The Prepaid Press - November 15, 2007 - (Page 10)

GENERAL PREPAID November 15 · 2007 - 10 5 MINUTES WITH Daniel Neal, CEO of kajeet interviewed by Gene Retske kids and their families and their environments, what they want, how they operate, and what they need. We do that by constantly studying and dialoging with kids. One of the things that makes us special is that we know a lot about kids and how to put together a service offering what kids want, and that parents will support. In doing that, we leverage other people’s invested capital. Specifically, kajeet does not build custom handsets. We don’t build retail stores or retail kiosks. We don’t build facilities. We don’t create speculative risky content. And, we don’t build core telecom infrastructure. GR: So, what do you do? DN: We partner with companies like Telcordia, Sprint, Nickelodeon, Best Buy, Target, Samsung, LG, Sanyo and others - so that others who have expertise in other components of the value proposition do what they do best. I think a number of the MVNOs, the more spectacular failures, sought to try and do too many things, and to do things that others were better equipped to do. And, not to focus on understanding who their customers were and super-serving them through existing means of distribution. GR: I have to note that all the things that you said NOT to do, were all the things the experts were advising TO DO. DN: I agree, and in Amp’d’s case, people bought that advice. We thought, from the very beginning, differently about it. We’ve always felt that we really have to leverage other people’s expertise. There is an ecology of wireless out there. Best Buy really does understand how to sell mobile at retail. They have great real estate, a great footprint, a great team of sales people. You just do not want to replicate that. We tried to stick to our knitting. Our knitting is truly understanding our customers and assembling all the necessary pieces to create a great service from their point of view. That is the magic we bring to the table. GR: So, you think an MVNO should be a marketing company? DN: Some spectacular failures proved that others did not think so. They turned out to be hardware companies or content companies, or distribution companies. Helio has its own retail stores, for example. I ﬁnd that hard to understand. The real thing that you are doing as a “marketing company” is knowing who your market is, understanding them, and then, and this is not easy, taking those component parts, and building that service so that it really serves them. So that the devices are relevant, the applications and content are [relevant], the service plans, the way you message it, the features that you emphasize versus those that you don’t, the thinking about me. They get me. I am more like them than the big mega-carrier.’ That’s what marketing is. It’s not just about hawking cell phones. It’s about truly understanding the mind of the customer and super-serving them with the parts that are out in the market. GR: You are limited in some ways like this, though, right? DN: You are constrained in some ways. You are constrained by the device capabilities and the availability of devices, and possibly your network. There are, admittedly, many constraints on the business, but that makes our job all the more a value add, if we can capably put those parts together to super-serve those tweens and young teens. GR: Do you have any reason to be concerned that the mega-carriers would try to move into your turf, as some carriers have with other resellers in the past? DN: We think of ourselves as being very complementary to a large facilities based carrier. So, we have a great partnership with Sprint, who has a great network, both for voice and data. They also have long, effective experience working with resellers. They have a very big battle to ﬁght. Everybody knows the battle they are in. It’s really against Verizon, AT&T and T-Mobile. They have to focus on the vast middle market. It’s very difﬁcult for them to zero in and do an intensive job trying to super-serve tweens and young teens. GR: So, if the product is targeted for 11 to 15, what happens when kids turn 15, do they move on to something else, or do you offer them something else? DN: That’s a great question. The first answer is, we don’t know yet. We just launched in April. The second thing is, even though most of our customers are in that range of 11 to 15, we do have a substantial number of customers who are older than that. Who like kajeet. They like the simplicity, the capabilities. They like our prepaid offer. They like our 5-10-35 rate plan that is extremely clear, simple and fair. They know exactly what they are getting. There are no surprises, no hidden ‘gotchas,’ no extra fees. So, we have also gathered a bunch of customers who are older. It does beg the question, would we ever offer anything for older people that maybe is different from kajeet? It’s not a question we are wringing our hands over right now. We’re focused on the market we set out to focus on, to super-serve them, be true to what our brand is all about; that is service that is built from a kid’s point of view. That Mom, and others, will ﬁnd very thoughtfully done. It brings extra value from what you could get from a mega-carrier, that’s highly differentiated. Companies that focus on a particular segment are rewarded, even if people ﬂow through their segment. Right now our plan is to focus on our segment, to do the very best job we can to super-serve them, and not to take our eye off the ball. Daniel Neal is CEO of kajeet. Visit kajeet online at www.kajeet.com. The MVNO battlefield is littered with the corpses of failed ventures, including some of the biggest and most impressive companies in the world, like Disney. A few scant years ago, there was great promise, and many have tried, and many have failed, to ﬁnd the Holy Grail of marketing that will make for a successful wireless reseller model. One company, kajeet, has had a very good record of success in a relatively short period of time. Starting up in April of this year, they appear to have identiﬁed a segment with legs, and they are growing at a very satisfactory rate. What is their vision? We had a few minutes with the CEO and co-founder, Daniel Neal, who shared his views with us. GR: Where did you get the name, “kajeet?” DN: We took the ﬁrst letters of the founders’ kids names, and voilá, kajeet. Kevin, Alex, Joey, Eleanor, Eleanor and Tom. GR: Seems appropriate since your market is tweens, right? DN: It is, and young teens. Broadly speaking, at the fuzzy edge, it is 16. The sweet spot is 11 to 15. GR: Why 11 to 15? DN: We think that is the realm where kids are most likely to be getting their phones. We think the median age is around eleven and a half or so. There is a fairly big market there that has a low penetration rate that is not being served by other companies. kajeet is the only company built entirely from a kid’s point of view. GR: There have been some very visible failures recently in non-facilities based wireless companies – amp’d, Disney Mobile, Mobile ESPN and so on. What have you learned from watching this? DN: The ﬁrst thing that all the winners have in common is that they were prepaid, or pay-asyou-go, they were not postpaid. The ones who crashed and burned were all postpaid. The lesson is that it is very difﬁcult to have a successful MVNO in the U.S. GR: How have you applied these lessons learned? DN: One of the ways to think about kajeet is that we seek very hard to super-serve kids in our market and bring our expertise in knowing “We think of ourselves as being very complementary to a large facilities based carrier.” packaging you use, the way you engage the customer with your CRM efforts and your care center, all of those things have to be very carefully, and lovingly, thought through in order for your customer to feel that this company is different from a huge mega-carrier. ‘They are http://www.kajeet.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - November 15, 2007

The Prepaid Press - November 15, 2007 Online Wireless Recharge It's a Wrap for Gift Cards Contents GENERAL PREPAID Prepaid 101: Merchandising Regulatory Rundown: Wireless Broadband, LNP, Internet Taxes, and Stored Value Legislation Guest Editorial: Honest Minutes: "The Times They Are A-Changing" 5 Minutes With Daniel Neal, CEO of kajeet The Legal Line Prepaid Wireless Roundup WIRELESS Wireless in Brief 011 Mobile Launches Mobile International Dialing Hop-on Adds GSM Phone to Product Line Virgin Mobile USA Launches New Services kajeet Adds to Handset Line MarketStar Publishes Mobile Phone Usage Study Nokia and Cellfire Team Up Verizon Selects Firethorn iVisionMobile Launches Messaging Platform Sprint Expands "Unlimited by Boost" INTERNATIONAL Spot Rates NOMAD Brings MasterCard EMS to Europe R&M Finds Potential in Africa International in Brief TELECOM & TECHNOLOGY Caveat Emptor When Negotiating IP Licensing T&T in Brief MySpace and Skype Ink Deal Octastic Announces New Media Gateway DSP Pactolus Selected by Global Crossing Tadiran Announces New Loyalty Incentive Program Oblio Telecom Launches New Prepaid Products Total Call Enhances Prepaid Calling Cards PAYMENTS A Gift Card Technology Guide Pinnacle and PaySpot Roll Out POS/Prepaid Solution TIO Networks Announces Membership Program TransFund$ Partners with TruckersB2B AMR Finds Retailers Returning to Main Street Payments in Brief Diebold to Offer Prepaid Gift Card Technology InComm to Sell nFinanSe Discover Cards iVisionMobile Offers Retailers Mobile Payments i2c to Offer Stored Value Webinars Mobilians Starts U.S. Mobile Payments Operation NetSpend Increases Savings Program Interest EXTRAS Classifieds Contact Us Our Advertisers

The Prepaid Press - November 15, 2007

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