I half thought about blogging the recent E-Commerce News item about Skype and what one of their VC’s had to say but decided to wait for those more schooled in the VC world to comment. Malik’s stint as an investment banker and VC makes him the perfect commentator on this story. Now I’m only waiting for Ted Shelton, another one of the insightful and rightful bloggers who have enough of what it takes to really get under the hood of the hype to tell, not sell, the story.
2 thoughts on “VC on Skype: A Wolf In Sheeps Clothing or A Rooster In The Hen House”
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Of course Steve Jurvetson isn’t telling you the complete story. Free phone service is just a small piece of the business strategy of Skype.
On wednesday July, 28th I wrote in my weblog:
The strategic business design of Skype is wonderful, based on a Product Pyramid Profit (see Profit Patterns by Adrian Slywotsky of Mercer). Skype has a simple bit of software, easy to install. It’ll let you make free phone calls to your friends all over the world. And Skype doesn’t want any money for it. It’s free.
This will create a base of the pyramid, through millions of downloads. The base of the pyramid plays a critical strategic role in creating a “firewall” at the bottom. The firewall brand creates a barrier to competitors (presence of friends which use Skype also, reputation, voice quality), and protects the profitability at the top of the structure. How does it work? Well, after a couple days you discover the biggest part of your social network isn’t online. Then you decide to add credit to your SkypeOut account. Money flows in, profit starts for Skype and the product pyramide starts working with SkypeOut, SkypeIn etc…
Soon Skype will develop some amazing new functionality, which is only available in a premium version, but will cost just a few extra euro’s … Another possiblity to make profit happen.
A little slope and a little dope with the Newport massive
The only time Eggsy, aka Mr Love Eggs, can remember having seen snow was when he wrote swearwords and drew a big phallus in it in his neighbour’s garden as a teenager. Billy Webb (aka Tim Westcountry) has never been to a ski resort and believes apr