Zoove--it would take a real doofus to screw it up
A former CNET boss lands at a mobile phone infrastructure company that's already sitting on a gold mine.
Normally I don't cover companies run by friends or colleagues. How can you trust me to review a product when I have an emotional interest in its success?
So meeting with Joe Gillespie, CEO of Zoove and former executive vice president (my boss' boss) at my division here at CBS Interactive, put me in a bind. He's sitting on what looks like a very smart business that I believe is already well past the tipping point of success. I cannot not cover it, and I'll be damned if I'll give it to someone else. But if Zoove fails, I will have to re-evaluate any respect I ever had for Joe.
Zoove is a registry of mnemonic and short dialing codes for U.S. cellphones. All codes are preceded with ** ("star star") and they can be any length. Here's a demo: Call **SUZUKI from your mobile. You should get a recorded message from the phone call, as well as an immediate SMS with a hyperlink to a marketing video.
The marketer, in this case Suzuki Motorocycles, gets your phone number, phone type, and rough location, not to mention the opportunity to send you whatever data they want on your mobile--a text, a link to a coupon, or an actual voice call connection (as the StarLaw Network will be doing with **LAW).
The big news today is that Zoove has signed up all four of the major U.S. carriers: All the phones on AT&T, Sprint, T-Mobile, and Verizon work with Zoove's single directory of star codes.
Nobody is likely to step on Zoove's action here. Getting baked into the mobile carrier infrastructures took years. Having them all route ** calls through Zoove is a major coup. Theoretically, another company could come along and offer up a competing short code system, like ##, except, sorry, Zoove owns the routes to those numbers, too.
The fact that the company now has these networks locked up--with no competitors aside from archaic and overloaded toll-free number directory and the clunky five-digit SMS shortcodes run by CSCA--means that advertisers can start blasting these codes out with abandon.
And they should. Star codes are easier to use than other types of real-world links. With QR codes, for example, you need an app and you need to point your phone at something--tough when you're driving past a billboard (QR codes have other advantages, though). Using an SMS shortcode is twice as complex as a star code; you have to send a code to a code. Zoove codes can also be any length.
Want one for your business? Pay Joe--a lot. Short and generic codes cost the most. Two-letter codes are $75,000 a year; three-letter codes $50,000, four-letter codes are $25,000. I wanted to get **RAFE but Joe did not offer to make a deal. Shorter codes can be less, down to $7,500 a year, but generic codes are expensive. (**FLOWERS cost 1800Flowers.com a substantial sum.)
You're also going to pay Joe a fee for traffic and for use of the cloud technology that serves the correct mobile pages or links for each phone. The service also collects analytics.
In return, Zoove pays the carriers a fee for use of their data services. "It's only fair. They built the networks," Joe says. But I know he's not the type to spend money if he doesn't have to. They must have charged a fee for access. But now they're also invested in the success of the directory.
Zoove star codes could be the 800 numbers for the modern era. Zoove should spend the next year or two profiting from the land grab for short codes (and auctioning contended codes--NBA and NBC are the same numbers, for example), before dropping prices so shmoes like you and me can get our own codes.
One could argue that dialing phone numbers on smartphones is old-fashioned and that it's a bit late to build a business around it. But let's be real: it's faster to dial a number than fire up a browser or an app and enter a URL or other code. Once advertisers start using these codes, the registry will become invaluable and the land rush should start in earnest. It would take extremely poor execution skills to mess up this business. That makes Joe, I believe, one of the luckiest CEOs in tech.
Bonus tip: Zoove isn't much use to BlackBerry users who don't know how to dial numbers by letter on their keyboards, since QWERTY keyboard-based BlackBerry devices don't show the usual number-to-letter mapping you see on typical 12-key dial pads. 1-800-FLOWERS and **FLOWERS are both impossible to type if you don't know that 3 is F, and so on. But here's the secret to dialing mnemonics on a BlackBerry: hold down the ALT key when you want to map a letter on the BlackBerry's thumb keyboard to a phone keyboard number. Joe, who came to our meeting with his old-school BlackBerry, was all to eager to spread knowledge of this tip.