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October 05, 2007
Varsavsky Positioning FON To Reach Growth Targets
Back in July we watched a video interview of Martin Varsavsky by Lukasz Gadowski, the founder of Spreadshirt and business angel in Germany. What stayed in our mind aftewards was the notion that Varsavsky might know a lot about entrerpeneurship, but he has a really, really long way to go with the FON venture.
He said that FON was expecting to have 300k hotspots by the end of 2007, going on to explain that for the Wifi business to be viable, he still needed 2,700,000 more.
We replayed that portion of the clip to make sure we got it right. Yes, he said the goal is 3M. It seemed like an an over-ambitious plan, given that it took 18 months to get 300k spots online.
And based on our outsider's view of FON's marketing model, we figured it would only enable it to go so far.
It would probably take a heck of a lot of more money and effort to achieve the targets, maybe more time and money than his investors would tolerate.
But this week he surprised us. First we read in Blognation France that FON had signed a deal with Neuf Cegetel in Paris that could help it triple the FON footprint there, and yesterday Spark, the UK PR company, sent us a link to Varsavsky's announcement on his blog of a deal with BT in the UK (which was a first, by the way, the first time we got a blog link from a startup's PR company instead of a document).
There, he writes that "ever since we started building FON, the largest WiFi community in the world, I have been explaining how FON is great for telcos and ISPs".
He may say that he has been pitching but from what we heard and read, the telcos and ISPs were not catching.
We think these two partnerships are important for FON, while GigaOm is querying the potential costs to the startup to benefit from the BT deal. And Ovum market analyst, in its daily news analysis which we get by email, was not impressed, seeing little threat to the status quo.
BT provides some insight in a FAQ explaining what its subscribers get out of it and how it works [via aforementioned GigaOm post's comments].
Meanwhile in Varsavsky' blog there was a bathetic postscript in the comments following the founder's statement on BT's foresight in doing the deal with FON. Someone worried that the startup's image will be tarnished by teaming with BT. Outside the UK, BT has an image of being innovative, which we've seen evidence of, but inside the UK, it is still seen, apparently, as the slow lumbering incumbent.
All we know is that our July impression of the chances that FON had to reach its growth targets has evolved. As of now, the game is looking a little bit different.
Posted on October 5, 2007 09:42 AM | Posted to News And Updates | Permalink
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