Big changes need an executive champion. When Jonathan Christensen left Skype last month, he was the last advocate for a developer-centered strategy.
 His departure is bad for Skype, bad for Microsoft, and bad for Skype’s users. This is good for rivals who understand github culture, developer programs, cloud operations, and API business strategy. Here’s why:
Skype’s third-party development products are failures.
- The Skype Extras program collapsed from tens of thousands of desktop apps to a few dozen before Skype shut the program down.
- Skype tried for a UI-free Skype engine but SkypeKit is unattractive. It’s feature-incomplete. It’s a time sync requiring orders of magnitude more effort (about twelve thousand hours for the first Skype-on-TV apps) than alternatives (1 hour for a TokBox or Twilio integration). It’s burdened with outrageous defensive business terms: Skype can withdraw your license at any time for any reason and you may not run SkypeKit on servers, sell your service to business, or serve Chinese markets.
- Skype is very late to the cloud communication market. Voxeo, Twilio, Jajah, TokBox, and Vidyo (powering Google Hangouts) have been offering hosted telephony and video conferencing APIs for mobile and web developers for years.
- Skype’s few developer successes rely on cultivating personal influence, on sycophantic access to Skype insiders. Unless you know someone, you don’t get the resources to build or the waivers to release your product. This doesn’t scale and comes off arrogant and sleazy.
This post-Christensen senior management team understands finished goods. They even understand freemium models. But their hearts don’t beat faster at the thought of Skype powering a million web sites and apps. Their eyes don’t light up when talking platform economics. Their guts don’t tell them to bet on APIs, to open up and let a million designers and programmers plug-in to the Skype network.
So management lacks ambition for platforming. This shows in underfunded cloud projects, a closed (vs. public) developer program, staff defections, and belittling expectations. From management’s behavior you’d think outrageous success by Skype developer partners should trigger a publisher’s acquisition or sudden death. Ouch. Real platformers consider customer successes proof your network is attractive.
Skype’s platform-avoidance strategy will fail, probably this year. Skype cannot hope to deliver meaningful integration at Microsoft without the Skype versions of OpenTok and Phono; they will hit a technology wall. And new users from Skype’s Microsoft products won’t hide the overall slowing of Skype user adoption and revenue, or high defection to services that meet specific needs in specific contexts. As Microsoft’s Bing, Xbox, Kinect, Windows, and Windows Phone know, APIs bring you new revenue and new markets.
Circumstance will drive Skype’s managers to an open cloud platform architecture.
They’ll need entrepreneurial leaders like JC to take them there.
But they’ll have to believe.
Do you believe in platforms?
photo: Jonathan Christensen
 Phil Wolff designs and positions realtime collaboration products for effective people. Phil advises the Personal Data Ecosystem Consortium and is a director of the DataPortability Project. Email editor@skypejournal.com, Skype evanwolf, tweet @evanwolf, G+ or call +1-510-444-8234 to talk with Phil. Skype Journalis independent of Skype.
I agree on nearly all points with Om’s analysis of why Skype is buying GroupMe, why GroupMe picked Skype, and why it isn’t enough for Skype. 
For Skype management, more for the Skype everywhere strategy, it fills a gaping user interaction hole, and brings very active young users in many international markets. Skype’s owners don’t mind; this is equity neutral (Skype cash for GroupMe assets).
For GroupMe investors, this is their liquidity event when markets and economies are as uncertain in the long term as they are volatile day by day. For GroupMe management, they get Microskype marketing power and future replacement of Twilio SMS backend with a cheaper Skype texting/voice/video backend [take that, Twilio!]
Om, I disagree on Skype having a consumer vs. enterprise conflict. They believe technology consumerization will continue smuggling Skype into the workplace.
Skype’s does have two other identity crises. First, are Skype a communications company or will they take a leap into helping people be productive? I don’t think Skype can or will take that leap. The second crisis, are Skype willing to compete as a platform or must Skype control all elements of user experience? This struggle is in play now, as the new managers brought on by the Private Equity partners successfully contained and crippled SkypeKit, Skype’s first platform product in years.
Tony Bates’ blog post, Skype news release, GroupMe announcement.
Product management has a natural tension between features and elegance, the richness of more and the simplicity of less. This is true for APIS as much as for user interfaces. Telecom technology is complex, a high learning curve for outsiders. In the last year I’ve seen Voxeo, TokBox, Skype and now Twilio expand their reach to web developers by simplifying the programming experience, hiding the details of making connections and streaming media.
Twilio announced this morning that its “Twilio Client” is just three lines of javascript.
<script src="http://static.twilio.com/libs/twiliojs/1.0/twilio.js"></script>
<script type="text/javascript">
Twilio.Device.setup(token);
Twilio.Device.connect();
//you decide what happens next
</script>
With minor code variations you can build call center, conference call, intercom, softphone, audio recording apps, and text-to-speech apps in the browser. Promoting the launch, “five developers who write the most awesome Twilio Client apps in the next 2 weeks will win new Macbook Airs, tickets to the Twilio Conference, and Twilio Swag.” I’m loving the t-shirt. For those who use the Client, Twilio is cutting the cost of audio to a quarter penny per minute.
There are similar examples. A tiny Skype client powers Facebook’s first video calling app. Its API was also dramatically simplified, removing even usernames. TokBox embeds video calls and conferences with a few lines of javascript. Voxeo launched Phono last year, also a few lines of javascript to invoke their telecom APIs.
The gold standard for realtime communication: can you reduce your cloud service to a few lines in a language four million web programmers use every day? Can you simplify the object model, prune your parameters, and limit option so what is left is pure, elegant, beautiful and useful?
art credit: Twilio
CORRECTION (25 Sept 2010): "we (Twilio) aren’t putting in any money… all the investment is coming from Dave McClure’s fund 500Startups."
– Danielle Morrill, Twilio
Twilio is putting $250 thousand into a seed fund for startups that use its technology. Incubator and investor 500 Startups will administer the fund.
Nobody in the Over The Top Calling Platform market has pursued the startup community with Twilio‘s fervor and effect. I’ve seen them sponsor telephony meetups, the SuperHappyDevHouse hackathon, Hacker Dojo, and are national sponsors of Startup Weekend. It’s funny for me to run into Silicon Valley acquaintances that introduce me to this cool thing called Twilio that lets you whip out phone features in record time. This leaves Voxeo, Jaduka, Skype, and Jajah struggling for mindshare among early stage IT entrepreneurs.
I’d love to see a Skype fund for startups when the Skype network API comes out. Skype could partner with angel networks and microfunds to source the talent. Skype could also be more global in its outreach than Twilio can.
Update: Don Kennedy asked me about the ROI for Twilio. Here’s how this project pays off…
- Developers see economic value associated with the 500startups co-brand of Twilio. You may not know this but 500startups is a rock star in the NYC/SF/Silicon Valley seed/angel community. See also: Dave McClure, master of 500 hats.
- Entrepreneurs learn Twilio financial basics (services, costs, prices).
- Social proof is the way developers choose their tools. This program not only builds informal social proof through personal word of mouth, it also builds public proof points.
- Today’s model of entrepreneurship requires rapid prototyping to reach Minimum Viable Product (MVP) – so they can test market demand. Twilio lets developers get going for free ($30 in free credit, where calls are $0.01/minute inbound, $0.02/minute outbound, and $0.03/SMS) until you start charging customers.
- The fund will seed 20 startups. These are investments, not gifts or loans. 500Startups Twilio has a fair chance that at least one or two will have liquidity events that more than pay for the whole program. Most portfolios like this pay for themselves.
- Twilio builds investment banker cred for when they eventually IPO or merge.
- Twilio has a chance to learn more about startups (their customers) through their close working relationship with the 500startups incubator/fund.
- For each of the 20 startups funded, 200 will apply and 2000 will think seriously about it. That’s a lot of mental rehearsal for pitching the use of the platform.
- With any luck, Twilio will discover new talent that might join the company, contribute to the platform, and nurture its ecosystem.
- With any luck, Twilio will discover new ways to use its platform that will become amazingly popular among web developers and entrepreneurs.
As a marketing project, this has the advantage of being crisp (defined spend, defined audience, defined message, defined brand value, defined publicity moments), proven (a long history of corporate and government venture and adventure funds), and respected in Silicon Valley.
I pitched and demoed Practisimo tonight at the end of Startup Weekend – Education at San Francisco’s Dogpatch Labs.  Practisimo is a foreign language practice service. Practisimo brings native speakers to people who already know language who need to practice to keep their language skills alive. We started from scratch Saturday night, after killing our language lab product 24 hours into the project.
Joining up, speed-dating style, to form new business teams was entertaining. Getting the business design right was hard. Trusting strangers was spiritual. Decisiveness at top speed exposing your ignorance was unsettling. Keeping our collective eyes on the-very-next-thing-to-do was tiring.
Leaving Skype out of this real-time, just-in-time, find-someone-to-practice-with service was really easy .
Our requirements:
- We need technology like Chatroulette’s, where we pair two users so they talk to each other.
- We want to serve some users on mobile phones.
- We want to serve 1-to-1 video chat and text chat inside of our web site and inside of other sites like facebook.
- We don’t want to pay for bandwidth for our first million users.
Skype just couldn’t get us there.
We might have been able to use Skype network APIs, still under construction. But that’s for another year.
We thought about building it on SkypeKit, but I’ve been waiting for 125 days to even see the secret SkypeKit SDK documentation.
So we’re using other technology to help people talk to each other.
Video chat ran on the TokBox API. For the telephony part, between Twilio and Voxeo we chose Twilio; it was more familiar to one of our programmers (and Twilio co-sponsored #SWBAY). In-browser text chat used a little open sourced PHP. Forms and surveys ran on Wufoo. We cobbled a barely working, unlikely-to-scale, first-draft experience together using less than four hours of programmer time.
Today was Skype’s 7th birthday. Happy Birthday, Skype!
I wish I’d had a different story to tell. The new practice of entrepreneurship taught at #SWBAY ruthlessly focuses on doing the right things, right now, with the tools at hand, in ways that teach you what you need to move forward. Dear Skype, wish you were there.
Telecom platform geeks convened for the first SF Telephony Meetup. I linked to YouTube videos of most of the talks below.
 We were welcomed to the first SF Telephony meetup by Gabriel Sidhom, CTO of Orange Labs San Francisco. Gabriel teased us with a thought experiment: "What if the phone wasn’t the first thing that was invented but rather a computer? And email rather than voice telephony? Then how would we do voice?"
 Adam Kalsey , akalsey@voxeo.com, @akalsey for Voxeo and Tropo. "We’re an API for the phone system." V built their API support in Java for the JVM. They run your code in their cloud against shims that translate from your programming language to the JVM. http://labs.voxeo.com/moho. @tropo. Call or SMS: 415.894.9965: gtalk,XMPP: tropolocal@tropo.im
 Jason Goecke for Voxeo Labs [good to see you, Jason!] about Adhearsion. Telephony application framework that drives Asterisk. Integrates with Rails at the MVC model layer. Used by AlertPay, for example. Recent release: Asterisk 1.6 support, ActiveLDAP support. Next release in August to work with Asterisk 1.8, Ruby 1.9 compatibility, and bundler support. Learn more at AdhearsionConf 2010, August 14-15 in San Francisco: Talks, code-a-thon.
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AdhearsionConf 2010Jay Phillips, the creator of Adhearsion, will be joining us for two days of talks, discussions, hacking and pair programming on all things Adhearsion. We also have other folks on deck that will be sharing their innovative uses of Adhearsion. Free.Sunday, August 15, 2010 (all day)
Venue TBD
San Francisco, CA USA
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 Adrian Georgescu of AG Projects, Netherlands, for SIP2SIP. SIP service transparent for the end-points, publicly reachable sip uri user@sip2sip.info. Good for audio, video, fax, IM, file trans, SMS, presence, XCAP (originated by Skype’s Jonathan Rosenberg), NAT traversal. Launched 2008. 40k SIP accounts. Most devices are using more than VoIP. sip2sip uses a self organizing sip infrastructure (SIP Thor), applying p2p architecture to SIP. Talk on Thursday (the next day) about the highly scalable back-end systems. sip2sip is free for end users (without PSTN termination or SMS) and white label for operators with pre/post paid accounting. Easy provisioning for end users through scripts. SOAP/XML interface lets you build your own portal to administer sip accounts. For operators that want to offer Skype-like services to SIP devices. Contact info: ag@ag-projects.com. http://ag-projects.com. http://sip2sip.info. Project wiki.
 James Li, Dominic Lee and Adam Odessky of Orange Labs SF showed a television UI for a sip phone app accepting an inbound phone call from an iPad, sharing the television’s audio (CSI Miami) in the call, dialing out from the TV, and a fun demonstration of echo in a four-way conference call.
 @ChrisMatthiew of Teleku @teleku. Rails – RESTful Phone web service API. Competes with Tropo, Twilio. Hosted on ec2. Free Ninja hosting runs on free open source stack. paid Samurai Warrior hosting runs on Voxeo hosting. Teleku translates apps from its own PhoneML, a 7-command scripting language, or TwiML (Twilio’s language), or VoiceXML and translates them to VoiceXML. So you can run those apps on Teleku’s restful API. Now OpenVBX, built by Twilio, can run on Teleku with speech recognition, international text-to-speech, Skype, SIP, iNum, multi-channel support. "I applied to Twilio’s developer challenge. I haven’t heard back from them." Demoed an SMS from the Twilio app running on the Teleku API running on the Voxeo platform. Demoed Skyping a phone number answered by an OpenVBX IVR workflow running from Twilio’s software on the teleku platform on the Voxeo platform.
 Dan Miller of Opus Research spoke on this summer of recombinant communications (vs. unified). In the long run, everyone wants to be a platform. So everyone will be peers, cooperating with each other. The biggest companies will likely dominate at scale but small firms will continue to innovate faster.
 Darren Shreiber of the 2600hz project. +1-415-886-7901. How do you manage a network of Freeswitch instances? The BlueBox Project: Core is in Erlang, API-based. Heavy use of distributed software (db, messaging). "Let it fail" assumption so lots of redundancy; calls continue when servers go down. They monitor and virtualize integration. Completely Open-Source, not just the APIs. Designed to help service providers to spin up boxes faster, distribute boxes easily, cut costs, increase flexibility. modular services.
Orange Labs SF is hiring product managers and software architects. Peter Hallinan at Blindsight is hiring "not your grandpa’s android developer" now. 2600hz is hiring erlang and sip people.
Not news: No women there, aside from two Orange staffers helping with registration and video. For some reason Telephony remains a boys’ club.
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7 years and 12 days since Skype Journal launched as a stand-alone blog.
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Phil Wolff designs and positions realtime collaboration products for effective people. Phil advises the Personal Data Ecosystem Consortium and is a director of the DataPortability Project. Email editor@skypejournal.com, Skype evanwolf, tweet @evanwolf, G+ or call +1-510-444-8234 to talk with Phil. Skype Journalis independent of Skype.
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