Top News

Interview with Tom Kenney, Verve Wireless

Story by Benjamin F. Kuo

 

Encinitas-based Verve Wireless (www.vervewireless.com) is a local startup which has been developing software to help publishers make their content wireless-friendly. To get some insights into the firm, we spoke with Tom Kenney, the firm's President (and former VC at BlueRun Ventures) about the company.

Explain to us what Verve's technology is used for?

Tom Kenney: The company has been working for the last 3 years, since January of 2005, on building a mobile platform for local media. We've been in development for a few years, and the platform has been live since September. We're currently powering 4,500 free, ad-supported mobile sites for local media. What we do, in its simplest form, is we take all the complexity out of taking content mobile, and provide software-as-a-services so that local media properties can create high quality, mobile sites, mobile applications, and mobile messaging programs to connect them with consumers in the marketplace. It's a full blown, platform-as-a-service, with three modules. One being publishing, so that local media properties can create customized mobile sites; a module which handles messaging programs, alerts, couponing, etc.; and an advertising module that allows local media properties to create, sell, and deliver local ad campaigns through their mobile properties. The last thing we do, is we're an advertising network. We connect to different advertising sales companies that exist, including Nokia, Ringleader, Millenial Media, and Google. We bring monetization to the sites for local media properties. And, if they can sell advertising, that's great--if they don't we can sell with them and share ad revenues with them.

Why did you start the company, and what's the problem you saw?

Tom Kenney: We think the mobile web is a very local medium. It's really just starting, and even now we're six to 12 months away from seeing a mobile web explosion like you have seen with broadband. There's a new medium evolving, growing very rapidly, and it's very complex. We saw this opportunity three years ago--that all these different ecosystem participants aren't going to be able to work together, because it was too complex. We felt there was a great opportunity to build something that the largest and the smallest media companies can use to create a best-in-class solution, to compete effectively against Internet companies specifically, but also new media entities. We saw the opportunity to help local media connect today with consumers over the mobile Internet.

The origins of the idea were I had worked for Nokia for 8 years prior to Verve. The last six years of that was in venture capital, doing mobile Internet and technology investments around the world. I saw that initial consumer success and interaction was around local content, and that it was ultimately about local advertising. Looking for investments focused on that opportunity, I realized that there weren't any. The main reason was people felt that local was too difficult, so they were not spending much time on it. They were not looking at the long term evolution of the market. Meeting with publishers I saw a big opportunity if you could build a platform and company that takes advantage of this. Our CEO is a person named Art Howe, who is a publisher, and very successful. He has owned over sixty newspapers in his career. I went to him to ask him to be an advisor, and we clicked. He saw it too, and was thinking about the opportunity at the time. At the time, he owned the Village Voice. We had a meeting of the minds, and soon after were working on this.

Tell me what you think of the dynamics of mobile market -- are mobile only sites important at all, now that things like the iPhone are putting the full web experience on your phone?

Tom Kenney: That's a great question. The iPhone is a game changer, for sure. It has sped up development and usage, and all other metrics for the mobile web--by at least six to 9 months. Coming up in June, the 3G iPhone will be another dramatic event for the mobile web. At the core of Verve, we believe completely that the winning mobile solutions will be built for mobile. It won't be web lite, it won't be a transcoded version of a web site. It just doesn't scale, and it doesn't work. We work closely with publishing partners to educate them on the market and user experience. More importantly, it's easy for us to show a publisher two sites on an iPhone -- one developed for the iPhone, and one a regular website. It's painfully clear to publisher which direction they should go once they see that.

Local media properties and publishers have a huge competitive advantage, which is hard to match, if not impossible. In their market, they are constantly creating content, and it takes significant resources to develop those offerings. They are evolving--and evolving very quickly now, under duress and pressure from the Internet. They are becoming multimedia providers, and getting better in regard to the Internet and delivery of their Internet web sites. They're embracing video, mobile, and new mediums and channels. All of our partners believe that they ultimately must have a mobile specific offering. Not everything on the web needs to be delivered to a cell phone, but the content delivered to cell must be optimized. Our technology allows local media to create a mobile offering that optimizes presentation to hundreds of devices in the marketplace. If you have a Smartphone like a Nokia Series 60 type phone, you get something similar to the iPhone in presentation--we will take your site and optimize and deliver it for that phone. If you have a low end device, like the RAZR, we can deliver a solution that works wells and interacts with that device very well, too. The iPhone is great for the marketplace, but it doesn't change the business model--it just speeds it up.

You've got a interesting background - as a former VC from BlueRun (Nokia's VC arm), how did you find yourself on other side?

Tom Kenney: I've always been a mobile guy. I've worked for a few startups, and connected with Nokia doing investments, but all along believe I've been an entrepreneur at heart. I had my eye open for opportunities to dive back into the startup world. By the time I did in 2005, I was itching to go. The more I learned about local media, and traditional local media, and the issues around the model and how they needed to change to succeed and last, the more I got excited about what I felt was a unique opportunity. The more I learned about it, the more I felt I had to do it, that this was a once in a lifetime chance to build something of real value, which is sustainable, and where I could learn a lot. It was really timing, plus excitement around the opportunity. I learned a lot on the VC side on how to build successful businesses, the pitfalls and why a company fails, along with seeing very successful companies in our portfolio. Over that period of time, I learned a significant amount, to allow me to have the ability to do well starting a company.

Speaking of venture capital, how is Verve backed financially?

Tom Kenney: We initially did a seed raise in November of 2005, with a bunch of people on our advisory board. That culminated in a Series A round in July of 2007, worth $2.5M, with mostly angel investors. The management team was a quarter of that, and the others were very connected individuals from the publishing world, and mobile and Internet guys. We were lucky enough to pull together an advisory team, which has funded the company to date.

Finally, let's talk about your deal with the Associated Press. Is this what you typically would do with your companies?

Tom Kenney: What we are doing with them is typical, which is mobile applications. The AP is interesting. What is happening with the industry as a whole is potentially disruptive. Internet companies are causing traditional media to change. The AP is an interesting organization, as it is a nonprofit owned by local media companies in the country. We were contacted by them in October, they had started on this mobile offering and they wanted to see if they could use our technology. We were part of an RFP process, with thirty other companies. After six months, we finally won the deal. We believe we won, not only because we had the best technology--but also because we have the same business model.

Verve is all about a non-branded, platform-as-a-service offering for local media. That's all we do. We only work with local media properties -- newspapers, TV, radio stations, city magazines. We define our customer as any entity in the market which is creating content, and then supporting that content with the sale of local advertising. We have all the technology. There are hundreds of mobile development shops, but none with the industry focus and vision we have. We're ultimately building a platform for local media to compete effectively and successfully.

We also aggregate local media and can deliver it through different means, such as the Internet, carriers, etc. Our ability to aggregate local inventory and make it available to agencies is an attractive part of the model. It turns out that the industry got that too, and the AP with its local news network was building a similar solution. It was a mind meld. We were saying the same thing, and it was a natural fit.

Two years ago, the AP's board members told them that that they needed to help the industry evolve. They told the AP: you're the only entity connected to all of us--to pull this off, and to help us compete effectively with Internet companies, you've got to help us with the strategy. The AP 2.0 includes mobile, which is an important new medium to help them get ahead and build an industry leading solution. The AP and its 2500 members are creating all of the content the U.S. consumes. The reason you needed the Internet search providers, historically, is because each of those individual entities couldn't make the content available to everyone. With this digital cooperative, they're all on the same platform and languages, and can exchange content in real time--any content a consumer wants, no matter where they're at, no matter what devices. Traditional media is saying--in order to succeed, and to last, we must partner. The unmatchable competitive advantage is we're the ones that create local content, news, and information--and let's work together, instead of letting Google and Yahoo take it. Go direct to consumers. The AP, for the first time, with its mobile news network is going direct to consumers. Up until now, it was not possible--its own members thought it would be competing against them, even though they are one of the leading brands. The other big thing is it is advertising supported. Historically, the AP's business has been licensing--for example, charging $10K a month for access to the feeds. Now, it is ad supported, it is free to you and our partners, and we share the revenue. That's pretty significant. That's exactly what Verve has been doing all this time. We're happy to have won the deal, because we have the same exact model, and they're a fantastic resource and brand to move the needle quickly. It's a big deal for the industry, and a big deal for us.


 

Marketplace


 

 

Latest Headlines

Browse Issues

 
 

Keep up with all of the latest Southern California high tech news via email (it's free!)



or Cancel