Squaring Up With Widality
In the lead-up to Verizon’s Developer Conference 2010, WIP sat down for a frank Q&A with Terry Hughes and Tom Mullen from Widality, to discuss a few highlights from their latest app developer white paper: Squaring up to the app challenge. Meet Terry at the Verizon Developer Conference where he is leading a WIPJam panel on how to stop sucking wind as an app developer!
Some quick background: Widality is the developer of one of the popular BlackBerry business app momentem. The company was recently acquired by Wmode, a leading managed-services provider of mobile Internet services to operators. Now, as a new business unit in Wmode, the team is “expanding the widality of apps”, helping app providers to get above the noise and monetize, by delivering scalable quality services.
Terry is the Head of Market Development for Widality. Tom is the CTO of Wmode.
WIP: Congrats on the merger. Why Wmode?
Terry: Since the launch of our momentem app + service on BlackBerry App World over a year ago, we’ve worked hard to get excellent traction with users and RIM. However, we have still faced all of the struggles that start-ups experience. In the paper, we call it the Vicious Square – you develop an app, it gains traction, so you make it into a service. That takes off so you extend the support to more handsets, versions, etc... In reality as a tiny company you’re always playing catch-up to user demands and never really get onto taking your offering to the next level. And you spend so much time chasing the dollars. That’s why we realized that we needed to get out of the vicious square and become part of a bigger entity that had the critical mass to get stuff done and a range of ready-built technologies so that we didn’t have to reinvent the wheel (or the square!). This came in our merger with Wmode.
WIP: Can you elaborate on what you mean by the “vicious square”?
Terry: A good way to look at it is mathematically. Mr. Developer has started on the app journey – he’s come up with a great idea and built a decent app that’s gained some traction... then what? How does he get above the noise and turn his app into a global service with a recurring revenue stream? That is exactly the approach we decided to take at Widality. We now have users in 116 countries, and it wasn’t easy to get there. So here’s the math that will shock you: it took us 70 hours to build our app, but it took us the square of that time, 4900 hours, to build, roll out and operate our service over the first year. In plain math – hours to build and run a service = hours to build an app². We had to square up. The white paper gives lots of other examples of where a developer has to square up to be successful in the long run. My message to developers is to stop and think before trying to build the world’s next best app / service with no resources!
WIP: So a merger with a bigger company, rather than taking VC or other investment let you scale more quickly?
Terry: Money alone doesn’t solve the problems. We were sitting there with big opportunities that would have passed us by if we had waited to raise the big dollars and scale up. We were sick of being on the money train that never seemed to reach the station. Also we would have spent a lot of that money building things that partners already had. And we would have watched our shareholders get crammed down in the process. We analyzed many companies that did the big money-raise to get to the next level and we weren’t impressed with what we saw. We figured out that merging with a heavyweight industry player would enable us to immediately grab the market opportunity, to get off the money train and instead to spend our time on the product. The proof is in the pudding as they say in my home country of England; look at what we have achieved in just 2 short months since being acquired – the launch of our super app version of momentem globally, and sponsorship of the BlackBerry DEVCON, among other things.
WIP: What next for Widality and Wmode?
Tom: Wmode has been delivering media distribution solutions for over 10 years, and we have built platforms and technologies that carriers rely on to deliver and bill apps to their users. Terry calls us a plumbing company because we take care of the vitally important things that most app developers don`t do well or can`t afford to build for themselves. Payments is a good example; we know how to manage subscribers and collect money from them – a necessary evil! So Widality will be leveraging our technologies to globalize and monetize its momentem service, and our employees will ramp up development and will support the service as it continues to take off.
WIP: As a “plumbing company”, why did you decide to acquire an app developer?
Tom: Strictly speaking, Widality operates a sophisticated service for prosumers, where the app is a means to an end for those users. So we want to make momentem a global success using our resources, to showcase that, to make a lot of money along the way by monetizing the service, and then to do the same over and over again for other similar companies. Widality brings expertise in apps, app stores, end-user solutions, and a strong brand in the industry. We will be leveraging those things to “expand the widality of apps” for the app economy.
WIP: So rather than focusing strictly on operators, you’re now looking to offer services to other app developers as well?
Tom: We have great technologies to help every app developer to expand their service, however we have historically focused on carriers, which is still our bread-and-butter business. So Widality is our new business unit within Wmode responsible for delivering our services to the rest of the value chain beyond the carriers. We will be making some big announcements starting in Q4, and we encourage any app developer who wants to expand the widality of his service to come and talk to us at the Verizon event, at RIM’s DEVCON, or directly. Our contact details are in the white paper.
To read the full Squaring Up white paper, go to http://www.widality.com/squaringup.pdf