Last Wednesday, Technion’s E-Club had organized a meeting with FoxyTunes founders, and I was in the audience.
All I knew prior to this meeting, was that FoxyTunes was an Israeli start-up that developed an add-on for Firefox that lets user control almost any media-player right from the browser, and that recently it was purchased by Yahoo! for a reported $40 million.
I have to say I was surprised by this purchase, since the technology behind their product is quite straightforward, so I wanted to understand what value did Yahoo! see in FoxyTunes, beyond the simple add-on.
The meeting was quite casual, as most E-Club’s meetings are. Following short story of the company, was a q&a panel with active participation from the audience.
Almost immediately you could see that there is a clear division of expertise between the founders. Alex, the younger brother is the ‘technology guy’, while Vitaly, the older one is the ‘business guy’.
Of course most of the time I was concerned with formulating my questions, and not with hearing the answers, but I still noticed some interesting points raised by the guys. My comments to them are in italics.
- FoxyTunes is not only an add-on, but they also have a website, FoxyTunes Planet, that displays a mesh-up of information from other sites (Wikipedia, Last.FM, YouTube) about the music that currently plays in your FoxyTunes player.
- They don’t consider themselves competitors with the desktop media players (like iTunes, WinAmp, Windows Media Player), but rather complementing product. – Doesn’t it degrade desktop players to commodity status? (never mind what player you have, as long as you have FoxyTunes in your browser)
- As far as they guys were ready to admit, FoxyTunes don’t have any direct competition at all. – Thats an interesting point. Usually products don’t have competition if they are very unique and innovative.
As I said previously, the most interesting thing for me was to understand Yahoo’s decision to buy FoxyTunes. Of course I wasn’t the only one pondering about this, so quickly this question was raised.
Alex’s (the ‘tech guy’) answer was the following: they were in talks with Yahoo over possible partnership for some time, till they came to understanding that they have the same vision for the future of the product. So they decided that the best possible partnership is to have FoxyTunes become part of Yahoo.
Here comes the most interesting part: Yahoo bought not only the technology and the product (the add-on and the FoxyTunes Planet website). They bought 2 much more valuable things:
1. Large user base – FoxyTunes is very popular product, with dozen of million of users worldwide.
2. The developing team – the whole FoxyTunes team (9 developers) are moving to California to work for Yahoo on future development and integration of the product inside Yahoo.
So this seams to answer my question. Its not the technology so much that Yahoo is interested in, as the user base, that they can now tap into, and the talented dev team that will continue to work on the product, only now with Yahoo’s benefit on their minds.
At the end of the q&a panel, Vitaly (the ‘business guy’) summed up the meeting with some advice for beginning entrepreneurs. Most of them were sound , so I took the trouble to write them down:
- Success = Passion + Technical ability + Market
- Users don’t always know what they want – do what you feel is right
- At first stages, focus on product development, not business development
- Small amount of resources is an advantage – makes you do things, not buy things.
- Stealth is usually the wrong strategy – be as open as possible about your product with users, press etc. unless you have a serious reason to behave otherwise. Feedback from people is crucial.
- Find the right investors. Make sure potential investor has the same vision for your product as you do
- Don’t be distracted by naysayers – if all would agree with you, they would have implemented similar product themselves.
- Don’t revolutionize – evolutionize. Instead of trying to break some totally new ground, make an incremental improvement to existing solution.
- Customization is important – people like making little changes, so that things start feeling like their own.
Overall it was an interesting evening, so kudos go to Technion’s E-Club, good work, guys.
And of course FoxyTunes guys – great success. People may have different opinions, but your success is undeniable.
Back at home, after checking the Foxytunes Planet website, I was quite underwhelmed by it. Again, as is the case with the add-on, it is a very straightforward product. It’s an aggregator of relevant content from other web-sites (artist’s biography from Wikipedia, music videos from YouTube, etc.). It doesn’t have any original content, it doesn’t mash it up in any innovative / interesting way, and the GUI is very predictable. I don’t see myself using it.
I think that in order for mash-up to be successful, it truly has to be more than the sum of its parts. Maybe it should have novel technology that is interesting to experiment with (check Yahoo! pipes), or maybe it should have some compelling viewing experience (see Twistori), but it must have some added value. I fail to see any of this in Foxytunes Planet.