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>Date: Thu, 26 Oct 2000 12:31:23 -0700
>To: Tom Whore , Tony Berkman
>From: Ian Andrew Bell
>Subject: Re: Modo.net shuts down, Idealab blamed
>Cc: Mike Masnick , fork [at] xent [dot] com
>Bcc:
>X-Attachments:
>
>At 7:52 AM -0700 10/26/00, Tom Whore wrote:
>>You mean the Mood ring company went under? :)- So i guese petrock.com
>>should watch out as well.
>>
>>The device is not the message, the message is. Get the message tot he user
>>with what they got. Installed base is pre existing and you ride the tech
>>tree up with time.
>
>I beg to differ. The only strategy that failed these guys is the
>strategy of allowing Idealab! to participate in their previous round
>in April.
>
>You can sit on your ass waiting around for the “right” device to
>come along that supports your content and media goals, or you can
>get into the niche and develop the market through brute force by
>creating your own device. If you choose the latter, then you had
>better make that device a desirable product by making it cool and
>encouraging users to fetishize it. They clearly did. The Modo has
>been showcased in every consumer, industry, and fashion magazine
>over the last six months — people love it.
>
>There was/is no good, cheap, accessible network for Modo content to
>ride on so they “built” their own. $100 was not the floor price of
>that product — that’s the landing on the beach price. Divide that
>by half and that’s your price one year later. Multiply $100 by zero
>and that’s likely the price you’d see in 18 months, as slotting fees
>and ad revenues ramp up to support the manufacturing and
>distribution costs over time.
>
>It’s a great plan and the company was executing well. By incubating
>the idea in dense cities (SF, NY, LA) they were able to prove that
>the model of content development vs. advertising sales does work,
>and they didn’t have the scaling problems that companies (such as
>citysearch) who launched national services and couldn’t meet the
>demand for bodies and revenues got caught up in.
>
>My guess is:
>
> Cost to manufacture: $35.00
> Cost to distribute (retail): $48.00
> Network access fee per UIS: $0.75/mo
>
>This means that $15 per unit, or basically $1/mo. for the average
>customer lifespan, was supporting content development. Measure that
>against Yahoo!’s economics and it compares favourably.
>
>Modo was effectively broadcasting using the paging network. Their
>messages went out at midnite on the national Pagenet 929.375
>frequency and all of the devices shared the same CAP codes. This
>was basically underutilized bandwidth at that time of day on
>Pagenet’s network and since everything used the same CAP codes
>Pagenet didn’t have to worry about tracking and billing for
>customers, and provisioning was instantaneous.
>
>Everything about Modo was slick, and lean & mean.
>
>By all accounts, it looks like Idealab! was sitting on a winner and
>they fucked it up.
>
>-Ian.

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