James Siminoff

Thank you Google! Thank you! Thank you!

Image via CrunchBase

Almost two years ago I was pitching SimulScribe to a tier 1 VC on the east coast.  That morning Google had announced an offering that was in direct competition to one of their portfolio companies that they had put over $10 million in.  The VC’s were visibly shaken by the mornings news and during the meeting continued to ask us “…but what happens if Google enters the market.”  My answers has always remained the same, “It is not what you do IF Google enters your market it is what you do WHEN they do.”  If you can not answer that, then you should not be putting time and money into a business that you are obviously incapable of making successful.

So it came as no surprise to wake up on Thursday morning to a full inbox of people asking how are we going to survive with the new Google Voice (GV).  Even my hero David Pogue, the New York Times technology reporter said, “I’d hate to be a company that sells voice mail transcription… But that’s life, right? …”

GV is HEAVILY subsidized, I estimate their costs at well over $60/year per customer, unified communication offering with lots of features including voicemail to text, all for FREE.  On the face of things Google has launched a category killing free offering directly against my consumer brand, PhoneTag, that people have to pay for.

However as things continue to settle down a bit since the announcement you will see as I always knew that my business is defensible and that in actuality Google legitimized my business.

1.  Google’s transcription is very low accuracy vs. SimulScribe’s technology.  For over 2 years we have quietly been focusing 90% of our energy and resources into building the highest accuracy lowest cost technology for converting voicemail to text with IBM.  We officially announced this 2 weeks ago and based on test comparisons to Google’s voicemail transcription we are multiples better.

2.  Free does not always take up the whole market.  In fact they are the 4th company to come into the voicemail to text market and compete with a free offering.  Through that we have managed to build a successful retail offering, PhoneTag and technology company SimulScribe, the old fashion way, hard work and taking care of your customers, oh yeah and they pay for it…

3.  If GV becomes successful then it is only a matter of time when Google is going to shut it down or have to charge real money for it (oh no… not that).  Advertising to cover telecom costs does not work, it is simple math, the cost of standard calls (non-411, etc.) are too high to subsidize with ads, they just are.  This means that just like every other market that mathematically was wrong, housing, stock market, etc., this one too will come to rationalization.  The problem for most companies is being able to survive the “irrational” durations in the market.  Being profitable and having built a ridiculously efficient operation we can easily wait for rationalization to enter the market.

4.  One number unified communications offerings are niche market not mass market.  GV’s model does not work in the mass market, mark my words in a year the actual users (not sign-ups) of GV will be minuscule.  In order to use GV you have to give everyone a new phone number to reach you at.  Then when someone calls you it rings every number that you own, that is niche market.  Even worse when you then call someone back from your cell, they see that number and then call you back directly there.  When they do that it breaks the whole system.  PhoneTag is the opposite, keep all of your numbers and they all end in our system, sending you an email of what the caller said.  Yet as much as I love the PhoneTag model, I still believe that you will only see mass-market voicemail to text when the carriers offer it, they in the end truly control the customer.

5.  Google has moved voicemail to text from being an option to a standard feature.  All of the carriers seem to agree for a while that they should have voicemail to text, it just takes a long time to get them to commit because so far there has not been a market force… until GV.  Now every carrier realizes they need to have this feature ASAP, Google has set the standard and now they are behind.  With SimulScribe’s joint IBM technology we have the highest accuracy and lowest cost carrier grade voicemail to text platform in the market.  Based on the reaction so far I would not be surprised if we do 3-5x more business this year directly attributed to the pressure GV is causing.

Can Google kill a business, sure they have billions of dollars that they have historically been willing to risk it in new markets.  However through all of their forays and purchases in different markets they have been unsuccessful overall at category killing…

Did Google Talk kill Skype?

Did Jaiku kill Twitter?

etc.

So to all of the straight A Ivy league alums at Google I say thanks.  Thank you for making voicemail to text a standard feature that all other carriers will need to offer and buy from yours truly!

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