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!