Wednesday, May 7, 2008

Is the Voice 2.0 bubble breaking!

Update:
According to Om, TalkPlus has the same fate as Jangl . Thomas Howe has written an excellent article.

Looks like the Voice 2.0 arena is facing hardship. Jangl, one of the consumer VoIP widget providers for Web 2.0 communities has closed the doors . For those of you folks that is not aware of jangl, here is a quick dump- Jangl is an anonymous calling web based VoIP widget. Mashable has a nice post discussing the whole story. I was always critical about companies (jaxtr etc) that were solely focusing on building Voice apps for social networking communities. Where is the money? What is the acceptance rate of these widgets in social communities? I guess jangl might have found it hard to generate revenue from users that are basically looking for free stuff. Look at the statistics of these apps in social networking community. Its dismissal!

What surprises me is- Jangl had partnership with some of the big social networking community. It had a revenue sharing model with match and advertisement on PlentyOfFish. In Addition, they had partnered with Various, Inc., Justin.tv, Fubar and Revision3. That was an impressive list. I thought maybe match making sites like match and plentyoffish was a better place for these kinds of voice widgets that provide privacy and anonymity. Apparently, it looks like these partnerships did not generate enough revenue for these guys to survive the downtimes. I have gone through startup shutdowns; believe me, its hard. The good news however is, Michael, Ben and 5 other folks are joining jajah’s team.

Here is what Michael Cerda, the CEO of jangl Michael Cerda, the CEO of jangl has to say:

We accomplished more than most companies do on the amount of money we raised and the time we spent on it. And in our opinion it needed another 18-24 months worth of runway to realize its fullest potential; but at the end of the day every venture capitalist has their own coefficient of venture. To that end, we took company forward into an M&A process. Unfortunately with much bigger things happening in the marketplace it turned out to be the worst time in a few years to be selling


I guess there are lot of lessons that can be learned from this tale. First and the foremost, startups that are building applications for Web 2.0 platform need to have a strong revenue model to sustain the business. Even If the value proposition of the startup is to get acquired, you need gas to stretch that extra mile. Need to understand the target market very well. If the target platform is not the place for generating revenue, need to find alternatives. For e.g., Enterprise VoIP as a target platform is a better place for monetizing these Voice and messaging applications than Consumer platform. There are very few players that have managed to survive providing freebies to the users.

All that said this is too Jangl Folks- Bad luck guys! You guys did a better job than most of the startups I know off. Shit happens!

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5 comments:

Anonymous said...

according to Om, talkplus is going down too.

omfut said...

Thanks for the info. I did check that one. I updated my post

Cheers,
Omfut

myNuMo said...

We (MyNuMo) had been working with Jangl for a few months on a messaging client for the iPod Touch. Sadly the surprising news of their shutdown reached us just as that project was completed.

As the CEO of a bootstrapped startup I have mixed feelings about all of this. We now must deal with the financial loss from this event. Jangl may be shutting down, but I am going to make sure that our people get paid for their magnificent work on the project.

On the other hand, being a sel- sustaining business means not having to worry about being shut down in the same way Jangl was. It requires a extreme level of efficiency and frugality but it gives us the ability to react to market changes and opportunities, for example creating a series casual web based games for the launch of the iPhone.

It is not just VC backed Jangl that is effected by this shutdown, but all the companies and individuals that worked with Jangl in good faith to help them succeed.

omfut said...

@mynumo:
Good point. I have been through such situations myself. Sometimes these companies pull you down badly. I guess the priority for a bootstrapped startup should be to keep the burn rate under control. The worst thing about a startup is- you don’t have the energy and power to survive disasters like these. Just glanced your website, Looks like you guys have some revenue generating potential. Well, good luck to you folks. Stay focused!

Cheers,
Omfut

myNuMo said...

I expect great things from our iPhone games. The web-based ones have been extremely popular. I believe that will translate into sales for the native ones when Apple launches the iPhone app store.