The Peek works great in the States but the PeekFON setup in Europe is new. We have not roamed. We have not yet tested it around the continent. So today, we decided to give the first PeekFONs to Fon employees and close friends as beta testers who will test them and travel over the holidays. Then, after 30 days of testing, we will open the sale to the general public. We already have a waiting list for PeekFONs and we will deliver them in the order in which the request was received. To be on the list click here. We don’t collect credit card information. Only names and basic info. Thanks to those who ordered and we are sorry that we are not delivering today as we had mentioned but we believe that a month of bug discovery is the safer way to go. Also we are missing a few countries for roaming like Norway and Andorra. We are trying to see if we can solve this between now and January.
2009 15
If an iPhone is Facebook a PeekFON Aims to be Twitter
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Thank you Wired for your “Good Enough” article. It helps me explain why in the era of “my smartphone is smarter than yours” we are launching the PeekFON – unarguably the simplest smartphone around and no rival in terms of apps to the iPhone, Android or Blackberry. The PeekFON is about simplicity. A PeekFon is “good enough”. The PeekFON does one thing very well, email with a full keyboard. And email is what most people need at work. So the PeekFON is a working tool. It is geared towards companies who want to give employees connectivity on the road. The way I see it, if an iPhone is Facebook, a PeekFON aims to be Twitter. Simple, to the point, with limitations, but “good enough”. 23 euros for the device, no roaming anywhere in the EU, no contracts, and a flat 12,90 per month with the first half year prepaid. So you pay 99 euros for the device and 6 months of prepaid service when you order. After that, you only pay for the months you use it. If you want to reserve one click here.
2009 13
My Photography Homework
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Tomorrow I have my fourth photography lesson with Mauro Fuentes, the number one photography blogger in the Spanish language. In preparation for that lesson, this is my homework. They were taken this morning in Chelsea, London.
2009 12
3 Interviews at Le Web
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This was an unplanned interview by Michael Arrington that precipitated the PeekFON announcement.
This is a more extensive interview on Fon
This is an audio interview that was done by Jennifer Lindsay using a very interesting tool for the iPhone known as Cinch.
2009 9
FON Launches the PeekFON with Free PanEuropean GPRS Roaming
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This December 15th, Fon will launch the Peek in Europe under the brand PeekFON. The Peek is an efficient email gadget whose unique feature is that it will have no roaming charges in any European country.
I will personally do the announcement tomorrow at LeWeb and be at the Speakers Lounge to answer questions for bloggers and journalists at noon. Please follow me @martinvars on Twitter to see if there are any changes in time and location. Please write to me @martinvars or at martin@fon.com to schedule interviews.
The PeekFON will be 99 euros to buy, a reasonable price especially considering that the price includes both the gadget and 6 months of all-you-can-eat email service anywhere in Europe. No roaming charges. No contract.
After that we will charge 12,90 euros per month for the service but, as opposed to other email machines out there, there is no cancellation penalty of any kind if the user does not want to continue with the service.
This is a complementary service to Fon WiFi but it is not a WiFi product. It is a GPRS product. The idea is that with Fon you share a little wifi at home and roam for free. The PeekFON addresses those moments in which you can’t find WiFi in spite of Fon´s over 800,000 hotspots now available in Europe. With the PeekFON you get the most important piece of messaging, your email, anytime.
Browsing, Twitter, and other functionalities will be added within months. For now, buyers have to think of the PeekFON as an email machine with a full keyboard.
Why is Fon launching the PeekFON?
Because in Europe, we pay huge roaming charges when we leave our own countries. As a German you can come to France and easily pay in a day what the Peek will cost in a month.
Because many people still prefer a phone that looks like a phone for phone calls and sms, and an email machine for email, and don’t mind carrying two devices that do their jobs well.
Because even if you never leave your country Blackberry services, iPhone and Android services in Europe cost around 50 euros a month and have minimum 2 year stays and include no talking minutes. So in Europe, even if you stay at home, you spend 1200 euros to get email and if you travel around Europe, you spend double that on the average. This would compare with 312 euros with PeekFON vs 2400 euros if you roam, and 1200 euros if you don’t. So there are enormous savings for getting email.
Having said all this, Fon recognizes that, “apples to apples,” a Blackberry, an iPhone or an Android is a better product than a Peek. If you have the extra money to sign 1200 euros contracts and spend a few thousand more for roaming, the Peek can’t compete with the complete iPhone, Blackberry or Android experience. But as a pure and simple email machine, the Peek can compete. And its price is reasonable.
We also recommend Americans (and Asians and other non-Europeans) coming to Europe to get a PeekFON as roaming charges by US operators are a killer over here. So much so that the iPhone for example comes with a feature to disable roaming.
The PeekFON will be available at Fon.com December 15th. It will be available for shipping to all European countries for which shipping is now provided for the Fonera. If we see demand from USA and Asia we will also have it available at our US and Asian shops to be activated when landing anywhere in Europe.
GPRS service for the PeekFON will be provided by the new pan-European MVNO for gadgets Spotnik. Fon will be Spotnik’s first customer.
PeekFon in the press:
TechCrunch
TechCrunch again
Washington Post
Alt1040
Xataka
SlashGear
Phone-Review
tech.nologi.us
Gizmología
2009 8
Bravo Geraldine and Loic Le Meur!
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They are my dear friends, and I don’t need to praise them in public, but I will do so this time. They deserve it. A year ago, Geraldine and Loic ran a very publicly criticized LeWeb to which many people swore they would not return. The main complaints were: lack of food, lack of heating and lack of connectivity. Three event killers. Any other event organizer would have fallen to such criticism, thrown in the towel and retire from the business. But Geraldine and Loic are not “any other event organizer”. They have a passion for getting people together in an atmosphere of trust and they work hard and in sync at it. So not only they did not give up, but they came back in full force. With the best LeWeb ever. In the midst of a global recession, they got over 2000 participants from 46 countries. And if they manage to add more Asians to this event, they will soon have the most global internet event on the planet. So far, I have only been to the speaker’s dinner, but I am happy to report that it was warm, there was plenty of amazing food, and there was connectivity.
What do you do when you fall of a horse? You get a better one 🙂
2009 8
Menorca is doable in “the Winter”
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Please don’t say that we are not in winter yet, because in Spain we are. Spain is different. In this country winter starts early, and ends early – in Mid February I would say. This is the opposite to what happens to our days. During a Spanish day, everything takes place late – lunch at 2pm, dinner at 10pm. And, yes, you can go to Menorca in the winter and have gorgeous days, sunny with highs in the upper teens (our teens not the F teens which are so cold). Want some proof? Here are some pictures. But keep it a secret. It’s actually better when nobody is here – not including you of course.
2009 4
Fon End of ’09 Party
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2009 was a great year for Fon. We started with heavy losses, we cut costs, grew revenues and margins and ended the year as a profitable company. Our last month´s revenues were around $1M, up from $150K in January. Our losses in January were around $500K, last month we had a gain of $30K. As a result our stock options are now in the black. So in gratitude to all of those at Fon this year, we doubled the size of our stock option pool. Overall the mood was festive and we did what we love to do at Fon, a great fiesta. Here are some pictures that I took.
I would like to thank all of those who work for Fon, our investors, those who love those who work for Fon for putting up with us (including my wife Nina), and of course all the 800K foneros who share a little WiFi at home and roam the world for free. A toast to all of you!
In this blog I have criticized Europe’s way of doing business on different occasions. But as I continue to build Fon in Spain and reject the possibility of moving the company to USA, I feel I owe an explanation as to why we are staying put.
But first let me go over the obvious reasons why Fon, a tech company, should be in Silicon Valley. Silicon Valley is the epicenter of the global buzz machine and since Fon has become the largest WiFi network in the world based on word of mouth, it would much easier to create positive buzz from there. Indeed the few times that I manage to deal with the 9 hour jet lag and go to Silicon Valley for a few days, we end up getting great coverage for Fon. As sad as it is, Europeans and the whole world mostly buy what Silicon Valley blogs tell them to buy. And US bloggers and journalists have a great nationalist bias that many times is not so obvious to them. The second reason to be in the Bay Area is that so many brilliant minds are there. While everyone competes with each other, there is also tremendous collaboration, and Fon is left out of this creative flow.
But aware of these positive factors, I have estimated them against the costs of moving to USA and have decided against the move as there are three huge negatives of doing business in the USA. They relate to the three unreasonable burdens faced by the American entrepreneur: legal costs, medical costs and yes, military costs. Allow me to explain.
Calvin Coolidge said in the 20s that “the business of America is business”. After having done business in the USA for 20 years I would say, the business of America is business…provided that lawyers say so. And even if they say so, it is an unstable and incredibly expensive legal environment to do business in. I have built start ups in USA and in Europe and have enough data to make the comparison. In the life of a start up, legal bills in Continental Europe are, I estimate, 75% lower than in the USA. In Continental Europe, legal systems are based on written codes derived from Napoleonic times that are very clear on what is legal and what is not. When I do business in the States I have to pay lawyers over $600 per hour to spend endless hours and never give me a clear answer. I don’t blame them. Case law is just very expensive to study and its outcome is uncertain. In Europe the same lawyer may cost us $200 an hour and spend a maximum of say 3 hours to give us a yes or no. As a result my legal bills at Viatel for example were around $600K per year and the legal bills of Fon are around $90K per year. And not only are business lawyers cheaper. A typical tax filing, lawsuit of any kind in Spain may cost a pittance compared to what it would cost in USA. When I lived and managed companies in USA, I always felt that I had a legal Damocles sword hanging over my head. Here when people pour hot coffee on themselves they don’t sue the McDonalds. They just say “mierda”.
But not only is the legal system in USA a terrible burden on business. There’s another enormous “tax” on US business and that is health care. In Spain, for example, Fon’s employees go to state hospitals and get treated for free. Fon has no medical costs as a company. As this report shows, in the USA the average cost to a company per employee is close to $10K per year. In Spain, an engineer fresh out of university may cost $40K all inclusive to the company. If we had to pay another $10K of medical expenses that would mean that 20% of our costs would be to provide medical care for this new hire. So in Spain, and many other places in Europe, not only are total employee costs lower than in Silicon Valley for a very well educated population (not lower than in Texas for example but lower than Silicon Valley), but we don’t have to pay medical expenses.
And lastly, there is another burden to the American entrepreneur that is hard to quantify, but it is there. And that is the fact that USA spends close to half of what the whole world spends on the military. What does this mean to the average entrepreneur in Europe? In simple terms that we don’t pay a “defense tax” every time we do business. In the USA, military spending is 21% of the budget and an estimated additional 8% in other parts of the budget that are affected by the military with a big part being taking care of veterans. In Germany, Spain, Netherlands the military account for less than 7% of the budget. And who supports these huge efforts? For an entrepreneur, it is a real cost of doing business. Less services more costs for the company. The best example is education. Education in general and university education and training in Europe is mostly free. Education and training in the USA is occasionally free but frequently extremely expensive. In the end, the entrepreneur in the USA has to pay salaries that allow his/her employees to educate their children. Moreover expensive education spills over in other areas of society. Europe has an incarceration rate of less than 100, USA has an incarceration rate of 750 people per 100K inhabitants. In my view there is an inverse correlation between spending on education and incarceration that favors Europe. If all US prisoners were moved to a city they would overflow Madrid. Maybe spending less on the military and more on free education would have a more beneficial effect on society. Another example is public transportation. Most employees at Fon come to work in public transportation which is lacking in many American cities. Not having a car means great savings. Also, Europeans who have cars pay much less in car insurance because the legal system in Europe, while giving awards in case of accidents, does not find it fair to distinguish between your leg and that of Leo Messi. As a result, European employees make less after tax income but have less expenditures because our government here spends much less on the military and have almost 18% of their budgets more to spend in social services.
Should it surprise us then that European GDP is 30% greater than US GDP , $18 trillion Europe compared to $14 trillion USA? Why is it that this continent that Americans consider so 20th century, is holding its own without a common language and with many barriers to business that don’t exist in USA? Or why is it that entrepreneurs like my friend Loic LeMeur moved to Silicon Valley only to hire and fire people in USA and ending up being a Silicon Valley company with European employees? In my view it’s these three factors, legal costs, medical costs and military costs. These three abnormal burdens to the daily life of the American entrepreneur, explain a great deal of the European advantage. It is not that we are better. It is America’s self inflicted damage that sinks its currency and helps us in relative terms. Until the Obama administration addresses these three burdens and effectively lowers health care costs, establishes a system of limits on legal awards and spends less in the military, the USA, in spite of its unparalleled ability to innovate, will continue to struggle.
US accounts for almost half of global military spending
2009 29
Opening at La Mamounia in Marrakesh
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Tonight we went to visit the newly reopened La Mamounia Hotel in Marrakesh which after a $170 million renovation, a staggering amount for a hotel that has less than 300 rooms, looks stunning. We were invited by the new management. I can’t say that La Mamounia is especially my taste. I prefer small hotels or Riads as they are called over here, places such as MaisonMK or Villas des Orangers. Still, the work they did at La Mamounia is extraordinary and made me want to stay there next time we come to this wonderful city. Moreover, many events, weddings, parties, conventions, conferences are not suitable for small hotels. La Mamounia is sober for being a luxurious hotel in an Islamic country. It is mostly done in dark tones as you can see in the pictures that I include. The hotel opens to the public as of next week with rooms starting, sorry to say, at $900 a night. I recommend that you visit the Mamounia web site, if anything, just for the music.
These are some pictures of Marrakesh that I took today, a special day as it was Eid Al Adhha, the festival of sacrifice, involving the sacrifice of rams all over town. A pretty shocking site.
And here are some night pictures of La Mamounia.