Lunch with Foremski: Dutch Nimbuzz gets a Buzz on . . .
I'm lucky, I find an empty parking spot right outside the Thai restaurant where I'm meeting "EJ" (Evert Jaap Lugt) the CEO of Nimbuzz it's a company I'm starting to hear a buzz about.
I've no idea what EJ looks like but there's a guy waiting outside. He says "Hello Tom, there's a tall blonde guy inside looking for you."
I walk inside and sure enough a tall blonde guy bounds up and introduces himself as EJ. "I asked some guy outside if he was Tom he said he wasn't but he said he knew you." I sit down with EJ slightly embarrassed that I can't quite remember who the other guy is.
We start talking about Nimbuzz. It's a mobile VOIP and IM company founded in early 2006, HQ in Rotterdam, plus a development center in Cordoba, Argentina.
"Argentina is great, we've got about 40 people there, it's a university town, we got a lot of them from Motorola. But it is a different culture, they tend to like being told what to do by a boss but we've retrained them to think for themselves, and we give them interesting work to do rather than the boring stuff Motorola used to give them. In Holland we have a flat hierarchy, nobody likes to have a 'boss' we have a "manager' and we figure things out by ourselves."
EJ is a serial entrepreneur, which is unusual in Europe, especially in Holland. "If I was going to do a startup again I'd do it here in Silicon Valley, or Israel or in Asia - India or China. It's difficult to get motivated people in Holland, they don't want to work for a startup, they want job security and they are too comfortable."
He tells me about one Dutch guy that wanted Thursday afternoons off and to go home at 5 p.m. to spend time with his family. EJ told him he loves his family too (3 daughters) but in a startup you can't do that, you have to work hard for a few years then you can pull back.
We talk about the differences in the mobile VOIP business. "There are nearly 200 other companies in our market. The Americans don't understand the mobile market they think it is like the Internet with its standards etc. But mobile is different, with hundreds of handsets, many operators, and multiple operating systems. It's complex and you have to hash out agreements with many different parties and support many different handsets etc."
Part of the Nimbuzz strategy is to partner with social networking sites because they offer a viral distribution network. Nimbuzz offers a white label solution to the social networking sites for the web component part of their services but a branded Nimbuzz mobile component. "They get to keep the web part, which is theirs, and we have our brand on the mobile part of the service."
Nimbuzz allows mobile phone users to place free VOIP calls over their data plans, they can call call next door or across the world. They can also call users of other VOIP services such as Skype users. "VOIP and regular calls can coexist easily because if I'm calling a business partner I will use the cell phone service but if the quality is not as important I will use VOIP. Quality is dependent on how many people are using the data service at the same time."
I ask about Skype getting into the same market. "I know, you'd think they would be there already but they're not. Same with Google, I wonder why they aren't more aggressive in the mobile space."
It all comes down to focus and Nimbuzz is very focused on what it does, and so far it seems to be working, it has about 1m users worldwide. Are you making money?
"No we're burning money. We need to build up a large enough regional market and then we will do lead generation. I strongly believe lead generation is the future for what we do and eventually all mobile calling plans will be free, supported by advertising or lead generation. You buy the phone but the rest is free. We are already seeing the beginnings of that in some European markets."
What about funding? "We have some great investors, we have a new round we are announcing but Techcrunch already did it, they broke the embargo." I tell EJ that Techcrunch is becoming notorious for breaking embargoes, he shakes his head.
"We're very lucky with our investors. One of them is a large South African media company, MIH Group, which nobody has heard about but they are one of the most successful Internet investors around. About 15 years ago they decided not to invest in print anymore and they now own large shares in major Internet companies in China, Russia, Poland and elsewhere." Another key investor is Mangrove, the European VC firm which funded Skype. "Even though we had offers from other VC firms, our original investors said they wanted to do all the new funding."
EJ is in town to do some deals with some local companies, I can't say who but I did guess a couple of them. More news will follow.
After we finish the iced Thai coffees we walk outside to say goodbye. EJ heads off to find his wife who is shopping in nearby downtown San Francisco. "I like this town," he says.
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