Xconomy Forum Speakers: Exciting But Tricky Times for Mobile Entrepreneurs

A standing-room-only crowd gathered yesterday for Xconomy’s Forum on the Future of Mobile Innovation in New England, hosted by Microsoft at its gorgeous new New England Research and Development Center (or NERD, as Microsoft’s Reed Sturtevant called it). Google’s Rich Miner, MIT’s Sandy Pentland, and two panels’ worth of mobile entrepreneurs were on hand to share their latest thinking about the best ways for startups to gain and maintain a foothold in the mobile industry.

If there was a single takeaway message from the event, I’d say it was this: It’s a time of great ferment in the mobile industry, with carrier restrictions on the distribution of consumer-oriented mobile applications finally breaking down. But it’s very difficult to build a sustainable business around a single application or a single mobile platform—so companies need to think flexibly about the audiences and platforms they develop for, the amount of capital they really need (and the sources from which they’ll raise it), and the combinations of revenue opportunities they’ll pursue.

Next week we plan to post some video outtakes from the event, but today we’ll round up some of the highlights:

—Xconomist Mark Lowenstein, the managing director at consulting firm Mobile Ecosystem, set the scene with a few statistics and observations. Mobile companies raised $500 million from New England venture investors last year, and have raised $5 billion cumulatively, he noted. The traditional barriers to entry in the mobile industry—the wireless carriers’ traditional protectiveness about giving access to cell phone “decks” or top-level menus to third-party application developers, for example—are falling fast. New England companies, with their longtime focus on good user interface design, are well positioned to take advantage of this change, Lowenstein said.

CEO Panel, Xconomy Forum on the Future of Mobile Innovation in New England—Ted Morgan, CEO of Skyhook Wireless, said his company has just added the 100 millionth access point to its global database of Wi-Fi network locations, part of its WPS location finding system. He said getting WPS onto the Apple iPhone and iPod Touch platforms was the key moment in Skyhook’s progress—but that, ironically, he dismissed Apple CEO Steve Jobs’ first call about the deal back in 2007 as a prank.

—Jamie Hall, the president of MocoSpace, said the mobile social network has grown to 6 million members, who view 2 billion pages every month. The key to MocoSpace’s success in mobile social networking—a business in which several other companies have dabbled without much success—was circumventing the carriers by doing everything “off-deck,” creating room for constant innovation and upgrades.

—Mort Rosenthal, CEO of Enterprise Mobile, said that even though Microsoft is the mobile device provisioning company’s sole investor, “If it’s a debate between Microsoft and the customer, the customer wins.” While the company specializes in deploying Windows Mobile devices into enterprises, it also works with other platforms, because customers demand it. And while the fragmentation of mobile technology across dozens of major devices from several large carriers is a bugaboo for most mobile companies, it’s actually what Enterprise Mobile thrives on. “An enterprise does not want a free-for-all,” Rosenthal said. “We [give them] one throat to choke.”

—Dave Grannan, CEO of vlingo, said his company realized early on that the mobile ecosystem wasn’t yet open enough to get vlingo’s mobile speech recognition system out to lots of users without a major strategic partner with existing carrier relationships. That partner turned out to be Yahoo—and while Grannan called landing the deal to get vlingo’s voice-driven interface built into Yahoo’s mobile platform “luck,” he also said it took persistence. It wasn’t until the fourth meeting with Yahoo that vlingo was able to convince the company to take a look at its technology. (And then Yahoo suddenly wanted to buy vlingo—but the startup was “not for sale,” Grannan said.)

—Jason Jacobs, CEO of FitnessKeeper, said there have been 300,000 downloads of his startup’s RunKeeper GPS fitness application for the iPhone 3G, with a surprisingly high percentage of users (he intimated 4 or 5 percent or more) of the free app converting to the paid “RunKeeper Pro” app. That’s creating enough revenue to cover the company’s current burn rate—which is low, because many of the FitnessKeeper team members are being paid in equity and the only full-time employee is Jacobs himself. The trick for FitnessKeeper, Jacobs said, will be to … Next Page »

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Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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3 responses to “Xconomy Forum Speakers: Exciting But Tricky Times for Mobile Entrepreneurs”

  1. Excellent event. Another key takeaway was the costs of building a mobile company have come way down, but at the same time, market sizes and business models are ambiguous. Lots of opportunity but also more skill required to navigate a complex environment.

  2. Wade, nice recap of the event…

  3. Excellent Job!!!
    Thanks for sharing with us…..
    Mobile App Development