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Dutch virtual mobile market drops to 7.5 mln Sims

24 Dec
The number of mobile customers with virtual brands in the Netherlands fell by 15 percent in the six months to September 2015, after KPN’s brand Hi exited the market. The remaining 7.5 million customers at virtual operators still accounted for around 37 percent of the total Dutch mobile market, according to Telecompaper’s latest Dutch Mobile Virtual Operators Market report. Of the total, around 3.3 million were customers at operator-owned virtual brands, such as hollandsnieuwe or Ben, while the independent MVNOs counted 4.2 million Sims, or about 20 percent of the total Dutch mobile market.With the exit of Hi, KPN’s other brand Telfort became the biggest VO in the Dutch market. In terms of number of customers, the next four places were taken by Lebara, Tele2, Lycamobile and Vodafone’s hollandsnieuwe. These top five brands together accounted for 60 percent of the total virtual mobile market, an increase compared to six months earlier due to growth at all the players except Telfort.

While Tele2 has launched its own mobile network, it still relies to a certain extent on its MVNO agreement to serve customers, so it is included in Telecompaper’s VO figures for Q3 2015. With the next Virtual Operators Market report in Q1 2016, Tele2 will be excluded, as it is expected to have completed its nationwide network roll-out by then.

The ‘no-frills’ segment, offering basic services at relatively low prices, remains the largest segment in the VO market, accounting for more than 40 percent of customers. It grew by 3 percent compared to Q1 2015. All of the players in this segment, except Telfort and Simyo, managed to increase their customer numbers in the latest period, with Simpel and Youfone gaining the most. The next largest segment, taking about a third of the total VO market, remains the ethnic/international players, with Lebara taking the lead. The fixed operators, the third-largest segment, are also expanding in the mobile market, mainly due to growth at Tele2 and Ziggo.

Telecompaper’s latest 2015-Q3 report on Dutch VOs show that the total number of active virtual brands increased to 87 at the end of September 2015. Compared to Q1 2015, the total includes eight new entrants and three exits, while we also added two previously unknown players, which have been active a while. The market remains quite crowded, and several, particularly business providers continue to launch new initiatives, including mobile services as an add-on to their existing services. The number of launches as a standalone mobile-only solution was limited to one, the family-focused MVNO OpenMobile in May 2015. Other entrants included business fixed fibre player Fieber and six other business service providers.

Telecompaper expects more new entrants in the VO market, but also several exits, particularly amongst the independent MVNOs that only offer basic mobile services and depend on mobile as their main source of income. They will need to differentiate themselves better, as offering just a ‘me-too’ service is not a sustainable strategy, according to the researchers. The intense competition in the telecom market and changing interests among consumers are also driving MVNOs to launch value-added and OTT services, in order to limit churn and boost revenues, as recently seen at Lebara.

Much of the success of MVNOs depends on their wholesale agreement for network access. With Tele2 becoming the fourth mobile network operator, Telecompaper expects new opportunities to emerge for VOs. Tele2 is expected to actively seek wholesale customers on its network, as it works to raise capacity utilisation and recoup some of its network investment and operating costs. This may present a new chance for virtual players looking to gain access to 4G data services.


Enriching customer experience

4 Aug

The global telecommunications arena has been redefined by the Internet. To grow and sustain revenues, telecommunications companies must now learn to respond to customer behavior at a niche and sector-specific level, with increasingly media and functionally-rich experience.

 At the same time as creating new value for customers and stakeholders, all telecommunications companies must continually find new ways to streamline back-office operations and drive out IT costs.


The Atos proposition for telecommunications companies fully addresses both areas, helping create new client value and drive operational efficiency. New business opportunities are particularly focused on:


  • Smart mobility and new media
  • Machine-to-machine
  • OSS and BSS optimization and management
  • Loyalty and monetization
  • ERP consolidation and harmonization

As a back office and IT partner, we are well-positioned too: for the last two consecutive years, Atos was ranked the world’s #1 provider of IT outsourcing services to the telecommunications sector by Datamonitor.

Transforming telecommunications performance


What’s More Important – Strategy or Execution, Invention or Innovation?

17 Feb



Strategy Versus Execution

Think of strategy as doing the right things, and execution as doing things right. Both are important, and you start with a strategy to define where you want to go and how you plan to get there. From a customer-centric viewpoint, your strategy determines who you want to serve and how you plan to create value for them (and you). Once you have your strategy in motion (with clarity and coherence), it goes hand-in-hand with execution (with accountability and actions), both feeding and guiding each other. Remember, execution is where real action happens relating to your customer discovery, problems, solutions, outcomes and value creation. You leverage the key insights from execution to shape or reshape your strategy. It is a continuous cycle; a repeated process of learning, planning and doing.

Strategy is not what you do but what you don’t do. Execution is really what you do. Strategy requires a clear sense of purpose since you cannot be all things to all people. In essence, strategy is the culmination of two key decisions on “where-to-play” and “way-to-play.” Where to play defines your target customer, and way to play is a combination of two things: 1) your unique value proposition to that customer and 2) your core capabilities necessary to deliver that value proposition. Execution is essentially the process of creating and delivering the value to your target customer in the context of the two decisions above.



Karl Moore recently wrote an interesting article, “Strategy Without Execution Is Hallucination!” I’d add the viewpoint that “Execution Without Strategy is Dissipation!” In essence, strategy and execution are the front and rear wheels of a bike, and you cannot deliver a great outcome to your customer with just one wheel.

Invention Versus Innovation

Invention is making a new thing. Innovation is making a new thing that people want to buy. Innovation is a practical translation of ideas or inventions into value-creating offerings for customers. Strong and sustained value creation is the essence of innovation. Ideas can be old or new, and we don’t always have to invent something new to achieve innovation.

In summary, Innovation = Exploration (big customer problem) + Experimentation (minimal viable product/solution) + Execution (customer value creation).

Invention may play a critical part during any stage, i.e., exploration, experimentation and/or execution. However, successful invention does not translate to successful innovation, and you can have a successful innovation without any invention. Generally people have a tendency to imply that anything new is innovation. The notion of something “new” or “groundbreaking” is a relative concept. What may be “new” or “radical” to one person may be totally “routine” for others. Hence the only way to gauge innovation is to look at it from an end-customer’s point of view.

You can call your new offering (i.e., new product, service, solution, system, process, method, experience or business model) innovation if:

  1. It matters to someone i.e., it solves a real problem for a real customer at a real price.
  2. It provides a step-change improvement (i.e., 5X, 10X or higher) in how customers get their jobs done today.
  3. You are the only company that can execute and deliver such a value proposition.

The innovations with incremental customer value (i.e., evolution types) are more of table stakes now. Incrementalism is innovation’s worst enemy. So to drive and thrive in today’s dynamic environment, companies need innovations with step-change customer value (i.e., revolution types). One way to think about step-change value creation is the rule of 10X. Can you provide a unique value proposition to your customer that is at least 10X better than the current alternatives in terms of time, costs, revenues, returns and/or risks? If you are not constantly challenging your team with this type of thinking, you risk becoming a “me-too” company that does not inspire anyone (i.e., employees, customers or shareholders).

  • True – Are you basing your innovation assumptions, insights and actions based on factual data? Who have you approached to verify and validate the truth?
  • Helpful – What is the big problem and who are you helping and how? Can you qualify and quantify the benefits of solving this problem?
  • Inspiring – Are you creating innovations that inspire people both within and outside of your company? What is your unique value proposition to realize transformational ROI for your customers (e.g., a gain/pain ratio of 10X or more)?
  • Necessary – What are the capabilities (i.e., people, process, technology) necessary for you to execute? How are you going to build these capabilities (e.g., build, buy, partner, acquire) to over-deliver on the value promise?
  • Kind – Are you defining the success based on your customers’ success? Do you have a deeper purpose to positively impact customers’ lives and give something back to the community?

In summary, the future belongs to companies that are consistently delivering step-change value to their customers through perfect orchestration of strategy and execution and invention and innovation. These companies are driven by a clear purpose and deeper meaning around their existence, and they are bold and brilliant at the same time.


Companies Pursue Cross Sector Growth as Digital Technologies Dissolve Traditional Industry Boundaries

23 Jan
New digitally enabled markets to achieve higher growth rates than the traditional sectors they replace

As the global economy continues to recover, a majority of companies intend to pursue growth opportunities outside their own industry sectors as digital technologies help create new higher growth markets, according to new research by Accenture (NYSE: ACN). The research also shows that most top executives believe the ability of new digital technologies to dissolve industry boundaries is the most important structural shift businesses will face over the next five years.

The report, “Remaking Customer Markets: Unlocking Growth with Digital,” includes a survey of 500 C- level executives in 10 countries, which reveals that while 64 percent say their companies will continue to focus on growth within their current industry, 60 percent plan to pursue growth in, or in collaboration with, other industries in the next five years. The report examines six ‘digitally contestable markets’ in which established and new players from multiple sectors are using digital technology to reshape traditional industries and create higher rates of growth: Healthcare, education, financial services, manufacturing, retail and transportation. Among the findings:

  • While the core healthcare sector in the United States is expected to grow at 2.5 percent annually between 2012 and 2018, the impact of digital technology (e.g. remote diagnostics, electronic records management) will help drive annual growth of 3.3 percent in the broader market for staying healthy.
  • The UK’s core financial services sector is projected to  grow at 2.0 percent per year between 2012 and 2018, but the wider digitally contested ‘paying’ market will experience annual growth of 2.9 percent, thanks to digitally enabled trends such as crowd funding, peer-to-peer lending services and virtual wallet applications.
  • Germany’s retail sector is expected to grow 1.6 percent annually between 2012 and 2018, but the wider digitally contestable ‘shopping’ market will enjoy growth of 2.6 percent per year, due to trends such as real-time pricing, e-commerce platforms that enable consumers to become retailers and online sharing and bartering services.

According to the report, the aggregate value of three digitally contestable markets in 2018, alone – shopping, paying and staying healthy – will be US$5.9 trillion to the U.S. economy, €747 billion to the German economy and GBP£519 billion to the economy of the UK.

Despite recognizing the fundamental shifts taking place within their own industries, only 38 percent of the executives surveyed said that these shifts would be the primary driver of their company’s strategy, while 60 percent said their strategy will be influenced most by broader economic conditions.

“Digital technology has been with us for years but is now dramatically disrupting and reshaping traditional industry sectors,” said Mike Sutcliff, group chief executive – Accenture Digital, which offers solutions and services across digital marketing, mobility and analytics to help companies unleash the power of digital to drive growth. “Although companies recognize the potential of digital transformation, many are not yet aligning their growth strategies accordingly. Revenue growth will increasingly depend on their ability to embrace digital business models to redefine their own sectors, transform the way they operate and create entirely new products and services.”

Working with new partners
The report also reveals how companies plan to participate in digitally contestable markets in the next five years. Collaboration, rather than acquisition, is the preference, according to the research. Of those companies seeking growth beyond their current sector, 63 percent will create strategic alliances and 46 percent will enter into joint ventures. Only 39 percent plan to expand into non-traditional industry sectors through mergers and acquisitions.

Asked what capabilities will be needed for success, executives surveyed pointed to a blend of digital and “analog” requirements. Digital technologies were identified as critical enablers, including data analytics (cited by 50 percent of respondents), mobile computing and/or app development (48 percent) and social media (46 percent). But, consistent with the need for greater collaboration, the most important enabler identified by business leaders is in fact personal relationships and networks, cited by 58 percent of executives.

The report shows that there is a gap between companies’ intentions and their readiness to pursue new business models, however. Among survey respondents who classified their companies as being above-average performers, 80 percent said their businesses were well positioned to understand trends outside their traditional industry, compared to just 52 percent of respondents representing low-performing companies. Additionally, 84 percent of respondents from self-classified high-performing companies said they were well positioned to collaborate with outside entities to grow in non-traditional business sectors, compared to only 39 percent of low performers.

“Customers’ experiences increasingly rely on services jointly provided by companies from multiple sectors as banks, retailers and travel companies work together, for instance,” saidMark Spelman, managing director, Accenture, and co-author of the report. “Incumbents must be open to entirely new ventures and partnerships that disrupt their existing business in order to secure future growth. And while sharing data and deploying mobile or analytics technologies is important, companies must develop new capabilities and more flexible strategies to form those more open and collaborative networks that are at the heart of digitally contestable markets.”

Steps to success
According to the report, companies that hope to expand into digitally contestable markets and achieve competitive success must master three key capabilities:

  • Use Digital to Anticipate Customers’ Needs: For example, a leading British luxury retailer uses a data system that makes customer histories available as soon as those customers enter the store, allowing shop assistants to offer a more relevant and individual service.
  • Be Prepared to Take on Different Roles with Partners: For example, a Spanish telecoms provider entered new markets by working with a leading bank to support e-wallet and peer-to-peer payment apps and with an Italian insurance company to provide “pay-as-I-drive” car insurance services.
  • Use Digital to Speed up Decision Making and Product Development. For example, a U.S. yacht manufacturer partnered with a software company to prototype its designs through 3D printing, enabling it to make modifications up to 40 times faster.

“In digitally contestable markets, customers care less and less about which company or sector provides services, as long as those services meet their needs,” said Mark Spelman. “That creates commercial threats and opportunities, of course. Policy makers and regulators also need to respond to the blurring of industry boundaries if they are to keep up with customer demands and if they are to ensure regulation supports rather than restricts dynamic new forms of economic growth.”

View the full report at


25 Game-Changing Trends That Will Create Disruption & Opportunity

21 Dec

Stephen Darori on Disruptive & Opportunity Hitech

25 Game-Changing Trends That Will Create Disruption & Opportunity

No matter what industry you’re in, your company can’t survive without technology. From smart phones and tablets to mobile apps and cloud-based technology, there’s a plethora of technological advancements to not only keep track of, but also to profit from.

To stay competitive, your organization needs to anticipate the most significant technology trends that are shaping your business and changing your customer, and then develop innovative ways to use them to your advantage, both inside and outside of your organization. Remember, if it can be done, it will be done. If you don’t use these technologies to create a competitive advantage, someone else will.

Over the next five short years the following game-changing technologies will transform how we sell, market, communicate, collaborate, educate, train, innovate, and much more.

1. Big Data Gets Bigger and Becomes a Service. Big Datais a term…

View original post 2,503 more words

Smart Home: Which company will lead the 2014 Trends?

11 Dec


International research firm Parks Associates,  will provide an update on the connected home market and analyze the key trends and upcoming announcements ahead of 2014 International CES . Parks Associates estimates that in 2017, more than 11 million U.S. broadband households will have some type of smart home controller, up from two million in 2013..So we are seeing in the marketplace, including the Control 4, LUTRON ,CRESTRON, AMX, and other power company like Wulian etc, that will be a hot war in home automation area.

So which company will win and lead the 2014 trend? As we know, AMX is a famous brand and has a long history in the home automation area, but its technology is wire, and wireless is the trend, so it must be out. LUTRON and CRESTRON  , Control 4 , yes, you can say, now in the market , maybe many people know them and think their products are good, in fact, for these three companies, not all the products are wireless, part of them are wire. It means, you can not DIY by yourself completely , you must pay the installing fees. So can you find one company which can supply the whole set of home automation products and DIY installing completely? Yes, look for in China, there is one company wulian , you will find they can meet any your inquire for home automation products , what’s more, you can get the high cost performance!

Now in the market , Apple also said they goes into the home automation area, and many companies said they have the best wireless  technology , like WiFI, Bluetooth ,ZigBee, Z wave etc. WiFi has advantage in big date transportation like video, but at the same time, it is also its disadvantage, except the video, most of the home automation products need low power dissipation and low energy consumption. Bluetooth, PTP technology, that will not have a wide range of application. ZigBee, now, many investors think that is the best choice to home automation area, and there is a whole complete industry chain to keep the creativity, For Z wave, consider it just can supply more than 200 devices in theory, we just can say it has a limited range in home automation or building automation .

After flubbing mobile, Intel’s next big market play is telecommunications (again)

6 Dec

Intel’s mobile ambitions aren’t focused solely on the smartphone — it wants Intel inside the gear running telco networks. The chip giant sees a $16 billion opportunity in the networking and communications gear business.

Intel missed the boat on mobile, and it may be facing a fight from ARM-based chips in the data center, but the chip giant isn’t going to sit back and lick its wounds. It is actively reaching out to the burgeoning maker and connected device crowd withdevelopment boards, it launched a new chip designed for the internet of things and it purchased an API management company. It is also going after a less sexy but still large market that seems ripe for some x86 chips — telecommunications.

Intel wants its chips inside the switches, routers and base stations that are the workhorses of the telecommunications network, even if it means making some sacrifices. To meet telecom’s requirements it will have to partner with another chip firm to get the right kind of processing power for base stations and change its focus from integrating everything into one chipset into a more modular system-on-a-chip model. In a conversation with Rose Schooler, the GM of Intel’s Communications Infrastructure Division, we discussed the chip firms plans for what it sees as a $16 billion market opportunity, why the telco market is ripe for disruption and what Intel has learned from its previous (and abandoned) forays into this market.

The emergence of Telco 2.0

But first, let’s talk about why this is even an opportunity for Intel. Today, the telco market has a big problem in that people love its products (especially wireless data) but the cost of meeting that demand is too high. One reason for such high costs is the type of equipment telcos purchase. The concept of “five-nines reliability” (available up to 99.999 percent of the time) and telco-grade gear have created a booming business for expensive boxes that handle much of the telecommunications industry’s needs. The dominant chips in this market are PowerPC or proprietary network processing chips from networking gear vendors.

But much like the server industry in the 1990s, when Intel saw an opportunity to move its PC chips upmarket, the telco world looks ready for a cheaper, good-enough chip as long as it can meet certain minimum specs. Already telcos are trying to consolidate their hardware (it’s not uncommon to see telecommunications providers have their internal IT, their IP video equipment and their cloud services all on three different platforms) on a common infrastructure to offer them more agility.

As this transition happens, Intel (as well as ARM) is trying to offer an architecture onto which telcos can consolidate. When you add in newer trends such as software-defined networking, the telecommunications industry is at an inflection point that all kinds of gear makers are trying to adapt to. Intel wants to be in on that, and has for a long time.

“This isn’t a strategy that started when SDN started to get attention,” Schooler said. “We’ve been on this journey for a decade. We’ve been looking at the evolution for the IA [Intel architecture] franchise within communications and redefined networking to boil it down into all of the infrastructure and workloads that support a network function.”

Understanding the workloads

Intel believes there are four different workloads that its chips can address. It has better hopes of success in some of these while Schooler admits it would need a partner in others. The segments are:

  • Application processing: These are servers running traditional telco workloads like billing. This is an area where Intel already dominates in other enterprises so switching telcos to a commodity server architecture isn’t far-fetched. Investments include spending on carrier-grade Linux.
  • Data plane processing: The data plane is how a router decides where to send a packet. This generally involves looking up information in a routing table that contains the network topology. Specialized processors from Broadcom and Cisco and Juniper handle the bulk of this work inside telcos today. And in the giant core elements that still will be the case, said Schooler, who noted that Intel isn’t going after the routers that handle the largest amounts of traffic. Frankly, it can’t: Its chips just aren’t fast enough. It’s current chip for this market, The Crystal Forrest chip handles 160 million packets per second.
  • Control plane processing: This is the physical work of moving bits around the network. For a long time, control plane and the data plane processing were combined in a single box, but technologies like Open Flow are leading to a separation between the two.
  • Signal processing: This area encompasses the radio access network or RAN, and this is where Intel is the weakest. Processing cellular signals requires specialized digital signal processors as well as chips that are able to convert analog signals to digital and sometimes back to analog. Intel clearly has an eye on this market, as my colleague Kevin Fitchard covered last year, but Schooler admitted that it would have to find a partner.

Handicapping Intel’s odds

A telco base station.

A telco base station.

The challenge for Intel will not be proving that the market needs a more agile, lower-cost product, but that Intel’s architecture is the right one for the job across all four workloads. On the application side, it’s in a fine position, but on the control and data plane side it will need to develop an x86 chip that can offer the throughput of a network processing chip as well as features that telcos care about. This will require a new chip, and Schooler didn’t want to discuss this chip.

As for the signal processing, Intel has a deal with China Mobile to try to build out a Cloud-RAN, but China Mobile is also testing gear from Alcatel Lucent, an established vendor that has a partnership on the chip side with Freescale. That partnership seems to be going strong.

Schooler noted that in signal processing, Intel will likely have to rely on some-fixed function IP that comes from outside of Intel, which has me wondering where Intel will find the special-purpose compute engines to handle the tasks one taken on by DSPs.

In the core of the network, she’s more optimistic, pointing out that Intel has done a lot of work to upgrade its CPU architecture to rival the packet-moving prowess of a network processor. Schooler seemed to understand, however, that Intel will have to rely on proprietary networking chips (ASICs) as well as its acquisition of Fulcrum, a networking chip provider that Intel purchased in 2011.

“In the transport there will be a network processor and ASICs and the CPU will not take over all cases of throughput.” She pointed out that Intel has improved its throughput on its chips by 10x over previous generations, but she also knows that the fatter switches and routers that handle lots of traffic aren’t candidates for the Intel architecture today.

I’ve long said that you shouldn’t bet against Intel. This is a company that may miss a market, but it has the capital, the research and the market share to force its way into a business and make a go of it. Fundamentally, Intel bets on cheaper general purpose processing, which is how the market has moved over the last couple of decades.

It somehow missed the importance of lower power architectures, but is now doubling down on its commodity computing bet for the telecommunication market. We’ll see if the telcos are ready for that.


photo: Flickr user huangjiahui

The 7 habits of highly effective mobile fundraisers

14 Oct

The 7 habits of highly effective mobile fundraisers

It’s no secret that mobile Internet is disrupting technology markets, and according to McKinsey it could drive trillions of economic value within a decade. Gartner forecasts that mobile apps revenue will grow 5 from $15 billion in 2012 to more than $70 billion in 2016. So “thar’s gold in them thar hills.”

This is a huge opportunity, but it’s also a huge challenge. Even mobile app companies with millions of downloads can struggle to raise money in the current market (particularly mobile games, which currently generate ~3/4 of all mobile app revenues). Angels, accelerators, incubators and crowdfunding are great to get you started, but aren’t the solution for the “difficult” second album – Series A funding. The much talked about “Series A Crunch” (unfortunately not a breakfast cereal) means that there are >5x the number of unfunded early stage companies across industries today compared to 2008, and those make for tough odds even in a hot market.

So how do early stage mobile companies escape the Series A Crunch?

At Digi-Capital our deal flow is around 1,000 deals annually across America, Asia (China, Japan, South Korea) and Europe. Much of that comes from early stage mobile apps, mobile games and mobile technology companies, so we like to think we have a feel for the market. Our experience and pattern matching have guided us to focus on the 7 habits of highly effective mobile fundraisers:

1. Product meta-design

What do you need to demonstrate beyond beautiful graphics and great functionality/gameplay? Investors can look at a range of factors, including user interface/experience, user progression/conversion, user segmentation and app balancing, social co-operation, smartphone/tablet specific functionality, post-release content updates, sales events tied to content promotion, testing (user, black/white box), analytics, rapid low-cost development cycles, agile development, business model (including free vs paid), monetization balancing, app discovery, distribution (both local and global), localization, community management, virality/organic user acquisition, cross-platform approach, tech differentiation (hard to copy quickly) etc.

2. Product portfolio approach/roadmap

Are you a single product company, with a big investment in one product (i.e., more like Evernote)? Are you a platform developing multiple products, with low capital intensity per product launched (i.e., more like Supercell)? Is there something in your approach which can produce more than a single product success? Is your approach best for the types of investors you are targeting (VCs often prefer platforms/portfolios, industry investors can be more comfortable with one-way bets on products they deeply understand)? How can you persuade investors that the risk they might take on you is worth the potential reward?

3. Mobile sector/genre growth dynamics

Are you aiming at a sector/genre within the market that is growing or shrinking? Are you opening a new part of the market, or flying into the teeth of bigger, better funded competitors? Are you focused on iOS, Android or both? What about OTT (KakaoTalk, Line, WeChat, WhatsApp)?

4. Team track record and dynamics

Have you succeeded before? Have you failed before and survived? (Spoiler alert: that’s a good thing) Do you have everyone you need on the team to succeed? Beyond designers and engineers, who is your money person? Who in your team knows how to acquire users organically? Who on your team knows the snakes and ladders for your sector/genre (could be in the core team, or a mentor)?

5. Mobile money metrics/analytics

What are the mobile money metrics that could take you into the top 1% of mobile app companies by revenue? Digi-Capital ranks apps using its proprietary data set in terms of lifetime value, 7 day retention rate, ARPDAU, sessions per day, 3 day retention rate, ARPDPU, % of paid conversion in first 30 days, sessions in first 7 days/following 7 days, % of paid conversion in first 90 days, second session conversion rate, % of paid conversion in first 7 Days, sessions per week, average session length (minutes), and % of organic to paid users. Where do you rank against the best?

6. Company upside potential and downside protection

What is your company’s upside potential where investors could help (e.g., realize growth potential, partnerships, team augmentation, analytics, mentoring, outsourcing)? Where is the downside protection for investors in your company (e.g., underlying asset value, team, IP, user base, brand, marketshare, switching costs, commercial relationships, predictable revenue)?

7. Fundraising and exit relationships

Who are the VCs and industry investors investing in mobile apps today? Which mobile app categories are they investing in? What advantages and challenges do you face with each of them? Why could they want to invest (or not want to invest) in you? How do you get them to come to you, rather than you going to them? (Spoiler alert: that’s a really good thing). If they won’t come to you, how do you get to them? How do you pitch like an expert, not a newbie? Who might buy your company after you’re a hit, and how are you building relationships with them (VCs want an exit, IPOs are rare, industry investors want to own you)?

A lot to think about, but hopefully this might give you a better idea of how to increase your chances of raising Series A funding for your early stage mobile company. Get it right and you could do well, get it wrong and you risk being disrupted out of existence.



Mobile Fourth Wave: The Evolution of the Next Trillion Dollars

2 Sep
Smartphone image copyright Nik Merkulov 

We are entering the golden age of mobile. Mobile has become the most critical tool to enhance productivity and drive human ingenuity and technological growth. And the global mobile market will reach $1.65 trillion in revenue this year. Over the next decade, that revenue number will more than double. If we segment the sources of this revenue, there will be a drastic shift over the course of the next 10 years. During the last decade, voice accounted for over 55 percent of the total revenue, data access 17 percent, and the over-the-top and digital services a mere three percent. Over the next decade, we expect mobile digital services to be the leading revenue-generating category for the industry, with approximately 30 percent of the total revenue. Voice will represent less than 21 percent.

There is already a significant shift in revenue structures for many players. The traditional revenue curves of voice and messaging are declining in most markets. Mobile data access, while still in its infancy in many markets, is starting to face significant margin pressure. As such, the industry has to invest in building a healthy ecosystem on the back of the fourth wave — the OTT and digital services. The revenue generated on the fourth wave is going to be massive, but much more distributed than the previous curves. It will end up being a multi-trillion-dollar market in a matter of a decade — growing much faster and scaling to much greater heights than previous revenue curves.

Vodafone, one of the biggest mobile operators in the world, recently reported that in each of its 21 markets, voice and messaging declined (YOY). In some markets, like Italy, even the data access segment suffered negative growth. However, what was more disturbing was that the increase in access revenue didn’t negate the decline in voice and messaging revenue in any market. The net revenue declined in every single market, no matter which geography it belonged to. The net effect was that the overall revenue declined by nine percent, despite data access revenue growing by eight percent, because the overall voice and messaging revenue streams suffered double-digit losses. Once the access revenue started to decline (and it is already happening to some of the operators), these companies will have to take some drastic measures to attain growth. The investment and a clear strategy on the fourth wave will become even more urgent. They will have to find a way to become Digital Lifestyle Solution Providers.


So, what is the mobile fourth wave, and who are the dominant players today? The fourth wave is not a single entity or a functional block like voice, messaging or data access, but is made up of dozens of new application areas, some of which have not even been dreamt up yet. As such, this portfolio of services requires a different skill set for both development and monetization. Another key difference in the competitive landscape is that the biggest competitors for these services (depending on the region) might not be another operator but the Internet players who are well funded, nimble and very ambitious. The services range from horizontal offerings such as mobile cloud; commerce and payments; security; analytics; and risk management to mobile being tightly integrated with the vertical industries such as retail, health, education, auto, home, energy and media. Mobile will change every vertical from the ground up, and that’s what will define the mobile fourth wave.

In the past, the Top 10 players by revenue were always mobile operators. If we take a look at the Top 10 players by revenue on the fourth wave, there are only five operators on the list. The Internet players like Apple, Google, Amazon, Starbucks and eBay are generating more revenue on this curve than some of the incumbent players. However, some of the operators like AT&T, KDDI, NTT DoCoMo, Telefonica and Verizon have been investing steadily on the fourth curve for some time. The two Japanese operators on the list have even started to report the digital revenue in their financials.

Just as data represents 50 percent or more of their overall revenue, we expect that, for some of these operators, digital will represent more than 50 percent of their data revenue within five years. Relatively smaller operators like Sprint, Turkcell, SingTel and Telstra are also investing in new service areas that will change how operators see their opportunities, competition and revenue streams.


This shift to digital has larger implications, as well. Countries with archaic labor laws that don’t afford companies the flexibility needed to be digital players are going to be at a disadvantage. It is one thing to have figured out the strategy and the areas to invest in, and it is completely another to execute with the focus and tenacity of an upstart. If companies are not able to assemble the right talents to pursue the virgin markets, someone else will. Such players will see decline in their revenues and become targets for M&A. Some of this is already evident in the European markets, which are also plagued by economic woes. Regulators will have a tough task ahead of them in evaluating some unconventional M&As in the coming years.

The shift to digital will also have an impact on the rest of the ecosystem. The infrastructure providers will have to develop expertise in services that can be sold in partnership with the operators. Device OEMs without a credible digital-services portfolio will find it hard to compete just on product or on price. The Internet players will have to form alliances to find distribution and scale. The emergence of the fourth wave is good news for startups. Instead of just looking toward Google or Apple, the exit route now includes the operator landscape, as well. In fact, some of the operators have been making strategic acquisitions in specific segments over the last few years — Telefonica acquired AxisMed, Brazil’s largest chronic-care management company; Verizon acquired Hughes Telematics; and SingTel acquired Amobee.

For any telecom operator looking to enter the digital realm, the strategic options and road map are fairly clear. First, it has to solidify and protect its core business and assets. A great broadband network is the table stakes to be considered a player in the digital ecosystem. Depending on the financial condition of the operator, the non-core assets should be slowly spun off or sold to potential buyers so that the company can squarely focus on preserving the core and on launching the digital business with full force. The digital business requires a portfolio management approach that requires a completely different mindset and skillset to navigate the competitive landscape.

The first three revenue growth curves have served the industry well, but now it is time for the industry to refocus its energies on the fourth curve that will completely redefine the mobile industry, its players and the revenue opportunities. Several new players will start to emerge that will create new revenue from applications and services that transform every industry vertical that contributes significantly to the global GDP. As players like Apple and Google continue to lead, mobile operators will have to regroup, collaborate and refocus to become digital players.

There will be hardly any vertical that is not transformed by the confluence of mobile broadband, cloud services and applications. In fact, the very notion of computing has changed drastically. The use of tablets and smartphones instead of PCs has altered the computing ecosystem. Players and enterprises who aren’t gearing up for this enormous opportunity will get assimilated.

The future of mobile is not just about the platform, but about what’s built on the platform. It is very clear that the winners will be defined by how they react to the fourth wave that will shape mobile industry’s next trillion dollars.


McKinsey’s 10 IT-enabled trends for the decade ahead

16 Jul
IT trends

Using social media to encourage breakthrough thinking is among the top 10 IT trends identified by McKinsey. Image from

Last week, I wrote about the McKinsey Global Institute’s list of 12 most disruptive technologies; this week, I want to look at a companion piece from McKinsey: “Ten IT-enabled business trends for the decade ahead.”

The pace of information technology change, innovation and business adoption over the last few years “has been stunning,” McKinsey says. “Consider that the world’s stock of data is now doubling every 20 months; the number of Internet-connected devices has reached 12 billion; and payments by mobile phone are hurtling toward the $1 trillion mark.”

Two trends identified in previous McKinsey research have reached the point where they are now competitive necessities for most companies: big data and advanced analytics. In addition, McKinsey notes three trends that marketers are familiar with but are now expanding across organizations: the integration of digital and physical experiences to create new ways to interact with customers; the demand for products that are free, intuitive and radically user oriented; and the rapid evolution of IT-enabled commerce.

Without further ado, here are McKinsey’s top 10 IT trends:

  1. Joining the social matrix. Social media are more than a consumer phenomenon, says McKinsey. They connect many organizations internally and increasingly reach outside their borders, “tapping the brain power of customers and experts from within and outside the company for breakthrough thinking.”
  2. Competing with ‘big data’ and advanced analytics. The volume of global data now doubles at a pace faster than every two years, McKinsey reports, and the power of analytics is rising as costs are falling. Marketers are already assembling data from real-time monitoring of blogs, news reports and tweets to “detect subtle shifts in sentiment that can affect product and pricing strategy.”
  3. Deploying the Internet of all things. Tiny sensors and actuators are proliferating at astounding rates. Over the next decade, according to McKinsey, these sensors could potentially link over 50 billion physical entities! Uses range from managing production and distribution to new ways of monitoring our health through apps and ingestible sensors. Yum!
  4. Offering anything as a service. The shift toward cloud-based IT services has made possible new opportunities in the consumer market such as companies renting idle vehicles by the day or hour or renting unused space on a short-term basis. There are now online services where you can rent everything from designer clothes and handbags to textbooks.
  5. Automating knowledge work. “[A]dvances in data analytics, low-cost computer power, machine learning and interfaces that ‘understand’ humans are moving the automation frontier rapidly toward the world’s more than 200 million knowledge workers,” according to McKinsey. Examples range from computers that help attorneys sift through thousands of legal documents for pretrial discovery to supercomputers able to assist oncologists with cancer diagnoses and treatments.
  6. Engaging the next 3 billion digital citizens. Rising incomes and less expensive mobile devices mean that large numbers of citizens in developing nations are becoming wired. The growth potential is huge, McKinsey says, with digital penetration in India at only 10 percent and in China 40 percent.
  7. Charting experiences where digital meets physical. The blurring of physical and virtual continues at a rapid pace, with more and more physical aspects of our world taking on digital characteristics. From Google Glass to wristwatch computers, interactive devices are changing the way we retrieve and use information.
  8. ‘Freeing’ your business model through Internet-inspired personalization and simplification. After nearly two decades of Internet browsing and purchasing, consumers expect services to be free, personalized and easy to use. Expectations of instant results, and superb and transparent customer service are now spilling into brick-and-mortar stores. As a result, businesses are forced to offer more services free or at lower cost.
  9. Buying and selling as digital commerce leaps ahead. Decreasing technology costs and fewer barriers to entry have allowed for more peer-to-peer e-commerce and new kinds of payment systems. For example, Airbnb connects travelers with people who have spare rooms to rent. Similar marketplaces are springing up for bicycles, cars and labor.
  10. Transforming government, healthcare and education. These three sectors make up about a third of global GDP but have lagged behind in productivity growth in part because they have been slow to adopt new technologies. However, governments are becoming more efficient, healthcare costs are being contained and education is being transformed through greater use of mobile and web-based applications.

What do these 10 trends mean for business leaders? According to McKinsey, here are the areas that organizations need to focus on:

  • Transparent and innovative business models,
  • Talent (particularly in the sciences and engineering),
  • Organization and
  • Privacy and security.



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