40 Million Dollar Company, Paying Dividends, Growing Steadily: 3CInteractive CEO John Duffy (Part 3)

Sramana: When you sold that company in 2002, you received a return. Had you had any other returns from other businesses, or was that the first?

John Duffy: That was the first, and to date it has been the only exit I have ever had. I did well, but I did not get rich by Silicon Valley standards. I made about a million dollars. In 2002, I began to think about mobile as the next big thing.

In a way, I can describe what I have done in my career as building tollbooths. At MCI, I built tollbooths that allowed my customers to charge for things. My Internet company was built on processing payments. Mobile seemed like a natural evolution for me, so at the end of 2002 I put together my first business plan for a mobile communications company.

I made some assumptions. One of them was that mobile was a more advanced industry [in] the rest of the world. I figured this would be the first opportunity to copy overseas business models and bring them to the US. I looked at that and worked on it for almost two years. In those days, it was about content sales. It was about selling ringtones, games, and subscribing people to programs, where mobile phone billing was the payment system used. I knew about both of those aspects of the industry.

What I did not expect was how difficult it was to get connections with U.S. carriers. From my perspective, this was something that the European and Asian companies had not expected, either. Nobody was really building a sustainable business. I had enough experience with consumer billing to know that these programs would not last.

In 2005, I rewrote my business plan and geared it toward methods that I had been successful with in the past. I focused on integrating another platform into someone’s existing technology infrastructure. At that moment, 3CI was born. We started as a company to help other companies get short codes activated with aggregators to carriers.

Sramana: What is the significance of a short code?

John Duffy: You can go to GoDaddy and get a URL turned on. In mobile, a short code is somewhat equivalent to a URL. A short code is a five- or six-digit number that identifies your server on the mobile networks. Having a short number installed is a laborious process. You have to procure one and they are expensive, costing between $500 and $1,000 a month.

You then have to go to an aggregator to submit your program and get it approved by all of the various carriers you want to connect to. It is a bureaucratic, paperwork-intensive process that is highly frustrating. It was more frustrating 10 years ago than it is today, but it remains a frustrating process. We built processes and operations to support that process.

Sramana: Who were your customers?

John Duffy: Our customers were brands. Our first noteworthy customer for 3CI was ESPN. From there, after building the process that allowed us to manage the connections, we started building our platform technology, which allows us to communicate seamlessly using several different data protocols.

This segment is part 3 in the series : 40 Million Dollar Company, Paying Dividends, Growing Steadily: 3CInteractive CEO John Duffy
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