Dashwire CEO Ford Davidson Talks Financing, Apple Vs. Android, and the Future of Smartphone Syncing in a “Market That’s on Fire”
Ford Davidson has more smart phones than he can hold in two hands. It’s all part of the business, he says, a necessary product of keeping tabs on different mobile platforms—and competitors—and staying abreast of new trends. And though finding pocket space for all of his devices may be challenging at times, the 31-year-old founder and chief executive of Seattle-based Dashwire is no less than enthralled by the mobile scene.
The mobile software startup is a product of Davidson’s experience in the wireless industry. After getting his start at another local mobile startup, Monet Mobile Networks, Davidson spent three and a half years as a project manager in Microsoft’s mobile devices group, where he worked on the launch of Windows Mobile 5.0. Then he got an idea for a brand new company, and in 2006 founded Dashwire. Now, four years later, Davidson says the company is going strong.
Dashwire, which develops software and applications that automatically synchronize data from cell phones to the Web, first popped up on our radar in May 2009, when the company scored a $1.6 million investment, led by Seattle-area angel investor Geoff Entress and Best Buy Capital. And, catching the attention of another new investor, Bellevue-based Trilogy Equity Partners, the company raised an additional $1.1 million in September.
The platform appeals to the consumer market because it allows smartphone users to automatically sync pictures, videos, contacts, text messages, and phone records to a Web-based dashboard, where they can manage their cell phone minutes, transfer content from one phone to another, or send mobile text messages right from their desktop. The service also has social capabilities—through the app, you can even share photos via outside networks like Facebook and Flickr. But perhaps the most appealing aspect is that Dashwire is free for consumers, giving it a leg up on the competition, such as Apple’s MobileMe service, which offers automatic synchronization between the iPhone, iPad, and Mac and PC computers, for $99 a year.
While much has happened in the last year for the startup, Davidson says the ride hasn’t slowed down yet. In May, Dashwire was one of three local startups to make it onto FierceWireless’s Fierce 15 list, which recognizes innovation and intelligence in emerging wireless companies. And at the end of July the startup brought in another, albeit smaller, round—$515,568 in options, securities, and debt, from an undisclosed investor, according to a regulatory filing.
And while debt and options may not sound the same as equity, according to Davidson, the financing is another key step the company has taken over the last year in preparation for further expansion—including the roll-out of new products and capabilities—this fall.
“We have a number of projects that we’re going to be shipping this fall,” he says. “We raised a small amount of money just to insure that we hit those milestones and have enough cash to ship those products, so that we can do a larger funding round later in the year.”
Dashwire hasn’t broken the profitability barrier just yet, but Davidson predicts that’s all about to change. When we last reported on the company in May 2009, Dashwire had six full-time employees, and five contract workers. Today that total has grown to 20. The company has also revamped its business plan to tackle the inevitable question that all startups, especially those in online apps, face—how to make money. After much thought, Davidson says, the company made the choice to halt free downloads from Dashwire.com, and switch to a licensee service model.
“The way that our company has evolved is that we started out as a direct-to-consumer business,” Davidson says. The company first unveiled its services in 2007, and made them available for Windows Mobile users in early 2008. “That was before app stores were available,” he adds. And after receiving “great responses from customers,” Davidson says companies began to approach Dashwire.
“As we got some coverage, all these companies in the industry came to talk to us about how we could help them,” he says. Seeing an opportunity to cash in on a product without charging consumers, Dashwire opted to make the shift to a licensee program in 2009.
And the plan, he says, is paying off. Dashwire has already inked a licensing deal with Best Buy, offering its services through a platform called mIQ, and it has another deal in the works. This year the company is on track to pass an important milestone, according to Davidson.
“We’re going to do about a million dollars in revenue this year, which is fantastic,” he says. “In past years we didn’t make any revenue. Last year I think we had a very small amount of revenue. We moved to the licensing model, but we hadn’t shifted any products yet. We shipped the Best Buy product. We’re about to ship another product. So we think this model has a great trajectory.”
But one thing hasn’t changed—the company’s services are still free for consumers, whether you download the free Mobile Best Buy version, or participate in Dashwire Labs’ direct-to-consumer service, Awesome Drop. The Drop platform allows consumers to take any file they have on their computer, and have it wirelessly transferred to their mobile device so that they can access it from anywhere. The new initiative is a way for Dashwire to continue to expand its services and test out new functionalities.
“The goal with the labs initiative is to really be nimble in getting products out there and iterate on those products based on consumer feedback—take those learnings and bring it back into the product suite that’s licensable to different companies in the industry,” Davidson says. “The feedback that we’re getting is helping us to improve that overall platform offering that we then improve to our licensees.”
Dashwire services are currently available for BlackBerry, S60 (Symbian), Windows Mobile, and Android phones. The products are not, however, available on the iPhone platform. And while you can transfer music via Dashwire’s apps, they do not yet integrate with iTunes, something that Davidson says is a top request among customers, as iTunes is a popular music library management program for both Mac and PC users. So why doesn’t Dashwire integrate with the iTunes, iPhone family? It all comes down to the market climate.
“Basically what’s happened is there is like a mass movement into smartphones. Because more and more people are buying these devices, they’re buying them from different operators. Some of those people are moving from Blackberry phone to Android phone, and for us, this is all great, because we support different phone platforms—that allows people to migrate content from different phone services, and it allows us to help get their phone set up,” Davidson says. “What you’re seeing today is more migration from a Windows phone or a Blackberry phone into an Android phone, and less people emigrating from an iPhone. Apple users are pretty loyal, and the number of Android users on AT&T are pretty small.”
But that doesn’t mean they’re untouchable. The iPhone user, of course, is still a valuable market for mobile companies to try to tap. However, the rise of Android, the open-source operating system that has spawned a Google-powered app store, has grabbed the attention of developers and consumers. While Android is on the rise, more developers have started to move from the iPhone app store, which has more restrictions and tougher competition, to the freedom and flexibility of the Android platform. And consumers have followed. In the last quarter, Android phones outsold the flagship Apple iPhone for the first time. This has changed the game, according to Davidson.
“Apple is continuing to do cool things, but for developers Android is the new hot thing—If you’re a developer, you can pick up any Android phone,” he says. “The good news is, customers with iTunes are used to paying for things—they can just add it to their iTunes account. Most apps downloaded through the Android market are free. Apple has the benefit right now in that they have users who expect to pay, as opposed to users in the Google app store.”
While a larger playfield with more players is better, in many respects, for mobile companies and consumers, Davidson says, it also presents new challenges—like how to make your service or app stand out among the crowd.
“As these markets fill up with content, the question that users going into those markets have is, what are the right apps for me? And where do I find them?” Davidson says. “There are so many apps that are available, and software is really going to be the real driver of that differentiation.” And having more choices puts the consumer in a very powerful position. “For the end user, being able to discover software to help make that phone experience for them is becoming more and more important,” he adds.
And while Davidson says he “would love to do an iPhone app” for Dashwire, it’s not looking to be an immediate possibility with the current competitive climate.
“We haven’t been able to do one up until this point because Apple limits the developer services,” he says. “And because they have Mobile Me, there’s a lot of question around ‘will Apple let it into the app store?'”
Nevertheless, Davidson says the company has carved out a niche for itself in the wireless software marketplace—one that may even keep customers coming back, and add significant value to service providers they work with.
“What happens with smartphones that is really crazy is the device returns are huge—about 30 percent. And the biggest issue with that is that there’s usually nothing wrong with the phone. The sales person got them all excited about all the things they could do, but then they got home and they didn’t want to read the instruction manual, or there are too many apps in the app store, and it’s just too confusing,” Davidson says. That’s where Dashwire has an opportunity to clear up the confusion, and help the average consumer customize their device and enjoy its capabilities from day one.
“We’re really focusing on the core areas of the customer’s lifestyle, and the fact that our phone works on the different phone platforms is helping to differentiate us out there,” he says. Because Dashwire’s services are offered on most smartphone devices—except for Apple’s—consumers are able to easily migrate information from their old phone or computer to a new one.
“Dashwire focuses on mobile operators and device manufacturers—as they are continuing to come out with more and more smartphones in their device portfolio, they want a unifying service so that when a customer buys a Blackberry, or an Android, or a Windows phone, they want an app that can work across all of those platforms,” Davidson says. “Phone operators are great customers for us.”
So for the time being, Davidson says Dashwire is going to continue focusing on improving upon what it already does well.
“Our sweet spot is around helping customers start out right with their phone,” he says. “We’re participating in a market that’s on fire, so we’ve got a lot of wonderful opportunities here to help people get the most out of their phone, what their phone offers, and to help them make it more a reflection of them.”