Ooma - a Triumph of Technology or PR?

Yesterday, Ooma had its official launch, and at face value, is being touted as a game-changer. I'll steer you to blog posts that explain the details, but basically this is a device-based solution to give consumers a better VoIP experience, and an alternative to the fledgling pureplays like Vonage and 8x8. I'd include SunRocket in that list, but they're not even fledgling any more.

Let's just say Ooma was met with healthy skepticism from the blogging community, and yesterday morning saw a deluge of emails from the bloggers commenting about Ooma as well as sharing their public posts. Om Malik got the ball rolling first thing yesterday, and it didn't take long for others to chime in with their reactions. As usual, I'm late to the party, and for a number of reasons, I couldn't post about this until now.

Following Om's post, here are some posts that will give you a flavor for how Ooma was received - Thomas Howe, Andy Abramson, Ken Camp, Aswath Rao, and Valleywag. You get the picture.

Being late to comment has its advantages. Interestingly, there has been almost no buzz about this at all today. More on that in a moment.

So, having waded through all the rapid-fire email threads from the blogerati, and reading several blog posts, here are my basic reactions to Ooma's lauch.

1. Generally speaking, I share the reservations (or however else you care to describe their reactions). This all seems well thought out as a technology, and it's a bit of a cross between Vonage and Skype. You get the free calling, but whether you know it or not, you're also part of a peer-to-peer network - much like how Skype works - which is the lynchpin to make all this work. So, it potentially delivers a lot of benefit for the mass market, but there really isn't much new here.

Yes, you save money, but you have to buy a box for $399, and make it the hub of your home phone setup. As others have been saying, with voice getting cheaper by the day, it's hard to see how people will run out and spend $399, especially with SunRocket's exit and Vonage being on the ropes. When the #1 and #2 VoIP pureplays being on shaky ground, you have be a real believer to expect the market to embrace a company with a very catchy name, but nobody's ever heard of. Bottom line - you have to change your habits to use Ooma. Nobody is in the habit of spending this kind of money for a box, and re-doing your home phone setup to make this work. I think that's going to be a very real and formidable hurdle.

I just don't see enough real value-add or innovation here to make all this worthwhile. Sure, you end up keeping your regular landline (which may not be what people want to do), but Ooma isn't reinventing what you can do with telephony, so why go there? I don't think the base cost savings they're focusing on will be enough to change people's behaviors. Listen - I'd love to see Ooma succeed - we all need good news in this space, but I can't see this being a runaway success.

2. It's been done before. Even though I'm late to comment about Ooma, I briefed with their CEO, Andrew Frame, about a month ago. I got a pretty thorough walk-through along with the slide deck, but really couldn't say much until the news came out. During my briefing, the first thing that came to mind was PhoneGnome. We talked about it, and Andrew certainly knows their story. Very similar concept, but with a few more features, and a much higher price. Hmm. For more on that, you're best to hear first from Mr. PhoneGnome, David Beckemeyer, and his take on Ooma. The second thing that came to mind was Jeff Pulver's Free World Dialup (nee Bellster), which has gone through a few lives, but in essence had the same idea years ago.

3. This looks more like a PR coup than a real game-changer. The PR strategy seemed to go exactly to plan. Get all the A-list bloggers excited, and the word will spread from on high to all the blog followers, and then virally to the rest of the technorati. I honestly don't know how many bloggers were actually briefed on Ooma - as opposed to forming their opinions based on what other bloggers were saying. I'm one of the few bloggers out there that are analysts, and I suspect many of those commenting about Ooma were not briefed.

I find it interesting that the blogging community picked up quite nicely on this, but the mainstream media has not. This raises a basic issue for me of the perceived value of bloggers in the media community (which is perhaps by design). That said, most of the bloggers following this are not journalists, and while they're technically very savvy, it's not clear what they're really basing their views on. Regardless, most of what I've read is consistent, and I think on the whole, we're reading this thing about right.

That said, a few more points on this PR thing...

- In most people's minds, Om Malik is at the top of the blogging food chain in this space. Ooma's PR certainly worked for the bloggers. After Om posted yesterday morning, he put the word out to his core group of bloggers, asking us all to comment. I have NEVER seen a request like this get so much response, not even for the iPhone. Talk about being a key influencer - not only did this trigger a wave of posts and email traffic all day long, but there's an endless stream of reader comments on Om's blog post. The cynic in me says that Ooma's PR knows that bloggers just love to give their opinions, and if you get the top guy excited, it just spreads from there, and before you know it, we're all sucked into this vortex of telling the world how smart we are. Looks to me that's exactly what happened, and for better or worse, Ooma sure got their money's worth of PR yesterday with all this free publicity and advice. Of course, blogging cuts both ways - that's what I love about it. This strategy makes you look like a genius if the reviews are positive - but that's not what happened here. So, I'd be very curious to know how this is playing out with Ooma today.

- Aside from the blogging community, Ooma got a review from Walt Mossberg of the Wall Street Journal. In the mainstream business media, that's pretty comparable in my books to getting Om with the bloggers. That's fantastic press for a company nobody has heard of, and provides instant credibility. Of course, big media plays by different rules than the blogs, and Mr. Mossberg's review is pretty neutral. It is not a raving endorsement of Ooma - but not damning either. It's still a win for Ooma, but for those of you keeping score, it's nothing compared to the rave review David Pogue (another A-list mainstream tech writer) gave to GrandCentral, which I have no doubt, helped pave the way for their recent sale to Google. You can read Walt Mossberg's review off of Om's post. Interesting, huh?

4. Woe, Canada. This is a personal note, but also a call to action for bloggers who want to dig into a real story. During my briefing with Ooma, they were keen to set up me with a demo account and to ship me a trial unit. And I was keen to oblige - why not? Well, I told them to check first because I was concerned that the service wouldn't work here. It's really just for the U.S. market, and as things stand, I don't have a unit to try, and I'm pretty certain it won't work here. So, as much as I'd like help Ooma and get first hand experience with it, I don't see this happening.

This is another classic example of a U.S.-centric offering - which is fine, but it is doesn't do me much good. Canada is often an afterthought in world markets, and it's times like this that we feel so second-rate. It's the same thing with SkypeIn. When this service was announced by Niklas Zennstrom here in Toronto at VON Canada back in 2005, I found it incredibly ironic that Canada was not in the group of 8 countries the service would work in. It's basically a 911 issue, and it won't get resolved any time soon, so we don't have SkypeIn here with domestic area codes. Arghhh.

Ok, so what's the real story? Here's my second Canadian angle, and call to action. So, as all the bloggers know, Ooma has raised $27 million, has a high profile management/board team, and a very bold vision. I just can't get over 2 things....

- how much attention they got on Day 1
- how little attention they got on Day 2

Doesn't that worry you just a bit? If this is the kind of Day 1 attention that Ooma gets, I'd love to see what happens when the bloggers get excited about a story with much bigger financial implications, and much more intrigue. This what REALLY gets me about this whole thing. Read on...

Way back in March, I posted about a company called Geosign. They're based in Guelph, Ontario, a tiny city hardly anyone knows about outside of Canada. Well, this company raised an incredible $160 million from a U.S. VC - American Capital Strategies, and this hardly registered a blip anywhere.

How can this be? Sorry, but even by U.S. standards, this is a huge round of funding. Guess what, folks? Ever since this funding, things have gone terribly wrong on a lot of fronts, and the company isn't talking about it. It's not clear if American Capital was conned, but this has the makings of a major example of the blind chasing the blind, and could turn out to be a huge blunder and much worse. I can absolutely guarantee you that if this was an American company, the blogs would be all over it, and you'd be far busier with this than Ooma would ever keep you occupied.

I'm one of a handful of bloggers based in Canada, and there aren't many up here paying attention to Geosign either. I know of people who are, though, and when the story finally unravels - and it has to - you'll understand where I'm coming from.

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