many new ways for people to connect and interact. From a PR perspective, the big challenge is how do you tap into social networking to help build brands.

Bottom line for him - advertising still works, and PR still works. To be successful you have to find ways to engage these online audiences, and to do that, "you have to go where people hang out". So, whether it's blogs, Youtube, Myspace, etc., if that's where your market is you have immerse yourself in those places. He gave some great examples of this, and clearly, blogs are playing an increasingly important role for reaching online communities. Steve also noted that new business models are emerging, and he thinks that subscription-based models will work, and this is really causing havoc for the TV networks. But when you look at the success of things like iTunes and even residential VoIP, there's definitely credence to this.

As to how do you know who the good ones are, he noted that the community is self-monitoring. The credible bloggers will keep their following, and the wannabes will fall away in due time. Blogs and the Web are simply too transparent for it be otherwise. Good stuff.

Monday, May 15, 2006

Mesh Conference - Day 1

Quite the buzz today at Mesh - am sure the Mesh Group of 5 felt like proud parents seeing their new baby come to life. It's a great story about how a cool idea ramped up real fast to become a real, live conference. I'd say there were 400+ people there, and the buzz felt very real.

That said, I'm not sure what the buzz really was aside from the great anticipation one gets to finally be in the same physical space as hundreds of other like-minded people. I'm also saying this because the conference has - by design - an unconventional format, which is perfect given the disruptive nature of the whole Web 2.0 zeitgeist. The format is at the right level (not too technical/not too mainstream), and touches on a lot of interesting subjects, with lots of real thought leaders sharing their insights. I think it's a great formula, and I for one, think Mesh is on to something. We're all trying to figure this brave new world out, and it's more fun to do it together than at our desks.

That said, I'm sure many of us have been blogging about the day, but you have to go to all their blogs (like Mark's) to find them. There is a blog section on the Mesh website, and Stuart has posted there about the day, but otherwise, I haven't heard if there is any plan to somehow aggregate all the blogging that's going on about the event. It sure would be great if there was. I have no idea if anybody will see this blog post, and I'd love to find all of it in one place - wouldn't you?

The morning had 2 keynotes, and they were both quite good. Mark Evans kicked thing off with Om Malik, and it was great to see two uberbloggers do their thing. Both being journalists, there was a lot of talk about the balance between journalism and blogging, and there are so many issues around that. I found the discussion a bit meandering at times, but Om brings so much to the table. To me, his perspective is very grounded in reality, in part, I think because he writes for a traditional publishing form - a monthly, mass market biz/tech magazine (Business 2.0). Could there be anything further from the day-to-day realities of the Web 2.0 crowd? They don't wait a month for ANYTHING. Maybe I'm showing my age, but I'm 100% with Om in the sense that traditional media still has LOTS of life in it. As disruptive - and exciting - as things like Slingbox, Skype, Tivo, MySpace, etc. are - many people at the end of their work day just want to zone out and do something passive like watch TV or read a magazine.

And to keep it real, Om kept repeating that the Mesh crowd is NOT typical - we're a long way off from how the mainstream utilizes the latest and greatest. On the positive side, Om feels there's a great opportunity out there for ad-driven business models to make blogging a rewarding endeavor, but they haven't emerged yet. And he rightly lamented how RSS is killing his business since it keeps so many people from coming directly to his blog where all the ads are.

Finally, another nugget from Om was that the real value of the blog is not the content - it's the comments - the real dialog that blogs create a platform for. His job is really just to provide context for the important news items, and that sets the stage for intelligent engagement with a community that cares about that topic. Along those lines, as a journalist, blogging is his way of keeping a story going, which I'm sure all journalists would agree with.

Following this, Rob Hyndman had a very engaging discussion with Michael Geist. Prior to their sit-down, Michael gave his own keynote, which probably blew everyone away. I wish I could have taped it, because I'd need to watch it a few times to take in all the ideas he's throwing our way. Michael is definitely on top of this space, and really understands how it works and where it's going. Given his focus, copyright issues were central to the discussion. He did a great job of raising many troubling issues, and there are many complexities yet to be discovered as every form of content becomes digitized and so easily reproduced. The main message for me was his point about how copyright law is mostly about controlling markets instead of protecting the creators, and that clearly doesn't sit well with the latter community. I'm totally onside there, and if this stuff matters to you, you should follow Michael's activities.

Finally, before the lunch break, they had a neat idea called 15 Minutes of Fame. The conference team selected 3 companies they thought had a good story, and gave them each 5 minutes to tell it. First was, who just got funding and sound like an interesting play on accessing all your media content from anywhere. Next was I don't think I'm alone in saying I have no idea what they do, so go to the website if you really need to know. Finally, - hosted project management software. That one sounded pretty good too. Not quite sure if this concept really worked - I'll know better when I see tomorrow's Fame presenters.

The afternoon had 3 different tracks, and I could only take in one - Mathew Ingram hosted a session about journalism and blogging. A bit of a reprise here from Om's morning talk - and he was on this panel too - but still pretty good ideas there.

That was it for me today, and I'll be back for Day 2. On the whole, I'd say Mesh has been really well put together, and it's great to feel such a good buzz and sense of a community coming together before your eyes. Mind you, I have no idea who most people in the crowd are, since they don't usually travel in my circles.

I saw a number of people who were at last week's Canadian Venture Forum, which was really neat. But otherwise, many new faces, and no doubt lots of really smart people - all with the same questions in their minds - what is Web 2.0 all about, and is there a business opportunity? I don't know about you, but so far, I haven't seen much in the way of answers to either at the conference, but hopefully that will change tomorrow!

Here are some photos from the day, courtesy of my Nokia N90....

Stuart MacDonald, Cathy Faktor (TorStar Digital) and Mark Evans


Michael Geist/Rob Hyndman, Mathew Ingram and the Blogger/Journalist panel


Om Malik, the buzz at Mesh


Ronald Gruia/Om, Philip Stern


Saturday, May 13, 2006

Canadian Venture Forum Wrapup - Part 2

In this post, I wanted to share some photos and a video clip of the companies I saw who had the most interesting offerings for the IP commmunications market. There were a few others doing IP things as well, but these are the ones that stood out the most for me - in addition to the ones I posted on Thursday.

Before getting to those, though, a couple of photos first about others worth noting from the event...

Sean Wise of Wise Mentor Capital, the uber-force behind the event - and the keeper of the Cups.

And now, for those who I liked the most. I'd be happy to tell you more about what they do - just drop me a line.

Patricia Tessier of Voxlib, Bill Tam of EQO Communications


Ross Jeffery and Ian Hochberg of Zonez Wireless, Right - their magic box


Arnold Augustin of Hakai Networks ("Dristan for the cable guys"), Right - Barry Fogarty of Diginiche - see video clip below for more


Finally, here's a video clip I took with my Nokia N90 of a demo that Barry gave me of Diginiche, which is a full scale collaboration platform. Of all the things I saw at the show, I thought this was the most compelling. Have a look for yourself - the video tells the story really well.

Quick aside - I hope you watch the whole clip (it's about 3 minutes). Just as I'm signing off, Barry comments about having "phone envy" over the N90. Gotta love that! I get that A LOT when people see this thing.

Canadian Venture Forum Wrapup - Part 1

Am going to do this in two parts. This post will be a summary of Mary Macdonald's presentation from Thursday about trends in the Canadian VC market. It's not time sensitive, but it's a great overview of the nature of our market, and how we stack up to the US as well as globally. Mary is a VP at Thomson Financial, and you can view the whole presentation on their website.

So, here are the key highlights I found worth sharing....

- From 2003, the Canadian VC market has been fairly flat. On a quarterly basis, typically, $400 million CDN is invested, and 200 companies are getting funded.

- There's a myth about it being easier to get VC funding in the US than in Canada. Thomson's data shows otherwise. After doing a basic adjustment for the 10-fold size differential between the 2 markets, as well as for the currency factor, here's what their data shows. On an adjusted basis, so to speak (like to like), in aggregate, VCs fund twice the number of companies in Canada, but the total value of monies invested is only about 2/3 of what US VCs put in. So, Canadian companies may get less money, but they're more likely to get funded.

- On a per company basis, Canada is way behind for the levels of funding. American companies typically get 3.5 times more VC funding than Canadian companies. For Q1 2006, the average levels are $8.6 million for US companies, vs. $2.4 million for Canadians (all figues in $CDN). In 2005, those respective averages were $10.5 million vs. $3.0 million. Don't forget that the CDN dollar is much stronger now than a year ago!

- Remember I talked about CDN companies getting funded more readily compared to the US? That's on a relative basis. In absolute terms, Canada is actually right up there on a global basis. Believe it or not, 2004 data shows that Canada is #3 in the world in terms of number of companies getting VC funding. The US was far and away the leader in 2004 with 3,688 deals, followed by France at 921, and then Canada with 631. Even more interesting is how quickly things tail off down the line. The UK was just behind Canada with 587 deals, and then things drop off real fast to 217 from Sweden. Granted, this is 2004 data, but it certainly shows Canada holding its own very nicely on this metric.

- Deal size, of course, is another story. While we were #3 in 2004 for number of deals, Canada drops way down to 24th for average size of deals. This metric is more easily skewed,as in any given year a certain country could be very hot, or the nature of deals tends to be very big. Taking that into consideration, Japan is way, way out there with an average deal size of $146.3 million. Things fall off real fast to $63.3 million for S. Korea, and dropping again way down to $26.4 million for Hong Kong. After that, the numbers keep shrinking, with the US coming in at 7th spot at $9.7. Things rachet down from there, and we find Canada #24 at $2.9. All $ in CDN.

- The regional data within Canada is pretty interesting. While Toronto may be the economic engine of Canada, and Toronto tends to think of itself as the financial center of Canada, it's not the only game in town. In 2005, Ontario attracted the most VC funding at $751 million, but Quebec was not far behind at $710 million. The next closest province was BC at $226 million.

- On municipal basis, it gets even more interesting. In 2005, Montreal attracted more VC money than any other Canadian city. Montreal accounted for 24% of all VC money, followed by...not Toronto, but Ottawa, at 22%. Toronto is actually well behind both at 15%. A major reason for this is that the pharma and biotech sectors attract a lot of VC funding, and Montreal is very strong in these markets.

- Comparisons to the US are also very telling. There's a really neat chart ranking the amount of VC money by state/province in 2005. California is in its own world, attracting $12.4 billion. Massachusetts is the next closest, well back at $2.8 billion. Not bad, though, considering MA has 1/5 the population of CA. Going the other way, though, MA is well ahead of the next closest state, Texas, at $1.3 billion. After TX, we get NY, NJ, WA, and then Ontario in 7th place at $751 million. Colorado is 8th, followed by Quebec at #9 with $710 million (all figures in $CDN). So, on this basis, our biggest players, Ontario and Quebec, hold their own very nicely. For the non-Canadians out there, you have to remember that the population bases for Ontario and Quebec are on par with many of the larger US states like Illinois, Michigan, Pennsylvania, etc.

- Finally, there were some interesting stats on exits. In 2005, Canadian venture-backed companies were 5 times more likely to exit via M&A than IPO. In total, there were 46 M&As in 2005, compared to 9 IPOs. That said, there's more money in the IPO - nice work if you can get it The average value of these IPO was $67 million, vs. $47 million for M&A exits.

Friday, May 12, 2006

Canadian Venture Forum - Day 2

My posting about the show today will have to wait until the weekend. Just too many other things to catch up on since getting back late this afternoon.

Got more photos to post, and a very engaging video clip from a vendor with a pretty nifty collaboration platform. I think you'll like what you see, and just how cool collaboration can be when you put all the pieces together.

Also coming - a summary of VC industry facts and figures on how the Canadian marketing is faring.

Look for these over the weekend if you get a chance.

Mesh Conference - Sold Out!

Hat tip to Mark Evans on this one. The Mesh conference is sold out, which is great news for everyone associated with putting this event together.

I'm sure Mark and company feel pretty good about things, and it should be a terrific event. I'll be there and will post about it as I can.

Thursday, May 11, 2006

Canadian Venture Forum - Competing for the Cup

Today was Day 1 of the Canadian Venture Forum, put on by the Toronto Venture Group. The event actually started last night with a networking reception, which I quite enjoyed.

I'm keeping this post really short as it's late, and I'll have a more detailed wrapup later. I especially wanted to share highlights from Mary Macdonald's opening presentation today, which provided a great overview of the Canadian venture market, and how it compares to the U.S. and globally as well. Some very interesting facts and figures, but that will have to wait for now.

Just wanted to post some photos from today. Saw some good presentations, although most of the IP-related ones are tomorrow. Overall, among the IP-based companies, I can definitely say that most are focused on wireless applications. More on that later.

So, what's "competing for the cup" all about? Well, the CVF has it's own Stanley Cup, so to speak. They'll be handing out "Victor Awards" to the top companies at the end of the conference tomorrow. There's something about Canada and trophy-type events. Hockey is the only major team sport in North America that competes for the trophy itself - such a quaint tradition, but I love it. The other team sports are American games, and are largely a product of television - there's no romantic notion of competing for a trophy in these sports - I digress.

"The Cup", also, one of the opening panels with several major VCs


Some interesting things from the floor - Jeremy Bernard of Diaphonics (biometric voice verification), Fauzi Zamir of VisualGate Systems (video/surveillance over powerline)


Slingbox - "As Seen on TV"

It's incredible how powerful that tag line is. Somehow if you've seen something or someone on TV, it MUST BE IMPORTANT. I've never quite figured that out, but the American marketing machine has done a wonderful job of conditioning - or brainwashing, depending how far left you lean - the past few generations of consumers to respond like well-trained dogs to anything that's on TV. What else can possibly explain the runaway success of reality TV and extreme danger shows. People will DO ANYTHING to get on television. It never ceases to amaze me. Better stop now - I'm really tired, and don't want to get on this wavelength, coz I'll never get off it.

Back to Slingbox. I'm actually getting to a more subtle observation, which is this. While "as seen on TV" will continue to carry a LOT of weight, as everything becomes IP-based, it's also becoming true for the Internet. Watching TV on the Net is cool, and the big TV networks have quickly come around to the legitimacy of the Web as a channel for programming. So, you HAVE to love the irony of my Slingbox story here. I just think it's so neat that the cool factor for a device that lets you watch TV on the Internet is being partly driven by TV itself - the very medium it could one day displace. We're not there yet, but the "as seen on the web" idea will get more cachet because people have seen a device on TV that lets them do just that.

OK, I've taken that far enough. If you're still with me, here's the actual reason for this post....

A few weeks back, my colleague, Jim Courtney was interviewed by CBC TV as part of a story on Slingbox. Jim has been following Sling as long as anybody, and he's posted about them on his blog - and I've posted about him and Sling as well. He's also a contributing editor for Skype Journal, and I'll see him on Monday at the Mesh conference here in Toronto!

He called me at 6pm to tell me the segment was airing tonight on CBC Newsworld. Great news! I watched the segment, and it was great. Jim was on there, so he's gotta be a happy guy. I took a few photos off my TV using my Nokia N90, and here are some shots to give you a flavor for the profile. Apologies to Jim - you were only on a short time, and I kept missing you everytime I took a picture - the cutaways were really fast.

Blake Krikorian, Sling Media CEO


Backside of the Slingbox - that might be Jim's hand!


Mike Lee of Rogers commenting on what it means to MSOs


Wednesday, May 10, 2006

Upcoming events

Just a few quick things to update you on.

First, the Toronto Venture Group kicked off their Canadian Venture Forum tonight, with a reception in downtown Toronto. It was pretty good, and I got to meet up with some VCs and companies I'll be watching for during the presentations, namely Zonez and a new one for me, Hakai Networks. There's some stealth mode stuff going on here, so I won't say any more - but it sure sounds interesting.

I'll post tomorrow about the highlights, along with some photos, if I get anything decent.

Second - Globalcomm. I'm moderating a session run by Telecommunications Magazine on Tuesday about VoIP. It's part of a series of sessions they're running called Telecom U. The online brochure just went live this week.

Finally, on June 15, I'll be speaking as an analyst at a Triple Play Symposium in Boston. NetCentrex is one of the sponsors, and they were nice enough to ask me back again, as I was a speaker there last year. The program has expanded from last year, and it should a good event. They're also doing this in Dallas and Paris as a roadshow event, but I'm just doing the Boston leg. The online brochure just came out today - have a look if you're interested in Triple Play.

Oh, and don't forget Mesh, Toronto's first Web 2.0 event, running next Monday/Tuesday here in town. No news to report since my last post, but I'll be there, and will post and podcast as time allows. Am really looking forward to seeing Om Malik here, and I definitely plan to do a pod with him about the show.

Tuesday, May 9, 2006

Canadian IP Thought Leaders Podcast - Brian Cappellani - Sigma Systems

Today's podcast was with Brian Cappellani, CTO of Toronto-based Sigma Systems. Sigma is a market leader in OSS/back office platforms, and are especially strong in the cable market. Brian covered the key issues facing carriers as they migrate to IP, and the challenges of creating an effective OSS infrastructure to support cross-platform applications. We also talked a bit about what makes Canada a good market to create companies like Sigma, especially with all the telecom talent in cities like Toronto and Ottawa.

Click here to listen to the pod, or subscribe to my podcasts, as well as learn more about Brian.

NOTE - no podcast next week. The PPN crew will be at VON Europe, and won't be producing any remote pods. I'll be back on the 23rd, if not sooner.

Monday, May 8, 2006

CRTC Told to Re-Think Their VoIP Decision

I hate to sound like a broken record, but here we go again! In the never-ending yo-yo of Canadian regulatory rulings, the CRTC is now being told by the Federal Cabinet to go back and re-think their VoIP decision from last May. In short, it sounds like they are taking to heart the recommendations of the Telecom Policy Review that came out in March, which any fan of IP would have been happy with.

Needless to say, the incumbents like Bell and Telus were happy. It�s interesting to note that just like the RBOCs are largely getting their way with the FCC in the US, it�s looking more like that�s the case in Canada as well. This is exactly what the ILECs want to hear, as they can now watch the CRTC squirm and possibly � likely � go back on their word and let market forces rule.

If this does, in fact, come to pass, I know Jeff Pulver will be smiling. He was the lone American invited to come up and make a submission during the CRTC�s VoIP public hearings back in September 2004. His message was not well received, but for IP advocates such as myself, it was a message they needed to hear. For those of you who want to step into the time machine, you can review his submission here.

In short, Jeff's position was that the U.S. experiment of letting market forces rule was creating a highly competitive, innovative market, that in turn was driving rapid adoption of VoIP. I would argue that neither has really been the case in Canada. Sure, it�s different up here, but I think the playing field should be level, and we just might see that now.

And we just might see the kind of changes for the CRTC that the TPR has been advocating. Don�t get me wrong, the CRTC has a very hard job, and on the whole, they strike a good balance among the competing interests of free enterprise, good government, and well-served consumers. But their mandate and purpose needs re-thinking, at least as it pertains to the Internet world, which is quickly becoming about everything.

Friday, May 5, 2006

Cable VoIP + WiFi = MSO Advantage

Earlier today I mentioned I had another post coming about some interesting news that's good for the cable guys.

BridgePort Networks has been a leader in developing FMC platforms, and yesterday they announced a global reseller agreement with Siemens . Their NomadicONE server will be integrated with the Siemens IMS platform, and will enable the seamless handover of landline calls to WiFi and vice versa. This means that carriers can now support calls to and from a single phone number across different networks, and perhaps more importantly, it enables end-to-end VoIP.

This is great news for MSOs, and bad news for RBOCs - at least initially. And of course, it's terrific news for BridgePort who now get a global stage to strut their technology on.

Siemens has been particularly successful selling into U.S. MSOs, and strong evidence of this came earlier this week with news of a successful FMC trial with Time Warner Cable to support their IMS platform.

So, with these news items, it's not hard to see how together, Time Warner Cable, Siemens and Bridgeport can now create an infrastructure to keep subscriber calls off the PSTN altogether, and set the stage for more lucrative multimedia applications. What works for Time Warner Cable will work for the other MSOs, especially since the majors are working closely with Sprint/Nextel for the underlying network infrastructure and EV-DO access. Put this all together, and the MSOs have a pretty strong triple play, and if executed well, an even stronger quad play.

As a short coda, there's a bit of a Canadian flavor to this story. BridgePort, of course, is focused on telcos too, and have been working with Bell Canada for some time. Furthermore, BCE Capital is one of their investors, and of their founders, Tom Carter, is Canadian.

Hat tip to Andy Abramson on this one, and I'm sure Andy would agree that one of his clients, Iotum, would bring a lot to the party here. Imagine this - Web 2.0-style intelligent call routing across fixed and mobile networks with a single phone number (mapped to a SIP address). The MSOs could do an awful lot with that and truly take VoIP to another level.

Verizon's Price Cut - Raising the Stakes for Vonage

I mentioned the other day about speaking with Business Week about a VoIP story, and it was one of their lead stories today.

Basically, Verizon's price cut for VoIP can't be anything but bad news for Vonage, and you knew it was just a matter of time until the RBOCs - well, all two of them at this point - played the price card to put tacks on the road as Vonage speeds along towards its IPO.

In all fairness, Vonage started this game back in 2004 when the threat of them being the RBOC-killer was more perceived than real. However, they succeeded in baiting AT&T into a costly price war that slowed up their CallVantage roll out. I would even surmise that this episode played no small part in AT&T's rapid demise and takeout by SBC a year and some later.

If you buy into that school of thought, Verizon's price cut is simply payback for the pain Vonage has inflicted on the RBOCs. I don't think VZ is so benevolent to be doing AT&T such a favor, but it sure makes things more interesting. So, now the question must be asked of AT&T - will they now jump in the ring and match VZ? You could call this collusion - the way the oil companies are always accused of fixing pump prices. It's probably more the case that AT&T would do so just to keep pace with VZ since they do compete against each other.

The Business Week article does a nice job of telling the story, and they were nice enough to quote me in a few places.

Bottom line - this move will be a real test for Vonage. Do they blink first, and drop their price - which will hurt their valuation, or do they hold fast and focus on quality and features? I'm sure I'm not alone in being concerned that the RBOCs will use the power of pricing to quash Vonage and basically retain control over the landline market, bringing us ever closer - and back - to the pre-1984 monopoly world.

COMING UP... am working on a posting for later today that will be of interest to anyone following FMC. In short, BridgePort Networks has got something going with Siemens that I think the MSOs will get pretty excited about. Stay tuned.

Thursday, May 4, 2006

Conference Updates/More Media

Just wanted to update you on some upcoming conferences I'll be attending this month.

May 10-12 - Canadian Venture Forum, Toronto

At the CVF, a variety of fund-hungry startups will be telling/selling their story, and I'm looking forward to being part of the process. There are a couple of IP-based companies in the mix, which will be of most interest to me, including EQO (enables mobile Skype), Cascada (mobile P2P gaming apps), Voxlib (enables any-device, any-network communication), and Zonez (wireless broadband routers).

May 15-16 - mesh Web 2.0, Toronto.

It's been put together as a first-timer by 5 leading lights of Toronto's tech scene, including Mark Evans, Mathew Ingram, Rob Hyndman (they were all on my Bloggers Syndicate panel at VON Canada last month), and Mike McDerment (one of his companies is putting together my soon-to-be-launched website). They've managed to line up a great speaker roster, including uber-blogger Om Malik, and a lot of great sponsors are supporting it, which tells you there must money in this market somewhere!

Update - I was scheduled to be a Course Leader at a Toronto-based VoIP conference for next week, but their plans have just changed, and the date has been moved out to October.

More media....

Just a quick sidebar. I should get sick more often - for some reason, the media have been calling a lot this week, and for all kinds of stories.

Got a local double-play today - was cited in both the Globe & Mail and the National Post.

First, the Globe story was about how VoIP is starting to drive wireless, noting how Vonage Canada has finally launched its WiFi sevice with a UTS WiFi phone. It's not dual mode, though, so you really need a hotspot to use it. Still, it's a step in the right direction for them to compete against the bundles.

Second is the Post, where Mark Evans wrote about how declining landline revenues are hurting our incumbents. You have to be paid subscriber to get the whole article, but here's the story lead.

Also spoke with Business Week yesterday about another residential VoIP story, but it hasn't run yet.

And today, I spoke with Telemanagement magazine about Iotum. Stay tuned.

Canadian IP Thought Leaders Podcast - Ray Vilis, Versatel Networks

This week's pod was with Ray Vilis of Versatel Networks, which is based in Ottawa. Versatel has been a leading proponent of pushing intelligence out to the network edge, and on this chat, we focused on opportunities they are seeing in the social networking and conferencing areas. Ray talks about how the IM companies like Google and Yahoo are ahead of the traditional service providers on this front, and how they see value in the kinds of applications Versatel has developed. Another good example of Canadian telecom ingenuity at work!

You can download the podcast and/or learn more about Ray here.

Wednesday, May 3, 2006

Loose Ends - Iotum, Skype, Vonage, Wikis and Eagles

Been besieged with a nasty cold the past few days, so my blogging has been limited. I feel especially badly for not weighing in on the Iotum/PhoneGnome news, which is pretty exciting.

It's been covered very well by now, mainly via Andy Abramson, and Jeff Pulver, who, this morning cited a number of other posts about the news.

That aside, I wanted to reference two things quickly.

First, a posting from Alec Saunders about something I wanted to post about, but was just too under the weather. On Monday, one of our national dailies, the Globe & Mail ran - as its lead editorial item - a piece about Wikis, and how they're gaining legitmacy as a way to gather and publish credible information. It's very much the antithesis of traditional journalism, and it was quite interesting to see the paper give such prominence to the idea. Was glad to see something so Web 2.0 get attention on the editorial pages, and hope to see them do more of the same.

Second - just wanted to quickly revisit my posting last week about the eagle web cam site. This thing continues to explode - the web site now claims they're up to 10 million hits a day as excitement builds about the imminent hatching of the eggs. Here's some additional press coverage about it. Not sure what happens when the eggs hatch, but this gives us a whole new take about what reality television can be.

While I haven't been up to doing much blogging, I did manage to speak with the media and get cited about a few things...

BusinessWeek, about Skype 2.5, which ran this morning.

New Telephony about Vonage's IPO plans,which also ran today.

Canadian Business magazine for an upcoming feature on IPTV, and the Globe & Mail about wireless (for later this week).

Am also speaking with Telemanagement magazine first thing tomorrow about Iotum.