SpinVox: Do just one thing but do it right

SpinVox, founded in 2003, is a pioneer in delivering speech-to-text applications. SpinVox claims it has agreements with twelve telcos, to provide a system to translate voice mail messages into SMS or emails. These days SpinVox has been in the news because it just secured $100 Million financing from Goldman Sachs, GLG Partners and others, to fund their international expansion. See the blogsphere reaction:

Considering Automatic Speech Recognition as just a Voicemail feature, $500M valuation seems really high when compared to Voicemail suppliers.  Current price for Voicemail systems can easily be under $2/user. Even assuming Spinvox could sell the feature to carriers at $2/user, how many customers do they need to have to justify their valuation? Note the many competitors in this domain: startups (Jott, GotVoice, SimulScribe), specialized software (Nuance), big players (Microsoft, IBM, Google) and messaging vendors such as Comverse, Openwave or Alcatel-Lucent. The valuation reminds me of the Internet Bubble, where money was coming from investors instead of from the customers.

Nonetheless a good learning for any start-up seeking financing. SpinVox just does once thing, speech-to-text, and builds on its core competency to provide related applications (voicemail, blogs, social networks, etc). Do one thing, and be the best at doing it. Venture capital will love you, and hopefully your customers too.

One thought on “SpinVox: Do just one thing but do it right

  1. James Siminoff

    Jose,

    I like the post and found it interesting. At SimulScribe we believe highly in your theory of doing one thing and doing it right, to the point that all we do is Speech to Text for Voicemail.

    While we have not gone out for a VC round (we have not required that level of funding) I agree that the VC’s love our “focused” model and are always contacting us.

    Too many companies get distracted allowing more focused competitors to eat their lunch. At SimulScribe knowing that helps us to maintain our focus every day as distractions are always tempting.

    Jamie

    James Siminoff, Founder
    SimulScribe

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