Speaking UP for Voice Searches
V-Enable's opportunities and challenges within San Diego County's wireless mecca
Dipanshu Sharma left Nokia at the end of 2000, after managing its San Diego internet technology unit, to found V-Enable, a voice search company, where he remains co-CEO (with Craig Hagopian, former VP of marketing at AccessTel, who came over in early 2005). It's his third startup-one prior effort failed, the other never matured. Today, V-Enable is approaching 50 employees, and revenue has tripled from 2005, with a projection of cash flow breakeven in 2007.
By Scott S. Smith
February 5, 2007
According to Piper Jaffray, voice search will go from zero a few years ago to an estimated $8 billion in 2008. Directory assistance is another $9 billion industry, and V-Enable recently targeted it with enhanced assistance (providing extra information on local businesses, directions, maps, coupons, etc.).
The company offers a patent-pending system using voice commands that produce visual search results on wireless devices in two to five seconds. It also has up to 90% accuracy, more than twice as good as interactive voice response. According to V-Enable, most consumers claim that mobile data is too hard to access, so the potential for mobile voice search is enormous. Companies that have integrated V-Enable have discovered that its ease of use and elimination of typing errors prompt users to double their searches, which creates more ad revenue. Verizon Wireless, U.S. Cellular, Leap Communications, and ALLTEL are customers. "What's in our pipeline is incredible," says Sharma. "We're doing deals with two of the five biggest search companies as we speak."
A couple of other factors will drive business. One is the need for hands-free devices by 2008 in California and increasingly around the world. Another is that advertisers have already started to migrate from TV to the internet and will eventually realize that a mobile device is with someone all the time, the next logical channel.
But there were years of drought. After getting his first check from The Indus Entrepreneurs (www.tie.org), the initial $500,000 was "not very challenging to raise, but after that we were hit by drought in the financial markets, and customers were slashing budgets," Sharma recalls. "Our key assumption was that the mobile handset market would quickly move to phones with greater capabilities, and discovering we were wrong was a major setback. We kept our burn rate under $80,000 a year, and to stay alive I used my credit cards. The lights did go off twice!"
But by 2003, things had improved, and Sharma was able to raise $1.5 million from Tech Coast Angels in San Diego, Orange County and Los Angeles. By late 2004, use of voice for searching started getting traction. Sharma also found help at UCSD's Connect program and CommNexus (www.commnexus.org), a network for communications companies.
Qualcomm was one of the first to integrate V-Enable's technology into its BREW platform, which enhances the wireless experience for consumers by creating new services and revenue streams. About 70% of handsets are compatible with V-Enable's technology now, and because remote servers do most of the work, even the simplest devices can use it.
With the need to recruit heavily, Sharma says, "I think I can speak for wireless and tech executives in general that the region seriously lacks VP-level executives." While there are a lot of retired CEOs that could be enticed to startups, most "lack the entrepreneurial spirit, and we need to create a culture that is more risk-taking."
Sharma is excited about other local tech companies whose boards he sits on. One is Rocketalk, which enables free exchange of messages from any phone to any other phone, wireless or landline, overcoming carrier interoperability issues and providing lots of revenue. KaDonk provides collaborative software for project managers and their teams to stay on top of the status of each element, a big improvement over current products. Veracity Wireless provides live GPS tracking to business customers to track their field vehicles, optimize routes and reward drivers based on performance.
Awareness Is Half the Battle
Mobile search is on the map, so much so that the Mobile Marketing Association recently released results of its first-ever mobile search study. And the news was good for V-Enable and other companies in the voice search space.
Key Findings:
- Half of non-users were interested in trying mobile search over the next few months.
- 48% of non-users expect to start using mobile search at least once a week.
- Respondents with an annual household income of $50,000-$75,000 conduct an average of almost 16 searches per month.
- The ability to search by voice was the top-rated feature among respondents.
- More than one-third of current mobile search users would be "a lot more likely" to use mobile search if voice control were added.
Source: BizSanDiego.com