Telephony market predictions from Clay Shirky

Gregory Alan Bolcer gbolcer@endeavors.com
Sat, 18 Jan 2003 07:45:18 -0800


He left out the most important part.  Just for the record,
zapmail was unplugged due to these two factors:  mass
production of the fax machine, wide decentralization of
their locations.  Now if Fedex at the time wanted to
put secure, guaranteed fax machines at every hotel, coffee shop,
airport, bus terminal, bank, etc.  They still would have
pulled the plug.  Sounds very similar to a lot of wifi
business plans huh? 

Greg


"Mr. FoRK" wrote:
> 
> I've recently become oddly interested in the telecom industry and what
> personal digital empowerment will do to it. I still don't understand much
> but I like reading about it.
> 
> ==
> http://shirky.com/writings/zapmail.html
> To understand what's going to happen to the telephone companies this year
> thanks to WiFi (otherwise known as 802.11b) and Voice over IP (VoIP) you
> only need to know one story: ZapMail.
> 
> The story goes like this. In 1984, flush from the success of their overnight
> delivery business, Federal Express announced a new service called ZapMail,
> which guaranteed document delivery in 2 hours. They built this service not
> by replacing their planes with rockets, but with fax machines.
> 
> This was CEO Fred Smith's next big idea after the original delivery
> business. Putting a fax machine in every FedEx office would radically
> reconfigure the center of their network, thus slashing costs: toner would
> replace jet fuel, bike messenger's hourly rates would replace pilot's
> salaries, and so on. With a much less expensive network, FedEx could attract
> customers with a discount on regular delivery rates, but with the
> dramatically lower costs, profit margins would be huge compared to actually
> moving packages point to point. Lower prices, higher margins, and to top it
> all off, the customer would get their documents in 2 hours instead of 24.
> What's not to love?
> 
> Abject failure was not to love, as it turned out. Two years and hundreds of
> millions of dollars later, FedEx pulled the plug on ZapMail, allowing it to
> vanish without a trace. And the story of ZapMail's collapse holds a crucial
> lesson for the telephone companies today.