Interview with Christian Schagen, Jamster Inc.

Filed in archive Entrepreneurship on April 3, 2006

Ringtones have become a sizeable business bringing in millions for companies selling them and billions for operators. A good friend of mine Chris Schagen took the helm of German Jamba after it was bought by Verisign to start their US operations. Jamster as the company is known in the US has rushed to buy advertising space all over and build a multi million dollar business from 0 in just 2 years.



Chris was so nice to answer some questions for me via email.



Q: For the uninitiated - what is Jamster doing?



Jamster is a provider of mobile entertainment and content. The most
popular mobile content to date is - you've guessed it - ringtones,
which come in all kinds of flavors, be it realtones, polytones,
funsounds, and videoringtones. The innovation Jamster brought to the
US marketplace is that it operates primarily off-carrier-deck, i.e.
doing its own demand generation - which at the time we launched was
pretty much unread of in the US. Additionally, Jamster is offering
some really slick next generation services in partnership with
carriers and MVNOs, such as e.g. a mobile full-length-music service
with all-you-can-eat music in a rental model.



Q: What is your role and position within VeriSign/ Jamster?



I was leading the launch of the US operations for Jamster and
subsequently ran all marketing/demand generation. As of end of March,
I've left Jamster to create my next venture.



Q: What did you do before Jamster?



I was a co-founder of Mundwerk, an voice application service provider
based in Berlin, Germany. We started in 2001 - which we thought was
smart timing after the burst of the bubble and with the prospect of
being there big when the economy rebounded. Turns out that for about
4 years we've had a very hard time building our business. When you
think the Valley was in bad shape back then, think again, for in a
country where there is no incentive whatsoever to take any risks but
huge penalties for screwing up it's not fun to sell the new new thing.
After 4 years we sold the business - which turned out to be poor
timing again, for after the sale the remaining founder lead the
company to some very decent success. Learned my lesson though, and
will apply in my next venture.



Q: Please tell us more about the history of Jamster (Jamba)?



Jamba was founded in 2000 by the folks who had also founded Alando,
which later had been bought by eBay. For the first 3 years it
developed pretty steadily, but with the emergence of premium SMS and
off-carrier-portal content distribution the company experienced a huge
growth spurt and quickly established an international presence, and
now is the largest mobile content provider in the world in terms of
revenues, operating in over 30 counties and connecting to over 100
carriers. In 2004, it got acquired by VeriSign.



Q: What makes the ring tone business so successful? After all some
artists now see bigger royalties from ring tones than CDs?



Ringtones are a fashion statement, allowing you to express yourself.
And granted, the tones most phones are equipped with are pretty much
crap, giving you a large incentive to experiment with what you can do
with your phone anyways.



That some artists see bigger royalties from ringtones that from CD
sales - and I'm pretty confident we are really talking about some
selected cases - is probably more due to the fact that the artists
really don't get a lot from the $14 or so you pay for a CD.



Q: What do you think is the market volume of ring tones in the US now
and in the next few years?



Every product in mobile goes through a dramatically short life cycle,
because handset manufacturers continuously crank out ever more capable
devices and the installed handset base replenishes in about every 18
months. So e.g. polytones which constituted a significant portion of
sales in 2004 are in sharp decline while realtones became the standard
in 2005. Overall, the market for mobile content will continue to grow
in the double digit range in the years to come, as new products and
services make up for the decline for the mature products. As a
company capable of doing distribution in 30+ markets, Jamster is
seeing all kinds of innovation on an everyday basis, and there are
some really compelling things coming up, especially with ever
increasing phone memory and OS capabilities and innovative carriers
embracing application based pricing flexibility for data.



Q: Although Jamster is part of VeriSign it is a pretty rare breed -
essentially an American company as a subsidiary of a German company.
Why do you think so few German companies 'make it' over here?



I am really puzzled to see how few companies from Germany actually try
to make it here - almost none. If there is any market out there which
is open for whatever kind of innovation, it is the US. Of course
there are all kinds of caveats you need to take into considerations,
but with the right local folks on board it's definitely doable.



Q: You have seen both sides founder and entrepreneur and corporate
manager of an international company - What is your most important
lesson as an entrepreneur? - What is your most important lesson as a corporate manager?



My most important lesson as an entrepreneur is to hang in there and
never ever ever ever give up. If your customers don't get it, tweak
it, and try again. It's tough business to find those few early
adopters, but eventually - if your idea is right - you'll be getting
there.



My most important lesson as a corporate manager... oh boy. It
probably is that you have to accept that being in a corporate
environment is a whole different ballgame, and that the whole
co-ordination and upward management kind of stuff is in fact very
necessary and not a waste of time at all - even if it may appear that
way for the entrepreneur's corporate-unsavy eye.

Thank's Chris!