I’ve spent the last couple of hours meeting with potential partners, and looking for one particular man — Niklas Zennstrom of Skype. Unfortunately for me, Skype doesn’t have a booth here, because, as Niklas told us yesterday, Skype hasn’t spent money on marketing. That’s a rather striking statement, if you stop to think about it. Yesterday Skype announced a milestone — 100 million downloads. In Niklas’ presentation yesterday he let us know that there are 1.2 million paying SkypeOut users, and that his network is transporting 1.5 billion minutes per month of traffic (side-note: how does a P2P network calculate minutes of usage?). All without having spent any marketing dollars.
Skype is truly an example of influencer marketing at work. In the influencer model, influential users of the product tell others about their successes, and those others, in turn, try the product and influence still others! It’s the old Breck Shampoo ad (and she told two friends, and she told two friends, and…) applied to marketing. Combine that with network effects (to receive a call from a Skype user, it’s best to be a Skype user), and an essentially zero cost distribution channel (the internet), and it’s easy to see why he hasn’t spent money on marketing.
The exhibit hall feels like a vestige of the old telco world. Front and center there’s Bell Canada demonstrating their new hosted VoIP service, built around the regrettably difficult-to-use Nortel MCS5200 client. Off to the right are a bunch of guys selling “wholesale minutes”. Nowhere are the innovators that Pulver called for in his speech yesterday, and nowhere are people selling anything but talk.
We’ll know it’s a different world when Skype has a booth at one of these shows.
Footnote: Jon Arnold has a whole lot more thinking on Skype’s business model here. As the old saying goes: great minds think alike, and no… you don’t have to finish the rest for me.