I was speaking with an investment banker friend of mine who shared with me his tales of listening to the management of many companies in the VoIP space and how immensely screwed up they were. You see he tells me these companies are generally lead by people who don’t understand they are running a business.

Yes he mentioned, the majority of companies in VoIP are still focusing on things like trying to dress up their companies for acquisition by focusing exclusively on partnerships instead of focusing on customer wins.

He analyzes balance sheets for a living and says most VoIP companies still don’t get it. He says everyone thinks they are Skype and in reality well – no one is. Perhaps except Vonage he said.

In other words start focusing on getting in front of customers. Sell to customers. He is shocked to see frivolous spending on anything that doesn’t get you in front of the person with dollars. Get in front of as many customers as you can he says.

His point is that a few companies are purchased as novelties like Skype and or possibly Vonage and precious few others will be picked up for their technology allowing a bigger player a faster entry into their segment of the market.

The rest need to generate rapid sales growth and they need to do this by focusing on customer acquisition. A few companies in the session border controller market are marketing mutes he states. Session border controllers are a segment he honed in on. He asks why these companies don’t focus more on getting in front of carriers? They spend marketing and event dollars on speaking to their competitors and not their customers.

My take? He is probably right. VoIP has gone mass market and the management of all the companies in our space have to evolve to fight in a world where our industry is under siege by new entrants and VCs who want a piece of VoIP.

Doing business the same way you always did won’t cut it in the future.

You may be thinking I am overdramatic and ahead of my time and you needn’t worry. You may be right but as I researched this story I did  a search on the term “evolve or die.” The last time I wrote this was back in January of 1999 where I told the PBX and ACD makers they need to evolve or die. In hindsight this prediction was right on.

Now I am not saying I am always right as I am not. What I can tell you is you are doomed if you are doing business the same way you were in 2002. If you are in survival mode and trying to eek out single-digit percentage growth you are toast. I am seeing more aggressive competition in the softswitch, IMS, and SBC markets – every market. It is a jungle out there and if you don’t feel the heat yet you will. I see your competitors months before you do and believe me you are in for a wild ride in 2006.

VoIP is hot and you must adapt and evolve to play with the big boys in 2006. Good luck!