Donuts for Developers: CEO Scott Kveton on Getting Urban Airship Aloft

Every startup has a defining moment from its early days. Its first big customer. Its first outside funding round. Its first big change in strategy or revenue model. For Urban Airship, I would say it was its first big developers conference. And the company didn’t even make it in the door.

You might think the Portland, OR-based mobile software firm would be defined (at least so far) by its first round of venture funding—$1.1 million last month, led by True Ventures in Silicon Valley, with Seattle’s Founder’s Co-op also participating. But no. In my mind, at least, the startup’s defining moment was how it originally connected with the iPhone app developer community.

First of all, here’s what Urban Airship makes: software infrastructure that allows mobile publishers to do important things like send “push notifications.” These are messages that look like SMS texts except they travel over the data network instead of the voice network, so they’re cheaper. Customers can receive these messages even if the publisher’s particular app isn’t open on their device. This is for things like news alerts, sports scores, and peer-to-peer messaging between devices.

Urban Airship’s CEO, Scott Kveton, a former, Vidoop, and JanRain employee, tells the story of how he and his co-founders got together in May 2009. “Our previous company [Vidoop] had folded. What do we want to do next?” he says. They wanted a good business model from day one. They looked at push messaging in mobile and decided “there’s a great service here” and also, crucially, a good business. Within a month, they had a live product. But they needed a way to reach lots of customers (app publishers) quickly.

The scene was the Moscone Center in San Francisco last June. The Apple Worldwide Developers Conference was about to begin. This is the huge week-long expo where iPhone and Mac developers camp outside in the middle of the night to get the best seats for the Steve Jobs keynote and other Apple presentations. (Jobs didn’t actually present this time, as he was on medical leave.) The iPhone 3GS and iPhone OS 3.0 operating system were about to be unveiled to developers and publishers for the first time.

Kveton says his team couldn’t afford to attend the conference. So they got creative. They went to a nearby Costco and bought $1,500 worth of donuts and danishes. They brought the treats out to the 3,000 to 4,000 developers who were waiting in line for several hours before the expo began. In chatting with all these developers, they got to know what their potential customers wanted in terms of mobile messaging capabilities—and these customers got to know what Urban Airship had created.

This kind of “on the ground” relationship building, Kveton says, is so often missing at companies that think they have great technology, but don’t really understand their customers. It’s particularly telling that staying in touch with customer needs is still the key to building a strong business, even in this age of texting instead of talking face to face (maybe more so).

Urban Airship now boasts some 1,600 customers. They range from independent developers to Fortune 50 companies, and they include Universal Music Group, Virgin Atlantic Airlines, Tapulous, Gowalla, and Z2Live. Urban Airship is actively hiring; it currently has six employees, and will be up to eight by next month, Kveton says.

The company’s biggest challenge is keeping up with the smartphone market, which has only existed in its present form for two years (essentially post-iPhone), Kveton says. “What will this be like in 18 months? There will be a lot of opportunities, and we need to execute as quickly as possible,” he says. “The PC market took quite a while to get going, and was very, very lucrative. Microsoft provided a whole bunch of value in service providers and third-party applications. We’ll see the same thing happen in smartphones.”

With one difference, he says. “This will be significantly larger than the PC ever was.”

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