Do take our business plan and talk with "an angel" now?
May 26, 2007 11:33 AM   Subscribe

Three years ago, a friend and I began developing a web app that allows for instant video conferencing. It uses 15kbs, and uses Flash to achieve its internet goodness. It just works, no problem. And we have had success with it - as a product at two separate companies, no less, building it from scratch both times. Up until now we have been charging for it, month to month, as a service for businesses that can want something better than IM chat. (It has a lot of extra "bells and whistles.") But now we want to switch it up. We want to go Web 2.1.

When I say 2.1, I mean take a good idea - two-way television (or "youtube with a phone receiver") - and plugging it into an established Web 2.0 business model. So this shift plus another shift into the Web 2.0 business model.

Voila! Web 2.1!

It doesn't matter if only one person has the service, even. You can see and hear me, and type back your response. (Even if you can't hear me, you can see me and we can both "type-talk." But I guarantee you want to plug in your webcam and use it after you see (and hear) me on my end. Essentially, how I explain the idea is it's "the shift from book to television, sythesized with yet another shift - to telephone - and add this to a Web 2.0 business model, and everyone wants to use it. Scratch that, once you use it, you'll never want to use an ordinary telephone again.

So anyway that's the background. Now for the question.

My buddy and I are hooked up with two small companies that see what we are saying but are neither interested in moving out of their respective fields (both transportation) to move into specializing in content and... happyhappyjoyjoy... dataflow. As it stands, this is an old model example of the cart steering the horse.

Presently, I am all for presenting this to an angel and getting funding to staff and build our web app as a videophone for ordinary users, and a videoconferencing tool for business users (the Pro account). But the two bosses of both of the companies we represent are focussed elsewhere. Both are happy to use it for their own ends, and sell it to other commercial subscribers for a large monthly fee. In other words, the old model.

Do we 1) move again, and rebuild the service again 2) license the service from the primary company for exclusive use, or 3) do something to get the two owners to realize the true value of it, 4) stay with the companies but break off and set it up as a separate division.
posted by humannaire to Computers & Internet (13 answers total)
I'm sure you've done your research - I'd probably approach MySpace or it's ilk.

But you better make a decision quick - apple's ichat and skype work pretty well, and are free.
posted by filmgeek at 12:28 PM on May 26, 2007

I can't tell if you own this thing or not. You say you're charging business for the use of it, but then you also mention licensing it from the "primary company". Can you clarify? Obviously, nobody's going to give you money do develop something you don't own.
posted by schoolgirl report at 12:36 PM on May 26, 2007

Response by poster: We developed it once, and can do it again, both times for two different companies. At this time it is a "Flash app," so it's based on other's proprietary software.
posted by humannaire at 3:20 PM on May 26, 2007

Response by poster: apple's ichat and skype work pretty well, and are free.

Not on Windows. And besides being extraordinarily difficult to set up, skype requires download of additional software AND is video-less.
posted by humannaire at 3:21 PM on May 26, 2007

Response by poster: By the way, the global companies who are our clients are paying $200 - $400 a month to use this. Mostly because it works better than any other video chat/conferencing service out there.

The key point are 1) "only" 30kps for two-way instant video and voice, and 2) no additional software downloads, so our clients customers and agents can use it immediately. It's better than "out of the box" because there is no box!
posted by humannaire at 4:24 PM on May 26, 2007

Back to market saturation and the like, don't AIM/MSN (or just MSN, as the case may be) offer video chat?

I'm pretty sure my Trillian Pro client allows for that quite gracefully, though I don't have a camera hooked up.

I'm also a bit confused--when you wrote this for the other companies, did you transfer all ownership to the IP to them? If so, wouldn't recreating it violate any sort of licensing you may have intact with them? Or only if it was licensed to a competitor?

How hard would it be to recreate? Copy/paste/change the branding?

It's flash-based, so you'd have to launch it through a portal site? Or does it use Apollo to act as a standalone service? I can see Google being interested in something powerful and simple that they can tack on to their gchat interface... But you need an accessible proof of concept up first, and not something proprietarily kept away.

How much will it cost to relaunch? Are you mostly going to be paying for bandwidth, or is it a p2p approach? If it costs nothing, get a basic site up for people to 2-way chat. Show off what it can do, etc. Build a mission statement and a marketing requirements document and a bit of a business plan and show it off to some people. Attract a community of die-hard users and your product's value goes up exponentially.

Good luck.
posted by disillusioned at 4:29 PM on May 26, 2007

Skype works on Windows, is currently free, and offers video conferencing. It does require a download.
posted by turbojav at 4:57 PM on May 26, 2007

Not on Windows. And besides being extraordinarily difficult to set up, skype requires download of additional software AND is video-less.

Skype is not that hard to set up, nor is it videoless. While I would say you may have a target market, in that current videochat sucks if you're not using a Mac on both ends, you still need to be aware of your competitors.
posted by spaceman_spiff at 7:45 PM on May 26, 2007

skype requires download of additional software AND is video-less

If I was an angel reviewing your pitch, it would concern me that you are planning a business model based on competitive analysis that has been invalid for a long time.
posted by meehawl at 11:15 AM on May 27, 2007

Other competators exist as well. I.E.

What is the revenue model? Your immediate competitors mentioned upthread have other business models (Microsoft: total market dominance, Skype: pay to call traditional phones).

How does this scale? Are you using flash media server?

Remember, small corporate usage patterns are very different from the 5-10 thousand concurrent connections you'll be experiencing with even the most moderate public usage (Think 100k registered users, 5-10k online, each maintaining at least an open video downstream, and something like 1k maintaining a video upstream) . Even at 30kbps it adds up quickly, and scales in unpredictable ways. We stream something like 3k concurrent video connections (thankfuly it's static content, not live, all downstream) and that gets mighty hairy. When we've tested live streaming solutions, the complexity and resources needed to meet our load increases significantly.

I'd look into interesting problems that this could solve, that aren't currently being solved. Think of how much better askmetafilter might be if people could talk face to face in a conference room. What problems can only really be solved face to face? Where does video add signal to conversation and reduce noise?
posted by Freen at 3:22 PM on May 27, 2007

Also, are you absolutely certain you OWN this. Look over all the contracts you and your partner have signed with regard to your employment at the companies currently selling the product you speak of.

They may in fact own the fruits of your labor.
posted by Freen at 3:23 PM on May 27, 2007

Response by poster: Freen
You seem to have a better grasp of this than anyone else - it must be your own familiarity with a similar product as my description was both vague and inadequate.

In any case, your insight has helped a great deal.

My understanding of Skype has been that video was coming. That was awake up call. And Skype is wonderful, but it has a learning curve, and everyone has to have the same software downloaded and installed or it's a no-go.

As for who "owns" it, the one main company definitely does. We have discussed this with them, and they are more than willing to let us proceed in any number of directions.

My main interest here is making available something great.

Freen directed my attention to one model - the social network - that we are uninterested in. Myspace is what it is and has its own video functioning from what I understand.

Our solution - complete with it's own console - could utilize a portal site, however it is better as an addition to company websites. It creates a customer service interface which leaves the others in the dust.

For instance...
Potential client visits site with solution. Console user notes appearance of potential client, and remotely sends and invitation to chat. Potential client gets invitation, and accepts. Agent comes online with video sound and chat (typing) in new window. Coversation ensues - if potential client has speakers with sound, if camera with two-way video (otherwise one-way), if mic with talk. In any case, customer SEES agent, and both can communicate at least by way of typing back and forth.

The benefit is that A) the site is now actively monitored, B) visitors are now actively addressed, and C) transfer rate from visitor to customer explodes.

Is this of assistance in understanding the product, and what I am asking? This dialog has certainly helped me understand how we must best position ourselves!
posted by humannaire at 6:46 AM on May 28, 2007

Best answer: Followup
Um, skype has had cross platform video for nearly a year. I know this because I moved my family from AIM video to Skype, specifically cause all they had to do was download skype and go.

It worked great, with zero reconfigurations of router firewalls. It's learning curve is no more difficult than IM.

Where I think you have two markets:
a) business anonymous communications (such as support with video)
b) the social networks (facebook, myspaces, linkedin) are huge and looking for a competitive advantage. This would qualify. Online dating services as well.

So, of your question, I'd say #3 or #4. Convince your owners of it's value - do not rebuild. Go to them with #3 and develop a separate company and that offer you a longer term financial interest (which will help convince them that it has value; else why would you want a piece of the action.)
posted by filmgeek at 8:47 AM on May 28, 2007

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