Having Fun At The Cusp Of Technology And Entertainment: Phunware CEO Alan Knitowski (Part 4)

Sramana: What business model did you finally arrive at after working with Discovery and seeing your reputation soar?

Alan Knitowski: We started doing a lot of partner models. During the first 18 months of our business, 90% of the business was done off the partner model. We would co-invest with our customers, we would do the maintenance and updates, and we had skin in the game. On the other side, our partners would handle the sales and marketing, promotion advertising, and things of that nature. We would work together to get prominent featuring at places like Apple and Google.

During the first 18 months of our business, we predominately went after paid applications that were ad free. They were premium priced applications. The Myth Busters application was $4.99 at launch, and on the iPad it was $5.99.

Sramana: When you do revenue sharing on this type of application, what type of revenue sharing do you get?

Alan Knitowski: In general we do a 50/50 split. There are always exceptions to rules, but in general if we put up half of the money and do the back end and our partner is going to put up half the money and do the front end, then we are all going to work in concert. In that scenario we share risk, cost, and upside equally. There are always exceptions to the rule, but partnership agreements are generally done in that fashion.

As the years have gone on, we have seen different types of structures come on that change based on the engagements. On average, a lot of them are 50/50, but if they are professional services for the client side we may allow them to keep all the revenue that they generate but they can subscribe to different module functionality on our side. They can pay for us to do maintenance, support, and updates just as you would license enterprise software maintenance contracts.

Sramana: How did you develop the concept of having different modules to provide to professional services clients?

Alan Knitowski: When we built our infrastructure to solve all of these problems, we learned a lot. We did not initially intend to make all 15 modules that we have. Those modules came as we worked on the client side, the server side, and as we worked with brands on a global basis. We are in 100 countries in 10 languages. The engine we built was agnostic on the server side, while on the handset side you have Android, IOS, and various operating systems for smartphones and tablets. Our customers in the media and entertainments space ranges from NBC to CBS. We work with Turner, ESPN, Univision and a whole list of other companies.

In the sports vertical we support NASCAR tied to Sprint and Turner. We worked with the NFL and we are working with Circuit America, which is going to be delivering Formula 1 for the first time in the United States. We have verticalized things on top of our engine for some of the biggest entertainment and sports brands in the world.

On the technology side we support everyone ranging from Samsung and Nokia at one extreme to AMD on the other extreme. Over time this has allowed us to create a diversified set of verticals and engagements as well as a diversified set of revenues between professional services, subscriptions, and transactions.

This segment is part 4 in the series : Having Fun At The Cusp Of Technology And Entertainment: Phunware CEO Alan Knitowski
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