The company you want, ain’t always the company you get…

If you’ve were paying attention to last month’s blog post, you’ll know that 30 days ago, my CTO and I were on our third trans-continental flight that month, squished and uncomfortable, trying to let the time pass as quickly as it would, while I rushed to get out a 15-day-late post to our blog.

Well, a lot has happened in those 30 days, fellow nerds. So much so, that I’m rushing today to pump out yet another 15-day-late post. Expect more of the same, next month, as I don’t believe the Fates are yet done with us.

You see, what we didn’t know while on that flight was just how different the horizon would look for AppleSeed once we reached the ground again. Perhaps, we should have been paying better attention - the signs were all there - but somehow, our Jethro Bodine “cypherin’ skills” just weren’t up to snuff.

I could blame it on the jetlag, but if I’m honest with myself, we were just too busy, navel-gazing into the deepest recesses of our Nerdiness, to catch the changes.

Lemme take a step back. When we founded AppleSeed in September, 2005, we knew that the company we were creating wasn’t going to singlehandedly change the mobile industry, so we didn’t try. We just hoped it would empower us enough to give a gentle nudge to some folks, so that they might understand that they were in our way, and politely step aside. Seems friendly enough on the surface, doesn’t it?

Within a few months, we had a host of positive feedback from our advisors, and some really favorable market indicators (i.e. - the costs of getting access to mobile O/S sources plummeted). Patting ourselves on the back at the 2006 3GSM show in Barcelona, we assured ourselves that we were on the right path.

So, of course, we were a bit surprised when some of the “nudgees” pushed back a little. Nothing so bad as a lawsuit or denial-of-service or anything, just an admission by the guys with the purse strings that while they really did like what we were doing, they just didn’t get it.

That’s understandable. One must drink a lot of kool-aid in the Nerditude, and our brand of kool-aid is an aquired taste…

The one thing these money-folks never did compain about, though, was our business model. It was a little complicated, sure, but in the end, it made perfect sense. It was always the one thing in the slide deck we never got a ton of questions on, so we assumed we’d gotten it right.

We were going to ignore the low-hanging fruit of ad-revenue (to the consternation of some) in favor of offering a subscription to a new combination of goods and services for the mobile-internet space. We called the package our “whole product service bundle.”

With this model, an AppleSeed customer wasn’t just a customer, she was a subscriber. Sure, she bought a handset, our handset, but she was also buying an AI, and a webhosting environment, and a whole bunch of new tools and services that she would pay for every month, and use to whatever end she liked. And since we were only going to initially target our handsets and services to Nerds like ourselves, who were already paying for webhosting, we would have a growth curve that was manageable, and not likely to cost us much in “ad spending.”

For us, this was the perfect business. Big enough to serve our subscribers well, and small enough, and niche enough, to survive amid all the fragmentation that’s going on in the mobile markets. I mean, who cares if Vodafone, and T-Mobile and Orange own the lion’s share of the mobile market? We don’t need those kinds of numbers to be successful, and frankly, we wouldn’t know what to do with all those non-Nerds anyway.

But then we got on that plane, and everything changed.

Sounds ominous, doesn’t it? It isn’t really.

You see, some 60 days or so before, we’d decided at Nerditude HQ to start exploring some alternative methods of financing our work. Since most of us already had day-jobs, it made sense that the remaining crew would join the bootstrapping-ethic whole-hog, and follow suit. Soon after starting the job hunt, though, we had our first communication with DA MAN, who, asked us, through our incubator, for a “capabilities briefing.”

For the sake of length, I’m gonna save DA MAN story until next month, even though I promised it for this month. Trust me, it gets better with age.

Suffice it to say, after surviving an initial meeting with DA MAN, my CTO and I got on a plane, following behind some phone interviews we had with some companies.

We went out looking for regular, ol’ jobby-jobs, but we came back with something else: a business model we’d been told before was never going to work because the markets were too hostile, and a list of potential customers who each wanted to prove that wrong. So much for regular ol’ jobby-jobs.

It’s still too early for details, but what we’ve learned is that there are some folks out there who want to take some of OUR stuff, and integrate it into THEIR stuff, and pay us to allow them to do it. We’re talking software licensing, people, and it’s never been a path we’ve pursued.

The thing is, with even just a couple of paying customers, building on work we’ve already done, AppleSeed would be able to fund itself, building the company organically, without needing to carve 40+% off to the money men (and women). Think of that, someone paying you, funding you, before the product’s even finished!

Now for the reason for the title of this post. We started out wanting to build an ISP-like, subscriber-based, mobile-internet business, funded initially by the same VCs that were funding so much else. But, if things indeed progress in the way we’re being told, we may wind up with a very different company.

Sure, we’ll keep the ISP-like, subscriber biz — that’s our joy. But in addition, we may have to deal with the harsh reality that other people in the industry are going to see how happy our subs are and want to offer similar levels of service to their customers, even if those customers are not Nerds.

Strange thing is, one of our first advisors, told us to expect this kind of thing. Not the licensing model, specifically, but the confluence of events that would change our company from what we created it to be, to what it wanted to be, what the markets wanted it to be. His assertion was that successful companies rarely end up how they started. They become successful by listening to the markets, and allowing themselves to change to respond to what they hear.

So, we’re listening, and we’re going to consider a change. We’ll explore this new market and model with you, and see where it takes us.

Just be gentle with us…heh heh…