Why We Invested in US Mobile
Over the past year and a half, much attention has been rightly paid to essential workers. Grocery store clerks, public transportation drivers, healthcare workers, and individuals in dozens of other professions have reminded us that certain services are indispensable when it comes to maintaining secure, enjoyable lifestyles. Almost equally important throughout the Covid-19 pandemic has been the need to communicate and collaborate remotely. Wireless connectivity is undeniably an essential need in today’s day and age, and one of the most emotionally vital. We are thrilled to announce our investment in US Mobile, a next-generation mobile service provider that is transforming the wireless industry and saving consumers money.
So, Why Did We Invest?
In the world of Internet investing, there are few things we love more than backing companies that provide core services. These are the services that are so essential to daily life that spend in these categories is practically non-discretionary. Volition has already invested in at least three such services: Medly, in the specialty pharmacy space, Chewy, in the pet care essentials space, and RTS, in the waste hauling and recycling space. Customers think of these services as literally indispensable, and as a result, the companies that provide them benefit from stable, highly recurring revenue.
There can be a dark side to this type of stability. In many categories, we have seen legacy providers of core services might become so accustomed to a consumer’s loyalty that they become complacent. They fail to innovate on the service they provide, while at the same time using their monopolistic power to increase prices. When these dynamics take hold in an industry, we think it is the right time to start looking for investment opportunities in the space.
This was our goal when we began scouring the world of mobile service providers. It was clear to us what was broken about mobile space. We had a thesis that the focus of incumbent carriers on selling unlimited plans trains customers to believe that they require a plan with more talk/text/data than their actual phone usage would suggest. And, we believed that this leads most people to overpay significantly for their mobile service. In an industry so ripe for personalized offerings, we were shocked by the limited availability of plans that allow for real customization.
Finally, as consumers, we were disappointed by the level of customer service that we were receiving from the carriers that we had been loyal to for years. Given the intimate relationship that most of us have with our smartphone, it felt like our carriers should be doing better. Long call waiting times, unhelpful service agents or chat bots, opaque service bills that seemed to creep up in price every month, one-size-fits-all plans… we had seen it all, and we knew it was time for something better.
Meet US Mobile
When we came across US Mobile, we knew that our search for an extreme disruptor in the mobile carrier industry was over. US Mobile’s plans and pricing are radically customer centric, giving consumers the tools to hyper-customize a phone plan that meets their needs, and pay for only what they need (plans start for as little as $1.50 a month!) A customer who switches to US Mobile from a more well-known carrier will typically save hundreds or even thousands of dollars a year on their phone bill. Unlike brands who want to lock you into a rigid long-term contract, US Mobile also gives customers tools to track their usage and easily adjust their plan month-to-month, to unlock even more savings.
Television advertising is ubiquitous among mobile carriers, and large brands will spend millions to attract new customers. US Mobile has grown to impressive scale with almost no advertising budget, instead relying on its robust word of mouth among its passionate consumers. US Mobile subscribers love to talk about the company, and to recommend it to their friends. When a company can meaningfully grow on the backs of the customer’s passion for the brand, it is a clear signal to investors that they are doing something different in their category.
Many people have been with the same mobile carrier for years, or even for decades, and it can feel intimidating to make the switch to a new provider. US Mobile anticipated this challenge and started building their “eSIM” product years ago. eSIM technology, which is quickly rolling out to almost all new smartphone models, allows consumers to switch to a new mobile carrier on the spot, even just for a couple of hours, without needing to visit a store or remove the physical SIM card from your phone. Imagine being in the subway and seeing a US Mobile advertisement, scanning the ad’s QR code on your phone, and instantly unlocking a 1-week free trial of US Mobile service.
This is the experience that US Mobile is creating, and we cannot wait to watch it become reality over the next few months. And the innovation won’t just stop with mobile wireless – US Mobile has the vision and the expertise needed to rebuild the consumer connectivity industry from the ground up, touching everything from home broadband to the Internet of Things. We are beyond excited to support the team on that mission. Led by CEO and Founder Ahmed Khattak and COO Michael Melmed, we believe that US Mobile represents the best that the industry has to offer, and we are privileged to partner with them on the incredible journey to come.