Podcast: Mark Curtis, CEO of Flirtomatic and mobile industry beacon

I had a chat a little while ago with Mark Curtis, top chap at mobile flirting extravaganza, Flirtomatic.

I’ve long been watching Flirtomatic’s growth — and I hold them to be a shining beacon of the mobile data industry. They’re one of the first services I can recall who actually designed their entire operation around the mobile handset. They’ve one of the best sign-up procedures. Ever. Try it out, if you haven’t already. They’ve evolved their own internal economy, they’re knocking up 140-150 million WAP pages a month. And they’ve just done a deal with Germany’s media giant — ProSiebenSat — to see them launch formally into that country.

I had a good chat with Mark via our podcast system and here, then, is the audio version.

Here’s a summary of topics:

• Commenting on Flirtomatic’s revenue generation
• Very hard to make headway in the mobile industry. But it is possible.
• Challenges working with operators
• Flirtomatic users are normobs
• Would operators ever go public with mobile internet usage data
• Is ‘browsing’ defined as ‘mobile data’? Or no?
• Flirtomatic’s iPhone-designed site works nicely on an N95
• The launch in Germany with ProSiebenSat
• Strongbow Cider promotion: 350,000 ‘pints’ sent/swapped
• Operators and premium SMS

Here’s a rather interesting stat from the conversation:

We’ve recently run a promotion with an advertiser, Strongbow Cider, and we, I’ve just realized how much you’re going to like this. So, we need to turn this into a proper case study, but basically, we gave our users the ability to send each other virtual points of Strongbow. In two and a half weeks, which is as long as the campaign lasted, this is only on mobile, so the web users couldn’t to this, they sent each other 350,000 pints.

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Here is the rough transcript — but for full accuracy, listen to the audio!

E: Mark, how are you doing?

M: Hi! Very well, thank you Ewan, really well.

E: Mark, thank you for taking the time. It’s been a while since we’ve spoken.

M: It has. It has been too long.

E: Let me just recap. The biggest news that I can recall what your funding. Is that the biggest month, apart from this current one?

M: I don’t know. It’s a very good question. The last two years have been a series of kind of big jumps forward and then thing were placid for a while and then there’s been another big jump forward. Actually, I would say if I looked back over the last year, probably the biggest leap forward was launching the ? services just over a year ago and seeing the revenue happen immediately. If there was any one point which I would replay happily again and again, it’s that first month and seeing the immediate effect it had on revenues.

E: What happened? I image that you flicked the switch, if you like, and then the users discovered the facilities. ‘My God! Here it is!’ It was working before that, but this is a revenue line and it’s going up.

M: I think probably the ‘here it is’ moment came towards the end of last year, beginning of this year. Because, at that moment, we could see that we knew how to get to break even. Last April when we launched the premium services, we switched off subscriptions and we turned on premium services the same day. So, all of a sudden it was completely free and users could chose to buy extra stuff. Basically, we trebled our revenues that month. But, the results in terms of revenues, we saw in a day, in less than a day. This has happened several times during the kind of evolution of the company is that we’ve seen stuff happen in periods of minutes and hours, very dramatically sometimes. The first time we advertised on WAP, we saw 3 ‘ thousand people join the service in 3 hours.

E: You’re a big, or you were, a big user of AdMob. Is that still the case?

M: We also are using AdMob, yeah.

E: Did that held? Did that kick the 3 thousand users?

M: AdMob tends to be a slow, consistent burn. So, we can’t buy that volume of users off AdMob. It’s not that they’re not out there; it just doesn’t work for us in that way. That was actually when we operated, that’s when we first advertised on an operator portal. That’s when we saw that kind of number. Obviously, I can remember the team phoning each other all night long just kind of, ‘What the hell is happening?’ because these users were just flooding into the service. So, the revenue picture changed then and I think we saw the revenues grow pretty much solidly every month last year until December, January and I think in January I began to think we really can break even this year. We’re very, very well on target to do so in a couple of months, two or three months.

E: You are a beacon, a shining light.

M: I can’t possibly sprint up to that. It’s lovely to hear stuff like that. It’s still do damn hard. I read your thing the other day.

E: The mobile help room?

M: Yeah, and I restrained from commenting on it, because I knew we were going to talk tonight, but I think you are so right. It is so hard to make headway in this industry, but it is possible.

E: That’s where I hold you as a shining light in that you got it working. You got the signup working on mobile. You’ve got the technology working. You’ve got the service level working. I point to you when I’m talking to other companies and they say, ‘Our biggest problem, 80% of the people that we attract, that we’ve bought, we’ve got them and who would sign up and use our service or product don’t because of X, Y and Z. I remember speaking with you and having a conversation where you broke down the challenges you had with the different operators and what you’d done to overcome those. I thought it was fantastic, critical actually. I remember being sat on a boat, actually. I’m sorry I’m going to be interviewing you actually. I sat on a boat with a chap from one of the world’s leading dating sites and I said, ‘Look at this.’ He was absolutely astounded by the fact that you type a little key word, I think is a keyword generator. He was shocked how you had done it. I just wanted to say that was really, really smart and it’s nice to see success and I’m please that you got it. That bodes well for everybody else.

M: One of the things I really loved last year was when we saw the page views, we saw how much people were using the product. When you saw the numbers, it was apart from, ‘Yes, this is a good sign.’ My second thought was, ‘Golly, yeah, this means the mobile internet really could work.’ Because, if people are using, we did I think 130 million WAP pages last month. We’re probably on target, still about 142 at the moment. That’s a lot, people logging in 6 1/2, 7 times a day. Actually, what that shows is if you can get people, then they will use the mobile internet. It is going to work. I think probably that message is now a bit out of date, because everyone is seeing the iPhone stats.

E: I like to think that your customers are NorMobs, as in they are your Sony Erickson user, right?

M: Completely, they are. Sony Erickson are 12 out of our top 25 devices. So, yes they are and in fact, again, one of the things that really interesting about what’s happened, being that our users are fabulously normal. If we where a national newspaper, we would probably be the Sun. So, they’re very, very mainstream and I find this interesting about the mobile internet because if you think about the, normally services, I don’t say we’re a leading edge service at all. But, services which are new and using a new combination of technologies, which in effect we are, tend to be picked up by the digerosi and the early adopters first. So, stuff like RSS and Fliker, those things were typically picked up by high end users, very advanced, people like you, very early on. You tend to be up market, wealthier, etc, etc. Well, whats with Flirtomatic is that even though mobile internet usage is probably only 15% of the total UK population, it’s actually very normal people who are using it, which gives me a lot of hope because it means that there’s still another 85% of people out there that we can get, which is exciting.

E: You are proving it. They are signing up. They’re using it 6, 7 times a day by hook or by crook.

M: Absolutely, and it doesn’t have to be. It doesn’t have to be the normal people who are quick to adopt Twitter and certain mobile ? Twitter, but I think Twitter, it’s not going mass market. My daughters are 18 and 19 and use digital technology avidly, but were never clear what Twitter was.

E: I’ve been sat with 16, 17, 18, 19 year olds, begging them to please try and use it so they could write a column about it and they’re telling me by text anyway. I say, ‘No, no, but this goes to everybody.’ ‘Yeah, but I text them anyway, I don’t care. So what?’ Then, how do you think the usage of your site is coming to BBC Mobile or BBC News? Do you think these NorMobs, your customers are using more of other services as well?

M: They are some. I’m sure they’re using other services. I actually don’t know. One of the frustrating things is that there is a significant lack of information in the market at the moment. Now, the operators do actually hold that information. I know they do, because discretely, several of them have said to us, you’re way, way up there in the usage stakes, both on and off portal. But, it’s difficult to pin them down, they certainly won’t go public on it, because it’s internal data. It would be brilliant if, and I believe that there are moves for operators to get together and publish data usage figures so that we can all see what top performing sites are and in a way, obviously it would be great to be in the top 10. It’s actually have the bench mark, what do we have to do to get into, it’s having the benchmark that would be interesting. It’s all very well me Twittering on about 130 million pages, but I think it is quite a lot from what I hear from people. It would be great to see what other people are doing and at the moment, it’s very difficult to get a view on that.

E: I think got to be one of the top.

M: Well, one of the difficulties we’re seeing, and we’re going to see more and more and more of this, is that there are research companies out there doing research into mobile. I think research methodology is flawed, because we’re in a relatively immature industry from a measurement perspective at the moment. One piece of methodology I saw recently involved an embedded application on Smart Phones, which measured what people are doing on the mobile internet, which is fine, but a lot of our customers don’t have Smart Phones. So, looking at this ? I could see that it wasn’t going to measure us very well at all. The other thing is that I think customers don’t have a secure grasp on, they’re on a level playing field in terminology at the moment. So, I think if you went to a lot of people and said, ‘Do you use the mobile internet?’ Deep down they actually wouldn’t know what you’re talking about. That sounds patronizing, I don’t mean, what I mean is, I don’t think, I think some people might guess that using SMS would mean the mobile internet and they would say yes. I don’t think that kind of commonality is of understanding of what people mean. On the web it’s self, six line, people do understand the terminology really well and I think there you can do that kind of customer research and get accurate numbers.

E: Have you got internet? Yeah. Nice and simple.

M: Exactly, people understand that.

E: Well, if the owner of the store can’t tell me if mobile browsing means mobile data.

M: I mean, I’m always reminded of a long time ago, I was desperate for Labour to get into power. I can’t remember when this was. I was towards the end of Tories kind of run, sometime in the late ’80s early ’90s. There was that same selection when the polls had all predicted Labour was going to win. The Tories got back in again. The John Major election and it turned out, at the time I wanted Labour to win. It turned out that people had been embarrassed to say that they were voting conservative and therefore had lied and said they were voting Labour or not really giving away a preference, because they were embarrassed to say they were voting conservative. I think sometimes in the early stages of adoption of a technology, when you say to people, ‘Do you do this?’ They don’t want to say, ‘No.’ They want to say, ‘Yes.’ So, I think numbers, what I’m really driving at is it would be great to see some very hard numbers coming out of the operators who really do hold this stuff.

E: Do you think it has to come from the operators?

M: It has to, to give the markets really clear ?. I can say what I’m doing and people can either believe me or not, obviously I’m telling the truth, but, you can judge by the quality of the information that comes out.

E: Have you looked at the various different, you mentioned the first time we talked, page views. Was that when you installed Google analytics or mobilytics or?

M: We don’t have any of those. We have Google analytics only on the website. It doesn’t measure the WAP site.

E: Why is that, then?

M: Well, what we do on the WAP site is we measure, each click presents a new page, because that’s the way WAP works, and therefore presents a new opportunity to advertise. On the iPhone, we’re going to have to, we haven’t started measuring our phone usage yet, because we’re still only in alpha, so it’s too early to do it. We’re not promoting it heavily yet. But, on the iPhone, they’re going to have to change our view. For example, if I want to look at another photograph of you on Flirtomatic, I have to click on another photograph which presents a whole new page and a whole new opportunity to advertise. On the iPhone, we’re using the sideways scrolling mechanic, which means you don’t get a new page, you actually get the photo scrolling past you. Now, you can’t really count that as a new page, because you’re not presenting a new page. So, then, we’re going to have to think about a different way of measuring that. Those are the kinds of standards which aren’t out there yet, aren’t understood, need to be debated. Actually, that’s really what I’m signaling to you is I think there’s going to be some very interesting debates over that in the coming months.

E: Do you think, broadly speaking, are we going the right way with the development of mobile and how the operators are reacting? The last time we spoke, it must have been about a year ago when we actually spoke. There was flat rate on one or two networks. The iPhones arrived; it’s really got the attention of the industry in that way, and some consumer attention. How are you seeing things over this year, this calendar year, if you like?

M: I mean, the best one in the world, it’s slow. It’s not terribly fast, is it? I think the iPhone is definitely changing people’s attitudes. I love it as a device, because it’s super clear to people. You can look at the internet on this. That then gets the idea in people’s heads; you can walk around with the internet in your pocket and look at it. I think that opens up opportunities for the Nokias and Sony Ericksons of this world to sell devices which do the same thing.

E: With the Flirtomatic iPhone, are your designers going nuts with excitement about what you’re able to do with the interface? I imagine Flirtomatic on iPhone is going to be really cool.

M: Have a look at it. If you go to it on iPhone, it should, tell me if it doesn’t, it should detect you’re coming on an iPhone and what it does is it offers you the choice. Do you want to look at the website, or do you want to look at the iPhone site? Obviously, most people are going to take the iPhone site. Yeah, I think we’re very, very, very excited by it and actually, the really exciting moment was when my CTO said to me, Matt Wolfe said to me, ‘Mark, do you realize this works on the N95?’ I said, ‘You’re joking. What do you mean it works on the N95?’ and he showed me. And it more or less works on the N95, now, the layout isn’t perfect. It does need a bit of tweaking, but it’s more or less there. Now that, what then we face as a business is the following issue, which is, on the iPhone in Brittan, we are confident that the user’s on flat rate data by definition or using it over WiFi. But, if we were to take that interface and put it now on the N95, which is a very appealing proposition, we’re then asking our users to download a lot more data then we do on the current WAP site. So, it’s giving us a challenge and the challenge is we’re not looking at the WAP site and thinking, ‘Oh, God, this looks a bit dull,’ despite the fact that it’s worked very well for us. We’re beginning to look at it and think, we really, really have to upgrade this and we’re doing stuff at the moment to upgrade it. But, on the other hand, what we don’t want to do is take the iPhone design wholesale and implement as much of it as possible on those phones until we are confident that users are going to be okay with the amount of data usage that that requires.

E: They’re not going to get bill-shock.

M: Exactly, because for example, if I’m right with my terminology here, with the iPhone, we use JavaScript and JavaScript means that it can automatically make demands on the server and that’s fine, if the user isn’t so concerned about data usage. It gives us a problem, which is we’d like to use the interface, but we have to think long and hard whether the customers are actually going to want the interface. They’ll certainly like the look and feel of it, but will they actually appreciate what it does to their bills? It’s all manageable, so we can figure it out. One of the things, I have to give credit, my board urged me to do the iPhone interface and one of the reasons that one of them was particularly championing it was it was going to teach us a lot about what the future interface of the service on any device was going to look like. He was absolutely right.

E: It’s a brilliant perspective to hear from a company such as yours. Tell me, you’ve launched formerly, in Germany, what was the thinking behind that? I think I understood that Germany being a very mature market for mobline, similar I suspect to the UK, and the good partnership you’ve got with ProSiebenSat?

M: ProSeibenSat, yeah. ProSeibenSat are the biggest TV network in Germany, with multiple channels. It’s sort of similar to Sky that they’ve risen up through the ranks over the last few years, if I understand it correctly. Very good, very good partners and actually, to be completely honest with you, we were looking at which European countries we wanted to go to and we got connected to ProSeibenSat and they were very keen on a relationship.

E: That’s a brilliant deal there, Mark!

M: It is a good deal. We took the deal. Basically, we prioritized Germany because it was such a good deal to go with them. So, we’ve just launched and the TV advertising launches early next week.

E: Goodness me. Are you still calling it Flirtomatic?

M: Yep, yep. I keep on taking a rain check on this.

E: Can you comment on the advertising and the like?

M: Which advertising?

E: I’m sorry, is it television advertising?

M: Yeah, we’re doing television advertising, WAP advertising, web advertising and ProSeiben have a good relationship with operators. So, we’re hoping to work with them on that, too.

E: So, you weren’t thinking of changing it to Flirto, I’m just thinking about the ? technique.

M: No, no, we’ve checked it carefully. The whole thing is in German. We’ve actually got two German girls working in Flirt Central, our customer care unit so they can work with, we’ve tried to take care so that it’s as vernacular as it is in the UK. We check carefully, will supersnogs work? Will people find that funny and entrusting and apparently they will. It is good news. Generally speaking, our strategy is to localize where we need to. So, if we go to, I’m making this one up. If we go to Portugal and it turns out that Portuguese people think the lips are sexier in green than they are in red, then what we’re going to do is we’re going to have what we call, receiver rules. So, if I as an English user send a Portuguese girl a supersnog, then she will get green lips even though I’ve sent red lips.

E: That’s smart.

M: That’s the idea anyway. So, it’s exciting. It’s very, very interesting. We’ve managed from soup to nuts, we did the whole thing in three months, which is pretty good. We now believe we can do it much more quickly than that and we learned a lot, because there were some things that we simply didn’t expect, just boring stuff, but things like terms and conditions and the legals.

E: No boring, every listener here is either a developer or works in the mobile industry or direct fascination with it.

M: We had to do a lot of work on that, much more. It didn’t delay us, because we always planned it to be three months and we came in, bang-on three months. But, we had to pile a bit more resource into the ? and German media law than we had somewhat foolishly expected, but now we know.

E: Was working with the networks, was that ?, your partner had good relationships.

M: We relied on the partner to do all of that.

E: Fantastic. Can you give us a viewpoint? What’s next? What should we be looking out for?

M: The big work at the moment is completing the iPhone application. It’s not complete yet. We’re saying clearly to people, it is in alpha. It will be in beta I think by the end of this month and then we’ll sort of finish testing by mid August. That’s probably going to work. So, stuff like location searches, it’s working on the iPhone, but we haven’t put in what I would call best possible UI yet and we need to do that. We’re looking at other territories, a bit more travel at the moment than I’ve been doing over the last couple of years?

E: This may sound a bit geeky, but when you’re traveling, how are you staying connected?

M: Actually, I’ve been using the iPhone. So, this is a big geeky, but the killer app for me is the maps on the iPhone. I love it, love it. It means I don’t have to prepare before I go. I don’t have to print out a map before I go. I just get to the town center, type in what I’m looking for and up it comes on the map. It’s very, very good. What I could do with on the iPhone would be, I don’t think it’s got one, would be a built in compass so I could tell what direction I’m pointing in. I did walk the long way around quite along ? Boulevard recently and worked it out only after 10 minutes and felt rather foolish, overly reliant on technology there.

E: Do you know, for version 2 there will be an apps store on iTunes, you’ll be able to buy applications. Can you see yourself launching a 99 pence or 99 cent or 1 cent application or something like that as a means to marketing the service?

M: No, probably not. Not at the moment. Sorry, it’s a clich’, but never say never springs to mind. But, my experience with applications with Java was so painful that I, and the web app works so well already, that I can’t see much of a benefit for us actually.

E: I’m excited for all of the developers who previously haven’t really had much of a point and click easy opportunity to get their products out there. I’m just wondering, I suppose it’s not entirely relevant for you guys of course. Is there anything that you can give us as a tease then? By the way, users much be approaching what, a million?

M: Yeah, we are actually, about 890 thousand now.

E: Goodness me, goodness. Have you any predictions for the future? What do you think going to happen on the next’

M: No, I’ve been thinking about this a bit recently. We’ve recently run a promotion with an advertiser, Strongbow Cider, and we, I’ve just realized how much you’re going to like this. So, we need to turn this into a proper case study, but basically, we gave our users the ability to send each other virtual points of Strongbow. In two and a half weeks, which is as long as the campaign lasted, this is only on mobile marquis, so the web users couldn’t to this, they send each other 350 thousand pints.

E: How did StrongBow, how did their marketing agency react to that?

M: They’re very pleased, apparently. When you click on a pint, you go through to the StrongBow WAP site and you can get a voucher on your phone, which you can take into a pub and redeem against a real pint.

E: Oh, come on!! That is ingenious!

M: I don’t have the numbers on hand how many were redeemed yet. I know the click-through rate and probably shouldn’t talk about it, because I don’t have the usual permission from the marketing agency, etc, etc, which is fair enough for them. But, the click through rates were pretty interesting.

E: That’s a medium in it’s self.

M: But, you just see the light. It’s like, ‘Oh my God! Of course!’ The phone, mechanic, bouncers, you know, gifts, all sorts of stuff really began to open up at that stage.

E: So, that must have been something at inception of Flirtomatic you thought, ‘Oh, maybe we can do this in the future.’

M: Yeah, yeah, yeah.

E: Did you ever think that you could get to this point where your user knocking about 350 thousand of them?

M: No, it’s so exciting. I was looking down at the pub on the corner and thinking, bloody hell, we’re selling more pint than they are on a daily basis. It was a pretty interesting experience. I think that’s big. The other thing which occurred to me today, which I just though I’d offer you, is a saw European mobile operators are now taking pretty seriously the idea of near field payments and they’re looking very, very hard at it. So, this is the idea that phones become mobile wallets properly and you can use your phone to pay for small items or presumably larger items as well as you walk around. It is a bit of a distance away, obviously, but the fact is all the operators are now looking at this very hard, and the thing that I thought was interesting about it was, the thought suddenly struck me as I was reading this, if some manufacturers and operators are going to do this, and you’re going to start using your phone to pay for a pint, some sweets or some fags or whatever, if you’re going to start doing that, they’re only going to be able to take a commission similar to credit or debit card companies. If that’s the case, what the hell happens to the hefty stake they’re currently taking over WAP payment or premium SMS?

E: Well, just give us a quick overview. For those that aren’t entirely aware, how much do you have to pay the operators?

M: We probably get about 94P from 1 pound 50. Of that 1 pound 50, some of that goes on VAC, so it’s about 94P our of 1 pound 27. Some of that goes to the payments aggregator, which is fair enough, they provide a good service and the rest goes to the operator. I’m not one of those people who bitches about that, because we wouldn’t be doing what we’re doing if operators hadn’t enabled easy billing over WAP and premium SMS. So, I’m a big fan of it. I wouldn’t have a business if it wasn’t for the fact they’d done it. What’s interesting is, and one of the things that helps us as a business is that all the things we sell or almost all of them are virtual goods. So, we don’t have to worry about somebody who we’re buying to the goods from and the margins, etc, etc. But, as soon as you begin to get to a stage where people are using their phone to pay for things and the vendor is taking 95, 96%, why would a vendor in a tobacconist or a corner shop be any different from a vendor actually selling something on the phone? That begins to savagely undermine the whole payment structure of premium SMS and WAP billilng.

E: You see a reckoning soon then?

M: Well, I think it’s a long way away. I think you’re talking’

E: It’s always possible for them I suspect. They obviously have to get your money.

M: Well, yeah, but then, image you’re an operator, if O2 or Orange could turn their device into the number 2 way or number 1 way of paying for things in any market they’re in, the volumes that they create on 4% are out of all recognitions of the volumes they currently have on 30%.

E: Right now, you look at Vodaphone or any, they have billions in voice revenue, but I’m not quite sure what they’re going to do next year and the year after in terms of voice revenue. I suspect, if I was an operator, I suspect I’d probably be looking exactly where you’re suggesting.

M: It’s something that’s huge for them, but it’s also good for us, because what it will do is it will push the margins massively in our favor eventually, which is good.

E: I was just thinking about Cyworld and SK Telecom because I can remember what they were doing in South Korea. My next question was, who’s going to buy you?

M: I don’t know. If I knew I probably couldn’t answer, but I actually don’t know.

E: Okay, because I can well imagine what you’re doing right now, in the next couple of years the value is just going to go up and up and up. Look Mark, thank you very much for your 10 minute conversation. You’ve been very, very good. Thank you for taking the time. I’ll let you get on with business of Flirtomatic. Thank you very much, sir.

M: Thank you and great to talk.

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Mark, thanks for taking the time!