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SNAZ Commerce Solutions was forced to file for Chapter 7 liquidation last week. According to CEO, Vikram Chachra, the closure was “due to a lack of additional funding.” Try a lack of people who are actually interested in using mobile wallets.
The one stop mobile shopping concept is a good one—in five years— but clearly Chachra and Co. were running this company with Yankee Group-like visions of m-commerce. The fact is that there is no mobile commerce market right now, so any movement in the space has to be tempered and gradual. SNAZ, like too many other companies, has set the industry back by making too big of an early bet.
As Chachra bragged in a SNAZ farewell email to friends, ‘In less than a year, we rapidly ascended to the top of the m-commerce vendor market, winning and implementing no less than 10 contracts with wireless players like Palm, AT&T, Nextel and Alltel.”
Yes, 10 contracts, all of which were dependent primarily on someone actually using the wireless wallet and taking a chunk of the resulting revenue. So who was going to encourage people to actually buy via mobile devices? The carriers? The carrier’s commerce partners like the GAP? Doubtful.
Take a moment and contrast SNAZ to a company like 2Scoot, which is focused on enabling mobile payments at fast food restaurants and gas stations. While these are small implementations, 2Scoot has partners that are honestly interested in streamlining their purchase and payment processes. That kind of market need and partner commitment provides the basis for a real business model, whereas SNAZ was trying to sell pie-in-the sky. The carriers bought it for a while. Unfortunately, they were the only ones buying anything.
More from Josh Newman: Verizon 3G?
Josh Newman is editor of Unstrung and is remaining consistent with his strategy.
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