Internet is not accessed with mobile phones for two main reasons: devices are designed for voice instead that for managing data; mobile operators have discouraging data plans and, since now, have preferred to try to exploit (without success) their walled gardens. Nevertheless, it is clear that the next big thing in when people will be able to access the Net and their assets online: devices like iPhone will allow us to carry non only an address book, bu our social network.
I interviewed Fabrizio Capobianco, Ceo and founder of Funanbol, in Rome. We talked about its company, the choice to adopt an open source model and the challenge to build mass market mobile application in a sector where standardization is still a dream.
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Nicola Mattina. Who are you?
Fabrizio Capobianco. My name is Fabrizio Capobianco and I am the Ceo of Funambol. Funambol is a mobile open source company and the largest open source project backed by venture capital funds. We are based in Silicon Valley while the development center is in Italy, which makes us fairly unique in this space.
NM. What is it possible to do with Funambol applications?
FC. Funambol is a mobile application server that is able to push email to a mobile phone. It does not matter which is the provider: it can be Yahoo! or Google. It does not matter what is the device: it can be a Raz or a Nokia or a smartphone with Windows Mobile.
NM. Since it is an open source project, the development is a collective effort. Why did you choose to have a community developing the applications and what is the community bringing to it?
FC. Mobile sector has a major problem if you are trying to attack the mass market: if you want to realize an application that is used by a lot of people, you have to support an exceptional variety of phones. It is not only the firmware of the device: you have to consider the location and the carrier. It is the very complicated, if not impossible, for a single company to build an application testing it on every single phone out there. So, the only way to make this happen, is to use a community and work together to test the application on every possible phone. At Funambol, we have more than one million download and our community is spread everywhere: in the Us, in Italy, in China or South Africa and so on. We have testing and quality assurance coming from every single place in the world.
NM. How many people are using Funambol?
FC. We know that we have usually 70.000 dowload per month and we know that we are adding an average of 1.000 sites per day worldwide. The majority of downloads come from China and India. The countries where we get a significant amount of downloads are the US, Italy… South Africa is also very active, together with Australia and Brasil.
NM. How do you deal with people coming from so many different countries? Do you have specialized teams for geographic area or you just speak English with everyone?
FC. We speak English with everyone. The company is based in Silicon Valley, where we have sales, business development, marketing and product management. The development center is in Italy, where we have about 35 people, that come from anywhere on the planet. We obviously speak English internally and externally.
NM. Do you have relationships with mobile operators?
FC. Yes. The business model is that our open source version is meant for enterprise and individuals. Then, we have a commercial product which is focused on people or companies hosting our server: service providers, mobile operators and portals. In our list of customers we count some mobile operators like Vodafone in Europe.
NM. You did the start up in Italy. How did you get to the United States? How did you contact venture capitalists?
FC. I was actually living in the US, in Silicon Valley, before starting Funambol, so for me it was easier. I’ve been living in the Valley for eight years now.
I came back to Italy and I started a development center with people that I knew very well. I started two companies in Italy before Funambol, one was called Internet Graffiti and it was the first web agency in 1994. So we built a Silicon Valley company and raised money there, with an offshore development center in Italy.
At the beginning it was fairly strange for the investors to see a development center not in India or in China, but I think we were able to explain why Italy was a better choice. Some of that came also by the fact that the product was open source already, and it was already very popular, so they could download and try it themselves: we didn’t have to explain why we thought the software was good.
NM. How do you deal with different cultures in Italy and in the States? Is it an issue having a group in the States and another one in Italy?
FC. If you look at any Silicon Valley company, the development center is somewhere else. The cultural differences between the US and Italy are less than between the US and India or China. So it actually makes life much easier once you assume that software will not be developed in the US because it’s too expensive: nobody does core development in Silicon Valley anymore.
NM. Which is the future of mobile applications?
FC. Mobile is the next big thing, it’s the device that you carry with you eighteen hours a day. A lot of people keep it turned on even when they sleep, so it’s the most important device we carry around at this point. If you get out of your house and forgot the phone, you will go back and take it. The applications we see on the web are just a subset of what you can have on a mobile device, which is a personal device.
The trend that is going to be more interesting is around mobile advertising. Advertising is what started the Internet: Google and Yahoo are all based on advertising. The phone as a platform for mobile advertising is even more powerful because has one element that is key, which is location. You have your phone with you, and so, if the phone is able to tell a server where you are, you can get advertising based on where you are, which is not only interesting for you. It can be very interesting where you are walking: it could be that you are walking in front of a store and so the advertiser of that store will have a lot of interest to reach you, while you are about to come in.
Mobile is a phenomenon that is happening. What has been holding it back, has to do a little with devices and a lot with data plans: the cost of data plans and the fact that in many countries you have to pay per-kilobyte is what is holding really back this phenomenon. But the change we’re seeing in the market is towards data flat plans and so, once you have a flat data plan, you are looking at a new Internet on a mobile device, like when you will move from a modem to the Dsl.
NM. How long will it take in your opinion to have a flat tarifs on mobile. Will mobile networks ever become neutral as the internet?
FC. I think the answer is pretty much today. In particular, in the US every carrier as a flat data plan and we are talking about 15-20 dollars a month. Europe is lacking behind which is big risk because they risk to miss the ability to really take advantage of this phenomenon. They’re still looking at a per-kilobyte, although you have examples like Tre that has a 19 euro a month data plan that includes five gigabytes a week, which can be considered a flat data plan.
We are talking about now. The iPhone, for example, which is gonna be launched in the UK, in France, in Germany in the next months: it’s gonna change the way people perceive their access to data with a device. It’s a data-centric device and you will buy it mostly for the data component, and less for the voice component. That changes the perception of the consumers towards the use of cellphone, which actually is going to start everything.
NM. Thank you very much and good luck.
FC. Thank you.
With the contribution of Antonella Napolitano and Anna De Bona.