Why Freemium?

It was November of 2007. Vlingo was about a year and a half old and we had a full day off site to discuss a strategy for our first Vlingo branded product. Like most companies with groundbreaking technology, we wanted to release a reference application to show the world what we could do. Most people had a bad impression of speech recognition and we wanted to get users to prove that this was not your father’s voice recognition -- that people would adopt it. Also since our technology gets better the more people use it, we wanted to make it free to maximize adoption. We started off debating between building different types of voice enabled apps like SMS, IM and web search. It was at this point that I first heard our co-founder Mike Phillips ask the question that would lead to our company vision. “Why develop one type of voice enabled application? People should be able to say anything to their phone and Vlingo should understand their intent and take the appropriate action.” Instantly everyone in the room saw the light – you could feel the excitement.

Fast forward to today. This “reference app” has been available for almost a year and already millions of people have used it on their Blackberries, iPhones and Nokia smartphones to instantly connect with the people and information that is important to them. Amazingly the average user uses Vlingo around 5 times a day! Our goal is to continue to invest heavily in our products and technology to offer new functionality and make Vlingo available to more people around the world by offering more languages on more types of phones. The problem is finding a business model that fits these broad goals. The two standard options are to charge users or to advertise. If we charge, many less people would be able to use Vlingo and we’d be stunting the growth of our user base. If we advertise the user experience would surely suffer -- plus current mobile advertising rates are ok for a couple guys building an iPhone app, but not for a team over 40 developing cutting edge technology. We believe the answer to this challenge is freemium.

The idea of the freemium business model, first articulated by venture capitalist Fred Wilson in 2006, is to offer significant functionality to customers for free with the option to pay for enhanced features. Two weeks ago we announced the release of Vlingo for Blackberry 3.0 with the following enhancements over 2.0:

• More Hands Free support including Bluetooth
• Faster -- up to 30% faster on many devices
• Full support for the Blackberry Storm
• Easier, faster Web searching
• Email from multiple accounts
  

With this new version we will continue to offer most functionality for free with the option of purchasing premium features in the form of Vlingo Plus. We know that the majority of people will continue to use the free product, since it has most of the features our customers use on a daily basis, but that is fine with us. We only want some of our users who find our premium functionality especially valuable to pay a onetime fee of $17.99. We think that’s a small price to pay for things like the ability to send emails without having to look at your screen. Of course we’re happy to continue to support our current 2.0 users if they chose not to upgrade to 3.0, although they’ll be missing out on 3.0’s enhancements.

As Mike said back in 2007, we will continue to work towards our vision that users should be able to say anything to their phone and we will understand their intent and take the appropriate action. As we do that, we will continue to make sure that most functionality remains free. Whether you purchase the Vlingo Plus or continue to use the free version, we will work tirelessly to make Vlingo the most useful application on your phone.

Hadley Harris, Head of Market and Business Strategy, Vlingo

Vlingo Beta for Nokia S60

Today Vlingo announced its official beta support for Nokia S60. This is a truly exciting step in the evolution of our business and initially will include support for the Nokia N95, N95 8GB, E51 and E71.

While we have attracted a significant and loyal following through BlackBerry and iPhone downloads, we also recognize that S60 and in particular Nokia represents by far the largest single path to widespread distribution. Consequently, I have been spending a good deal of my time recently showing Vlingo demos to various category groups at the world’s largest manufacturer of mobile phones – Nokia.

You might be forgiven for thinking of Vlingo as a US company; we did after all launch our first products in the US, but in fact Vlingo has grown to become an international consumer offering with customers worldwide and a European office in the United kingdom. It’s from that office that I conduct the day to day business with our customers and partners in Europe and since joining Vlingo just twelve months ago have been privileged to witness the growing tide of interest in Vlingo.

As a European and for those reading this blog in Europe, it will probably come as no surprise that Nokia stands head and shoulders above other mobile phone brands regards popularity in this part of the world, however, what is surprising to those outside of Europe (including many of my US friends) is the scale of their domination. In 2007 alone Nokia shipped over 450M devices, yes! That’s nearly half a billion, representing over 39% of all global device sales. Not bad for a company who originally thought the future lay in rubber boots!

Founded in 1865 in the Finnish town of Tampere (which they describe as the Manchester of Finland), Nokia has grown to become the world’s largest manufacturer of mobile devices accruing some 39% market share. In the distance (as at Q3 2008) they are (well not exactly closely followed), but indeed followed by Samsung with 17.3%, Sony Ericsson with 8.6%, Motorola with 8.5% and LG with 7.7%. And all this from a company Head Quartered close to the arctic circle whose market leadership some thought to be threatened by the Motorola Razor!

So of course, on the back of these staggering figures we are hugely excited to be embarking on this additional path and I personally have had the good fortune to spend a great deal of time recently in Finland with my new found Nokia friends ensuring that the Vlingo product meets with their very high and exacting standards. We hope very soon to be able to make some exciting announcements including our launch on Ovi Store. Ovi Store looks set to provide a truly great user experience for many categories of applications, including messaging, games, music, entertainment and much much more. So look out for more news.

For those carnivores amongst you making the pilgrimage to meet with this great leader of our industry, I can certainly recommend Reindeer from the watering holes of restaurant Tiiliholvi in Tampere or Restaurant Demo in Helsinki and be sure to pack warm close during the months of October through February when temperatures can drop as low as – 20 degrees (and that’s in European money!)

I’ve found the Finns to be delightful (even at airport security!) and the English language seems adopted almost everywhere. Nokia as you can imagine, plays a very large role in the economy as it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki), so we are even planning a Finnish / English language variant to support the accent.

Please join us on this new Vlingo S60 journey and help us make Vlingo on S60 as big a success as BlackBerry and iPhone has become by signing up for our new language beta. We are looking for a limited number of people from the UK, Spain and Germany to try out the new version. Remember, this is a language beta so initial recognition accuracy may be less than you would see on our GA versions.

The beta will run through May 31, 2009. To participate in the beta go to the following links from your Nokia device.

UK English: vlingo.com/betaen
Spain Spanish:vlingo.com/betaes
German:vlingo.com/betade

Below are documents for your reference during the beta:

• Vlingo FAQ
• Vlingo Privacy Policy
• Vlingo Terms of Service

For questions and support during the beta period please contact Vlingo via email at: NokiaBetaEN@vlingo.com

Ashley Griffiths, Managing Director, EMEA, Vlingo

The Next Version of Vlingo: Vlingo 3.0

Since we launched Vlingo 1.0 in June of 2008 as a free application, we’ve been literally overwhelmed with demand. What really started as an experiment to see if people would use a “voice user interface” to control all the applications on a mobile phone has become the most popular mobile voice app in the world! Given this response, we had to decide between maintaining the project as an experiment or invest deeply to keep developing a better voice user interface.

Today we’re announcing that we’ve chosen the latter path and have made significant investment to bring out Vlingo 3.0 with a great deal of new functionality including hands free support. This also means that we had to make the business decision to charge for some of this enhanced functionality. The full feature set will be available for a fee, but we will continue our tradition of offering most of the functionality as a free version of the best speech recognition software in the mobile industry. The free version of Vlingo 3.0 includes everything except the full ability to send text and email messages. See the matrix below.

Now…what can you do with Vlingo? Below is a matrix to help you see the functionality between both offerings.

Vlingo 3.0 adds support for lots of corporate BlackBerry accounts as well as more devices including BlackBerry® Storm™, BlackBerry® Bold™, BlackBerry® Curve 8900 ™ and BlackBerry Pearl Flip.


US, Canadian and UK users can get Vlingo on BlackBerry App World™ or on the Vlingo website.

And we have good news for existing users: if you already have Vlingo 2.0, you can keep using Vlingo 2.0 for free for the life of your device. Of course, if you want to stay on Vlingo 2.0, you’ll miss the new hands-free features. But it’s up to you!”

As always, we will continue to post news, tips & tricks on the Vlingo blog and on Twitter at http://twitter.com/Vlingo. We want your feedback. Let us know what you think!

-Erin Keleher, Senior Marketing Communications Manager, Vlingo