Montreal Start Up

I have been working on a post about the relative merits of FON and it has reminded me of the early days of the free dial-up ISP’s.

I was involved with setting up Livedoor, Japan’s first free ISP. It was based on software developed by Toronto based Chris Sukornyk*. This downloadable software controlled the connection and delivered non-intrusive advertising to subscribers.

It would appear that the main revenue stream was from advertising, but actually there was a much bigger “hidden” revenue stream – telco kickbacks. These kickbacks were paid to Livedoor on the basis that we generated incremental revenue for the telco provider that terminated our dial-up numbers. (At that time in Japan it cost approx $0.10 per 3 minute call). It seems obvious now, but at the time these type of revenue sharing agreements had never been considered, let alone implemented.

I think FON may have some “hidden” revenue streams – I’m still thinking them through but when i’ve finished i’ll post my thoughts. Now, I certainly don’t have a problem with FON making money, but no one should be confused – making money is their aim. They are working hard to “help create a community of people who get more out of their connection through sharing”; but they certainly plan to make money on the back of that community. They, unlike ISF, are a commercial enterprise. They have just raised another $US13 Million (total $US35 Million) but I am still reflecting on whether I think they will be a successful commercial enterprise.

Note: I do really like “hidden” revenue streams. When I review business plans I am always looking for revenue streams that may not be obvious. I ask myself, “who, in addition to the direct customer, is going to benefit from the market I am creating ?”

*(Chris and his brother founded X-stream Networks and he has recently been driving the technology behind Bubbleshare)