The new Fonera 2.0n is not only the ultimate internet assistant, but it also helps to make the world a better place saving you money. If you buy a Fonera 2.0n instead of any other WiFi router you can keep your computer off when doing long downloads and uploads. Conservatively you might save 40 hours of computer time with your Fonera 2.0n every month, which means you will save 2280 Watt·hours. That´s why the new Fonera is black and green.

Image representing Marko Ahtisaari as depicted...
Image byhttp://www.fon.com

via CrunchBase

Marko Ahtisaari is a remarkable Finnish tech entrepreneur who I have known for many years. As you might have heard in this blog, Nokia just acquired Dopplr where Marko was CEO and I was an investor. Now I have more good news about him, Marko has just been named the new head of design at Nokia.

Let me give you some background about Marko because his bio deserves a post in itself. Marko was raised in Helsinki, Dar es Salaam and New York. He studied economics, philosophy and musical composition at Columbia University and later lectured there in logic, philosophy of economics and the history of thought. Marko serves on the board of F-Secure, Newsmill, Artek and WITNESS and is an advisor to our dear Fon. Marko was also one of the Blyk cofounders as well as a founder and CEO of Dopplr. He received a Grammy Showcase Award. His father is a former UN diplomat, president of Finland and the recipient of the 2008 Nobel Peace prize.

Now as a Nokia shareholder I count on my friend Marko to help Nokia where Nokia needs most help and that is usability. Nokia makes great smartphones but while they have some of the best hardware in the world they fall behind in ease of use. My own current ranking would be this. I rank iPhone and Blackerry tied ahead of the pack, then Android, then Nokia and Windows Mobile goes last.

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G.hn is a home networking standard developed by the United Nation’s ITU-T that supports gigabit speed communication over power lines, coaxial cables and phone lines. For example, if you have two notebooks with G.hn compatible chargers they would have access to the local network when plugged into a power outlet. The installation is simple and easy. The broadband modems will need an adapter to connect it to the home power grid. This technology is great for HD content distribution around the home.

What does this mean for Fon? Right now Foneras need an Ethernet connection to the ISP’s broadband router. This means their location at home is restricted. With G.hn the Fonera doesn’t need this and it can be placed anywhere in the house where there is a power, coaxial cable or phone line outlet. This means that you can place your Fonera wherever you want, to help you make more money by selling wifi or to increase wifi coverage at home.

In this video I compare the Mifi from Novatel with the Fonera 2.0n. Bottom line is this. If all you want is to convert 3G to WiFi get a Mifi. But if you want a router that can do both ethernet and 3G as internet sources, that can upload videos to Youtube on its own, download torrents on its own, give you free roaming to 650,000 other routers, and allow you to make money, that is n and works with many mobile operators Get a Fonera 2.0n. Also 3G plays a great role in a Fonera in case your ADSL breaks down.

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Dopplr has just been acquired by Nokia. Dopplr is a web service that lets you share your travel plans with your network and exchange travel tips and advice about cities around the world. It helps you make your traveling smarter and more enjoyable. Dopplr calls this aggregate of collective intelligence the “Social Atlas”, a cutting-edge service that has provided the team with new insight on how people and location interact. I invested with Dopplr on the first round for the same reasons that I make all my investments. An entrepreneur I admire, in this case Marko Ahtisaari, and a product I use, Dopplr.

Nokia is an excellent platform for the development of this know-how. While I really don’t know what Nokia plans to do with Dopplr I believe that an integration of the service with Nokia phones would make a lot of sense. A mobile Dopplr is the ultimate pocket travel guide. Anytime, anywhere and in the palm of your hand you have the best restaurants, bars, clubs etc. that people who you trust recommended. This element, “the people you trust” is very important. There are many sites that recommend hotels. Trip Advisor is a great one. But the problem I have with Trip Advisor, or IMDB is that I many times find that my taste is more like that of my friends than that of the world at large. I don´t care where the average person wants to stay, or where the average person wants to eat, or where the average person wants to go. I care where my friends who are my most trusted advisors want to go. And that is Dopplr.

Lastly I would like to say that is interesting that Nokia continues to acquire companies of friends of mine. Plazes in which I also invested, and Plum. Nokia continues to be the number one technology company in Europe and Europe needs a strong Nokia. And where Nokia is weak is in services, in software small acquisitions make sense.

Disclosure I own Nokia shares.

Congratulations to Marko Ahtisaari, Matt Biddulph and the Dopplr team!

Here´s a personal view on the Clinton Global Initiative. I recommend you watch it in HD.

CGI´s uniqueness lies in the fact that all participants have to commit to do something to improve the world. My commitments have included building wind and solar farms. As you know this is a business but it reduces carbon emissions. Building the Fonera 2.0n is also a business but this fonera replaces computers that are normally on to do the same tasks and that can also be a commitment. CGI is not against you making money, it is in favor of you doing it in ways that is sustainable.

Image representing Fon as depicted in CrunchBase
Image via CrunchBase

At Fon we have an amazing board: Anil Hansjee of Google, Danny Rimer and Mike Volpi of Index Ventures, Janus Friis and Niklas Zennstrom of Atomico (formerly of Skype) and Chris Smith of Coral Ventures. We also have investors from Sequoia CapitalEbay, BT, Digital Garage, Excite Japan, Marc Andreessen, Joanna Rees, and of course myself, CEO and Founder. All of us together have invested 36 million euros in Fon. All of us a little crazy of course, because the basic idea of Fon, “share a little WiFi at home and roam the world for free” is a far fetched, improbable concept. And it has not been a smooth ride. We have made significant mistakes, among them losing two thirds of our funds subsidizing foneras many of which ended in some lost closet around the globe. It was a year ago in the midst of the crisis and, recognizing these mistakes, that I started to personally finance the losses of the company. I felt it was my turn to show that I was willing to risk it for Fon. But losing around a million dollars a month it really seemed that Fon was going to sink. But this post is the story of how it did not. Most likely because I had been through this before.

I saw Viatel sinking for 9 years until my original 200K, and those of my then key investors like George Soros, ended up being worth over a billion. I saw Jazztel lose large amounts of money as well, but because of the strategic value of its network it was then worth 900 million when I left and my investors Advent, Apax, Spectrum Equity cashed out nicely. I also saw Ya.com, a company that we built with 55 million euros and sold for 750 million dollars, lose tons of money. And we sold it way before it was profitable again because of its strategic value. Both Deutsche Telekom and France Telecom wanted to own the second largest portal/ISP after Terra. And I saw defeat as well. I personally lost 52 million dollars in Einsteinet, a German cloud computing company managed by a remarkable group of people in Munich, but 5 years ahead of the boom of cloud computing. It was a terrible blow for me and my investors, but, if anything, it taught me a simple lesson, not to give up too soon. Cloud computing did make it in the end and Google, my investor in Fon, would have probably bought Einsteinet. This background may explain why last year I decided to insist with Fon.

19 years in technology have trained me to expect the unexpected, to “hang in there”. What the 3 companies that I started and got to be worth over $700 million dollars by the time I sold have in common, is that they were strategic assets that huge telcos wanted to buy. But I still could not make them profitable. I guess it did not matter. In the right markets you can get away with this. But what was true in 2000 was not true in 2003, when I threw in the towel on Einsteinet. Presently the world is like 2003, except that what happened to technology then is happening to everything else now. So last year when I became the only investor covering the losses of Fon I knew that for us it was profits or death. I went for profits.

And a year later I am happy to announce, a la Facebook, that the last quarter of 09 will be our first profitable quarter. And I mean not just EBITDA positive but profitable. I can also share with you that we will probably do around 2.5 million dollars in revenues up from 400k in the first quarter (all figures are in dollars). Currently growth is phenomenal, costs are low and margins are high in our two lines of business; selling foneras, selling wifi access passes alone or with our partners which include some of the largest telcos in the world (BT, SFRComstarZon and others).

Of course I don’t know precisely where do we go from here at Fon. But since we are not a public company I can share with you at least where I would like to see Fon in 2010. By next summer I would love to be doing around 1 million in profits per month. And for all of 2011 I would be very happy if we did around 20 million in profit. This is not unreasonable but we have to get from here to there. Growth is tremendous but we could stall. To reach these objectives we have to continue making telco deals and make the launch of our Fonera 2.0n a success. I am personally very excited by how well the Fon team has worked to come up with the Fonera 2.0n, a router that not only shares a little wifi at home and roams the world for free, but it is also your “internet assistant”. The Fonera 2.0n is really a PC hidden inside a WiFi router. When you connect it to a hard drive of your choice it downloads torrents, Megaupload, Rapidshare, uploads to Youtube, Picasa, Facebook, Flickr. It also converts 3G to WiFi like the MiFi. It tweets itself so you can follow it away from home and it has a few other tricks such as making money for its owner. We think that for 79 euros or 99 dollars it will be a hit. Or at least we hope so because whatever people in business say, they never really know how successful or not something will be.

Granted, we could lose momentum and be not at 1 million but at something like 300K a month in profits by next summer, in which case recovering the 36 million euros invested will mostly depend on what got me and my partners off the hook in the past, a strategic sale to large players. Telcos who want to own the biggest and fastest growing wifi network in the world. Another source of value may be the partnership with Ubiquisys, the FemtoFonera, which expands the Fonera model to the 3G world. This is unproven value but it could very well materialize. In urban areas it is ugly and absurd to continue to build huge antennas in roof tops when small elegant cells like the ones Ubiquisys makes can give both 3G and WiFi to people in the block. This is especially useful in underground areas, garages, malls, where 3G coverage is very costly and inefficient.

As a start up with 3 years of life, breaking even makes you, first of all, a sustainable company and that we will be… very profitable? That remains to be seen. But turning the corner is huge for us. I would like to end this post thanking all the foneros we have around the world, our partners the telcos who realized how happy customers who pay at home and roam the world for free can be with their service, to our investors who trusted us with a nutty idea and to all of those who have worked and now work for Fon.  I would like to thank my now wife Nina, who I met working at Fon, who still works with me at Fon, and who put up with me during the worst moments of this venture.

Muchas gracias a todos!

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With the “share a little WiFi at home and roam the world for free” formula, FON got to be the largest WiFi network in the world – currently at over 650K FON Spots. Now, with the new Fonera 2.0n (802.11n) WiFi router that gives Foneros (FON members) an auto uploader/downloader built-in, FON should reach well over 1 million FON Spots.

The Fonera 2.0n is described in the video below. In addition to making you a free, lifetime member in the largest WiFi sharing community on the planet, this is what the Fonera 2.0n does when connected to your favorite hard drive:

– downloads torrents on its own so you can arrive home and watch your favorite content (do not download illegal content, there are plenty of legal torrents available, for example www.legaltorrents.com). You can tell the Fonera 2.0n what you want to download from work or school, from your computer or even from your iPhone or Android.

-downloads from Rapidshare.

-downloads from Megaupload.

-downloads from any site with a file to download, like the latest Ubuntu version.

-uploads videos to YouTube. Send them over WiFi to the Fonera and the Fonera sends those HD monsters to YouTube, freeing up your laptop for the next hours.

-uploads those high quality pictures that take forever to Flickr, or Picasa or even Facebook.

-offers large files for your friends to download.

-prints via WiFi. It sends music to your amplifier via WiFi. It connects to a webcam so you can know what is going on at home. It works with DynDNS.

-converts 3G to WiFi like the MiFi.

-twitters! The fonera is the first gadget to tweet itself. You open an account for your Fonera and the Fonera tells you what it is doing, like “Your video is in Youtube,” or “Somebody connected to your WiFi signal.”

And of course, the Fonera 2.0n is N (802.11n), which means faster WiFi at greater distances. Lastly, if you don’t like to share WiFi and just want to have the Fonera 2.0n all for yourself, or you don’t believe you will make money offering WiFi to others, you can disconnect the FON function altogether…and we will still like you :). But before doing that, you should know that Foneros who share their FON Spot earn on average 6 Euros in revenue (over 8 US Dollars a year), which means your Fonera 2.0n just might end up paying for itself and then some.

More in depth video

I am the CEO and Founder of Fon. Fon has built the largest global WiFi network in the world. We have over 650K WiFi access points distributed in many countries with UK, France and Japan being our best markets. Fon is owned by Ebay, Google, BT, Index Ventures, the management and some other small investors who have invested a total of 36 million euros in the company. The basic idea behind Fon is that “you share a little wifi at home and you roam the world for free connecting to other Fon routers known as Foneras”. Fon´s revenues come from people who do not share wifi at home yet they find Fon WiFi signal and want to use it. Fon operates alone or in partnerships with telcos such as BTFon, or SFRfon and many others. After 3 years of operation Fon is becoming a profitable company in the last quarter of this year.

Now Ubiquisys makes Femto cells. Femto cells are a great idea. Its the same concept as a Fonera meaning a box that is connected to ADSL/Cable/Fiber internet on one side and sends wireless signal on the other. Except that the wireless signal is 3G, not WiFi.

So you can see a match in the making here. And this is what is going on.

Fon and Ubiquisys have entered a strategic partnership to develop the first “Femto Fonera”, which will provide mobile 3G data and voice access from a wireline broadband connection. You can share this 3G signal securely with other Femto Foneros, just like you share your wifi with the other Foneras. Apart from experiencing high quality voice and data connectivity at thousands of community hotspots, Femto Foneros could also enjoy tariff discounts from their mobile operator.

The Femto Fonera is a cost effective way to increase 3G coverage indoors and enable high bandwidth applications which are not possible through the traditional cellular network. It can also be used in public spaces without interfering with the operator’s macro network.

Ubiquisys is currently the number 1 femtocell vendor. Their ZoneGate femtocell offers the best performance of any femtocell, it is the smallest and it consumes very little energy. The Femto Foneras, like the femtocells, will require no setup, they will have no buttons and require no admin software. They will be supplied through a specific mobile operator which would be providing the spectrum. The Femto Foneras will detect the user’s presence, which opens up many possibilities for location based applications and services. This Android app, for example, changes the home screen and the applications available when you enter your home and the phone seamlessly connects to the femtocell. Fon and Ubiquisys are in talks with several mobile operators to evaluate the Femto Fonera concept.

Here is the full press release.

My good friend Hans Peter Brondmo just told me that he sold Plum, his start up to Nokia and he is moving from San Francisco to Berlin to run it. Nokia seems to be on a quiet buying spree. They already bought a company I invested in Plazes of Felix Petersen and are looking at many other players in related areas.

Nokia has also made another move that makes sense and is to concentrate social media activities in Berlin. I don´t know if Europe will ever have its Silicon Valley but if it does Berlin will be a contender. It is a fascinating city with a multilingual population in a country that from what I have seen produces the best programmers in Europe and some of the best in the world. Without offending anybody else who works at our company, whenever something really complicated goes wrongly at Fon it is a German programmer who gets us out of the problem. And Berlin is extremely affordable as a city. Living there costs less than in Madrid or any other major European capital. And while the weather sucks if you come from Spain for Nokia´s employees moving South from Helsinki has to be seen as a promotion, at least weather wise.

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