This South Park episode shows the mood I was in going around Paris in late 05 trying to connect to WiFi and was not successful. It was this anxiety that led to the idea that resulted in Fon. Necessity is the mother of invention as they say.

Journalists sometimes portray WiFi as the enemy of operator based mobile services.  But if you take a look at this email I got today from AT&T you will see that what we reply at Fon is true.  That mobile operators are concerned about apps that use a lot of data and prefer that traffic to go over WiFi.  Even with HSDPA if people start downloading 300 MB movies for the iPhone network costs are unsustainable.

This is why WiFi has a role to play alongside GSM/3G and other mobile technologies.


Cyloop is a music portal that is having significant success in the Spanish speaking world that is making inroads into English and soon other languages. Today I met and spent 90 minutes with Demian Bellumio, the founder of Cyloop who came to see me at my office. During that meeting I saw the first potentially sustainable future of the record label. As it is very late here in Spain and I have to catch a flight to NYC tomorrow to give a speech at Columbia University my alma mater I will make a few comments and not an in depth analysis.

First of all Demian is a very unlikely entrepreneur to come up with such a hit as Cyloop. His background is not in music. But in the short time I spent with Demian I could see that he has a natural ability to learn a new sector, that he has extremely developed entrepreneurial instincts even though he mostly worked for others til now and that there must be something especially harmonious in the trio who started Cyloop. This trio consists of three Argentines friends from childhood living in Miami, Demian is the CEO/biz dev type, his brother is the designer and his best friend the “musician” in Cyloop.

cyclop32.pngNow what is the proof that Cyloop is on to something radical in the music world? That in countries where all you need to do if you want music is go to The Pirate Bay and download it for free without breaking the law (yes, to download music for personal use is legal in Spain), Cyloop is growing faster than piracy. How do they do it? Well first they teamed up with Spain´s largest portal, Terra to become their music channel. Secondly they got all the record labels in the States and Uk to give them most of their music, and thirdly they created a MEDIA experience out of listening to music. This is what in my view distinguishes Cyloop from say, who now also has access to all the music from the record labels. The difference is that Cyloop is not about loading your MP3 player which in any case you can´t do there unless you use software to divert streamed audio into your hard drive. Cyloop is about musicians and their fans meeting in a site with a My Space spirit but with more editorial control and with their music included. What will the post Cyloop world look like? Kind of like now but with more money to those making music. A world in which consumers see ads as they enjoy music, buy merchandising, build an emotional bond with the musician that leads to concert ticket sales and the overall experience ressembles interactive TV more than radio. Cyloop is also the music portal of Warner Music and many other sites.

1sml.jpgYesterday Fring released an iPhone version of its great mobile VoIP and Instant Messaging application. This is the first native application providing real VoIP on the iPhone, via WiFi, of course. Fring is compatible with Skype, MSN, GTalk, ICQ and Yahoo! and provides calling and messaging to your friends on these popular networks. It also provides VoIP calling using the SIP standard, so you can use any VoIP provider to call for very cheap rates using WiFi.

Fring works very well on the iPhone thanks to the great WiFi support Apple built into it (one of the best connection managers around, choose a network and access it automatically the next time). Fring has been available for a while on Nokia phones, but WiFi support built in those smartphones is less sophisticated, so Fring had to add several features like WISPr, to connect to already known hotspots, and its WiFi roaming feature, to let you automatically switch from a WiFi network to another, or from WiFi to 3G.

The best way to use Fring on the iPhone is of course with iFON, FON’s WiFi connection manager for the iPhone, which scans available WiFi networks and automatically connects you to FON signals, without having to enter your login details. So when you are abroad you can use your iPhone to easily find a FONspot and call home via Skype or SIP.

Call quality with Fring on the iPhone is very good, better then on Nokias in my experience. Instant Messaging is of course another great addition to the iPhone, a much needed one. It’s very intuitive and the iPhone’s huge multitouch screen offers a very good experience. You know already about the iPhone’s keyboard, you get used to it and you’ll still be faster then with T9.

Fring stays active while the iPhone is in sleep mode or if you press the “home” button on your iPhone and do other things with it. This way you always get notifications when you receive an instant message or when a call comes in.

You can install Fring only if your iPhone is jailbraked, but this is just a pre-release. Once the final version will be ready it will sure be available on Apple’s App Store for every iPhone out there (in June, when the new firmware will come out).

Here is a video my friends at Fring just made to present this release

If there is one thing that Bill Gates got right and Steve Jobs did not is collaboration. And it is because Bill Gates knew how to collaborate and leave enough money on the table for others that he became the richest man in the world and Steve Jobs did not. And it is also because of this that Bill Gates became the largest philanthropist ever in the history of humanity and Steve Jobs, even if he had had the money, would have probably never gotten to that spot. Bill Gates likes to share his toys. Steve Jobs does not.

Now let me explain. I hate Vista. I use Apple, I have an iPhone, and I am now blogging from a MacBook Air. I even own Apple shares since they crashed last month. Having said this, I think it is time that Apple allows Leopard to be used in Dell computers, for example, so we can get quality, competitive products that are better than this new Apple clone. Us Leopard users…we want choice. I hope that guy in Miami does not get shut down. In any case, my advise to him would be to sell the boxes and let people install Leopard in them on their own.

modu1.pngI’ve recently found out about Modu, a company based in Israel developing a new concept of mobile phone. At first sight, modu is just a very small mobile phone (smaller then an iPod Nano), but what is really cool and most important about this device, is that it comes as a central part of a whole ecosystem. Users will be able to slip their modu into a variety of modu jackets, an evolution of what we are used to call “covers”, or into modu mates, devices like video players, navigation systems or digital cameras.

_44421937_modu_afp203.jpgModu jackets provide users with a new look for their phone, but also additional functionalities. For example, if you slip your modu in a blackberry-like jacket, your modu becomes a business phone with a QWERTY keyboard, if you slip it into a multimedia phone jacket, you get a camera, music controls and an embedded speaker. Slip it into a “modu kid” jacket, and it becomes the perfect phone for kids, with big buttons and special keys to call mom and dad. Companies can design their custom branded jackets and provide them in partnership with modu.

A modu phone can give connectivity and additional features to modu mates, that can be all kind of gadgets. If modu will get the traction and critical mass needed for device makers to adopt the technology, modu users will be able to slip their modu phone into a digital picture frame, a camera, a gps device, etc. Visiting modu’s website you can get a good idea of “jackets” and “mates” that could soon be available.

This is quite smart: by building a modu mate a consumer electronics manufacturer could get a device with communication capabilities and connectivity while saving a lot of the time and effort required for development and approval from operators or regulation authorities like the FCC. There are lots of devices for which connectivity and communication capabilities would make a lot of sense, but replicating a whole mobile phone is just not worth the hassle. Bluetooth, of course, is a good and already popular alternative.

Unfortunately this phone doesn’t seem to provide WiFi access and not even 3G. For a phone that should give connectivity to other devices, relying on GPRS seems not a good choice, probably forced by space constraints. WiFi would be a perfect fit, giving fast and cheap connectivity when at home (think cameras, digital frames, video devices).

Modu plans to start selling the phone in October with Telecom Italia in Italy, OAA Vimpel Communications in Russia and Cellcom in Israel, for less then 200€ including a jacket.

Now that we have began giving La Fonera 2.0 to coders, I started dreaming of new apps that I like to see done over the standard Fon functionality (give me WiFi, give some WiFi to others, allow me to make money with my WiFi, allow me to roam the world for free).

As you know the Fonera 2.0 is like a minicomputer that, other than being a social WiFi router, can do all sorts of things so long as we program it. And even more if we add an audio in, a mike, a speaker…

Here are the ideas, the good, the bad and the crazy ones.

-Fonera bridge functionality so i can get any encrypted signal or open signal from inside the home and turn it on the window to Fon signal.

-HSDPA to WiFi converter so HSDPA can be useful in many devices. For this the Fonera 2.0 should have a car plug or an external battery pack.

-Mesh functionality for wireless communities that, as opposed to foneros, have people who want WiFi and don’t have DSL or cable.

-A Flickr uploader so i can put the SD reader straight to the USB drive of La Fonera, go to my Fonera web page, instruct the Fonera to send those pictures to Flickr, leave my home and have La Fonera send them over the next hour or so. Same with Photobucket and other popular picture services.

-A youtube uploader so i can get my favorite videos into a pen drive or SD, stick it into the Fonera, upload them to Youtube while my laptop is doing something else or i left home.

Bit Torrent or Azureus: download my favorite movies and tv series (that are legal to download) into my hard drive that is plugged to La Fonera 2.0 all this while I am not at home or doing something else.

-Combine La Fonera 2.0 with another piece of WiFi hardware that goes in an amplifier and receives streamed music from my computer over La Fonera, or from a hard drive in La Fonera that I left programmed to do this. This hardware would be like a WiFi music receiver that gets WiFi signal and transforms it to audio out.

-Same idea, but with video and my TV so i can get video delivered to my TV over WiFi.

-An app that once i have the WiFi receiver in my TV shares my screensavers with my TV’s so i see my family and friend pictures in large TV screens.

-A network hard drive for both individual files and a WiFi back up system. This could be combined with as well.

-A WiFi network printer with printer plugged via USB to La Fonera.

-A wireless USB functionality so La Fonera can be somewhere and the peripherals somewhere else.

-A home monitoring system for security/babies that not only allows me to see, but to talk back to people near the camera again using already existing cameras. Even just a microphone without a camera would be good so you can listen to what is going on around La Fonera like a baby monitor.

-Buttons that could be on La Fonera and given specific uses, for example, that are pressed when an older person takes medication so this person can be monitored from the outside. If they don´t press the button, they may need a phone call reminding them to take it or they maybe simply……. dead. On a similar vein a panic button for security reasons that is tied to a security service.

-The ability to add a simple keyboard and monitor to La Fonera to use it as a simple Linux computer (i would need video card and probably a more powerful computer). But this simple computer could do tasks that i may not want my expensive laptop to be doing, such as being a media server.

-A WiFi pbx system for telephony.

-An iPhone app that sends music from my iPhone into La Fonera over WiFi so La Fonera sends it to my audio system (that has WiFi receiver). In general, I feel that what the iPhone and iPod Touch should do is allow me to walk into my home and send music to my stereo.

-A Facebook app (for this La Fonera needs to have a speaker) that would work like this: you would go into the Facebook app and program your Fonera to make funny noises when your friends poke you, to read you your timeline, to read you your messages and anything else you would like it to say. Ideally this Fonera would be a special purpose product that looks like your FRIEND in Facebook, like a robot that tells you all these things, that moves when you are poked, etc.

-An interface with Rapidshare and Megaupload, two extremely popular file exchange sites (again, with all the caveats of this being legal).

-A simple app that turns La Fonera into an alarm clock that wakes up up in the morning, or a more complicated app that is connected to the Google Calendar and makes La Fonera remind you of things to do.

-The famous FATERA, a scale with WiFi connected to La Fonera that posts your weight every morning to groups that are trying to lose weight, sort of AA but for losing weight and at home. Similarly you could have breathalyzers for people actually on AA so others can know if you drank. Again social pressure to lose weight or stop drinking.

-Sensors that can be attached to La Fonera so you can be warned of temperature changes in your home or fire or simply make temperature graphs of your home. These sensors would have to be away enough from La Fonera so its temperature does not affect them.

Well around 1300 Iraqis got fired yesterday for being ineffective at battling other Iraqis. USA must pull out of Iraq now.

As I’ve recently disclosed, our main objective at FON is the launch of our next product, the Fonera 2.0. The Fonera 2.0 is a Fonera that will not only make it easy to provide WiFi for yourself and for your neighbors, it will also provide Foneros with great features like the ability to connect a hard drive to it and autonomously upload or download content from the Internet while you’re doing something else on your laptop or your PC is off. In short the Fonera 2.0 will manage your daily relationship with the Web 2.0 doing such thing as sending your pictures to Flickr, your videos to Youtube, downloading your torrents, etc. Many of the things that the new Fonera will do a PC can do of course but why tie up a thousand dollar investment with your vital info doing menial task when you can have a $49 Fonera do them.

The Fonera 2.0 will be an open platform for developers to build their applications on top of, much like a hacked iPhone is now. An open platform is nothing without a community of developers, so we’re announcing today the launch of The Fonosfera, our development community program that will span not only the Fonera 2.0 but all Fon products. We know there are already many communities doing great things with our Foneras, adding new features and fixing bugs. The idea behind the Fonosfera is to bring all the development work the communities have been doing and will do in the future to any Fon user.

The Fonosfera will be a chance for all these communities to keep working independently, while contributing to the development of Fon products including the Fonera 2.0 and the applications that will run on it. The Fonosfera will provide a space for gathering and sharing between developers and to make their projects available to end users all around the world. It will include a framework with development and community tools such as svn, trac, forums, mailing list, wiki etc. We already picked a few communities that have proved they can do great things with the Fonera and sent them a test version of our Fonera 2.0.

The Fonera 2.0 will provide a USB connection and users will be able to plug any sort of USB device to it (as long as there’s software support in the firmware, and we invite developers to add support for any device they might think of). The Fonera 2.0 will provide out of the box the ability to connect a hard drive or pendrive to it, so you can access it on your local network and use it to store the contents your Fonera 2.0 will download from the Internet for you. Another interesting feature we are working on is the ability to connect an HSDPA modem to the USB port of the Fonera 2.0, to share an HSDPA connection on the move or where DSL is not available.

We are working hard to make the Fonera 2.0 as open as possible, and we are willing to take all the help the development community can bring to Fon and Foneros. Our users will still have to wait a few months to get their Foneras 2.0, but we’re sure it will be worth the wait.


We are happy to report that at Fon we have raised $9.5 million in a C round. Our current valuation which unfortunately I can´t disclosed has been the best valuation so far. This does not mean that we were not hurt by current market conditions which are pretty bad for start ups (Fon was founded in February 2006). Our leading investor in the round was a US Venture Capital arm of Sistema, Russia´s leading telco but our usual suspects, Google, British Telecom, Digital Garage and of course your blog writer participated in the round.

What are we going to do with the money? Launch Fon in Russia, launch the Fonera 2.0 (the fonera that uploads and downloads stuff to and from the internet while you are doing something else with your laptop) and develop the fonera 802.11n for an end of the year launch.

Unfortunately we will also have to do all this spending less money because this market forces us to do so. We already cut losses at Fon from $1.3 million per month to $800K per month in the last half year and we achieved this through cost reductions, a great reduction in router subsidies and increased revenues with high margins. We plan to do more of the same in the future and my target is to be losing half a million per month by June and to break even by the end of 09. And yes I do know that I should not be telling any of these things because we are a private company but if this blog is of any value to entrepreneurs I believe I must share them with you.

Bottom line: tough market forces you to think harder about everything you do but we are very happy to have closed this C round.

Español / English

Subscribe to e-mail bulletin:
Recent Tweets