Posted by Ross Hill | 2 August 2007

Peter Adderton

Amp'd Mobile

3 Comments

Tags: mobile video

Amp’d Mobile is a great example of how things can go wrong. Their service was built around Amp’d Live, a pre-installed program on all Amp’d Mobile phones which gave users access to downloadable and streaming video on-demand clips, live events, streaming radio stations, and downloadable content such as games, ringtones, and songs. Today they’re in court as bankruptcy proceedings begin.

Moconews have the exclusive interview with Peter in a 32 minute podcast.

Peter successfully launched Boost Mobile and is still the chairman and director of Boost Mobile Australia. He has come under attacks during his time at Amp’d because he is still flying around in his helicopter and has lots of other nice expenses. He says that he has been flying for 20 years and bought it long before starting Amp’d, since he made a nice sum out of the Boost sale. Of course, when the director of a company going under is still flying around in his own helicopter it doesn’t look too good! He said the Venture Capitalists would have been horrified if he was spending their money on it.

Anyone who knows venture capitalists know that the day they put one dollar of their money into jet fuel will be a cold day in hell.

The failure of Amp’d, he maintains, was a finance issue, and not so much an operations issue - although they sure had a lot of operation issues still. They were in the process of changing vendors from a small scale option to one that could effectively scale to the large number they were aiming for, but at the same time they signed up 100,000 new customers over a 17 week period. In the end there were major cashflow issues because at times some customers weren’t being billed at all. Amp’d had major growth but were lacking the infrastructure to back it all up.

You don’t raise $400 million in 18 months by spending time inside the office. Trying to ambitiously raise that amount of money, while at the same time trying to create something new and different, was a challenge that caught up with us in time. On the financing, we were learning as we went along. With the amount of cash that we required, it probably made more sense to go with one or two big pockets than a lot of smaller pockets.

But what were they really trying to do with the company? The goal was to be a mobile media provider, and at the time they saw being an MVNO as the best strategy to get there. Peter’s focus was what was going through the pipes and how people experienced the content instead of trying to become the next big telco.

Peter learned that the media can have very different faces. In magazines, newspapers and blogs we are always reading about how Facebook or Myspace have sold for millions or how Youtube is taking the world by storm and was acquired by The Big G for $1.8 billion, then we hear about the Enrons who have had their time in the spotlight on the way up and are now back there on the ride down.

The one thing I have learned about the media is that you have to take the good with the bad: when you’re on the rise everyone’s there for you, and when you are going down, everyone’s there to kick you down.

So what are the plans for the future?

I want to continue with a team to build out what we set out to build. The more wireless pipes that are built, the more there will be a need for organization and aggregation of content. With the amount of cash that we required, it probably made more sense to go with one or two big pockets than a lot of smaller pockets. But I won’t be out there raising $400 million again.

Meanwhile their direct competitor Helio is charging ahead, recently announcing the 100,000 subscriber mark with an amazing ARPU (average revenue per user) of $100, which is much higher than the average for mobile startups.

Today Adderton will have his day in court as the Amp’d Mobile bankruptcy auction proceedings begin. If you’d like to hear the full interview you can visit Moconews.