- 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 (except holidays).
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I spent the week partly in Stockholm speaking at the E-Challenge Scandinavian venture capital event and partly in Santa Cruz, CA, presenting to the Ericsson BIAP course.
Venture Capital in Scandinavia - A Growing Herd of Black Sheep
The E-Challenge conference was a genuine try of hard-working young people to raise the interest of the potential venture community to come and support entrepreneurs. Compared to Silicon Valley the audience was very small and the atmosphere was somehow inhibited. Someone said: “I don’t have my business cards with me, I don’t give them out to everybody!” Also, “being rich and deciding to whom you give your money” is perhaps somehow socially questionable at least in Sweden ;-). Anyway, Rolf Skoglund (http://www.ideainvest.com) was there, he is a private investor with a controlling stake in http://www.autobytel.com in Europe, among other things. The winner of the contest was Zoomon AB (http://www.zoomon.com), with an innovation in the online vector graphics CAD/CAM space, potential for GPRS and 3G. - http://www.e-challenge.com/
From the wireless Internet perspective, Categoric Inc. was an interesting speaker at the event. Categoric provides a business alerts architecture that enables supply chain collaboration, planning and execution in various market sectors. Manufacturers, distributors, transportation and logistics services, and retailers use Categoric Alerts to collaborate across the supply chain, reducing inventory and improving service levels. An excellent company with an Icelandic founder, Mr Thorgeir Einarsson. (We have experience on Icelanders from http://www.oz.com.) We should be more active in the enterprise space with our wireless Internet business development (since most of the money short term, particularly in the US, will be there and not on the consumer market). Categoric certainly should make our shortlist of partners to evaluate. - http://www.categoric.com
Tornado-Insider is a useful European publication and venture capital portal site. Yes, they are affiliated with Geoffrey Moore (http://www.chasmgroup.com). On the web site you can find e.g. a useful events calendar for European Internet industry events plus a list of recently financed European startups. - http://www.tornado-insider.com/
More Portal Deals Appear: SkyTel Snatches EBay
Starting July 1999, bidders on EBay online auctions will be able to get bad alerts into their SkyTel pager and shortly thereafter they will have the capability to increase bids via their pager. Ericsson should find a way to match this move and pre-empt the mindshare benefits the paging folks are getting by being associated with the $ 24 bn market cap category leader like EBay. Possible actions include: 1) make sure we develop partnerships with leading online auction companies to use SMS and WAP on the leading GSM markets (work with companies like http://www.living-systems.de) and 2) approach EBay with a service bureau or gateway offering in order to “embrace and extend” their budding paging affiliation into mobile phones.
- The Moment of Truth for the Record Labels is Getting Closer
You have certainly read about all these IBMs, Sonys and AT&Ts developing secure music delivery technologies for the record labels so that you would not have to go to a store for your next Rolling Stones collection? That’s part of the point, but not all. I was surprised how far MP3.com has come in building a portal which in fact is an online marketing platform for new talent. You first dig the new stars as “freeware” and as the artist matures you are gently guided to the section offering appropriate merchandise. I still maintain that record labels are nothing else but marketing and brand building platforms and if they don’t become competitive in the online world in this role they will have a problem. - http://www.mp3.com
Also, you should download the new vTuner from RealNetworks. They have built a client application which is “the Yahoo of radio stations”, enabling you to navigate and find fast a radio station you like and to get advance information on the quality of service they offer. - http://www.vtuner.com
The big opportunity for Ericsson in all this is to marry digital broadcast technologies and the always-on mobile infrastructure to offer instant feedback and impulse buying capability for people consuming broadcast services. That would change the business logic of commercial radio and television dramatically.
Starbucks in Deal to Bring Their Brand Online
Starbucks led a $20 million venture investment in TalkCity, presumably beginning the migration of the Starbucks coffeehouse environment to the Web. By the way, I suggested sometime in 1996 the buildup of The Ericsson Internet Cafe Network in cooperation with Starbucks - to help make us an Internet brand. The VP of Marketing at Starbucks has some merits: he spent seven years at Nike building their brand. - http://www.talkcity.com
- Wall Street favorites - the pick of the week
Last week Keith Benjamin, my favorite stock analyst, commented on the EBay/Skytel deal (see above) with comments which will be carefully considered by Wall Street and the Silicon Valley investors: “…We expect eBay’s customers to embrace this new technology. Just last month, the average eBay user spent over 2 hours on the site, according to Media Metrix. Not only could wireless auctions “liberate” users from the computer screens at home or work, but we also feel they could increase the excitement and addictive nature of the auction experience. As a result, we believe eBay’s users could be even more loyal as the switching costs rise due to the incremental personal investment for the wireless service. On the whole, we view the wireless market as a huge catalyst for e-tailing because it could add another level of convenience to the shopping experience by truly offering Web access 24 hours a day, 7 days a week. For example, we wonder what would have happened if all the die-hards who waited in line for the upcoming Star Wars Episode 1 had owned a PDA with a connection to http://www.moviefone.com. We suspect the lines might have been a little shorter.” - Keith Benjamin, Chief Internet Analyst, BancBoston Robertson Stephens.
The Ericsson Mobile Phones Website Underperforms - How Much Money Are We Losing?
- I visited the Ericsson website before buying some accessories. Not that I needed to do it, since I knew I call 1-800-ERICSSON and place my order. But I actually did not find that phone number anywhere on the site, let alone the first page where it should be. Also the dealer locator was somewhere hidden. Regarding product information, I was able to get information on the right car hands-free kit, but there was no explanation on what the extra accessory “Advanced Music Mute” does or why I should buy it.
To show that other people find the Ericsson support unsatisfactory, here is a quote from Alex Gove, Senior Editor at Red Herring: “I had a question about my Ericsson phone. went to the site and had an awful time finding a customer support number (dead links, unclear organization of site) finally got a number (800-ericsson). called the number and the recording said that due to heavy call volume, they could not help me at this time. then i was disconnected! called back and pressed button for nearest dealer. phone rang and rang until i was again disconnected!”
How much sales are we losing due to poor web strategy? Other companies are taking this question extremely seriously. One can claim that Eckhard Pfeiffer, the CEO of Compaq, got fired largely due to poor execution of their overall web and Internet distribution strategy.
END NOTES - WearLogic is trying to arrange a meeting with me to present their flexible computer technology. They have created a prototype on a flexible e-wallet, commercially available early next year. (http://www.wearlogic.com/WebGlossy.htm) - AOL will invest $ 1 bn in Hughes Network Systems to boost their broadband strategy to cover direct satellite access to consumers, a move which aims to match the AT&T cable investments. (CNET). - Microsoft is considering opening up Windows source code (WIRED) - Microsoft Joined the WAP Forum, whatever that means (ZDNET) - Microsoft acquired Sendit AB for $ 130 m, first Swedish wireless Internet millionaires were born (ZDNET)
That was all for last week, this week Monday-Tuesday I will be at Venture 99 (http://www.herring.com/events/v99/), the big Herring event in Lake Tahoe. I actually just arrived at the Ski Resort at Squaw Creek and went to the Awards Dinner last night. This event has 700 people and the quality is excellent: Nokia, for instance, is represented by their CEO, Pekka Ala-Pietilä. Just wait until next Monday…
