Key challenges for mobile 2.0 include :Catching up with Web 2.0 ?
> Leveraging up Web 2.0 faster
> Attracting investors despite hurdles
> Bring together operators and service innovators
> Building on successful business models
> Bringing to market innovative user experiences from start-ups
There seemed to be a bit of frustration in the mobile social media panel that mobile 2.0 is not yet booming. Tommy Ahlers, CEO Zyb (just acquired by Vodafone)advice: simply care about the end-user [experience], avoid filling the screen with ads, fix fundamentals and get services off the ground. Smaller operators are better at doing that and more innovative but he promised to change Vodafone for the better.
Charlie Schick, editor Nokia Conversations recommends to avoid the clash between web services for big screen/keyboard and those mobile on small handsets. No one is going to dominate the other.
Alex Romero, Director Yahoo! thinks it requires tuning the eco-system leaving room for MNOs and other players. And Doug Richards, CEO Trutap summed it up : We are only at the very beginning of the industry, openness will create better user experiences.
Attracting investors ?
Rudy de Waele invited me to join this VC perspective discussion with a corporate venturing view. What’s holding VC investments and IPO’s back ? One issue is the business scalability mentioned by Maximilian Niederhofer from Atlas Venture: the fragmentation is due to the number of devices, he gave the example of Atlas’s investment [32M$ with Partech] in Dailymotion, now 60 million users the web but too difficult to move to mobile. It’s clear that mobile 2.0 does not compete with web 2.0 investment opportunities. Imma Martinez, from Stradbroke advisors was very vocal about the channel friction issues such as revenue share agreements, low flat-rate data offerings, 9-12 months to negotiate carrier agreements, a view shared by the panel. In her blog, she refers to mobile services “corrida de toros” (bullfight).I proposed a more balanced view between short-term business improvement with longer-term innovations opportunities. At this moment, corporate funding, M&A or simply business deals may be appropriate to mobile 2.0. This is because mobile 2.0 can immediately enhance today’s Telco or enterprise “brick and mortar” services which have a sound business model. A good example in the conference was Dial2Do that combine voice service monetization with web 2.0 services (see below). I mentioned the business model of mobilizing HP Snapfish, photo sharing offering 9c print in partnership with 12’000 outlets and used by 50 million on-line users in 20 countries storing 2 billion photos. Another example would be mobilizing publishing with readers social network services complementing on-demand order and printing industry enabled by HP’s Indigo printers. Around the consumer electronics and content businesses, there is value in adding connectivity to the various home devices, for example mobilizing the exchange of play lists and on-line content preferences.
At the same time, looking into the 3-5 years future, I foresee great opportunities for VC-funded breakthrough innovations that will exploit LTE bandwidth, new video processing capabilities and enhanced devices. This is where there is a need for innovative start-ups and the VC exits should be plentiful.
Understanding operators ?
The operator panel discussion exposed the misunderstanding between mobile start-ups and mobile operators. Mobile start-up innovation and users expect a fully open and cheap playground; in contrast operators focus on CAPEX/OPEX optimization to monetize scarce mobile broadband resources. Anastassia Lauterbach, EVP Strategy, T-Mobile International explained these issues clearly but bluntly : P2P mobile data is 38% of traffic (YouTube alone is 17%), with less < 200€ data revenues. Applying Moore’s law, the flat-fee business model does not scale : 5-year CAPEX required is 70B€ in Germany [~300€ /subscriber/year]. She also mentioned the impact across the value chain that supports mobile 2.0 : network > platforms > middleware > customer care and service. The subsequent debate with the audience was heated and inconclusive (despite Raimo van der Klein and Gregory Gorman’s moderation attempts). I would have suggested at least a differentiation of mobile 2.0 services based on their real-time bandwidth requirement and alternate access points such as Femtocells and WiMax for video streaming.
Among other good comments, Martin Duval, CEO Bluenove and director Orange start-up program was positive on opening-up and offering flat-fee data services to bring ad-funded content services and rather than cannibalizing. Under the motto "together we can more" Orange wants to educate start-ups to develop mutually beneficial business cases. He also referred to Orange’s opening-up to Nokia Ovi. Gian Paolo Balboni, head of innovation Telecom Italia mentioned innovation by providing access to network assets through web middleware services. Unai Iturburu, head of Vodafone Spain R&D indicated that we need better industry alignment to combine web and mobile services and quoted Vodafone’s Betavine.
Already a successful business !
The open business models panel showed 5 successes ranging from off-deck, MVNO and on-deck approaches.
Chris Liu, of Fjord gave the example of Flirtomatik business model of “ego-services”. They have 120M PV/month, selling digital flowers and kisses. He referred to the challenged of supporting handsets.
Leif Fågelstedt, COO Blyk explained how they monetize their “understanding of users”. The 7th media is less about content than it is about context” . Blyck's 900 campaigns resulted in 29% response rate (up to 60% in some targeted campaigns). Most are “conversations” such as SMS > SMS response > MMS > WAP menu. He says the MVNO business model is a win-win for the operators and not cannibalizing as it brings new revenues from advertising, they are expanding in Europe in the fall. Blyck’s emphasis is on personal communications but there is room for expanding into content and social networking. But right now you can’t solve the handset fragmentation issue so it’s too early.
Ilja Laurs, founder Getjar sees it as an off-deck community of downloaders with an enormous diversity (10K applications, 200K download/month, example: flashlight replacing lighters in discos, battery drainer , Opera Mini 7M dl). For him, mobile billing is a nightmare so advertising sponsoring is a better solution. Ray Anderson, founder Bango said they combine off-deck and on-deck and see MNOs opening-up. Laurence Aderemi, from Admob now serves 3 billion ads/month 100% off-deck.
Awards winners and next wave
The team assembled a great line-up of start-ups. We met them the previous day at ESADE where they gave a VC-pitch. I’ve classified them in 3 themes because of my particular interest but presentations were grouped by financing stage.
Personalization, social networks
• Zipipop : they have invented “intention broadcasting” for your social life, casual meetings among friends and even for your “sex life”. It is a really cool user interface, a la T9 for broadcasting “Let’s meet for coffee at this place”. I enjoyed discussing with Helene Auramo, Zipipop CEO their monetization ideas and suggested “intentional advertising” like “the cook is in a really good mood at this place”. Viral marketing by SMS invites. Richard von Kaufmann gave an excellent pitch and had the T-shirt with the best logo Zipi-fish. *** Best Early Stage Start-up.• Rummble, is a location-aware social networking for discovery of events and recommendations, with micro-blogging.*** They won an award.
• Aka-aki, proximity-aware networking. Personalize, on the go, share emotions and content, lifestyle; cross-media, location-based advertising. I like the fact that it gathers contacts along the way, kind of an active address-book. They have an excellent video pitch and I had posted about them earlier.
• Shout'em, mobile social media : White-labeled Twitter-like service, launched as Zrikka in Croatia, (200K subscribers) they also have a photo sharing site. Their ambition is to support Symbian, iPhone and Android handsets.
• YouLynx, mobile social media with geo-tagged upload/download and IM/VoIP. They address the PC/mobile convergence and synchronize address book, communications, content on both devices. On-portal deployment at O2, Vodafone, Telefonica, America Moviles, Orange, Airtel, DoCoMo . Presentatin by Jorge Gonzalez
• Taptu , mobile social-aware search Stefan Butlin, Taptu CTO, presented
• Mobiluck , mobile location based IM, chat and social networking. MobiLuck helps you share your location, spot friends nearby, and meet interesting people and places along the way!
• Nimbuzz, Free IM, txt, PC calls, mobile VOIP in progress. Client for 22 brands/500 models. Great functionality with Skype, Gtalk, AIM, Windows Live messenger, Yahoo!Jabber, Myspace, Facebook.
• Palringo, mobile IM client for sharing text, photos, and voice IMs with groups or individuals.
Multimedia user interfaces
• Dial2do, a great application that uses voice to connect to web 2.0 services. It goes beyond traditional unified messaging (e.g. SpinnVox) or voice activated dialing and let’s you Twitter or Facebook in addition. Other services include : Jaiku, Tumblr, Jajah, Zimbra, etc… And voice allows immediately monetization. The US market seems ready for this : 60% of wireless calls while driving 87 min/day. Their go to market includes packaging in retail with Plantronic, Jabra and other plastic telephony appliances. Ivan McDonald , the CEO has a very convincing pitch. ***They won an award.
• Kooaba,is a revloutionalry cool image search engine that fits perfectly with cameraphone capabilities. “Shoot a picture of a record cover and get the music” kind of experience. Herbert Bay is an alumni of ETH Zurich.
• Via mobility, they developed a mobile widget execution platform to leverage the 150K widgets on the web and adapt them to 100K phones. You get your customized idle screen for notification and contents. This was presented by Serge Crebassa. This is important if your bet is that widgets are the way to innovate without handset fragmentation issues. The core skills of the company is in the embedded AEE and again this is critical.
• Clicmobile: Alex Kummerman, CEO presented a really impressive visual city guide with celebrities launched for Louis Vuiton, walk with celebrities for 12 € in Shanghai, Beijing. The foundation is a social network but it’s really the user interface and the quality of content that attracted my attention
• ViiF, video enabled mobile entertainment : Most of the service is via download, but the services can be tried out by video call 22557 in Germany, easy to customize with a web interface. They have revenue-sharing agreement with content providers. A welcomed competitor to iTunes video.
• Secufone, developing specific user interfaces for iPhone for safety/security applications. They transition from a custom-handsets business for elderly people and security firms. A good example of business cases from focusing on user experience within a niche.
• Mippin mobilizing web by adapting sites. This blog can be viewed there.
Monetization with advertizing• Unkasoft, mobile sponsored gaming : Repurposing mobile games catalogues for advertising campaigns e.g. Pepsi Max (a game of saccharin vs. sugar) Contact : Jaume Lanchares
