Yanked From The Cloud: Why Connectify Unplugged Its Switchboard Campaign

Backed or Whacked logoEditor’s note: Ross Rubin is principal analyst at Reticle Research and blogs at Techspressive. Follow him on Twitter @rossrubin.

Connectify, a Philadelphia-based software company obsessed with making the Internet faster and using Kickstarter to do so, this week pulled the plug on Switchboard, its most recent connectivity campaign. Alex Gizis, Connectify’s CEO, said his backers wanted it that way.

Connectify is no stranger to Kickstarter. When the company launched its Dispatch software that aggregates multiple broadband connections to boost speed, it raised over $100,000 and delivered its rewards on time.

But Dispatch, which worked at the socket level, had some limitations. It performed well accelerating web browsing and torrenting, but didn’t do much for streaming video and could spell trouble for a VPN connection. The company thought the solution was to move the connection aggregation to the cloud.

“You log in, and and now your Internet is faster,” says Gizis, who notes that the software, like Skype, simply navigates firewalls without having to fiddle with settings like port forwarding. And so it returned to Kickstarter, proposing to build a global server network called Switchboard that would accelerate Internet access from just about anywhere. Users would be rewarded with a year of access to the service.

The Switchboard campaign got off to a solid, if not breathtaking, start. Ten days into its $100,000 campaign, 244 backers had contributed nearly a quarter of its funding goal. It’s not uncommon for companies at that point to turn up the volume, launch more attractive reward tiers, and make a strong social media push. Connectify, though, yanked the campaign.

Many Kickstarter campaign owners say that the feedback they receive during a campaign is one of the most valuable parts of running it. Usually, these are ideas for enhancements or thoughts on which design or feature roads a company can take. In Connectify’s case, though, the feedback was that running the cloud itself was actually the wrong path.

Gizis says he got tons of messages with a common overriding theme: Potential customers liked the technology but wanted to run the servers themselves; they wanted to put their own Linux servers in the cloud. It was the sweet sound of failure. Connectify’s core competence in software would allow it to sell Switchboard directly to corporations without the risky proposition of investing in a pricey global server network.

The shift of Switchboard from hosted service to enterprise infrastructure could spell bad news for your average Jane seeking to eke out a meager few extra megabits per second on the mean streets, but it will still be available to consumers as a personal server for $90 that runs on personal PCs and Macs that you can access from the road.

Furthermore, in addition to the many companies that wanted to own the Switchboard servers themselves, Connectify heard from hosting companies that said that they could run the service more cost-effectively than the company could; Gizis expects that at least one of them will make the service available directly to individuals the way many hosting companies offer hosted Exchange servers.

When asked if Connectify could have received this kind of feedback without Kickstarter, Gizis said he couldn’t think of an alternative. He notes that the company conducted research among its current customers before it launched the aborted Kickstarter campaign. In the end, he notes, the real test comes when you ask people for their credit cards.