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Hurray SMS is death…

October 13, 2011 1 comment

October 12th 2011 Techcrunch declared the day SMS began to die. Why? 10-12 is the day that iOS5 was made available to the general public. In this update there is a new functionality called iMessage. iMessage will check if the person you are sending an SMS to is also using iMessage. If this is the case then the SMS will be sent as an instant message and not as an SMS. The technology is not new (e.g. Whatsapp, Blackberry Messenger). However it is the first time that users will no longer have to install a separate application and choose if they want to send an instant message or an SMS. Android is likely to follow shortly. Also interconnection between iMessage and other platforms is still necessary. However this is clearly an example of the Innovator’s Dilemma, disrupting an industry via the use of disruptive technology.

So why the Hurray? This is very bad news because thousands or even millions of jobs might be at stake in mobile operators all over the world.

The hurray is because innovation will finally come back to the telecom industry. The beginning of the end of the CFO promoted to COO promoted to CEO a.k.a. CFEO [FEO in Spanish means ugly]. The bean counters that were warned years ago that disruptive technology would destroy the mobile industry as we know it. However they choose to ignore the message and put into place RFP processes that kill any innovation, make investments based on short-term business cases, substitute vision & strategy for ROI, etc.

With major risk of disruption, it is time for mobile operators to embrace new ideas. To invest in innovative solutions. To try out new unproven business models. Or face the consequences. Me2-strategies are no longer enough.

At last long-tail partnership management (LTPM), Telco PaaS, Mobile PaaS, Big Data Analytics in the Cloud, Nanopayments, Mobile Graphs, Freemium, Telco Gamification, etc. it can all be proposed. For once the big question will not be, “Show me a business case with ROI in 3 months” but instead “Let’s set-up a tiger team and see how we can be successful”.

Don’t understand the message as if this is a return to the nineties where venture capital kept even the most rediculous dotcom alive (e.g. pets.com, webvan.com).

The next ten years will be the age of the commercially skilled visionaries leading the most successful companies. The CEOs that can look futher ahead then next quarter but that do not focus on research for research but on the next big business. CFO’s and COO’s will be still milking the cashcows. However the CEO will be worried about next year and no longer about  next quarter. The tragedy in life is that the one person that knew this period was going to come, passed away before it even started. This article is in memory of the greatest visionary of modern times: Steve Jobs…

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RFP is for evolution, tiger teams are for revolution

October 7, 2011 3 comments

RFPs are the number one reason why Telecom is no longer innovating. How can a new product be innovative if at best it takes 1 month to go from idea to RFI budget approval, 3 months to do an RFI, 6 months to do an RFP and 6 months to implement phase 1? All taking into account that there are no reorganizations in the middle or deep backoffice integrations.

RFPs are also flawed in another aspect. They assume that a business case can be made upfront and that the operator understands what the end-customer wants. For all those that have read “The Innovator’s Dilemma“,  will understand that for any disruptive technology, existing marketleaders can not go and ask the end-customer.

So what is the alternative for RFPs?

Another book is helpful here: Nail it then Scale it. Do not assume you understand what customers want. Do not start to make a first release and a business case and launch something.

Start by understanding what the customer’s pain points are. Understand if a solution for these pain points is big business or not, a.k.a. a vitamin or a painkiller [You want it to be a painkiller because then it is no longer optional].

Nail the pain points by talking to customers and understand the size of the market. When you understand what to solve, then design a solution. The solution should be in the form of a virtual prototype [on paper or Powerpoint]. Sit together with customers to validate if this resolves the pain. Adjust if necessary. Repeat the process as often as needed to nail the solution to solve the pain points for a potential big market. Create a real prototype with the absolute minimum functionality to sell to customers. Nail the go-to-market strategy (customer buying process discovery, market infrastructure discovery and pilot customer development). Nail the business model (predict business model with customer data, validate financial model, interatively launch the business, monitor business with continuous data flow). Scale it and take into account Crossing the Chasm.

So far the theory. Now how can this be brought into practice?

The solution: Tiger teams. 

A tiger team is a very small team that is responsible for the Nail It part. A tiger team is a cross-functional team. There are three main areas in the tiger team: product, technology and sales.

Initially 1 or 2 people will focus on the product. It is their task to nail the customer pain, discover if the business is large enough and to come up with a solution and a virtual prototype that fulfills the customer’s most basic needs [minimum feature set]. If the customer signs off on this then the tiger team is expanded to include 3-5 technology experts that can build a real prototype. Afterwards the team is extended with 1 or 2 sales and marketing experts to nail the go to market strategy and the business model. The team is given a limited amount of time (e.g. 6 months) to reach customer traction (e.g. minimum number of paying customers, generate profits, etc.). Afterwards the team gets to the second round in which they get an extension of 12 months and some second capital injection to grow the business. This capital injection should allow for more people to join the team. What is important is that the resources should still be on the lower side! By giving too much money too early you will kill the innovative spirit. This second round should allow the team to cross the chasm. If they do, then it is time to transfer the new business either into a business (unit) of its own [if it does not fit the current business] or to incorporate it into an existing business unit.

Should the idea fail, the prototype not take up, the solution not cross the chasm, then no harm is done. In case of failure you would not have spend any more money then the typical cost of a full RFP process. So you fail quickly and scale even faster if things are working correctly. Remember failure means learning more than moderate success and is often only a step away from a real success…

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