Small business Q&A
Jason Kerr, founder of Spoke Phone, talks to Aimee Shaw about starting new ventures and mentoring start-ups in Silicon Valley
What does the business do?
We turn mobile phones into business phone systems. In the old days, companies used to have to buy a phone system . . . desk phones, wires, landline numbers, all of those kinds of things, and now all they need is an app on their mobile phone.
What was the motivation for starting it?
We wanted to make life simple for small businesses. The second motivation was that we noticed in our company that people were talking less, we’re texting more, emailing, and what we saw were some problems were much better sold by voice. As companies employ more people who work remotely, that whole talking and solving problems, got less and less as people started relying on email, so we wanted to put a system in place where companies can easily talk internally.
I like solving problems with technology. I started the latest business primarily because we believe that you can solve more in a two-minute call than you can in back and forth emails.
How big is your team?
We have a team of 14 but hope to have 30 people next year.
You’ve really got to talk to the customer and you have to tune your own views based on feedback that you get. Jason Kerr
Who are your clients?
We have about 150 customers right now across Australia and New Zealand. We only started in February and we’re aiming to have 380 customers by the end of the year and these customers have mostly between five and 100 employees, companies that have a portion of their workforce who are mobile and remote.
The smallest pack we have is $79 a month. That includes five users and all calls. Prices are typically under a third of the cost of anything else out in the market.
What are your long-term plans for the business?
Our long-term plans are to build a community of small businesses who all talk to each other, their customers and their employees, without cost being a barrier.
Have you had any other businesses in the past?
This is my fifth business and I have had several kinds. My first business was an aviation software business that was sold to Accenture in the 1990s. The second business was a cellphone text messaging platform that was sold to AT&T in the US. The third business was a voice messaging platform that was floated on the MA secondary index in London and then the last business was a recruiting technology business that was bought by a private equity company in Silicon Valley in 2012.
How much competition are you facing in this space?
We’re tackling a very crowded space with a product that we believe is going to be right for the space and where the space is going to be in two years. Right now, we’re seeing that companies still want desk phones but I think in the next two years this is going to be something that isn’t top of mind. In the New Zealand market, we are probably 18 months too early. We are finding customers but I think in the next two years we will see people really question why they aren’t just living off their mobile, even at larger companies.
In the phone systems space, there are hundreds of options, but we’re the only company focusing on mobile workers. All of the other mobile systems have a mobile app but really it’s for when you leave the office you can forward your calls to it, like a little adjunct. We’re only mobile so our entire enterprise-grade phone system is in an app on your mobile phone. We’re aiming at the small businesses sector. No one else is aiming in that area.
What are the biggest hurdles you’ve had to overcome?
There’s been a series of hurdles. I’ve had businesses with 10 people through to 550 people, and depending on the size of a business and the maturity, there are different problems.
Interestingly, across all businesses, the problems are largely the same in each stage of growth. I don’t know if there is “a biggest hurdle”, but I think there’s probably about five main hurdles of any business. You have to get early traction, early validation, early market validation for your product and customers to fund your growth.
In this business, the biggest problem is going to be getting consistent call quality. If you think about what’s happening, we are mobilising — there are no wires plugged into the wall so you get interference. Our challenge is technical. How do we deliver global call quality? If you ask me in another year’s time I’m sure the problems will be different.
You do mentoring here and in the US, how did you get involved with that?
When I sold my private equity company I ended up working for them so for the past three years I’ve probably looked at about 500 companies of all shapes and sizes and through that you meet lots of people. I have ended up doing a bunch of mentoring for start-ups and people we meet through the private equity process.
What advice do you give to others thinking about starting their own business?
The biggest piece of advice is to build something people want. We all have ideas about what we think people want but you’ve really got to talk to the customer and you have to tune your own views based on feedback that you get.