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.
Zennstrom decides to disrupt another fat, usurious, oligopolic industry: wireless broadband. “FreedomPop is aimed at making access to the Internet over wireless free.” “The Internet is a right, not a privilege.“
Free calls from Google Talk in the US and Canada through 2012.
Skype for Android 2.6 release added new features.
Skype for iPad 3.6 and Skype for iPhone 3.6 fixed a few bugs, improved stability, minor UI improvements and fixed a problem with chat deletion.
Skype updates its Firefox and Chrome browser toolbars on Windows, speeding Click-to-Call markup and improving compatibility. Which release of IE will come with a Skype plug-in preinstalled? When will Skype offer a click-to-call service for content management systems? And when will Skype add people-search to browsers? With all the browser publishers working to build in realtime IM/voice/video/ communication protocols in 2012 releases, a widely adopted browser plug-in is an important point of future customer contact.
 Skype’s man in Washington, Chris Libertelli, now leads the Netflix government affairs team. While at Skype his deft touch with the FCC helped Skype assure access in US markets and partner with wireless operators. He also led Skype’s government affairs operations for the US states, Canada and Latin America. Paul Bond says usage-based-billing is the hot issue. With Chris on hand, I expect net neutrality to continue to be on Netflix’ agenda but take a backseat to battling for Netflix and its customers’ right to stream. Skype hasn’t announced who will fill Chris’ shoes.
A November 18 Survey: Mobile operators predict they’ll lose SMS traffic to Skype and other messaging apps. Mavenir’s survey says they’ll respond with IMS services. Good luck with that: BGR reports there are almost a million apps for the major mobile platforms.
A Forbes reporter rehashes an October New York Post security story about a few NYU-Polytechnic researchers who use Skype’s peer-to-peer network to see user IP address. Then they layer on hype that this is a security flaw. This is odd: having two computers see each other’s IP addresses is how the Internet works, unless you want your data run through an intermediary. Intermediaries pretty much defeat the point of a p2p network. Here’s the research citation: S. LeBlond, C. Zhang, A. Legout, K.W. Ross, W. Dabbous, I Know Where You are and What You are Sharing:Exploiting P2P Communications to Invade Users’ Privacy (pdf), Internet Measurement Conference (IMC) 2011, Berlin, 2011.
Phil Wolff builds 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 Journal is independent of Skype.
Every startup founder is getting this question from investors, and customers. This wasn’t true in 2009. The question speaks to two of Skype’s strengths as it approaches its 8th birthday: brand and network effects.
The first strength is brand awareness. Everyone knows Skype. Literally half of Internet users have tried Skype. So Skype is no longer the domain of specialists in telecom, instant messaging, or video conferencing. More people know about Skype than know about Cisco’s telepresence or that Vidyo powers Google+ Hangouts. More people understand you can make cheaper calls on Skype than know of the hundreds of other services that offer even lower rates.
The second strength is network effect. The chance that someone you know is in Skype are vastly better than with any other communication or collaboration service. A user’s social network switching costs are not trivial. You lose history, you lose touch with contacts. You are adopting a weaker dialtone with fewer people you care about available for calls right now.
To be considered, challengers must do what Skype does.
Skype is the new vanilla, the new baseline, the ante for this round. Once you can “skype,” then you must offer something different, something more, something better.
Bonush will try to be Skype voice chat in a browser after it launches. (open for early Beta right now.)
Ooma Mobile was Skype on an iPad, before Skype’s own iPad app.
Vonage’s Time to Call is the voice part of Skype while paying for international calls at Skype rates with pay as you go billing to your iTunes account. Convenient for some.
TalkMe.IM’s Talkatone is Skype with Google Voice.
IsCoord’s is-phone conference for iPad is Skype with SIP without video on an iPad available for white-label OEMs.
Toktumi’s Line2 is Skype with better SMS and telephony features, without video, instant messaging or presence.
FriendCaller is Skype on many devices and in browsers, with a Facebook voice app.
ChatTime is SkypeOut international calling for less money, showing what time it is where you’re calling.
Voxer is Skype without PSTN, adding voice IM and location check-ins.
Apple’s FaceTime is Skype just for Apple and without PSTN service.
Skype still wins. Explicit or not, every time we discuss a product in this space, we invoke Skype.
Rivals (and even the term “rivals” invokes Skype) have four choices:
- Do less. Cut features to increase focus, convenience and usability.
- Do more. Add features to serve unmet needs.
- Do different. Reconceive the problem, delivery, pricing, psychology.
- Niche. Serve an underserved market, add insight into a specific context.
Two things complicate matters.
1. Skype is a moving target.
They left an opening for iPad apps for two years, letting others define themselves as Skype+iPad before entering the space. We will see Skype@Microsoft co-brand all sorts of products, from Sharepoint services to gameplay add-ons. This adds danger to filling in a gap in Skype’s product family.
2. Skype is become platform.
Microskype will offer real-time communication components to developers on nearly every Microsoft platform. Mobile, web, desktop, server, you’ll be able to build Skype into whatever you imagine over the next few years. APIs make “do less,” “do more” and “niche” easier for everyone, right down the long tail.
For example, blogs like Skype Journal will offer group video chat for readers of this very page, the site paying a tiny monthly subscription for the feature, free to visitors. It will be part of every “would you like to talk with a customer service agent” widget. Peer-support graphs like WeightWatchers, Quantified Self, and Twelve-Step programs will guide with whom you talk and when.
Platformers like Skype, Voxeo, Tokbox, Jajah and Twilio will power them, commodifying voice and video chat as hundreds of thousands of apps and web sites add realtime talk to their user experience palette.
So what works now? Less, more, different and niche are all viable. You just must be extremely persuasive on why the “better” you offer is worth the customer’s switching costs. Investors will want you to spend toward achieving network effect critical mass.
What works in the long term? Dominating a defined niche (there’s room for only one Grindr) or changing customer expectations, as Skype did to Plain Old Telephone Service.
Someone will change the paradigm, displacing Skype as the iconic reference. Until then, product managers, buyers, investors and the press will ask: how are you different from Skype? Your answer is…
I spoke with XConnect VP John Wilkinson this morning about their VIE product. VIE’s plumbing connects video calling services to each other. VIE (pronounced vee, the French way), the Video Interconnection Exchange.
VIE’s offers three interop services. Registry lookup, signaling, and transport.
VIE’s registry is a database of endpoints, each representing a video calling origination or destination device. A caller’s system asks the registry for information about the call destination. The registry holds identifiers like IP addresses and phone numbers, and maps the two to each other. It also holds profile data about what each end point supports. If your end point is a conference room telepresence system, what protocols does it it support? What codecs, streaming protocols, session setup, resolution, and bandwidth can it offer or require? The database is populated and updated by member networks from their own registries. A common registry is what makes VIE’s video interop work.
 VIE’s second service is signaling between end points. You might call from a SIP endpoint to an H.323 endpoint; VIE translates those different session protocols.
Transport is the third service. For networks that want the service, VIE will move and transcode a call’s video and voice data. Transcoding converts live streams from one format to another.
Most of XConnect’s customers are buying all three services. VIE is free for current members now but XConnect will eventually meter usage.
VIE’s near-term roadmap includes enriching the registry with more useful information and ways to search, adding user presence, blending in Unified Communication services, and multiparty video calls.
VIE’s first users are in advanced markets with high penetration of voice over broadband, like the Netherlands and South Korea. Norway’s Telio has hundreds of thousands of customers connecting outside its network through VIE.
As I see it, VIE offers an immensely useful service. Video technology is balkanized, as are video calling networks. Connections and calling are becoming more complex, not less, as more networks seek interop. VIE lets operators avoid worrying about interconnect, focus on their own operations, and store information in a specialist service.
Wilkinson says pioneering social and communication companies often focus on being better and different. They start off building organic growth in their closed network. Sooner or later they reach a tipping point where the value to their customers (and of their customers) of Fast+Best strategy gives way to the value of the network effect, reaching more of the right people. My sense is Microsoft will push Skype to that tipping point in the next twelve months, demanding integration across all of the MSFT properties and established namespaces. Whether that drives Skype into XConnect’s arms? We’ll see.
 Are you tired of Twilight romance? Of True Blood intrigue (the new season starts this weekend)? Then pick up The Strain. Hogan and Del Toro’s vampire trilogy is a dark, fast, medical thriller; an epidemiological Robin Cook meets Nosferatu’s creepy dread.
We meet The Strain’s vampires at New York’s JFK airport, a superbly evolved viral infection, spreading wildly through populations despite the best efforts of the Centers for Disease Control and Prevention, who are better prepared for a zombie apocalypse. When you are turned, you mindlessly return to your family to spread the vampire contagion. As you mature from a mindless, bloodthirsty revenant, you develop wit, self-control, focus and social organization. Society can’t take you down by killing some master vampire; every bit of your vampiric biological matter flourishes independently, finding niche after niche. Humans, dogs, vermin. The spread of this organism is so fast, wide, and effective, this could be an extinction event for the human species.
This is such a Skype story.
Consulting clients often ask me how Skype grew so well. I say virality was built into the product’s DNA from the start. You need two people to talk. So once you get the Skype bug, you drag your first circle into Skype, likely your family. Then you infect coworkers and friends. Finally entire institutions are in Skype’s thrall.
I was infected in 2003, shortly after Skype launched. I told my friends. I blogged about it. I invited colleagues. I bought webcams and installed Skype for my transcontinental family. Skype had a symbiotic relationship with me. I spread Skype and was rewarded with better calls, lower costs, more convenience, and more independence from phone companies.
Most social software manifests as an outbreak, burnt out quickly. Skype managed to become an epidemic, then a pandemic. Epidemic simulations model an infection’s success on multiple factors. Speed of transmission, the time until a new host becomes infectious, mortality or resistance rates, susceptibility distribution, isolation vs. connection of sub-populations, and reinfection rates.
The same analyses apply to Skype. Time until first call, loyalty rates, sharing rates, usage rates, peak social graph, time to first purchase, social graph diversity (a few strong vs. many weak ties), rates of use on more than one device, percent of time with active Skype dialtone.
Skype’s virality let it spread like a plague. Skype’s p2p tech meant it wouldn’t run out of food (cash) while it spread. Skype is still spreading after having touched nearly half of all Internet users.
The Strain is a compelling page turner. Can’t wait to read the second installment coming out in paper soon.
See also:
Communication is well mapped and settled territory. So is telecommunication, video conferencing, and messaging. This means talk, in its many forms, is full of competitors that know how to string two digital tin cans together.
Collaboration is unmapped and unclaimed. People come together with common purpose, choose goals, and work towards those goals despite most systems, not because of them.
Collaboration is wide open.
Gamestorming: A Playbook for Innovators, Rulebreakers, and Changemakers defines collaboration patterns, each pattern in the form of a game. These games are designed to help people think, learn, decide, and commit. Together.
1994. The United States Department of Defense wanted to clean up sites where chemical weapon facilities had once operated. I was on Bechtel National’s bizdev team, helping construct our bid for the billion dollar job. The project manager brought in a facilitator to design workshops for a the managers and scientists who would lead the work. We were to uncover the risks and challenges inherent in the project, interpret what the contracting officer really wanted but hadn’t said. A complex, fuzzy problem with a hard deadline and big stakes. I saw strangers quickly become a team, focus on problems, feel safe enough to disagree and to think creatively. All in a few hours. This was my first experience with skilled facilitation.
I saw works similar to Gamestorming on Kaliya Hamlin’s bookshelf a few months ago. Decades of books and scrapbooks assembled by skilled small group facilitators. They approach team interaction like sports coaches, where the “other team” you’re playing against is the purpose for coming together. Different strategies for different opponents. Different techniques for different situations. A mix of roles that let the team go through what they must to reach their goals. Gamestorming’s playbook starts with a framework for group practices, a pattern pattern. The rest of the book catalogs 88 games, and many more can be found on the Gamestorming blog and wiki.
While Gamestorming was built for in-person collaboration, most of the games can be adapted for teams working remotely.
Skype should go there.
If only so we don’t have a billion crappy, time wasting, unproductive meetings over Skype.
Only one company comes close to offering a software product for this space. Dive into GroupSystem’s ThinkTank for a feature list. Requirements collection. Brainstorming. Sorting and clustering ideas. Voting. Prioritizing. Analyzing. Visualizing. It’s a rational, logical, reductionist approach to decision making and consensus building. It’s the right-brain counterpart to Gamestorming’s left-brain support for creativity, discovery, insight, for problems with fuzzy goals and high degrees of uncertainty.
Collaboration is where Skype and Microsoft can create enormous value for every user.
And Skype needs to do more than execute on a “Skype Everywhere” strategy. Skype can be knocked off, even with Microsoft’s support. Networks of people migrate all the time. We were using the acronym YASNS (Yet Another Social Networking Service) as far back as 2003. Skype isn’t safe.
Serving collaboration raises an effective barrier to entry. Helping groups of people be productive together, a tool for synergy, creates a value much harder to abandon than simple communication. In choosing between two communication channels, we choose the network that makes you and your social graph more effective, more productive.
A “Skype for Working Together” strategy is not obvious, easy or fast. I’d love to work on this, one of my “dream jobs.” Where do Skype-based collaborations break down now? Why? What can be done to prevent breakdowns? Can you identify and measure team formation, flow and accomplishment through Skype interactions? Where are people going to do all the things Skype won’t do before, during and after a call? Skype can raise a new barrier to entry through deep understanding of collaboration problems and the many better practices for getting things done together.
P.S. Collaboration is not just for the workplace. Collaboration is how we get things done together in the rest of our lives. It’s how we find work. Plan vacations. Troubleshoot a child’s problems. Organize a protest. Run for office. Restore a community. And work out why our last romance fell through.
P.P.S. Does Skype really want PowerPoint’s reputation as a powerful tool to create mind-numbing meetings?
P,P.P.S. Oh, and the book is an easy, fun, insightful read. Pick up a copy.
What’s happening next? Quora wants to know.
Finishing the deal
Which executives will lead Skype’s post-acquisition integration with Microsoft? Who will lead from Skype’s side and who from Microsoft’s?
Which management consulting firms are likely to help Microsoft integrate Skype post-acquisition? The big firms offer well-defined merger processes and the extra staff to do the analytic grunt work. Microsoft, however, may have its own specialist teams or, in this case, may keep Skype sufficiently stand-alone that traditional integration may not be the plan.
Which government bodies have a say in Microsoft buying Skype? Why? USA executive and legislative bodies, since Microsoft is in headquartered in the US? Luxembourg, where Skype is headquartered? EU, where Skype have subsidiaries? Elsewhere?
Microsoft’s acquisition of Skype is pending the clearing of regulatory concerns. Are any of those regulatory hurdles Skype’s? Most regulatory concerns regard Microsoft, given its past anticompetitive behavior. Skype may be affected by telecom regulation in various jurisdictions.
When will the merger between Microsoft and Skype take effect? Without problems, months.
What could interfere with the closing of Microsoft’s purchase of Skype? Due diligence? Governments? Litigation? What else?
Planning the transition
Will Skype have to materially change their EULAs and ToS as a Microsoft division? Beyond changing their names and contact information.
Will Skype headquarters move from Luxembourg as part of the transition to becoming a Microsoft division? If so, to where? London? Palo Alto? Redmond?
When Microsoft buys Skype, how many of Skype’s employees will Microsoft keep?
How will Skype’s internal organization change post-Microsoft acquisition? What has Microsoft done in past acquisitions? Given the massive joint-product hopes, will Skype create new roles to support Skype’s relationship with the rest of Microsoft?
What can Skype do to keep talent through the acquisition? What are best practices?
What can management do to keep Skype’s pre-acquisition swashbuckling spirit? A question with an assumption.
Revising the product roadmap
What can Skype’s management do to preserve strategic focus while also integrating Skype products into Microsoft’s other businesses? Skype is in a long term battle to be the world’s dominant communication medium. This means it has non-Microsoft rivals among wireless and wired telcos, collaboration products like WebEx, messenger products, video calling and conferencing services, game-centered entertainment products, Internet identity providers and many other fronts. At the same time Microsoft announced Skype or Skype features would show up in at least seven different Microsoft product lines. How do you stick to what is strategic given the temptation to partner throughout Redmond?
Out of hundreds of potential Skype-Microsoft product blends, how could Skype prioritize which ones to deliver first? Given finite product resources, Skype will have to choose which product integrations get the most attention now. For example, how would product managers trade-off Skype-Lync vs. Skype-LiveMessenger vs. Skype Kinect, etc.? I’m not asking for a ranking but various approaches to making smart trade-offs.
If Microsoft bought Skype to compete with Apple why didn’t it just buy Qik? Users, product breadth, brand, talent depth and technologies.
Will Microsoft continue both Skype & Qik as it is? I’d imagine Qik features showing up in all Skype products over the next six months. After that, Qik would be a good sub-brand for a whole new Skype product family.
Thanks, XKCD, for the laughs. I love you!
Lee Matthews reported Microsoft Windows 8 will come with an app store. The story highlights struggles for power between operating system publishers, hardware makers, software developers, enterprise buyers, and the people who use software.
Who controls the virgin computer? Microsoft struggles with PC makers over what software ships with Windows. Companies like Dell, HP, and Sony add their own selection of non-Microsoft software to computers they sell. Bloatware often includes media players, video conferencing software, games, backup and antivirus utilities. This is important because many customers never download software after purchase; they use what comes with the computer. Companies have often paid handsomely for preinstallation and premium desktop placement.
Skype ships preinstalled on many Windows personal computers, thanks to distribution partnerships with companies like Dell. Qik shipped preinstalled on many Nokia smartphones.
Who controls consumer downloads? App stores liberate our shopping instincts. Apple’s app store changed user behavior. People feel safe enough to try and buy apps from a store whose brand they trust. Apple’s Mac App Store, and Microsoft’s Windows store, try to transplant that new consumer behavior to operating systems which no longer attract software developers.
 So far, app stores must come with an OS to find market traction. This bodes well, or at least OK, for the Windows store.
App store traction, however, makes bundling software with hardware less of a selling point. While preinstalled software is great for enterprises buying standard configurations, app stores hold the promise of personal choice.
Skype and Qik have been successful in Apple’s and Android’s mobile app stores. Will those successes translate to Windows and Mac desktop app stores? How will people shop differently in mobile and desktop stores? How will Skype optimize its products so it is a blockbuster capturing an unfair advantage in visibility, reputation and downloads? How does Skype avoid becoming a long-tail product, outshined by Angry Birds?
Who controls customer acquisition? Small developers rely on gaming the iPhone app store to be seen in an intensely crowded market. Social software — like Skype, Facebook, texting, email, and CityVille — replace heavy direct and retail marketing by building in reasons for customers to bring other people into their apps. Will app store operators consider social recruiting a leak in their control of their marketplace?
Who controls the business models? Apple has absolute control over its app stores. They limit what apps do, what they say, their pricing, and even subscription design. Microsoft must envy Apple’s ability to share in developer revenue. What controls, covenants and restrictions will Microsoft apply? Will the Windows store’s advantages make it worth Skype’s complying?
Who controls the customer relationship? iTunes set the standard for disintermediating record stores and music publishers from music buyers. I have a more active relationship with iTunes than I have with Blue Note. Have app stores done the same to software publishers?
Swaraj Sarkar asked me:
Which of the following factors are responsible for Skype’s Success?
- Constant improvement of Product quality.
- Regularly updating the product mix.
- Product promotion through various forms of media.
- Customer support
- Advent of Social Networking
- Growth through word of mouth
- Not using the concept of trial version
If there are any other factors, Can you please mention?
Why limit yourself to such a short list that’s exclusively from the world of marketing?
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Last week I published my second interview with Skype CEO Tony Bates. He shared a few of his ideas about values that will guide Skype through coming challenges and growth, the way Cisco’s guided them. Tony’s list was, roughly:
- Engineering will lead product innovation.
- Skype is a truly global company.
- Skype must speed bringing ideas to market.
- A dynamic company for a dynamic world.
Useful “how we do things” mandates for a company in transition. They don’t identify who Skype is and what it stands for.
So here’s my own rough draft.
 We Believe In Talking.
Speech is not just a human right, it defines us as human beings. Talking connects us to our families, our friends, our work and our communities. Skype helps people talk.
We Believe In Fidelity.
We will strive to make your conversations as vivid and true-to-life as you want them to be.
 Relationships Matter.
Relationships are built one conversation at a time. They bring knowledge, friendship, love and trust. Skype helps you give relationships the care, attention and skill they need to prosper.
 People Form Groups.
Belonging is a fundamental human drive. People form informal groups among friends and people who share interests. People form formal groups, like companies, teams, and governments. Skype will help groups form. Skype helps groups talk internally and with other groups.
 Speech Leads To Action.
We are more powerful with others. Working together is how we improve our lives and heal the world. Skype helps people get things done together in the workplace, in the public square, in the arts, in learning, and in our playgrounds. You will get more done when you Skype.
 Safety First.
You should be free from fear. Skype actively opposes abusive communication, the use of communication to further violence and other crimes, identity theft and other property crimes. We will help you be free from casual surveillance by private parties and governments.
 We Support The Personal Power Of Skype Users.
Your data is yours to control. We help you define and enforce your privacy in our corner of the digital world. We support your data portability rights including the ability to bring your data to Skype, to put it to good use with Skype and with other services, and to leave gracefully with all your data. We listen intently.
 We Cannot Do This Alone.
Skype needs partners; we will be a great partner. We rely on the rule of law; we will be good citizens. We depend on the Internet and the intellectual property commons; we will leave the Internet better than we found it.
I’m sure Skype’s employees can improve on this straw man proposal. That’s what intranet wikis and retreats are for.
Is this how you see Skype? Items to add, subtract or change?
A note for context: Professor Jim Collins (famous for Good to Great: Why Some Companies Make the Leap… and Others Don’t , Built to Last: Successful Habits of Visionary Companies , and How The Mighty Fall: And Why Some Companies Never Give In ) advocates for a corporate ideology:
In 17 of the 18 pairs of companies in our research, we found the visionary company was guided more by a core ideology—core values and a sense of purpose beyond just making money—than the comparison company was. A deeply held core ideology gives a company both a strong sense of identity and a thread of continuity that holds the organization together in the face of change.
We chose the word ideology because we found an almost religious fervor in the visionary companies as they grew up that we did not see to the same degree in the comparison companies. 3M’s dedication to innovation, P&G’s commitment to product excellence, Nordstrom’s ideal of heroic customer service, HP’s belief in respect for the individual—those were sacred tenets, to be pursued zealously and preserved as a guiding force for generations.
What is your sense of Skype’s purpose?
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Hi, John! Hi, Tim! You know that lost continent that never made it onto your map of the Battle for the Internet Economy? Found it! It’s the continent of realtime communication. I’m naming it Skypelandia. I’ve been exploring and here’s what I found.
Skypeland has a kingdom in the heart of realtime communication. Skypeland is surrounded by larger countries, tribes, and cities.
Let’s start to the North, where we think the first Skypelanders started: in the Messenger Isles.
The islands are populated by tribes of instant messengers. Nearly all of them support voice over IM but some go further. If you look to the southeast you’ll find the Port of Unified Communications where they bring ornate enhancements to to simple messaging and calls.
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Aol and Facebook seem to be launching new (Gizmodo: Why You’ll Give Up Gmail for Facebook Mail) and refreshed (TechCrunch: Aol To Unveil New Aol Mail On Sunday) free email services this week. Why not Skype? Mail would be a great line extension.
For existing customers:
- One inbox for directed email, voicemail, video mail, IM chats, mailing lists.
- Start live talk from an email.
- Start an email from live talk.
- A more complete picture of your relationships.
- Smoother modality shifts during a conversation or a relationship:
- from short form (texting) to longer messages (email)
- from abstract (mood, presence, text) to intimate (video)
- from personal (one-to-one) to large group (listservs, conference calls)
- More access to alerts, invitations and other conversational triggers.
There’s some prior art if you’re looking for use cases. Netralia’s Skylook for Outlook (free trial) pioneered this in 2006 for people who spend their days in Microsoft Outlook. Skylook let you:
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Quora asked: “Why hasn’t Skype been more active in the business market?”
Let’s consider Skype’s products, then Skype’s operations.
Products
Skype didn’t have business products until recently. They now have Skype Connect (Skype trunking that connects to company phone systems the way your long distance provider does), classified advertising for in-client Yellow Pages (formerly Skype Find),  Skype for Asterisk (Asterisk is the most popular business phone system software), Skype on Television for conference rooms, and Skype Manager (for creating and funding employee Skype accounts). The standard Skype for Windows client comes in a business edition with easy configurability to enforce security and other company policies.
Skype’s communication suite of instant messaging, voice calling, video calling, conferencing, screen sharing, and file transfer works better than any comparable product.
However Skype clients miss features that would blend it into everyday knowledge work.
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This question came up on Quora. My answer:
Skype designed the Prime program as a test. It was set up to fail when launched in March 2007 as part of Skype for Windows 3.1.
- The rates charged to service providers meant you would be paid just 55% of sales after Skype collected VAT (which might not even apply in your country) starting four months after you delivered the service.
- Skype Prime’s maximum rate was too low so high-end billable services, like architecture or nursing, could not charge enough.
- Prime’s minimum rate was too high, so people in developing countries could never afford the service.
- Skype never promoted it seriously, burying it on the web site.
- The software user experience was confusing and didn’t quickly iterate to improve (understaffed).
- The Prime provider directories didn’t benefit from any insights from eBay’s experts at creating active markets and trusted communities.
Skype’s sixth president, Josh Silverman, cut the project in 2008 shortly after he took control of Skype while clearing a number of deadwood projects. 
IMHO, Prime could be Skype’s greatest business opportunity, since the price of voice minutes is trending toward zero. We live in a flat global economy, where for every dollar spent on hard goods and capital expenditure, ten are spent on information, education, entertainment, and services. Skype can still become the eBay of the knowledge and service economy, bringing those who seek help together with those who offer it in a safe and well regulated marketplace. After a decade, eBay is a $40 billion business, Amazon an $80 billion business. Skype as a marketplace has the opportunity to blow past them.
I’d like to see the Skype for Business division reconsider Prime. What would it take for Skype Prime to succeed?
- Research. Develop a cadre of collaboration researchers who can model the range of behavior people really use in all different types of contexts. Project culture vs. task culture vs. process culture. People you know and trust vs. newbies and strangers. How length and continuity of engagement vary by type of service. All of these dramatically affect how you discover, trust, contract, interact, pay and endorse providers.
- Theft. Look at other online labor markets and steal their great ideas about feedback, supervision, team formation, talent discovery, alerting, and certification.
- Engineering. Continue building Skype’s technology to enable third-parties to bring Prime into their contexts. Aside from building Prime features into a scriptable client, offer Prime as a platform. eBay, PayPal, and Amazon do roughly half their business through their APIs.
- Allies. Partner with others to learn and understand the markets.
- Workplaces. Bring this inside the enterprise as a tool for people and teams within the workplace to buy and sell services to each other, even if only through swapping charges to cost center codes.
This is not low hanging fruit. This is a long term strategy. Skype’s other coming businesses (Skype as a Cloud Service; Skype as a Video Conference) will print money but nothing makes money like helping other people sell things to each other.
P.S. Just for fun, at last count, the top provider categories on Prime: Computer and Internet (35%), Business and Personal finance (13%), Relationship advice and Counseling (9%), Tutoring and Homework (9%), Language lessons and Translations (5%), Spiritual and Astrology (4%) and Other (24%).
P.P.S. One side effect of the Prime experiment: The whole language education industry moved online, to Skype and to similar tools. This time they kept service payments, directories and marketing outside of Skype’s ability to define rates or extract rents.
Call me at +1-510-343-5664, Skype me, follow @SkypeJournal and @evanwolf. Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats.
I want to go to the purpose of Skype for a bit.
Think of Skype as a game.  Skype’s gameplay and the game mechanics optimize for SkypeOut. Anything which doesn’t produce SkypeOut behavior, directly or nearly so, is hidden or removed. Skype to Skype calling is merely training for SkypeOut. Free Skype video calling is just bait to keep you playing until you’re ready to pay for a SkypeOut subscription (or a premium video subscription). The game’s navigation topology (topography), reward and punishment loops, models of character portrayal and self expression, social gestures, twitch-reflex conditioning, control surface design — all of it screams "move just one step closer to SkypeOut."
This is a limited and self-defeating game design strategy. Skype is the only game in this space right now. That will not last long. So let’s consider the basis of competition among games or gaming platforms that endure.
Some platforms follow the Hollywood portfolio model: produce a hundred games and a few will be blockbusters that pay for the whole business. Others emphasize different mental states like martial kata training that leads to victorious personal combat, or the diligence of farm cultivation, or solving mindbenders. Some software that promotes positive real world social behavior, like sharing restaurant reviews or updating map locations or endorsing events.
Most games, per Zynga, have a shelf life of weeks. So you can appreciate their portfolio model. How do you break from the flavor-of-the-month mold? What games spread? What games persist? What games evolve with mass culture, the aging of their users, advances in technology?
I’d look to World of Warcraft and other MMORPGs. Their game mechanics are tied to ongoing subscription revenue, like Skype. Yet their approach to game design is fundamentally different. Warcraft hits at multiple levels of Maslow’s Hierarchy like physical survival, security, prosperity, belonging, friendship, family, and esteem. Warcraft even provides a medium for expressing morality, pursuing curiosity, enjoying spontaneity, solving problems, stepping back for bigger pictures, and developing new talents and skills. People find meaning in their WoW experience. It changes how they work and live. It changes who they are.
Skype is shaping itself as little more than a utility, like a headset you put on to talk while you do something else. There is no higher purpose, no deeper fulfillment, no rewards beyond figuring out how to dial the phone.
As Skype stands, it cultivates the illusion that nothing is between you and the other people in a call. Skype staff want fidelity and a palpable sense of being there that dissolves the walls and windows and leaves you immersed in the conversation. This is hard. And admirable. But it is only hard the first time; once someone has shown the way, fidelity can be replicated. We saw that when rivals adopted the GIPS codecs Skype used. And fidelity is only admirable at first blush; high fidelity suffers from the tolerance we build to good things we take for granted.
So Skype needs more than fidelity. It needs more than being everywhere.
It needs a higher calling.
That higher calling will require rethinking Skype as a game.
Which higher calling? Let me suggest a few.
- Immersion. Fidelity is just the first step into an immersive experience. Skype could fill The Augmented Reality Gap for conversation. Mobility lets us talk untethered. Augmenting conversation lets us use newly commercialized technologies to have better conversations wherever we are. Today we go to the Internet to talk. Tomorrow, Skype could bring your slice of the Internet to and into your conversations. Skype for Talk That’s Real.
- Work. Help people work together, collaborate to perform knowledge work. This is a deep vein to mine and profitable. Focus on work cultures, work organization structures, on work planning, on the fight for resources. Unleash the world’s cognitive surplus. Skype for people who Get Things Done Together.
- Relationships. Help people build better relationships in all areas of their lives. More relationships in the Adrian Scott scaling sense, busting the Dunbar limits. More diverse relationships, breaking through echo chambers to expose more of the whole picture. More relevant relationships. Skype for people who Really Connect.
- Learning. Students are taking control of their learning. Like the shift from linear cable channels to on demand video, education is moving from lockstep classrooms to just-in-time education, learning journeys, self-directed and learning in small teams. Conversation is fundamental to how kids and adults learn and remember. Knowledge flow, people sharing what they know, affects corporate values. Know more through Skype.
- Play. Young men spend more hours playing video games than watching television. Or YouTube. Become the must-have tool for team talk, the height of realtime collaboration. Be the engine for talking during casual games, where checkers give you the excuse to just hang out. Be the back channel for amateur sports where fans share a game when they can’t share a room. Skype for Fun.
UPDATE: Tying this back to game design (or software design in general), Why shapes What shapes How. For example, a Skype for Getting Things Done Together might trade Skype’s instant messaging metaphor for a calendar/scheduling + status update metaphor. Instead of contacts+history you’d emphasize plans (for conversations) and actions. A calling beyond talk offers Skype a precious freedom to reimagine user experience.
Whatever your take, Skype needs more relevance than a can with string.
It needs a sense of purpose.
Not just for the company but for its users.
Something to believe in.
Dear Tony, what’s your vision for Skype?
Call me at +1-510-343-5664, Skype me, follow @SkypeJournal and @evanwolf. Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats.
Credit: Illustration from Shrunk Gameplay Mechanics by The Butterflyers
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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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