Cracks in the wall of indifference
Yesterday afternoon I got a call from a salesman in one of our European branches to ask me an urgent question:
"James, have you ever heard of a company called Skype?"
I took a deep breath, counted to five, and tried to diplomatically explain that, not only had I heard of Skype, but in fact 13 months ago I was the first among the broking analysts anywhere to write about it, one week after it launched. What's more, I've written several thousand more words since then on Skype and a lot of other related issues and companies, and have given countless presentations to institutional investors which left many of them profoundly unsettled. "So much for competitive advantage in research," I thought. I also thought about the late (but immortal) Rodney Daingerfield's stock phrase: "I don't get no respect."
Later I paused for reflection and realized that this incident, though galling to me personally, is probably significant, and here's why:
The person in question is a Luddite, overworked equity salesman trying to cover the entire Japanese equity market, and dealing with information flow in two languages which are not his native tongue. The fact that he has remained ignorant of Skype until now, despite my best efforts, is not all that surprising, given the nature of his workday: endless order executions, client calls, lunches, company roadshows, IPOs, etc. I understand that. What is important is that, even a year later, this relatively insulated Luddite is now aware of Skype, and moreover, is scared about what it means for a whole raft of companies. I took the opportunity to bring him up to speed on Popular Telephony yesterday, and now he is really scared.
Obviously, I won't get too excited about it until I have a few more examples under my belt. However, if people, who have up to now somehow managed to miss the millions of column inches of coverage Skype has received in the press over the past year, are now independently waking up to the implications, and to a sneaking suspicion that even more disruptive things may be just around the corner, we might be about to see one of those hockey stick adoption curves that brokers love to put in research.