Skype Journal: Print This

Skype Journal: Tim Draper the proud "father" of Skype and vSkype

June 20, 2005 11:25 AM

It was Fathers' Day around much of the world yesterday.

The present: vSkype recieved was purely informational, but for them it was an exciting day. Five days after launching their new video offering:

272,148 downloads. 1.6 million minutes served.

I believe this to be the fastest adoption rate for a Skype plug-in.

I interviewed the person I would dub the father of both Skype and vSkype, Mr. Venture Capitalist himself, Tim Draper of Draper Fisher Jurvetson.

I posed questions for Tim in the following categories:

The Skype Company
The market for video
The Skype Software Development Community
The risks for Skype
vSkype

Here is what Tim had to say...

The Skype Company

Is Skype a Global Telecom or secretly a media company in the making? A media company where calls are free; but content is a revenue generator?

I hadn’t thought of the media angle myself, maybe the founders have. For now, it is a communications platform. I think the biggest opportunity here is in collaborating with companies who want to do add-ons.

What are the challenges for Skype in Asia?

This is better answered by Niklas, but I think Asia mostly offers huge opportunites for Skype. Skype has great relationships with Tom.com in China and LiveDoor in Japan among others. More to come.

Stuart tells me his strategy is to move vSkype onto other presence networks, like AOL and Yahoo. What could Skype offer SCN (Santa Cruz Networks) to keep the technology in the family? Or should it?

I have always been a fan of open systems and free markets. I think SCN is best off going after multiple distribution channels, and Skype’s strategy is to work with as many application builders as they can.

How do you see SCN and Skype partnering with the other companies in your portfolio? For instance, you've invested in Akimbo, focusing on Video over IP to TV. Or your many social software plays. EVDB, FeedBurner, Meetup, Ingenio, Technorati, Wheels of Zeus and Xfire, for example. Are you encouraging Skype and SCN to broker technology or sell service to your other partners?

Great ideas. I am sure that many of them will be interested in working together. We will do our best to facilitate the meetings among them.

The Skype organization is growing at a very brisk clip. We know the Skype Application scales well, but their culture has to scale too. They seem a little thin in the manpower resources area. What is being done to make the culture more scalable?

I think Skype will benefit greatly from their API programs, from their affiliate programs and from allowing their users to continue to innovate around them. The team is exceptional and I believe they are moving in the right direction.

The market for video

This morning's (Saturday) New York Times article is about a guy in Seattle who teaches classical guitar in a number of US Cities and Spain using Videoconferencing. What other revenue opportunities do you see being enabled now that the good video technology is available? Where will we likely see the next disruption occur?

I try never to underestimate the imaginations of the creative people of the world. The "pong" videoconference game and the idea of putting a different setting behind you are two ideas.

The Skype Software Development Community

How important is a third-party development community to Skype and the Skype users?

I personally believe that there is nothing more important to Skype today than developing systems for third parties to easily add on to and plug in to and associate with Skype. We also want them (the third parties) to be very successful with their Skype relationships and a major initiative is underway to help streamline this process, while also helping consumers build trust in Skype applications.

Niklas Z has done a fantastic job of creating a huge new market ─ 40 plus million (soon to be 100 million) customers. Unfortunately these customers want everything for free. Skype is making money. But no one else seems to be. If third party developers do not make money they will soon disappear. What is an appropriate business model for the players in this market?

Give them time. Third-Parties for Skype have just begun building their applications. Soon there will be big successes from companies that pioneered using the Skype platform.

A number of developers who have seen vSkype have commented negatively that SCN has broken the terms of the Skype EULA and TOS with their Video Tab and floating V icon. This may, or may not true, I leave that to Skype’s attorneys. Doesn’t the lack of the ability to create plug-ins that map into the UI and maintain the Skype ease of use, look and feel actually hurt Skype and the third party developers? What can be done to improve this?

I don’t know about the first part of the question. I know Skype is doing everything they can to make it easy for third-parties to operate smoothly with Skype and their interface and these systems will get more sophisticated and streamlined with time.

The Platform Risks

vSkype or Spontania could add a billing system and sell video minutes using a PayPal system just like Skype did. They could add the GIPS codec to their voice engine too and improve their voice quality. This seems to be a potential risk for Skype. Skype builds this enormous global network and others take it over. Does that worry you or excite you?

That is exciting. Skype will remain open to creative and workable new solutions. There is a real benefit for a platform company to build an ecosystem that allows other companies to make money. Think of Ebay. Or even Microsoft.

SCN and vSkype

How will vSkype compete with Skype’s own video offering? Voice mail products like SAM and Pamela have failed to get even a modest toe hold in Skype’s VM market. Sure vSkype are filling a gap in a very hot market right now, but what happens when Skype delivers its video offering?

All offerings will have a different set of features and must find a market with an appeal to different users. SCN’s offering is especially good when talking to multiple users and showing things like powerpoint presentations and spreadsheets to a group. Skype’s own version will probably be more universal.

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Comments (2)

1.6 million minutes served??? How can vSkype measure the usage of its software? Is vSkype spyware???

Posted by: John Doe at June 21, 2005 11:20 AM

Hi john doe.

The current release of vSkype is server-based; not peer to peer.

Regards, Bill

Posted by: Bill Campbell at June 21, 2005 12:31 PM