November 2010

Hi Chris, tell us a few words about yourself.
Chris: I am the founder and CEO of Locutio, a developer of premium branded voices for GPS. Before setting up Locutio back in 2004, I was a management consultant. Having missed the DotCom boom, I really fancied doing something a bit different. When the GPS market started to take off a few years ago, I saw a market gap for replacement celebrity voice content.

So, you’re running a small business, but the chances are that the results of your work might get to millions of cars on the road today. What is it about exactly?
Chris: It’s about giving people a choice to replace the fairly boring voice that comes with their GPS with an iconic voice they know and love. We’ve launched the original voices of Snoop Dogg, Homer Simpson, C-3PO, Yoda, and Darth Vader, as well as the Looney Tunes voices. It certainly makes the journey more fun, and it’s about to get more interesting, too, now that GPS is being pushed hard on mobile devices.

How did you come up with the idea? I’ve been using a GPS for many years now, and I never even thought there might be a business related to the GPS device itself other than mounting devices.
Chris: You know, it really was the result of a conversation in a pub, one of those “that’s a cool idea. I wonder if it’s already been done” type discussions. To my surprise, it hadn’t. That was back in 2004. It really was an uphill slog for the first five years. We had almost no money, no customers but lots of interest.

In fact, GPS and location-based services are one of the hottest sectors around right now – think about the interest Foursquare and Facebook Places are generating. We are simply trying to provide premium content that, as well as generating revenue in its own right, will also encourage people to use apps like Google Navigation and drive advertising revenues.

I think you could call voices for GPS systems a niche product. How do you evaluate if the niche is big enough to bring enough revenues?
Chris: By 2015, it is estimated that there will be around two hundred million GPS-enabled phones worldwide. By 2020, that number will grow substantially again. So for us, it is a sizeable niche we intend to exploit! Mobile carriers and manufacturers have made big investments into GPS technologies to date. So anything that gets people interested in the navigation experience is going to help sell those tariffs and encourage customers to use their data plans.

When we started, we had no idea how big the market was for these products. This was simply down to the fact that the industry was so new, and there were no data to analyze. I recall doing a crude “how many people in every 100 would be likely to buy a voice” type projection. In truth, I was just really excited about the product. My enthusiasm and interest were enough to motivate me and others to bootstrap and go through the pain of a start-up company. If you aren’t excited about it, don’t do it! I’m also a great believer in the maxim, “build it, and they will come.”

We’ve been cash positive for a while now since we changed our business model in late 2008. We’ve been making celebrity sound-a-like based products before then. Sales were slow, and we realized that unless we got a major voice out there, then we’d never get traction.

What was the first premium celebrity voice you produced for a GPS device?
Chris: It was the original voice of Homer Simpson, launched in June 2009 on TomTom.com. Homer kick-started the industry, in a sense, as he was the first premium animated character to come out on GPS.

And what are the most appreciated or make the most sales?
Chris: Well, Homer sold fantastically well – the bestselling GPS voice ever. We did a deal with Lucasfilm to bring the official voices of Star Wars to GPS, and these are selling very well too. You can get them on the TomTom iPhone app as well in Europe. We also brought the official Looney Tunes voices to TomTom in partnership with Warner Bros. this past September. There’s Bugs, Daffy, Sylvester, Yosemite Sam, and Pepe LePew. Adding the original 1940s music scores to work on the Looney Tunes voices was a challenge, but it really sounds like they’ve come straight from your favorite cartoon. Snoop’s voice still gets a lot of attention in places like Australia and Europe.

I have to say, I’ve looked at this Star Wars voice sample, called a good friend that loves Star Wars. He was heading home from the office, and when I told him about the Star Wars GPS, he told me he would buy the GPS the minute he goes home just for this. Did you expect this kind of response from the market?
Chris: When we started the company, I personally thought that the voices would drive sales of GPS. This is starting to happen now that there are some very high-quality, premium voices out there. However, the voices are part of the wider customization trend, where people expect their GPS – just like their mobile phone – to feature various useful services and fun content. After all, most of us want to personalize our consumer electronics devices in some way.

I think it even goes beyond personalization for some people, like your friend, for example. He’s obviously a fan of Star Wars and wants to trigger all those great associations when he’s driving around. If done well, the voices can really be a lot of fun!

Do you have a small business with around 4 people? How can a small business like yours make deals with big companies like TomTom and Warner Bros? What gets you to their table?
Chris: Innovation, mainly. We just stuck to it and continued to improve the product. Licensors love the idea as there are very few products that are unique and that only rely on the aural dimension. TomTom liked the idea because they are pretty advanced in executing their content and services strategy; they have a wide portfolio of cool content, of which branded GPS voices are a key element. We delivered the Star Wars voices to them in four languages, which was important for their overall content portfolio.

I also think it is about passion: the people that license The Simpsons want to work with innovative companies that do something very well with a lot of enthusiasm that will enhance their brand. It also helps that once you’ve signed a major deal with a large licensor, you have a lot of credibility in the marketplace.

What was the most important moment or development that ensured the success of the business? Is there a tipping point when you know you are successful?
Chris: Getting the Fox deal to bring The Simpsons to GPS. It took 39 months from the first meeting until Homer came out on TomTom in June 2009. Fox and Gracie loved the idea, but The Simpsons film and other things got in the way. The delays in getting the product to market were more due to timing and logistics than anything else.

Also, being able to draw a full-time salary was a big moment for me. It took 5 years from inception to the first proper paycheck. That was a good day!

By the way, what is your typical customer?
Chris: Males in their late 30s. But this is changing as the customers who have mobile GPS are getting younger and more diverse demographically.

And how exactly can people get the voices on their devices?
Chris: At the moment, The Simpsons, Star Wars, Snoop, and Looney Tunes voices are only available at www.TomTom.com. If you have TomTom on your iPhone in Europe, you go to ‘change voice,’ and the Star Wars voices will show up in your ‘change voice’ menu. If you have a PND, you know the kind of GPS you stick on your windshield, then you plug your TomTom in and follow the brief instructions. You can get the voices from our own voice portal at www.voiceskins.com, too.

Some advice for people wanting to start a small business during the crisis?
Chris: It’s funny, but our product took off in the recession as it is a low price, fun impulse-based purchase – much cheaper than buying a whole new gadget! So, in a sense, it makes sense to do something recession-friendly. But in terms of the more subtle aspects, I’d say never give up on your vision. Sometimes, it takes people time to catch up. You’ll need faith. By faith, I mean the ability to trust that somehow it will work out. Put your ego and fear to one side; I liken it to climbing a mountain – after a while, it’s as hard to go back down as it is to keep climbing up. All the technical stuff like business planning, cash flow forecasting, and the like comes with time and experience. The soft, less tangible aspects like faith, belief, trust that I found the most challenging.

What would be your words of wisdom for people not finding a business idea?
Chris: You don’t have to come up with something new. In fact, there are good reasons not to follow my path and put everything on the line for a product or market that doesn’t yet exist. Sometimes, just improving something that already exists and executing with a bit more flair and effort is all it takes.

But if you can find something that floats your boat, do it!

Welcome, Oliver, to www.entrepreneurship-interviews.com. Tell us a few words about yourself.
Oliver: Before getting an MBA, I played bass in a rock band and produced music videos for bands such as Helmet and GWAR, all pretty heavy stuff. For the past year and a couple of months, I have been with nrelate, working on everything but the coding itself. I have always had a start-up-type mentality. I love bringing something from the ground up to a place where people are interacting and being positively affected by the creation, whether that be a piece of music or a piece of software.

You have a WordPress “related content plug-in” business. What is that all about?
Oliver: We saw the current plug-ins that were available out there, and we thought we could improve upon them, so we developed the related posts plug-in. We are currently on WordPress but are also working on getting the plug-in out on Blogger/Blogspot and Drupal as well.

WordPress s really popular these days, but most people are used to getting everything for free when it comes to plugins and tools. So can you actually make money with WordPress plugins?
Oliver: Some companies definitely make money with plugins. The clearest way to make money is by charging a one-time or recurring fee to use the plugins. Other people use the “Donate” button method, but I am not sure how well that works (someone probably has an amazing stat on this). At the end of the day, if your plug-in doesn’t provide unique value to the user, money is really out of the question.

What is your main plug-in doing?
Oliver: On a high level, it is providing related links to a site’s own archive. We do this by indexing all of the content on the site and then use our algorithm to determine the best posts to link to for a given article. Many of the sites we are on see click-through rates of 6-12%, which translates directly into more page views and ad revenue.

How is it different from other “related content” plugins?
Oliver: There are a couple of things that differentiate nrelate.

1. We allow users to show related content links from sites they have listed on their blogroll. This is especially useful for a person who owns a few sites and wants to automatically send traffic between them.

2. We allow users to pick thumbnail size. This may seem like a pretty simple thing, and maybe technically it is, but with all the different sizes a blog may be, giving the users a choice to fit the perfect amount of thumbnails on their page has made a world of difference for how the plug-in looks.

3. We allow any size site to sign up to display ads and receive a revenue share. It doesn’t matter what your traffic level is; if you want to use the ad network, we will sign you up, and even if the amount you make is just enough to cover hosting fees, that is fine with us; we just want as much coverage as possible, and to grow with the next group of up and coming bloggers.

Who is your typical user?
Oliver: We don’t really have a typical user. Sites using our plug-in range from large sports sites with tons of visitors and tens of thousands of posts to do it yourself craft sites, celebrity gossip sites, news, politics; I mean, just think of all the different things that bloggers write about at this point, we have at least 10 to 20 blogs in each category that is out there.

And how does the revenue model work?
Oliver: We sell ad space on the plug-in and share this ad revenue back with the blogger based on performance (clicks). This is all opt-in, and any blogger can still get the same full-featured plug-in without showing advertising.

What are the benefits for the publishers?
Oliver: If a more traditional publisher is using WordPress, they can certainly install the plug-in, however, generally, much larger sites also have a lot of moving parts, so they would talk to us for a more custom install of our software. The benefits, however, remain the same, increased clickthroughs, increased ad revenue, and greater visibility of all available content for a given site.

And for the bloggers?
Oliver: Bloggers using WordPress are getting a free plug-in that is going to start driving more page views on their site from day one. It looks good on just about any site, and if there is a problem with the plug-in, we are pretty much on the clock 24/7 with customer service. For the majority of sites, the plug-in is installed and starts working within an hour or two. A blogger will immediately see an increase in page views on their site.

How did you come up with the idea?
Oliver: I’ve always been a fan of WordPress. Mainly because I am by no means a technically gifted individual, and WordPress has allowed guys like me to hack together a site in a couple of hours. They are not always pretty, but they function, so I think that is pretty cool. When we were looking for different ways to showcase our underlying language processing software, we put our heads together and thought that WordPress would be a great springboard for us. We knew we could add some value to this community of active and passionate users and then use that feedback to improve the product.
But going further back, the main idea behind the company, which was actually Neil’s (Founder), was to create a way to see what bloggers were writing about the current events at any given moment. Basically, the Op-Ed section of the paper has somewhat moved into the blogosphere, and there is a lot of great content out there that is being missed by an audience that would love to read it. From there, we ended up building a bunch of products for publishers and are now coming around to release those products to blogging communities.

Most entrepreneurs are afraid to start a business in a domain where you can get stuff for free. What is your advice?
Oliver: If everything out there is free, make sure you build a product that addresses a need not being currently met in the market and scramble like hell to get as many users as you can, as fast as you can. Also, try to differentiate on things like customer service or other places you think you can compete with.

How do you fill a need that is not currently covered?
Oliver: We started by releasing a plug-in that had thumbnails and could link to other content of a person’s choosing, not too revolutionary, but it was a start. We are now discovering tons of needs that people have. Many plugins don’t work with people’s sites, slow them down, or just don’t look good; people have let us know this, and we work to make the changes to make ours work for them. We also wanted to give the average blogger the chance to make a little extra money from their blog, so we allow any size site to show ads and share in the revenue.

Coming back to the product, what type of advertisers can be displayed in the related content area?
Oliver: Right now, we are using a daily deal advertiser, but as we continue to expand, we will be offering all types of different ads; basically, we will need to cover as many ad categories as we have blogs that are appropriate.

I must say I gave the plug-in a try before the interview, and I found it very accurate in providing the exact related content to the current post. What is the secret?
Oliver: Neil and a few other tech guys spent about a year working on the main software engine that makes nrelate run. Now, we have a person dedicated to improving how well we relate to the content. That is pretty much it, a ton of hard work over time by some really smart people.

Do you need to be a technical guy to start a business like yours?
Oliver: You don’t have to be a technical guy, but you better have a very solid one on the founding team; you also need to have a decent grasp of how the software you are building functions, because if you are a small team, no matter what your previous experience, you will end up working on the tech in any way you can.

What would you differently if you were to start all over again?
Oliver: We would release the WordPress plug-in from day one. We spent a lot of time working with publishers, and it just wasn’t as rewarding as it is to be dealing with bloggers every day, to see the plug-in going up on more and more sites.

You told me you are continually working to improve the product. How do you gather user feedback?
Oliver: Right now, anyone can email me or drop us a line via a contact form, and I will write back and document any suggestions that are made. When we get enough suggestions for a new feature or change, and it is something we can feasibly do given our other development queue, we will add those enhancements. The whole thing has been awesome; I get to talk with around 20 bloggers a day and love hearing new ideas and helping fix problems that come up.

And talking about improvements, what are the next milestones for the product?
Oliver: We are working on a new plug-in, Most Popular, so getting that out will be the next big milestone for the company. As for the related content widget, the next real big milestone will be integrating it more into the WordPress structure, so our main algorithm can feed off of WordPress-specific items such as Categories and tags.

Hi Matej. Tell us a few words about yourself.

Matej: I am Slovenian and live and work in the capital, Ljubljana. I am what they call a serial entrepreneur. My academic background is a B.SC. in Chemistry and MBA from the University of Kansas. I love making startups and new creative businesses, especially in the product sector. In my professional life, I have worked mainly in the media and telecommunications sectors. Last four years, I have spent as an investment director in a venture capital fund. My first startup was a contact lens retailer that in a couple of years grew to be the biggest in Slovenia; I exited this company in 2008. About a year ago, I started my second startup: CalypsoCrystal.

You have a start-up in the iPhone accessories field. What is it about?

Matej: We think that iPhone is a phenomenon. People buy the iPhone because of its design, capabilities, and also values/emotions that iPhone carries. We are sure that iPhone buyers do take care of their devices. That’s why they are buying all sorts of accessories. From cases, covers to speakers. We would like to cater to the upper segment of iPhone buyers. The ones that would like to have only exclusive, well-made accessories. That’s the story of CalypsoCrystal, the premium accessory provider.

What is the product range?

Matej: Currently, we are offering the Crystal Dock. Crystal Dock is an exclusive accessory for an iPhone made of perfect crystal glass and comes in four distinctive designs. It is a combination of traditional luxury, contemporary design, and technology.

What are the main characteristics of the docks?

Matej: Crystal Dock is made in a traditionally luxury crystal glass material used for centuries on all European courts and on special occasions. It is a demanding material that expects nothing less than precision and years of learning for the craftsman to be able to arrive at the perfect cuts and the desired shine. Just to make one of our Crystal Docks, it takes a couple of days and more than 15 pairs of hands to complete each unique piece. Every part of the Crystal Dock was carefully taken off, as the connectors example were specially designed for the Crystal Dock to perfectly fit the device and at the same time sync and recharge it.
On the design side, there are four distinctive designs; platinum painted Aurora is produced only in a limited edition whereof 999 numbered pieces. Beau with a deep cut to bring more shine, Celestia with a more organic design, and Dune that mimics the waves and brings special optical effects.

Just to give our readers an idea, where can they see the docks?

Matej: On web site www.calypsocrystal.com, there is quite a good presentation of the Crystal Dock. Furthermore, there are several premium retail outlets that offer Crystal Dock. Harrods in London, for example.

How did you come up with the idea? You wanted to do an iPhone accessory, or you wanted to do Crystal products, and the best one turned to be an iPhone dock?

Matej: We are building the premium accessory company, and we have found that the docks segment is quite empty and that we can offer a competitive edge here. Furthermore, the company’s vision is to use premium materials in our products, and using traditionally luxury material was a logical solution.

What is the targeted user?

Matej: We are looking for customers with distinctive tastes in style and design.

Can people buy the docks anywhere other than the online store?

Matej: Yes. Harrods in London, for example, or Yoox.

What was most difficult when starting the business?

Matej: Well, this is not my first start-up, so I have some experience with it. This one went quite smoothly. The biggest challenge was to produce a crystal item with specific characteristics and different usage as ever before. There was a lot of time invested in the development of the product. This is why when you look at the Crystal Dock, it seems so obvious and simple. There is a lot of advanced technology included to arrive at this result. How to include plastic connectors inside the crystal and make a product that is used on a daily basis and not only as a decoration.

Do you remember who your first customer was?

Matej: Of course. The customer came from Las Vegas.

How did it feel to have the first sale?

Matej: We just played “Viva Las Vegas” in the office and posted it on our FaceBook page to share the news with our friends.

After finding the idea about the product, what was the process of starting a business? How do you decide it has a chance to be a good business?

Matej: There was done quite some research on the potential market. The result of the research showed that the premium segment is quite unpopulated with the competition. I know that this segment is also hard to penetrate, but I simply taught it is worth a try. For some other decisions, it was just a “guts feeling” and strong faith in the product.

Did you make a business plan to see how much you need to sell to pay the bills?

Matej: Of course. This is a prerequisite for any start-up.

How did you get on the International market? What are the marketing strategies for a small business like yours?

Matej: We believe that the world is flat and therefore we are using lots of new communicating channels. We are lucky to be approached on a daily basis because the product is so outstanding from another offer on the market.

Any advice for people wanting to start a business? What should they do to go from an idea to the first day of a business?

Matej: Courage and speed. What will make or break the start-up is the time that the company needs to find its customers. Of course, you have to offer a product that reaches the highest quality standards, but even more, energy has to be spent on sales and marketing. It is crucial for the entrepreneur to discover early enough whether the product is sellable or not.