- IN THIS ISSUE:
- * Business Week Conference TakeAways
- * Having Lunch with Peter Schwartz
- * Handhelds in the New Millenium
- * Organizing A Party = Creating A Community
- * Do We Stand Behind Our Slogans
- * How about if Ericsson…
I just came out of the Digital Economy Conference of Business Week that took place here in San Francisco. Some 500 corporate executives, mainly CIOs, were listening to the fairly enlightening program. I also attended the “Handhelds in the New Millenium” event of the Churchill Club. And last but not least, I had the opportunity to have lunch with Peter Schwartz of Global Business Network, one of the absolute brains of Silicon Valley. More of all that below.
- BUSINESS WEEK CONFERENCE TAKEAWAYS
Business modeling is the key. Don Tapscott, a business bestseller writer, moderated the first day. He once coined the term “digital economy” and he is also one of the authorities on the youth market (“Growing Up Digital”). I learned that excelling in conventional corporate functions such as management, finance, supply chain and marketing are now taken as given, they are a part of so called “corporate hygiene”. The real differentiation comes from excelling in business model innovation. Cisco is a ‘business modeling platform’, a business web, with over 10,000 companies participating.
My take: Ericsson should start its contribution to the new economy from this end, just like NTT DoCoMo has done with i-mode. Please refer to last week’s newsletter (which were excerpts from the MISE Business Model Project team results).
Business webs. Value chains are giving way to business webs. Companies are remains of the industrial age. In the New Economy infrastructure between acting entities is rich in function, not only in bandwidth – small can act like big. What is the use of having a big organization? Does that way of organizing constitute a competitive edge? Also, the marketing ‘P’s in an interactive world will change dramatically. ‘Product’ is produced together with the customer (that means the end-user!). ‘Price’ is being replaced by ‘price discovery mechanisms’ (something to keep our supply and marketing executives awake at night – hopefully). ‘Promotion’ is disappearing and it will be replaced by interactive relationships (focus on end-users again!). Brands can be instantly created – and killed. Agents and bots are insensitive to branding messages.
The channel conflict. You have to deal with the channel conflict – don’t wait and see. According to studies, moving a customer from a distributor into a web channel reduces share of cost from 14 % down to 4%. During the last two days I have listened to high level executives from the following companies talk about their channel conflicts: Procter & Gamble, Delta Airlines, Avon (cosmetics, 3 million sales reps), Royal Caribbean Cruises. They say it is all about 1) finding a complimentary role (innovation, new channels), 2) supporting actively your channel relationships and 3) mining your CRM databases to extract value. Delta Airlines pointed out how long it takes to implement a change in this respect. That’s why they all are acting, not waiting.
The new Hewlett-Packard. I had the fortune to listen to Carly Fiorina, the new CEO of HP. The strategy of the company is built around the strong position of the company in appliances, infrastructure and services with a special focus on mobile e-services. Sounds familiar? The new e-speak platform (automated creation, location and brokering of interactive services) is in the middle of the strategic thrust. HP is creating a new ecosystem – e-speak went open source yesterday… And what are the three leadership principles to turn around the huge multinational company? Carly’s answer: 1) leadership is about making strategic decisions, 2) enable the company to fulfill its potential and 3) create and maintain a balance in all aspects it is relevant. Ericsson should focus on the number two: innovating on new business models would guarantee that more of our engineers have a job in the future (I mean a job in the first place).
Mother’s little helper. OK, we all know, children influence greatly in the buying decisions of the family. They are savvier in using the web. What struck me was that parents might start using their children to systematically carry out the family ‘cyber-tasks’ in the same manner as I was asked by my parents to cut the lawn and milk the cows. Children will perhaps become ‘knowledge consultants’ who have a defined role as assistants in family cyber-routines. Paid in different virtual currencies. Child labor?
Miscellaneous. Procter & Gamble, the inventor of soap-operas, goes .com by launching Reflect.com, an Internet pure-play. They waited four years after reserving in 1995 the domain http://www.badbreath.com/ and over 200 others… Location-based marketing is a sweet spot for News Corp, keep that in mind when talking to the Murdochs… Which company has the largest amount of editorial content on the world-wide web? Believe it or not – CNET. With an annual marketing budget of $400,000 it became the 13th largest network on the web… Barnesandnoble.com is in the content business, not in the book retailing business, the company is planning to expand product and service portfolio. Wireless is a new strong focus for B&N, they joined recently both WAP Forum and the Phone.com Alliance… UPS is systematically innovating on its customer base: How can UPS be an enhancement to a travel service? What is their role in financial services?… Royal Caribbean Cruises is soon launching a ship with online access in every cabin. Ship-to-ship gaming and gambling are in the pipeline… The discount broker TD Waterhouse has a deal with Nokia to bring out wireless services early 2000 in Hong Kong and US, they were the strongest American proponent of WAP and GSM I have ever heard… During a coffee break I met with the Latin American representative of Citibank who is setting up their Latin American mobile banking services with Telefonica and Nokia. He said their efforts are separate from the Citibank corporate initiatives… I spoke Finnish with Linus Torvalds, the creator of LINUX and ambassador of the secretive http://www.transmeta.com. I asked whether we should contact their company and he hesitated for a while and then said ‘it might make sense’. We will all know on January 19th…
HAVING LUNCH WITH PETER SCHWARTZ
Today I had lunch with Peter Schwartz thirty minutes after leaving the session featuring Linus Torvalds – what a day. Dr Schwartz is one of the $10,000+ per day consultants who has his own think-tank, Global Business Network (http://www.gbn.org), famous publications (The Long Boom) – and an active life as a venture capitalist. “This year I have participated in four IPOs, three of which have been great successes.” (A great success typically means you multiply your investment by 20 or so in two to three years.) Thanks to SMG Sifo I got introduced.
Peter Schwartz is personally a strategic consultant to Motorola and their wireless Internet group. For the curious minds, yes indeed, Bo Hedfors is his main contact in the client organization. Naturally the conversation stays on a highly general level, but I get signals that tell about difficulties in the Motorola organization to embrace change, end-user focus and share holder value. The main takeaway for me was to realize how much Motorola can benefit in their venture activities from the direct involvement of consultants like Peter Schwartz. I also understand Motorola will launch a new venture fund, initially operated together with GBN.
And Peter, isn’t Gary Hamel the lead strategic advisor to Nokia? “Sure, we were that together ten years ago.” Peter is still a close personal friend of Nokia’s President Pekka Ala-Pietilä. “It tells something about the sense of urgency when someone spends as much time in Silicon Valley as he does, given he is a father of three. He has come a long way to understand this new world and what is happening in Silicon Valley and I can tell you – now he really gets it.”
“We are living in a special time in human history and in the history of wealth creation. This is the Renaissance and Silicon Valley is Florence.”
HANDHELDS IN THE NEW MILLENIUM
Churchill Club organizes seminars every Wednesday night down in Palo Alto. Some two hundred networkers and influencers gather to a hotel ballroom to hear about different topics each week. Yesterday we saw the battle of the handheld titans: Symbian – Microsoft – Handspring – Palm – HP. The market research house Mobile Insights presented some worldwide market figures which were very flattering to smart phones, compared to the great but lesser prospects for handhelds and pagers.
Juha Christensen from Symbian did a great job in fighting with the enemy on their home turf. He promoted Symbian’s focus on the enterprise market and relations with Oracle, Sybase and IBM. Strong relations to Nokia, Ericsson and Motorola became clear. The recent conflict around the Nokia/Palm announcement got a politically correct answer.
Palm and HandSpring echoed common culture and understanding. Behind their action is a solid strategy. Why did they choose Mobitex for Palm VII? “Because it works well nationwide.” Palm.net, OpenSky (saw the recent announcement with AT&T on CDPD?), the network of 30,000 developers are all part of a master plan. The CEO Alan Kessler had just visited NTT DoCoMo in Japan and was fascinated by i-mode. Watch out!
Microsoft is a looser – at least for now. Even if they joined Bluetooth earlier this week which was a great win for us all.
ORGANIZING A PARTY = CREATING A COMMUNITY
On more normal Internet news, we should urgently look into working with the “party-organizer startup” Evite.com. Their service enables the creation of RSVP events where participant through “rsvp-ing” create instant communities. If I am invited to a popular industry event, I’d better secure my place immediately by responding to the invitation. The European industry networking group in SFO called Eurotrash (!) uses Evite to arrange their parties. I am on their list and I get an email invitation to a party. I can reply YES, NO, or UNDECIDED. Then I can visit the closed Evite party community and see that I ended up as nr 26 on the yes-list and that John Malloy, the head of Nokia Venture Fund has replied ‘undecided’. I can also see that Jorgen from Adtempus.com has declined with a comment “I will be kicking off the ski season at Whistler Mountain that day”. This type of creating a community is something mankind has never seen before. Of course this type of service is also extremely viral.
DO WE STAND BEHIND OUR SLOGANS?
At Telecom 99 Ericsson launched a superb branding effort around “Power of Mobility”. The key elements of the statement are as you certainly know: 1) Mobility, 2) Personalization, 3) Convenience and 4) Quality of Life.
My question is: Do we have a named individual for each element whose sole job is to innovate upon this element and guide PUs and R&D to come up with solutions which include a leading implementation of this element? In order words, we might need:
- a Mobility Czar
- a Personalization Czar
- a Convenience Czar
- a Quality-of-Life Czar
As an example, the Personalization Czar could start by organizing in Stockholm a one-day seminar inviting leading personalization technology companies to present. He/she could publish a weekly internal Ericsson BI newsletter called “Getting Personal”. He could also make sure we are early on involved in emerging standardization initiatives related to the personalization area.
HOW ABOUT IF ERICSSON…
Raising the Ericsson profile in on the US West Coast? At least Nokia is doing it – Nov 30th they organize a web event with quite a populistic (involving movie director Renny Harlin) focus together with University of Southern California: WebRush – Content in Your Pocket. http://www.webrush.net/
The Vigil Web Monitoring Info Service is possibly cheaper than the tools we have now to track how we stack up against our competitors in the online media.
Upcoming happenings at Ericsson - Dec 15: 7th Internet Research Days. http://ip.ericsson.se/events/iday7/index.htm
QUICK TAKES – NTT DocoMo is rumoured to be preparing a (MP3-based) music distribution solution for 3G networks… According to Nikkei, the amount of mobile subscribers in Japan will surpass fixed line subscriber base in March 2000 (57 million). This underlines the smartness of i-mode as a strategic move… Unimobile launched a unified messaging portal with a strong focus on mobile devices, the portal war for mobile Internet is escalating… Now you can send a voice greeting embedded in your Amazon greeting card using OneBox unified messaging service, all free of charge… A Seattle-based startup Engo.com is running an auction site featuring wireless alert and biding capability… Hotlinks is running a “hyperlink community”, a similar approach might be useful when building community solutions for mobile Internet… The Java-based streaming media solution from GTS might offer opportunities for GPRS-based surveillance solutions… The FaceTime Customer Supportal ASP would be a great add-on to our mobile service portal offering , particularly to SMEs… I have the feeling that Project Skytalk, one of the new “stealth mode” Internet startups in the valley would be a good partner for mobile Internet portals such as Chatb.com… EBay launched a credit card payment solution which could lift the C2C commerce onto another level, no details available yet… The Nokia-backed Paypal.com mobile payment service launched last week… WebOS launched, this software ASP and a competitor to Desktop.com is a great opportunity for WAP when GPRS is here. Adam Dell, the brother of Michael, is financing this… A Finnish company CodeOnline is developing interactive learning solutions for mobile Internet… The Intuit spin-off Freeworks.com is a great “administration portal” for small companies, a top candidate to be WAPified… – (To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)
- SELECTED THOUGHTFUL READING - US holiday shopping this year will have around $6 bn volume. Download the fresh analysis report from Creative Good, mostly useful from the site and online service design perspectives… Seidman’s Online Insider argues that the deployment of broadband access will accelerate dialup Internet access becoming free of charge. And that Microsoft is not allowed to lead the pack into this due to the lawsuit. I agree… Wow! Market research portal BitPipe brings you all market research you could imagine (thanks to Johan Hjelm for the tip)… – (go to http://webacademy.ericsson.se for links to stories)
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This is a weekly newsletter describing the non-confidential part of my work during the past week and how I see market evolution affecting Ericsson (as interpreted my me in my role working for LME/DMA in San Francisco as a business developer with a focus on Internet applications and enablers). The report will be published every Monday. For subscriptions go to http://webacademy.ericsson.se/elists.
