Upromise is a microinvesting service that automatically collects a small percent of every dollar you spend at specific restaurants, for a specific type of grocery, or with a certain credit card – to put into a college fund for children – either your own or other children that you specify.

All you have to do to sign up for the service is to register your credit cards. If you want to boost the size of your Upromise account, you might get a Citibank Upromise card, which contributes 1 percent of your total card bill into your account in addition to the incentives you get by buying products and services linked to Upromise

By 2005, merchant and credit card rebates have the potential to represent an incremental $1.1 billion per year in assets to banks and investment management firms, according to a recent study conducted by Financial Research Corporation. This money will be spread across millions of accounts, which underscores the "micro" nature of microinvesting – many of the accounts at Upromise have balances under $100.

Stan Davis, the futurist, once described his method for generating new ideas as "joining two contradictory concepts together." This was the way in which he coined the term "mass customization." Similarly, Upromise’s motto might be "save by spending." Its members can take some comfort in their $2000 credit card bill by knowing that $20 is going to be deposited in a Upromise college savings account.

The company is well-capitalized, having raised more than $95 million in venture capital, and well-connected. As it notes on its web site:

The quote is from Jeffrey Citron in The New York Times. Mr Citron is both a major investor in Vonage and its CEO. In the U.S., the company has 80 percent of the market for voice-over-internet (VOIP) calls. It’s signed up 100,000 customers already, and predicts that it will have 250,000 customers by the end of 2004 and a million by 2006.

The 33-year-old Citron fits the description of a romantic product developer, in the mold of Dean Kamen, Steve Jobs, or James Dyson. When Citron was in his mid-20s, he created the electronic networks that made day-trading economical. In 2003, he was accused of illegal trading by the Securities and Exchange Commission, paid a $21.5 million fine, and was banned from the securities business for life.

This still left him with a personal fortune of around $200 million. At least $12 million of this has gone into Vonage.

Citron is not financing this company alone. While his investors are not quite as blue-blooded as those from Upromise, he has raised $52 million from venture capital firms like New Enterprise Associates, the 3i Group and Meritech Capital Partners.

VOIP has been an intriguing, and theoretically attainable, technology since the earliest days of the internet. Because of the packet-switching structure of internet data communications, VOIP service is less expensive than land-line based telecommunications, and can provide a variety of additional benefits. For example, area codes need no longer be linked to a particular geography. You can take your VOIP number with you wherever you go, even to Europe or Asia.

Companies like Net2phone, Delta3, iBasis, and ITXC have been trying to create this service since 1999, with little success. In the last year, sales at these companies have declined an average of 25 percent, and none of them are currently profitable.

In contrast to these earlier providers, who are looking to partner with cable or land-line providers, Vonage sells directly to end-customers. From a customer point of view, Vonage looks just like another phone company. For a flat fee of $35 a month, a subscriber gets a box that attaches to her broadband connection, and a phone number with an area code of her choosing.

Like Netscape communications in 1995, Vonage is opening up a portion of the internet to the broad public. Once customers try Vonage, they may stick with this service, or, as was the case with Netscape, they may switch to another provider who might be able to offer additional features or higher quality.

Will Vonage succeed? In terms of Citron’s romantic aspirations to change the world, it has succeeded already. The company’s growth has prompted both the landline companies and the regulators to respond.

Whether the company will make money, meet its aggressive growth projections, or even be around in 2006 are all open and intriguing questions. They are what make Vonage an innovation to watch in 2004.