How long have you been saying that carrier based telephony is a race to the bottom? Well, you can stop saying it, as we’ve arrived. When you purchase an Ooma phone, you never need to pay for your minutes again. You might shell out four Bennys for the privilege, but that’s it. Yes, that’s it folks – no more paying by the minute ever again. We’ve pressed the bottom button on the ol’ telecom elevator, and the doors have opened. And what I love about this story is how complete the bottoming out is. Andy is always telling me to be as positive as I can in my posts, and when I criticize, to give an example of somebody who’s doing it right. A challenge here, my old friend – but I’ll try.
Technical : C. No, C-. I wonder if anyone told the investors that the Chinese could produce the exact same phone for fifty bucks, or that it simply isn’t that hard to write a peer-to-peer VoIP network. Of course, if Ooma makes any connection to the PSTN (such as DIDs), Ooma has to pay for that somehow, so they have an incremental cost for each customer, no matter how peerish they get. If they don’t, why would you make a bet on yet ANOTHER walled garden? Maybe the phone rocks, but so did PingTel’s. And you know how they turned out. Let’s face it, do you think any phone that attaches to a wall is that compelling? How much better would this be: don’t make a new phone. The old one works fine. Use the same old phone to do something valuable, like Jott is doing.
Business : D From a business perspective, when do you think the investors will learn that business plans that start out with “Yes, we won’t make any money on the basic service, but we can monetize it later on by doing…” are like something that’s too good to be true? Right – it usually IS too good to be true. Ooma (minus five points for stupid Web 2.0 name) will rely on selling value added services to their subscribers to increase their profits from the phone sale. Value added services? Did anyone check to see the adoption rate for new services with cell phones? The most popular VAS available for phones are ring tones (you want that in your kitchen) and text messaging (does this thing have a keyboard?) How much better would this be: find something so valuable that I’d be willing to pay for it, like GrandCentral. Give it a smart name, like GrandCentral. Get a real business plan, like GrandCentral.
Buzz : B. Well, compared to Ashton Kutcher’s acting career, this might be a real step up. He typically entertains me for an hour or so at most, but now I can watch Ooma blow through 20 million dollars, it will take months! Maybe even a few years! Nice. Best thing about the company is imagining my retirement with commercials from Ashton encouraging me to make phone calls. I met Demi in 1986 when she came to the restaurant I was working in, and let me tell you, she’s not just pretty – she’s 100 foot pretty. I might buy the damn phone if she signs the box.
Overall : I so wish I could short a private company. Anyone want to bet me?
