Lately there has been some criticism about FON having created the FON Labs. Some Foneros say that FON should focus on making FON better and not waste its time creating such tools as Fon.gs, Gspace, or Gmailuploader because these don’t really address the FON’s core competence. In this post I would like to explain why is it that FON has chosen to do both: assign 40 coders to improve FON while also assigning 2 , who report directly to me, to develop FON Tools at the FON Labs.
As you can imagine, if you are building a global telecom network with only 38 million euros there’s no money left for advertising. To put this into perspective, at my previous company, Jazztel, we had half a billion Euros to build a Spain only, urban only, high speed network. Now at FON, we are in Japan, China, Korea, Taiwan, all of the EU, USA, Canada and in some ways competing and in others complementing the mobile operators of the world with a network worth of around one trillion. And we are doing this with only 38 million Euros. So while at Jazztel we could do (and Jazztel still does) TV ad campaigns (that are actually very effective), FON has to accomplish the objectives of Jazztel, but globally with 0 money for ads. Quite a challenge.
So how does FON build a company that is infastructure based without advertising? My answer is twofold. First, we came up with a proposition that people tell people about without the need for ads: share a little bandwidth at home and roam the world for free. Foneros want others to become Foneros so they can roam. That’s how we grow. But that is only part of the story. To accelerate our growth at FON, we invented another type of advertising. Some say it is similar to that of Google, but I argue that it is not the same. Google, one of our investors, invented RELEVANT advertising and FON is creating USEFUL advertising….and it’s working super well (to be fair, some of the Google growth is also based on launching useful tools, but that is secondary to their main strategy of relevance).
Let’s take an example: Fon.gs. “FON Get Simple” as we call it is a tool that is a blend of TinyURL with tagging. TinyURL is a fine idea, but it is not complete because it turns a long and impossible to remember URL into a short but….impossible to remember URL. So Fon.gs turns a long and impossible to remember URL into a short and MEMORABLE URL. So how does this help create the WiFi planet that is our corporate objective? Well for many, Fon.gs will be the first time they see the word “FON”. For example, if I want to send a friend pictures of Barack Obama from Flickr, I will send her www.fon.gs/flickrobama rather than http://www.flickr.com/search/?q=barack%20obama&w=all, and she will see FON in there for the first time. And again, and again, and people will be sending each other fon URL this, fon URL that, and that is how we become known. Cost of developing Fon.gs? 1300 euros and after a week people all over the world are using it.
In the case of Gspace, the same logic applies. Gspace is a software that mirrors your PC on the internet at no cost to you. This is extremely useful for Foneros who tend to be travellers. With Gspace any PC is their PC. Gspace gets 10K downloads per day from all over the world, but while it’s hard to believe, it only requires around 800 euros per month of maintenance and development costs for FON. And everyone who uses Gspace sees FON there, and we get a lot of clicks into FON from the mirroring platform.
We also have the Gmailuploader, a very useful tool to send your old emails into Gmail. Gmail is great but Gmail does not allow you to send your old emails to Gmail. FON does with the Gmailuploader.
A very relevant tool is the Mac and Linux Fonspots. It is a download that turns your Mac or Linux machine into a FON Spot, or FON Hotspot, so you can provide WiFi to others if you have a phone connected to your laptop at a Cafe or conference. Even though we don’t have this download for Microsoft (if you know how to do one for Microsoft please let us know), we already have had 6000 downloads in 2 weeks of this tool’s availability.
And there are more coming! The next one is FonWit, a chat client and add on to Skype that when you are skyping and somebody, say in a job interview, comes up with a word you don’t know, or the girl you are trying to impress comes up with a musician you haven’t heard of, the moment you move your cursor over it the google search on it appears and you get out of the bind.
So if Google invented relevant advertising and it was huge because what you are offered is similar to what you are reading, I think we at FON are inventing another form of advertising: tool based ads. The tool is the ad. We give you a useful tool and we call it FON or show FON in it. You are happy with your tool while we hope that thanks to that tool you get to know FON and you say, hey, sharing a little WiFi at home and roaming the world for free is a cool idea, I will become a Fonero. But with all this, please do not think that FON has stopped working on improving the FON platform and Community services. As I said, the ratio is 40:2 in terms of coders working on FON and those working at the FON Labs. FON Labs is basically my ideas put into practice by Victor and Albert Martin, two creative coders who are great both at improving and implementing my concepts. FON Labs is in Catalunya. But FON Madrid has 40 engineers working on a set of improvements that we will launch in June and July and will make FON much more useful and effective as a platform. Stay tuned.
I hope that this explanation is clear. And as far as how successful this strategy is, my answer is that it is working splendidly. We have spent less than 50K developing all these tools and we have over 600K people using them and growing fast. More people use our tools now than FON itself, but many spill over from the tools to FON and that is the strategy. It’s much easier to go to Fon.gs and create a URL than to buy a $40 router, get it shipped and install it by your window. So many first get to know FON through our tools, creating brand awareness and trust, and then become true Foneros.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars