Why working with carriers is a waste of time

Apple's iTune App Store made it possible for the little guy

For content and service providers seeking to reach a customer, don't bother working with carriers.

"It's a collosal waste of time to go with a new idea and new product that you can't show some kind of demand," said Alec Saunders, Founder and CEO of Iotum, which just this week launched a conference application for the iPhone. "You're in for a very long sales cycle - 18 months, 30 months - not uncommon."

Saunders and I touched base at the Under the Radar conference this week, to talk about the Calliflower conferencing service for the iPhone.

In this segment of "Lessons learned," Saunders shared his experience working with carriers. "We tried and failed at it twice," he said. "The economics are horrible," he added, referring to a time when a carrier offered to give Iotum 35 cents for every $1 paid by a consumer. But the carrier wouldn't pay for any marketing, leaving Iotum to do the heavy lifting to get its product out. 

Thank goodness for Apple's iTune's App Store. This is the way to go "direct to consumer," said Saunders, whose biggest piece of advice to mobile startups is to find a direct-to-consumer model.

Of course, the road ahead is still fraught with challenges as an iPhone app. While it's great to get shelf space, Apple also takes a 30% cut of the retail price and app developers, like Iotum, will still have to win over the customer. There are currently about 5500 apps in the store today.