Daniel Doulton Co-founder SpinVox Message Conversion Service

“Well, good evening.  Thank you very much firstly Ivor for inviting me and also to the team of hosts here tonight. I hope I can stand up to the billing.

I know there’s a heckler already over in the corner, oh no he’s moved, damn where’s he gone?

There’s a problem of musical chairs.  Sorry about this. Technology upside down.

I’m going to briefly tell you firstly about SpinVox.  There’s a lot of people only know bits of us and that’s kind of the fun of our story is that we’ve moved very quickly in the last five years since we really came about as a business.  And then I’ll tell you something about the history before you get too bored and then want to ask the proper questions and get me to fess up so let me stand back and give you a brief snapshot of who we are.

Well SpinVox does one thing.  We convert voice messages, anyone’s voice, anything you say, into text and we use the word reliably and that has been, for want of a better term, the reason we, I believe have been successful globally.

Today we convert anything from voicemails that you might receive, we convert dead phone calls into allowing people to speak text messages and increasingly we’ve finding people using us to speak emails, text messages, speak to social networks, update corporate back-ends whether they’re a sales person in the field who wants to speak an update or a record, and fortunately right now our market is kind of going sort of exponential in terms of choices in where it could go.

But I think just a couple of brief numbers that might help you understand where we are today.  We mostly work with mobile networks and you’ll typically find us being the silent player who automatically converts what you say if you call someone say in Spain today on Vodafone you will undoubtedly bump into SpinVox if you don’t, if they don’t answer their phone. If you call somebody in corporate America you may find that their landline phone is allowing you to speak that person an email immediately rather than sit around wondering, well what happens next? 

We generate revenue, we are on track shortly to reach 100 million users. We have a deal with Telefonica whereby, we’re being rolled out to all of their subscribers across Latin America.  So they have a total user base of some 125 million users.  So we’re fairly comfortably going to pass the 100 million mark by the end of this year, early next year and I think you know the upside trajectory from there is really all about the journey I’ll tell you about in a second. But in simple terms I have one simple belief that we should be as ubiquitous as dial tone. If you get dial tone you should be able to use SpinVox to use your voice to reach any screen and that has been a very powerful simple equation that we’ve used when talking to customers or going to any market.  So how did we get there?

I’ll briefly tell you about me.  I am, as a child I think my very first job from memory, as I expressed it to my parents, apart from wanting to be a farmer cos I actually believed that cornflakes came from chickens, my first properly stated job was that I actually wanted to work for what I think I called the World Invention Company. I used to think that this was how it all used to happen out there.

Through a long process of very expensive education I ended up at university, Imperial College, where I did a combined engineering degree and an MBA. Went and spent some time in industry, in fact cut my teeth in consultancy which was very much a great learning ground for what I do today.  Exposed at a young age to ridiculous amounts of seniority, ridiculously short time-lines and how to give an answer by tomorrow on a subject I had no idea about. So I know how now to hire consultants which is clearly not looking at chaps who were my age.  Twenty something at the time. I did also then go on to, for a brief interlude I worked on the trading floors in London and found very quickly that although I could do the numbers and make money it didn’t really excite me. It didn’t really feel like I was doing something meaningful.

And I bounced out to a company then, very interesting little darling of a technology company called Psion. Some of you may have experienced using the handheld organizers.  It then became the platform for Symbian which is now the phone operating system that probably theory says 80% of you now use unless you’re all iPhone users.  So I had a very good background there and headed up all of products for them internationally.  So at someone else’s expense, I learned a lot about product design, business management, internationally around lines of business and even got the opportunity to set up a new business aside Psions which was Digital Radio.

Dot com was about to happen.  I guess I knew it in my waters and I got burn out so I actually decided to quit the high tech life and went off for a year and set up my own little business all to do with flying.   Now you may say what the heck’s that got to do with anything and that’s a very good question but I learned some of my most valuable lessons at least in what I’ve applied at SpinVox from my little caper in the Alps teaching people to fly hang gliders and paragliders. That is my passion by the way so if you ever get invited out for a week-end with me do ask first where we’re going cos if it’s got a slope you may be sitting on something you didn’t expect.

So, no, my little business taught me things not only about myself. I now realized that doing something on your own is bloody tough and I realized that I’m not a loner, I need to do it with somebody else.  And I realized something else as well, a very simple lesson, a very important lesson was that I can’t sell.  I can take it all the way to the line but you get me to close somebody on a sale and I’m probably the last person there cos I’ll end up giving most of it away for free and being too nice and too British about it. That was a very important exercise because it did help me at least very quickly polarize around where my real value was versus thinking I could do everything and be the CEO of you know, the next, the next Apple or whatever it was. And it was on that venture that I met my now business partner Christina Domecq.

We were, and this is absolutely true, in Chamonix, I was flying paragliders trying to teach people how not to kill themselves and she was climbing Mont Blanc and we didn’t actually meet on the mountain, we met at the bottom but we bumped into each other and in very short succession struck up a very, very interesting relationship because we’re complete opposites. But we had this absolute attraction in terms of getting on incredibly well and understanding what the other person was about and doing. Christina at the time she was, if I’ve got my maths right was 26, and was already running her first business in New York and through a short succession of events we, post 9/11, sold her business, got involved in somebody else’s business who asked us to come in, it was a luxury yacht business based in Mallorca and it was during the sell process of that where we were helping the owner sell it that we had this wonderful moment and it’s true, this is how SpinVox came about.

We were in Madrid.  We’d been in several meetings with potential investors/buyers and all that sort of stuff, hustling around Madrid. And it was the height of summer.  It was bloody hot, we had been in meetings which in Spain means 6 hours not an hour and we’d naturally done the polite thing, we’d turned our phone off.  And came out of the meeting, got in the car and Christina turned her phone on and she had 9 new voicemails. And I think she was about into the 4^th message before she turned round and said to me eh, meh, meh, meh, meh, meh I hate voicemail, meh, meh, meh, meh, meh it’s horrible. Not exactly that but it sounded like that to me cos I was hot and feeling bothered and we weren’t getting anywhere and I was like alright, ok, what do you want now? It doesn’t work, it’s really stupid blah, blah, blah and I thought hmmm and she said the magic word and I said well what do you want it to do?  She said well, why can’t I just read the damn thing and I was like, that’s a good point. Spent the rest of the evening telling her, don’t worry I’m sure someone’s done it. I, by the way, I have a bit of a background in speech and stuff so I had vaguely, had a vague idea of what’s,  I’m sure someone’s gone and taken what I knew 5 or 6 years ago and put it on a phone and made all this stuff happen for you magically.

At 4:30 in the morning I was getting fairly convinced that no one had actually done it. And with a few very short cycles of thinking hard about it and going oh my gosh, if we’re right about this, that no-ones done it, the market is enormous, couldn’t think of at that point I think there were just over 2 billion mobile phone users thinking well, I’m sure half of the world has voicemail on it and probably half think it’s horrible and half again will probably think it’s a good idea to actually be able to read it instantly rather than have to poke around with a phone and  listen to people’s slurry and long rambling messages.

And so the momentum started gaining and we, at the same time I hit on how to solve the problem and this is the very interesting part on the technology side of SpinVox which is that in many ways we approached the problem backwards. And I realized that speech recognition was, wasn’t actually the answer and that’s why the industry had spent 20 years and billions of dollars trying to do this and wasn’t able to do it.  So we designed a system that was going to find out what the answers were first and then automate backwards.  So many of you may have seen that people say oh but there’s lots of call centre agents involved, etc. That’s true when you’re starting out with a brand new language. We have humans who help convert messages and help you, help us sorry, build the system.

And to put it into context today, roughly speaking and I’m going to be generous in this room, you probably all have a vocabulary of about 20,000 to 30,000 words. Equivalent to a lecturer at university in their domain.  The English Oxford Dictionary is about 617,000 words.  We have today a language corpus that is over 2 and a ½ billion entries.  So our system actually knows spookily over 99 point x, depending on the language, in American English it’s getting on for 99.9%, of anything you are likely to say.  We already know the answer. And what our system cleverly does is it uses a whole range of automation to find the answer.

So, with that strategy in mind, we set off, started business, got our first customers here in the UK, and in many ways I became the least liked person in the speech industry and I never claimed to be part of the speech industry at the time. But I had, you know, when we first started out and we had the first 10,000 customers we had Carphone Warehouse start selling us for voicemail as a value add service.  I remember being interviewed by people from the industry, analysts etc saying wow you’ve done it, it’s great, how did you do it.  I said, well, you’ve got to work from the answer backwards and like, no, no, no, no, where’s the technology?  And I said well there is technology but you’ve got to work from the answer backwards so I’d gone off foggily opposite to the normal convention on how you do this stuff and I spent many years avoiding the speech industry and anyone who, as a journalist or commentator, was going to grill me about speech technology and when would I license it to the world.

And I’ll come back to that point in a minute because it’s an interesting end to the tale, at least to-date.  So the business itself went through what I call about 3 major transformations and I call them back flips.

And this is the interesting thing.  We started out with a simple product which we focused here in the UK as a voicemail product.  So, wind the clock back and in 2005 if you popped into one of Dunstone’s shops,  Carphone Warehouse probably someone would have been trying to sell you apart from insurance and a head piece, how about  a bit of Spinvox Sir? And you can have a free month and we picked up about a quarter of a million customers in that process here in the UK.

So we built a retail business and it was all going very good and we could have carried on that way and we realized, as we’d understood from the outset that well this wasn’t good enough.  I wanted to be available to everybody and as available as dial tone and clearly with all due respect to Dunstone’s empire that wasn’t going to get me around the globe very quickly. And so we invested and raised about £10 million at the time to rebuild our whole system, to make it carrier grade, redesign our products, redesign everything.  And we literally had to turn the house upside down to be able to serve our network customers, a completely different game from dealing with you know cute retailers as it were cos you know that’s totally out of our control.

And about a year after that we did our first deal so in about 2006 we transformed.  2007 we started actively engaging with big networks and closed our 1^st network deal in the States with Cincinnati Bell.  And between 2007 and today we’ve closed about 35 deals globally.  So we clearly got something right in that transformation but there was something missing still. So we started working with networks ok, so you have voicemail you can stick us in plan but how do you go from there, how do you get bigger?

And this really started a very important trajectory for us as a business which I call The Journey to the Centre Of and there are three centres that I’m aiming to move our business to.

So the first centre is to make sure I get to the centre of every conversation that takes place. Because if I can actually convert most people’s messages, voice messages or whether it’s a note or whatever you want to do and give it to you on a screen somewhere I’ve made voice actually very powerful and very useful . We’re doing that today in the telephony markets and we’ve tapped into a very boring problem, one that no-one had bothered listening, thinking about for many years but you probably won’t appreciate this when I say it but did you know that anywhere between 60 to 70% of phone calls that you make, on average, don’t connect with the person first time. That’s really frustrating. And about 30% of the time you’ll probably hang up and either email or text them. 

Well, we stand right in the middle there and just keep you in the flow and even if you can’t have a conversation with somebody in real time you can speak to them and they can have a conversation with you in text or whatever they’re doing at that moment in time.

That market as we build through gets deeper and deeper into the network which is the 2^nd centre that we’re heading to.    So technically speaking we’re on a journey to the centre of the network. And the last piece which is, for me has always been set out with originally saying, if there’s one thing that people ask me, what did you do really well, it’s that we created a simple experience that works anywhere.  So the one idea of being able to reliably convert whatever you say and publish it to a screen, it doesn’t matter which screen you want, actually is one idea that can be taken anywhere.  And we’ve been able to successfully translate that through networks all the way now from, on 5 continents from Australia, Africa, Europe, Canada, US and now Latin America.

That one idea has translated in all cultures, all different environments, and is very quickly growing.

And I think it really, it really beggared the question of us when we look back and we say why was it that we were able to successfully keep going.  Well apart from keeping it really simple stupid, the old mantra that we adhere to and trying to keep my product list down to 3 or 4 ideas only rather than 50 or 100, it boils down to the fact that we realized that there was a big difference between the invention, which is how do you convert someone’s whatever they say reliably into text, through to well how do you make that come about and it is all about innovation and there must be, if I listed them out, 100 innovations.  I mean, as I was talking to you earlier, and I’m sorry if I jumped around, but the back flips that the business has done has been all around actually reinventing ourselves to serve an innovation.

So the last innovation that we’ve just been through and the big back flip the business has taken on which is the funding that we raised about a year and a half ago, the Goldman Sachs round of 2008.  That allowed us to design products that are now natively part of the network. So you, as a user, no longer have to know anything about SpinVox.  There’s no price for it, it looks like it’s free to you and it keeps popping up whenever you’re making a phone call or trying to get hold of somebody  or now increasingly you decide actually I’ve just got a text message there’s a little link at the bottom.  If you click that click that little link, magically, you can speak through SpinVox and speak that person a text message back.

That on its own has again changed our business models, it’s changed how we operate, it’s changed the team, it’s changed who we have with us. And for us that has been a very tough year but a very satisfying year because we’ve actually done it,  we had as I was saying the deal with Telefonica and the deal with Vodafone in Spain have taken us to that level of business.  And the power of that is that it has transformed every part of our business, from as I say the technology, the business models, how we sell, who we are as a business and where we can now go next and it was a very tough decision because two and a half years ago when we realized that this was really, you know, the next important phase for us we had to go out there and convince people that it had never been done before, obviously.  We hadn’t done it before, I couldn’t turn round and say, yeah, look these great guys, all 6 of them, I just got them straight out of the University of Telco, and they know how to sell network features in speech, in voice, speech rec and by the way we don’t sell anything to the network, it all sits on our computers, ie in the cloud. And that was a big ask but we had Goldman Sachs, who led the round, fully buy into that and to-date so far we’ve actually hit every single milestone in terms of the operating business.

Naturally, some of you will have read some of the UK media about the tear down part of SpinVox and saying ooh, well, actually no and ooh dear they’re in trouble, all those sorts of things. That’s fine, yeah, we’re all having a tough time but I think the good news for us is that the business really has performed and moved on and the numbers will play out so I’m hoping that early next year we’ll have a nice clean factual announcement about 100 million odd users of our service, 6 languages and potentially some very interesting deals inside both business and in web-sphere. We’re finding now increasingly that the web players are very serious communication players.

It brings me I guess lastly to an area of kind of where does this go and what do you do with it. I think in many ways for us that chapter unfortunately still has 4 or 5 different endings and I don’t know the answer to it yet.  And that is one of my biggest challenges now from my role which is actually strategy inside SpinVox mostly.  Where do we go next with the business?  Do we go and start going white label and license to partners?  Do we sell to somebody or find somebody with a very big trouser leg who can accelerate my growth and take me to what is very achievably a billion users within 4 or 5 years.  That really is not beyond us at this stage. Do I go and license it all out and retire young and get a sun tan beyond my means somewhere in the Bahamas?  I don’t know yet and that’s the exciting part of where we’re at.  And I think one of the things that we still get out of bed for in the morning is that we are pushing the envelope in every sense of the word.  We’re pushing the envelope in terms of speech. Interestingly the speech industry, as I said to you from the outset, didn’t like us very much, didn’t understand us, this cloud speech thing kind of got them a bit worried.  You know we said well it’s speech as a service, you know, why not?   Why on earth do you want to spend £5 million on servers and people just to do your own speech rec and by the way it’s bloody complex. You don’t want that cost of ownership problem.  Yes, yes, but ... problem being that there’s a highly vested value chain that’s predicated on licensing revenues and equipment and professional services.

We have actually started disrupting what the whole voice channel means for phone networks and that’s the bit I’m really excited about.  Because they’re sitting in this very difficult world where frankly speaking within 3 to 5 years I don’t think there’ll be a major economy where your phone rate will not be absolutely flat rated.  So the US market is pretty much gone there, we’re seeing parts of Europe go there fairly quickly like France.  UK will probably follow at some point.  The problem with that is that when you really look at it and this is the argument I often have with the, my friends inside networks, is when you get to the numbers guy they look at it and go I don’t want more people to speak, I sell them £50 a month and I’d rather they don’t use the network at all cos that’s a cost so my gross margin gets eaten away.  A slightly bizarre piece of logic when you really think about what you’re trying to create in terms of value but we’ve given the opportunity to create new voice events and it sounds very simple and very boring sometimes but if I can make the idea of clicking on something or speaking a text to somebody worth 10p to you cos you are going to text anyhow and by the way I’ve done it now, I’ve completely doubled any ability they had in the voice channel.  And currently today they pretty much book you know a minute in about a fraction of a pence to them in terms of value. 

What I can do in 8 seconds, 10 to 20p is groundbreaking for them and we’ve got a lot of momentum and excitement around what that can be.

So, as they say, sitting ahead of us the future is very bright, it gets me out of bed at about 4:30 every morning trying to figure out how we solve this conundrum. Answers on a postcard most welcome. The winner gets a share in the spoils and as I say as well I think the fascinating thing for us as well is that when it comes to what our technology has done as well I think a very simple fact speaks for itself. If you look at where we came from starting with the answer and working backwards with technology, our technology has now been able to reduce our load for humans by 98% in just 2 years.  So we’re in the final mile.

I don’t know if I’m going to crack perfect speech. I think that’s a bloody difficult task because when you’re very drunk or you’re really aggressive or you’re not feeling good about something it’s quite hard to follow what someone’s meaning unless you really know them and can imply what they’re about.

But I think it’s a very exciting challenge and the future for Spinvox as I say has got many different paths so in many ways part of my excitement of meeting Ivor and possibly talking to some of you who have been there is I’m sure your, your insights and questions will probe us to think about it in the right way.

Thank you very much.”

- spoken through “SpinVox”