Friday, February 29, 2008

Watch Carl Freer Un-Plugged On March 6

Carl Freer told me in New York on February 5, 2008 that he was planning a tour to a dozen American universities, where he will tell the story of Gizmondo from an entrepreneur’s point of view. "I’ll be talking about what went wrong, " he says and promises to take any questions the students want to ask.

"They could see me get shot down, and make an ass of myself, or I will come out intact from meeting this key demographic group. And I will get shot down if anything I say is not the truth. You can’t fool these kids, and I look forward to the hard questions," Carl Freer said.

I look forward to the hard
questions, says Carl Freer.
Photo: Hans Sandberg

"What I want to do is basically to put the cards on the table, and tell them how it is. What I want to achieve is an understanding of what the product is and of what went wrong, and how."

The tour is arranged by the PR-firm Sitrick and Company, which among its clients also counts hollywood stars such as Halle Berry, Danny Glover and Paris Hilton.

First stop in the Carl Freer tour will be Georgia Institute of Technology in Atlanta, where associate professor Blair MacIntyre uses Gizmondo handhelds that he picked up on eBay to teach augmented reality (AR). The idea for a tour grew out of discussions between Blair MacIntyre and Carl Freer about the tech university's AR-program. Blair MacIntyre likes the fact that Gizmondo has an open platform, is relatively powerful, robust and cheap compared to Sony PSP and the Nokia N95. Besides, Carl Freer was eager to support the school, both with development kits, tech support and scholarships.

Hans Sandberg

Postscript, January 21, 2009: Nice idea, but the tour never happened! Carl Freer said, when I asked him about at the end of the summer of 2008, that he didn't have time to do the tour. Was it a PR trick, a sexy idea to throw out there, for media consumption? Or was he just flapping? I don't know.

Watch Carl Freer speak at Georgia Tech live on Thursday at noon (EST).

Tuesday, February 26, 2008

Salieri (Hillary) versus Amadeus (Obama)

Is it only me, or didn't Hillary come off pretty pathetic when she huffed and puffed about Obama's NAFTA-flyer? "Shame on you, Obama" she called out on Saturday, and the next day she put on a mean and cynical show making fun of those (Obama and his fans) who are expecting the gates of heaven to open so that goodness can stream down while the angels are singing.

But her political theatrics were neither funny, nor effective. To the contrary, you got the impression that she acts like a sore looser before the game is even over.

I wonder if the problem with Hillary isn't - and hasn't from the beginning -- been that she feels that the world owes her the power. She played according to the rules of the game, and now it's her time to bring home the trophy to show mom and dad.

But here comes Obama strutting around like a political Amadeus, turning the heads of just about everybody who really should now better. And not even Bill, the master seducer, has been able to knock Obama off his elegant stride.

But the truth is that Hillary is hard, but not strong, while Obama is strong, but not hard. And that's what people like about him.

Besides: Obama is not afraid. The democrats have been scared to death for the republicans, because they have been convinced that people are easy to fool, and that the republicans can always win the masses over with simplistic solutions like lower taxes, social toughness and a hawkish foreign policy. It was this fear of now being seen as ”patriotic” enough that made Hillary and the other democrats open the gates for Bush when he was about to invade Iraq, but this is where Barack Obama is refreshingly different. (Even though his policy when it comes to Israel looks like a downer both to critics and true friends of Israel). Obama was against the Iraq war from the beginning, and he has the best chances to bring the U.S. out of the morass. Hopefully he will be wise enough, and have courage to start repaying the Iraqis for at least some of the damage the Bush government has inflicted on the country and the region, a bill that it will probably take a decade or two to payoff.

When Obama got the question of why he doesn’t have an American flag on his lapel, he answered that the republicans doesn’t have a monopoly on patriotism, but he didn’t try to prove that by trying to outdo the republicans in aggressive posture. Instead he said:

"A party that presided over a war in which our troops did not get the body armor they needed, or were sending troops over who were untrained because of poor planning, or are not fulfilling the veterans' benefits that these troops need when they come home, or are undermining our Constitution with warrantless wiretaps that are unnecessary?
"That is a debate I am very happy to have. We'll see what the American people think is the true definition of patriotism."

He is smart and ready to fight back, at the same time as he consciously reaches out for the mainstream voters. It’s a good position not only if you want to win over Hillary Clinton, but John McCain too.

Hans Sandberg

Sunday, February 24, 2008

A Gizmondo Search Mystery - at Least to This Newbie

There is one thing that puzzles me, and that is why my English blog has become invisible, at least to Google. When I use the eminent search enginge to look for blogs about Carl Freer, the first dozen blogs listed are repeating and commenting on my February 18th blog at this page. The 13th link points to a post on my Swedish blog where I write that I will publish my new interview with Carl Freer on the next day. When I do the same search in Gizmondo, it's even worse, but I don't think it is just that my blog is new and relatively unknown, because in that case, there would be no listings at all. Google do list my January 23rd post where I published a translation of my first interview with Carl Freer.

Is it personal, Google? Hope not...

Any expert with a clue?

;-( Hans

Monday, February 18, 2008

Carl Freer: Gizmondo Arrives Late 2008

Here is a translated version of Hans Sandberg's second interview with Carl Freer. The Swedish version of the article was published by the business news site on February 18, 2008.

Carl Freer (right) and his Gizmondo Co-Pilot 

Mikael Ljungman in New York City.  Photo: Hans Sandberg

The relaunch of Gizmondo has been delayed to the second half of 2008, but Carl Freer reassures
that it will happen, and that the new version will improve on the 2005 model. His ”Co-Pilot” Mikael Ljungman travels to China this week, where he and Ian Murphy from Plextek will go over the manufacturing setup. 

We met Carl Freer at a SoHo hotel on February 5th together with James Hunt, the independent investigator for the U.K. liquidators, and the Swedish businessman Mikael Ljungman. James Hunt was in town to ask Mikael Ljungman about transactions between some of his previous companies and Gizmondo Europe.

“I had outstanding questions, most likely uncomfortable, and I wanted answers to those questions. We got together and had a long discussion, and I’m perfectly satisfied, and I can state that satisfaction on behalf of the liquidator,” James Hunt says.

Mikael Ljungman is working with mobile communications and has cooperated with Carl Freer since 2002, but was hard hit financially when Gizmondo crashed. On top of that, he was pursued by Sweden’s legal authorities and tax authorities because of alleged connections to the “Uppsala Mafia” (in quotes, because the Swedish usage of the term “Maffia” has very little to do with the way it’s used in the U.S. Stefan Eriksson’s gang from the 1990’s, which Carl Freer never was a part of, consisted of a handful of small-town criminals, brazen maybe, but no real Mafia). He was convicted for tax fraud and bookkeeping errors, and his company was forced into bankruptcy as business dried up. Today he is challenging his conviction in a higher court, and works with Carl Freer, both on the Gizmondo-project and Blowfish Works.

Mikael Ljungman will travel to China this week, where he and Ian Murphy from Plextek are to go over the manufacturing setup with Gizmondo’s partner in Shenzhen, China.

Mikael Ljungman's business was badly hurt in the 
Gizmondo crash, but he sticks with Carl Freer, and is 
helping him to setup operations in China.  
Photo: Hans Sandberg

”Mikael is my Co-Pilot on this project. He has been an absolutely indispensable asset in putting the Chinese manufacturing together. Lots of shareholders will have a lot to thank him for, because without a manufacturer, how could I bankroll this? Where would I get $300 million for components?”

What’s happening with the reintroduction of the Gizmondo? When I met Carl Freer on October 19th, he said that the Gizmondo would be out by May of 2008, and a widescreen version by the end of the year, but he now admits that he was being too optimistic.

Are you on target?
“I can’t say, because I don’t know. We have every indication that we are on target, but I don’t know until all factory and manufacturing issues are solved. What I can say is that we will have the product by the end of 2008, but I can’t say if it is the third or fourth quarter.”

As far as the Chinese manufacturer goes, he says that he cannot reveal its name yet.
“We have a slightly unusual relationship with the Chinese manufacturer, because of its interest in distributing the product domestically. They are very reluctant to make any statements until they’ve completed their own launch plan. If it weren’t for this, I would be on the phone now saying that we need the statement tomorrow, because it is very important, but we have to respect them,” he says.

Carl Freer and Tiger Telematics/Gizmondo will not profit directly from the Chinese launch, but they will benefit from the excitement and an ad distribution deal connected to Gizmondo. Gizmondo’s Chinese customers will be offered the advertising package, which is based on the SmartAdds technology.

The new version of Gizmondo will have a more advanced version of the custom made chip nVidia developed for Gizmondo, and Gizmondo’s AR-technology has improved drastically and become much more realistic, according to Carl Freer. He also says that they have fixed the problem with the battery-life, which turned out to be a programming problem.

Carl Freer’s strategy for Gizmondo II seems much more cautious than the spectacular launch in the Autumn of 2005. He keeps a lower profile, and hopes that his alliance with the his Chinese partner will make it possible to relaunch the product with what he calls a ”grassroot strategy”. But first he needs to get the owners to agree to a restructuring of Tiger Telematics, a company that over time most likely will merge with or change name to Gizmondo. He doesn’t think it’s going to be very hard to convince the board, and notes that some of his former enemies, including the British financier Joe Marten (who had threatened to sue Freer and played a part in the attempt to push him out of Xero Mobile) has buried the hatchet. In addition, Blowfish Works and Xero Mobile, have come to peace, according to Carl Freer. (We tried to confirm this with Xero Mobile, but we have as of now not received any answer).

The largest weight upon Carl Freer’s shoulders is the bad reputation he and Gizmondo earned after the crash and bankruptcy in the winter of 2005/2006. He repeats that his attempt to clear his name will ultimately depend on his success in his project, but he has also hired the PR-firm Sitrick & Company, who are specialists in helping companies and individuals that have got in trouble with the media. It was Sitrick that recommended him to contact a serious journalist, and that now is preparing a speaking tour for Carl Freer to a number of technical universities.
”I’m going to be a very busy man in 2008,” Carl Freer says and laughs.

Hans Sandberg

Click here to read a translation of the first interview with Carl Freer since the Gizmondo crash.

Sunday, February 17, 2008

Why he left Xero Mobile and started Blowfish Works

This is an English translation of an article I wrote for the Swedish business news site (November 16, 2007). In this slightly revised version of the article, I added a couple of quotes from the interview, which was done in English.

After having been kicked out of Xero Mobile, Carl Freer started 
Blowfish Works.                                                

Stefan Eriksson’s crash on the Pacific Coast Highway could hardly have come at a worse time for Carl Freer, who had move to the U.S. in the summer of 2005 and was in the middle of launching a new company, Xero Mobile. It promised free cellular telephony to college students if they agreed to watch ads on their phones. However, conflicts in Xero’s leadership Freer start another company, Blowfish Works.

“I founded Xero Mobile and I was the largest owner. The idea grew out of the SmartAdds-concept, which I invented while at Gizmondo. I wanted to create value for Tiger Telematic’s shareholders. Stefan Eriksson and the others owned shares in Tiger and could therefore qualify as owners, but had nothing to do with the day-to-day business. Peter Lilly worked for the company and helped in writing the business plan. The technical development was done by the Swedish company Netlight Consulting and Steve Carroll,” Carl Freer says.

“Registered owners could qualify for shares in Xero without giving up the shares in Tiger, so there is a chance that you could be doubly rewarded, but today I have no control of Xero,” he says.

“I left Xero in the summer of 2006. I was never employed, but helped them with fund raising and commercialization of the product. In return I got a license agreement for a technology I had developed. It was never part of SmartAdds, or owned by Xero, because I had done that work in a separate entity. It was a ‘click-through’ process, covered by a business process patent, and worked like a ten-second stopwatch, which starts after an ad is shown. When you click on it, a delivery report with the IMEI-number is sent to the server, so that we can let the advertiser know that the customer has watched his ad,” he says.

Users of Xero Mobile’s service are subsidized not unlike when cellular operator gives out free or near-free cell phones to customers who sign up for two-year contracts. Xero’s service is paid for by ads delivered and monitored with the same SmartAdd-technology that was developed for Gizmondo. Access to the cellular network is leased from a cellular operator, why the model is called mobile virtual network operator (MVNO). At that time it was a new and hot idea, but today’s it’s on the way out.

“The entrance fee is $300 million. You don’t own the network and have to buy enough of a foothold to be able to sell your service, but it is a service that you bought from somebody else,” says Jeffrey Peacock, a long-time technical consultant, system architect and application developer. He led the development of mobile applications for Blowfish Works until August 2007.

The cost of the phones is the largest cost when you’re starting an MVNO-service. The users need new phones that besides voice can handle data and video for the service to work, and “it requires a very large investment to provide millions of students with expensive phones at no cost,” according to Carl Freer.

“You also must reach critical mass, and that is expensive. You need at least a million people, maybe even 5 million to be able to talk about critical mass in America. Besides, you have the carrier cost, and you have to pay upfront. Being an MVNO is costly, because you have to buy bulk. It’s such a cash draining exercise. If you get it right, the rewards are there, which is why Disney and everybody else tried to crack this market, but it is hard to compete against carriers that are also your suppliers. You’re at their mercy,” he says.

Vodafone initially founded the MVNO model as a way to outsource the job of collecting of a more focused customer basis. Europe’s successful MVNO’s were focused on business-to-business accounts. It was almost a Klondike feeling, but it wasn’t easy, and very few MVNO’s are successful.”

That’s where the talk of $300 million came from. When Xero Mobile was started rumors circulated saying that they had pulled in that much capital, but it was only a cost estimate.
“The MVNO model is dead. Disney pulled out despite all their resources, and so did ESPN, and Boost. People in America already have family plans, so getting free airtime is really not worth much. But my colleagues at Xero were adamant about the MVNO model. They have tweaked the business plan somewhat for the colleges, hired a very clever CEO, and Simon Davis and David Warnock are big investors in Gizmondo. They are wealthy guys who made their money in real estate. And Joe Marten is also there, of course. They hired Allen Brown as new CEO, and kicked me out. I tried to help out putting a deal together, but there were thinking to short-term, trying to figure out how much they could boost the share price without too much effort," says Carl Freer.

"The SmartAdds technology is based on a MVNO business model, where you became a MVNO. I didn’t see any value in that, and tried to steer them away from that. I told them that they need to be carrier agnostic, and that they need to addresses the needs of local advertisers. But they shunned my advice, as they wanted to do a quick sale, and brought in a management team that looked like 24 carat. They wanted to raise enough money to be able to pull out what they were owed by Gizmondo, but you can’t build a company on that mentality. Hopefully they will change their modus operandi now," he says.

"The deal with the new management team said that I couldn’t be involved even though I didn’t want to be bought out. I had started the company, but I realized that I had to step aside because of all the bad press, so I signed the agreement, which let me keep my royalty to the click-through technology, and a worldwide distribution agreement. It also stated that they would buy me out, but they never paid me, so I still have my shares, and they still call me now and then for advice," Carl Freer says.

His ownership in Xero Mobile could complicate the British company ROK’s attempt to buy out Xero Mobile, which we have reported about in Realtid.

Once he had left Xero Mobile, Carl Freer started Blowfish Works, which has similarities with Xero, but doesn’t require the customers to get new cell phones and is independent of the cellular providers. Blowfish Works runs on most mobile phones that can show video, and instead of rewarding users watching ads with free minutes, registered Blowfish customers get a cash card that fills up with a dollar everytime they have watched an ad.

”The underlying technology is sound, both when it comes to the software on the phone and on the server,” says Jeffrey Peacock, who wrote the software for the phones.

Blowfish Works is currently working with companies in the entertainment business to produce ads that people want to look at besides the fact that they get paid to do it. A key idea with the new business model is that it focuses on local advertisers. A pizzeria manager could log on to the web site, pull together an ad from templates, and then deliver it to users according to a profile that he or she has set up in advance by clicking on checkboxes. It can be teenagers within the same zip code as the pizzeria, and it is also possible to assign a maximum cost for how much the delivery of this ad should cost (every deliver costs $2.50).

The users register their interest in advance, and supplies information that helps the advertiser to pick the right target group. Such an ad could consist of a brief video together with a coupon, and they are downloaded when the user is not using the phone.

Jeffrey Peacock says that one problem with such a service in the U.S. is that the cellular operators control the functionality of the phones, and sometimes want to keep the control over what phone features the users can take advantage of. They want to us these features to send news briefs, movie clips and ESPN sports clips to the subscribers. It can be hard for a third-party company to get access to the phone’s video features, and that is the threshold Blowfish wanted to overcome.
”My challenge was to find a way to run video on cell phones independent of cellular operator. It wasn’t easy, because we didn’t have enough bandwidth for streaming video over the cellular network, but we figured out a way to do it,” he says.

Blowfish Works solution was to install a small program on the handset that signals to the server when it can receive video clips.

Carl Freer says that he owns the majority of the shares in Media Power, Inc., which in turn owns Blowfish Works. There are also two angel investors, but doesn’t want to reveal their names, as he has not asked them for permission.

During our meeting at the Hotel Mercer in New York, he gave a demonstration of the service, seen from the advertiser’s point of view. It showed that 1,289,413 users and 320 advertisers had signed up for the opt-in service. About 20 percent of the users signed up via the website, while a million had responded to offers from six database companies. The official start of Blowfish Works is set to January 1, 2008. (Note, February 17, 2008: The official launch has been delayed until March 15, due to the “porting process and carrier certification” Carl Freer explains in an email).

”Blowfish Works is not just a matter of ads,” he says. ”You can send anything, ring tones, music videos. Ring tones are a $6 billion market, where half of the revenue goes to the cellular operators.”

You can also send political ads to well defined target groups.
”We are talking to one of the presidential campaigns about using the Blowfish-model to send political ads and video clips to people who have showed their interest, ” he says.

The fact that they are using an opt-in model means that the ads will get a better reception than if it had been spam. Besides, the ads will never interrupt a phone call.

”We are hoping that people who run fan sites on MySpace will discover Blowfish. There are people with MySpace sites that have large numbers of visitors, but are unable to capitalize on that. We could license our technology to MySpace in exchange for 20 percent of the revenues. It could be a great tool for local rock bands that want to get their music out to friends and acquaintances, and maybe even earn a commission from an ad that is played before the song,” he says.

”I’ve been trying to find people with databases and that want to make money from them. Pop, rock and rap-stars could use this model to stay in touch with their fans. We could also issue cash cards with the artist’s name on them that will be preloaded with money when the fans click on the ads. It’s going to spread like a virus,” Carl Freer says.

Hans Sandberg

Coming Up: A New Interview With Carl Freer

Carl Freer in New York City.
                       Photo: Hans Sandberg

On February 5th, I met with Carl Freer in SoHo, where he gave me an update on his work to relaunch the Gizmondo, and insight in his coming "grassrots campaign" to clear his name, and stir new interest in Gizmondo. Check in again tomorrow, Monday, February 18, 2008.

Also on this blog: My October interview with Carl Freer about Xero Mobile and Blowfish Works. 

Hans Sandberg

Hubble Telescope Images