Wow, what an exciting few days it's been. I'm not sure which is more exciting, the fact that FON raised $21.7 million from Google and Skype, or all the blogging going on around it!
I've been watching Fon with some interest the past few months, and must admit that I'm totally blown away by the amount of capital they raised for what has repeatedly been called a "flawed business plan". (See "Wibiki joins Fon in reiterating failed business models of the past") Of course, having Google, Skype and 22 million dollars in your pocket gives a whole new perspective on the term "flawed business model".
The greatest thing for us about Fon managing to get this kind of backing is that it validates what we at Skyrove are doing, that is, community owned wireless infrastructure.
It does also make it clear that there will be major competition in this space! Fon is not doing anything new. It's really the same as Joltage, Wibiki and SOHOwireless, although Glenn Fleishman argues that the they're really a for-Fee hotspot service like Boingo or The Cloud and that the for-Free sharing model they're pushing is really just a smokescreen for the 'true' business of commercial hotspots.
I've been getting quite a few emails from folks since Monday asking what's the difference between Skyrove and FON.
Here are some differences AND similarities:
1. We have the same vision: Cheap Global Wi-Fi coverage through community-owned hotspots.
2. They have funding and brand-name backers, and we don't (yet) :)
3. There's nothing unique about their business model. They're simply offering BOTH for-fee and for-free sharing models. Skyrove combines the two in a new way, letting the Hotspot owner decide the price.
4. Skyrove is conceptually like the "eBay of Wi-Fi". We don't sell Wi-Fi, we provide the platform for anyone to sell it themselves at the price they set, while we take a commission on the sale. Think of FON as trying to be the "McDonald's" of Wi-Fi, which is the competitive space shared by Boingo, The Cloud, iPass and others.
5. Their router software was written by the same brilliant programmer who wrote our software, Sebastian Gotschall, and we use the same router, the Linksys WRT54GL. However, they are selling the router at $25 while in South Africa we're paying about 4 times as much from the distributors!
6. Skyrove's edge: Our system is implicitly ISP friendly. Although our system caters for both Usage (per MB) and Time billing, we are biased in favour of Usage billing. An ISP can offer a per GB package to Hotspot Operaters without fear of it being 'abused' in some way. The more GB used, the more money the ISP will make. We don't have to "convince" ISPs that "Sharing is Good". We believe it is good, but we'd like there to be a real "bottom line" incentive for ISPs.
7. We have already signed a small ISP in the US (SkyWi) and are in talks with some others (large and small)
8. We don't have SpeakEasy or any other ISPs theatening legal action (yet) (see Speakeasy Says No Deal with Fon)
*UPDATE: SpeakEasy and Fon made peace soon after. I spoke to a SpeakEasy rep who said that they're totally happy with anyone sharing their internet with Wi-Fi, regardless of the payment method*
9. Skyrove has a much stronger focus on enabling small entrepreneurs, particularly in developing countries, to set up multiple profit-making hotspots. We will enable ordinary folks to share with their neighbours, but we give massive incentive to entrepreneurs who install multiple hotspots.
10. Just like Martin's blog, this blog suddenly got a shitload of hits on Monday. Although Martin's probably got about a 1000 times more!
I hope that all the hype around Fon's fundraising will be the jumpstart needed for investors to start backing Wi-Fi projects, so that we can finally see truly global Wi-Fi access, particularly in the developing world.
Wi-Fi is a dirt-cheap technology. What is needed are folks like Fon, Skyrove and others to take internet access out of the hands of telcos and give the power of communication back to who it belongs to: the people.
Update: Wibiki embraces Fon
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