Here is the riddle. Which French start-up has been selected by Red Herring as one of the most promising European companies? Has started at the worst point of the Telecom crisis and is still in existence? Was able to take advantage of opportunities created by numerous and varied market disruptions? The answer is Volubill.
Volubill is a start-up company based in the suburbs of Grenoble, France. It works in an industry that is shaken by numerous disruptions: the mobile Telecom market. Within the last few years, this business dominated market becomes mostly a fashion driven consumer market. New business relationships take place when Service Providers such as Orange prepare to distribute Hollywood video clips. IP telephony, personified by Skype, threatens to brutally destroy the source of voice communications revenues which bring about 90% of European mobile operators' income.
Volubill founders, coming from large groups like Hewlett-Packard and Cegetel, identify a new market need uncovered by these disruptions. The Telecom Service Providers' existing billing systems are not able to deal with new multimedia services. Service Providers have to bill users according to the content perceived value as opposed to the communication duration. For instance, a mobile phone user may receive a weather forecast map free of charge, but he may have to pay to watch live goals of a football cup final. Volubill is created in 2001 and takes the challenge to adapt legacy billing systems to these new requirements.
However, the market evolution is such that this vision does not materialize as fast as planned. The first obstacle is timing. During a market disruption, it is difficult to anticipate the point when the market takes off. As André Meyer, Volubill CEO says, "We initially thought that we were six months late. We ended up being one year in advance". The consequence was a lack of revenue in 2002 and 2003. The second obstacle is the Service Providers' capacity to uncover new uses that will set off consumers' massive adoption and justify to invest in Volubill' billing solutions. Since 2000, several new mobile services were launched with meagre success: WAP (mobile internet access), MMS (photo pictures attached to short messages), push-to-talk (walkie-talkie functionality). Only in 2004 did new mobile services meet a broad user acceptance: messaging, video clips, music and games download.
In response to these challenges, Volubill executives engage into three strategic moves. First, they search which market niche will lead off. Thanks to high mobile users growth, Asian Service Providers are better prospects than their European counterparts. Alain Lefebvre, VP Marketing at Volubill, flies across Asia and evangelizes the market. He finds his first large customer in the Philippines, followed by many others. Second, Volubill tunes its value proposition. Inspiration comes from watching Amazon's billing efficiency: when a customer places an order with Amazon, he knows precisely how much he will pay, when his credit card will be charged and when his order will be shipped. From this observation, Alain Lefebvre derives a simple and powerful value proposition : Volubill' solutions bring full clarity to Service Providers when billing their customers. Third, Volubill creates a core competency to keep one step ahead of competition. Nicolas Bouthors, Volubill's CTO, bets on the combination of expertise of computer networks and Telecommunications networks.
Thanks to these 3 strategies plays, Volubill was able to stick around while competing US based start-ups were forced to give up. The latter selected a less focused strategy and spent more money to reach a poor result. On the contrary, Volubill showed its products marketability in Asia and prepares to attack the European market.
This example shows that a European start-up can succeed better than US counterparts, thanks to a clear strategy in a disruptive market. It shows the way to other European companies on how to innovate.
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