While we have ported all the older blog posts into our new home here, I suppose it's fitting that one of the new posts address an area I've spent a lot of time thinking about lately.

Today my good friend Phoneboy posted Why Jajah. Rebtel, and Others Like Them Will Fail. He said -

Thoughts about Rebtel, Jajah, and others have swirled about the blogosphere. Recent examples include Luca, Andy, Jeff, Pat Phelan, and plenty of others. I'm ready to weigh in on this subject, and you can probably tell what that opinion is by the subject of my blog posting.

Now I should say up-front that both Rebtel and Jajah may, in fact, be perfectly fine companies. I certainly don't have anything against them, personally. However, what I do have a problem with is how they are basically asking me to change my dialing habits to use their services. What's in it for me? Saving money? That's just so Voice 1.0.

Another friend, Ted Wallingford, weighed in with Phoneboy just says what everybody else is thinking. Ted says -

You want to know why haven’t had much to say about Jajah and Rebtel? Because I’ve been thinking pretty much the same thing Phoneboy has about these two services, which purport to allow cell phone users to circumvent minutely charges by routing calls through (in the case of Jajah) another independent carrier, as long as the call recipient is also a member of that independent carrier, and as long as there is adequate data service on the phone, and as long as the phone is one of about a half-dozen the carrier supports.

Phoneboy and I chatted about this a bit on Skype, and I'm going to weigh in as well. I'm already on the unpopular side of feeling the SJSU CIO did the right thing when he initially blocked Skype (and I feel vindicated that David Beckemeyer echoed many of my sentiments). I may as well extend my trend at taking the opposing view here.

I agree with Dameon and Ted, and those who haven't spoken out - Jajah, Rebtel and the like (they've been referred to as "minute stealers" in some posts lately) are doomed to ignominious failure and oblivion. They don't excite me at all, and I won't post much about them. They're like cheap gasoline at best, an analogy I'll get back to shortly.

Minutes are a commodity. I know that another friend, Alec Saunders, recently posted his view, but I just don't agree.  I'm not going to address Alec's points and attempt to refute them, because he's one of the brightest guys I know anywhere. And he's got a view of different facts and a Canadian perspective I don't have.

Here's what I know. Minutes are a commodity. They're a darn cheap commodity. I rarely ever exceed my cellular calling plan, even when I try. And an even bigger calling plan is pretty cheap in my view. Scrambling to save a few cents a minute on calls is like driving across town for cheap gas.

So here's my gas analogy. I drive an F-150, not the most economical motor vehicle ever built. It's got the big V8 in it to pull my trailer. If I put 20 gallons of gas a week in it (I don't, but we'll assume that for the sake of argument) that's 1,040 gallons of gas a year.. Let's be really generous and say I can drive across town and save 4 cents a gallon. That's a fantasy where I live, but a good working number. So if I put in the effort to drive, I can theoretically save $41.60 over the course of a year. Yeah, you read that right. Spending my time to drive across town, over an entire year, I can save 40 bucks. I don't bother because my time is worth far more than that. My focus...my core business in life, is worth more than $41.60 in a year.

So if your core business is saving money on voice, you can do the equivalent and shop across Jajah, Rebtel, the others. You can change long distance carrier every couple of months. You can invest your time and effort in saving money on phone calls. But phone calls are minutes, and minutes are cheap. Minutes are damn cheap. They are a commodity. So who's focusing on your core business while you're chasing pennies on commodity minutes? If I were to hazard a guess, I'd say maybe your competitor.

Sometimes good enough is good enough. Sometimes you need to get down to your core business and not focus on tiny commodity things. Do you spend as much effort shopping for printer paper in order to save a buck on a case? Do you buy cheaper coffee because it's cheaper? I'm all for economizing where appropriate, but there comes a point where the return on effort is no longer worth the effort.

That's not the case for everyone. For some of us, it's worth the effort because we're in a different situation. Alec may get ripped for ludicrous roaming fees for long distance because he's in Canada and spends a lot of time in the states. I get nationwide long distance everywhere I go, and lots of them. For me, good enough is good enough.

If your core business is developing and selling products, your focus has to be on the core business. Cutting expenses helps any business, but boosting revenue helps more. Don't letting chasing pipe dreams and commodities interfere with success in your core business. If you do, your competition will take advantage. I say that because I know how I take advantage of my competitions weaknesses...at every turn. Business is about success, and success is driven by beating the competition and winning.

If you're Jajah or Rebtel or one of those companies, the gas analogy still rings true. Discount gas stations survive on margin commodity sales. Let the economy shift, or let bio-fuels or other advances hit, and they're dead meat. They are short term businesses. Neither sustainable for the long haul or survivable in disruption. They are not in business for the long haul.

When I worked for AT&T, and later Lucent Technologies, one of my roles was as an emerging technologies sales manager, but I also sold  what was, at the time, the bread and butter of PBX systems ( Definity). I took a pretty standard approach with my customers. I've never lied to a customer. I build customers for life in my business. I'd tell them "If you're shopping for price, look elsewhere. I'll guarantee that any solution I give you will be the most expensive solution you'll see. But it will be the best and the value will far outweigh any competitors cost to value proposition. You will get what you pay for."

That was a pretty successful sales approach. I still have customers for life. They appreciated the honesty. I beat quota every year. And customers went away as happy heroes, with solutions that made them superstars inside their business.

Can you make a living on commodity marrgin? Sure. And you can make a living selling headsets, or fax paper or cheap phones. But you won't be an industry leader. You can survive, but wouldn't you rather thrive? Can your business settle for boring and second best or bottom-feeder survival? If you can, great, but you're aiming at mediocrity. Aim that low and the target's easy to hit.

Phoneboy said "That's so VoIP 1.0," but I think it's worse. And the "minute stealers" are only the beginning. There's another new offering that nearly sent me into a coma this week. Another friend Andy Abramson is pretty keen on Grand Central. I've seen lots of rave reviews. And if it works for you, great. My experience varies.

First, the web site wasn't Firefox friendly. An irritantant. But once I loaded up Internet Explorer and renabled ActiveX controls that I keep disabled for security, I managed to do a few things. I imported my Outlook address book. The whole damn thing. I'm sorry, but why did a phone service just import 400 entries that have no telephone number associated because I only deal with them via email. I spetn over an hour manually deleting entries to get it down to a usable size. The whole thing just seemed pointless. But that's not what bugs me.

Grand Central gave me a new phone number to use. Excuse me? I need another phone number like I need another hole in my...
I've got 9 working phone numbers already. Nine. What the heck do I need with another one???

Remember what I said about customers for life? One reason I have them is because they know my phone number. How many people are in your Outlook address book. I have about 1,700 in mine. That doesn't count businesses, that's just people. And I'm supposed to go give them all my new number? Or should I irritate them with something like Plaxo instead? (Don't get me started on that!)

Don't give me another number. Don't dare to try to sell me a service that needs a new number. Let me share a word - SIMPLIFY. Don't complicate my life with another phone number. Frankly, it's unlikely I'll use it. My phone number is tied to my identity with a lifetime of clients. If you're going to charge for a service, even if I get some time to try it free, it better simplify my life. And yes, sometimes simplification is complex, but that value proposition better pretty much be in my face, or I'm not going to bite.

So like my good friend Phoneboy, I'm a tad cranky today. And here I sit looking at companies that wnat to sell me commodity fluff I don't have time to chase and complicate my life with more complexity than I can find value in. That's not even Voice 1.0. It's a distraction from my core business and I'm too busy winning to waste time on losing propositions.

Sorry, but today I'm just not buying it. As Jack Nicholson said in the movie As Good as It Gets, "go sell crazy somewhere else. We're all full up here."


Technorati Tags: Jajah, Rebtel, Grand Central, Voice 1.0, selling commodities, surviving on margin