Tag Archives: Strategy

3 Learnings (and interesting question): “What if Steve Jobs was a telco CEO?”

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What can telecommunication CEOs learn from Steve Jobs. Interesting question discussed at TM forum, based on an initial discussion on TelecomAsia.

It has some good points in terms that Steve Jobs as the CEO of a telco operator could have made the history turn out differently regarding smartphones and mobile data services.

However, I believe that the focus on content selling is driven more by the current assumption that this is the business saviour for operators rather than being the key success story of Steve Jobs and Apple.

Apple’s business is in selling hardware. Content (music, video, apps) contributes only a small portion of their business. So in order to learn from Steve Jobs you have to take a different angle.

Here are my 3 key lessons for the telco industry:
#1: design insanely great products that stand out- telco products look the same almost around the globe, nothing really stands out
- focus on customer experience not on technology
- sweat out the details
- simplicity

#2: get your hands dirty with optimizing the business backend
Steve Jobs and now-CEO Tim Cook managed to turn Apple into the most profitable device manufacture by rigorous focus on logistics / business processes / supplier management. This is the invisible or at least mostly ignored part of the Apple success story.

#3: focus on the overall the experience
for customers and partner (read application developers).
- help the customer and make them feel treated well (retail stores, genius bars, migration services)
- don’t make them feel you just want to sell more
- no 10 pages of small print in product offerings
- support developers with a complete development environment, not just the APIs

And at the end just again getting back to the de-mystification of the innovation genius of Steve Jobs.

Social CRM – what is it ?

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Interesting attempt on the definition of social CRM (and the evolution to get to it) by Oliver Blanchard at the BrandBuilder Blog:

[Social] CRM is a business function supported by a system and technologies whose aims are to improve a company’s ability to derive insights into customer needs and behaviors by adding to their transaction data the lifestyle data they share online.

From my perspective it covers well the aspect of adding the outside social information to the existing inside view of CRM.

However, In the age of Facebook, Twitter, Youtube and all other social media, I think there is also the aspect of adding the social network capabilities to the CRM part, i.e. let your followers and friends do part of your customer relationship, especially the promotion and brand building part of it. Some others would probably also call it Word-of-Mouth-Marketing.

This obviously also depends on what should be considered under CRM and then you can think about externalizing some of the functions. For me key business functions of CRM are Customer Care, Complaint Management, Bonus and Loyalty Programs, Promotional Campaign Management and there is probably an official definition somewhere.

And to add to this ReadWriteEnterprise just summarized the latest from Gartner on Social CRM.

Two stages of simplicity

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Simplicity and Zen-like elegance has been attributed as the key success factor of many products currently.

Just coming out of a conversation about GUI design I realized that the push for simplicity has 2 challenges or stages. The first is to simplify, i.e. leave out or at least hide rarely used functionality or components.
This in itself can be demanding especially for product engineers who believe in the importance and consequently immediate visibility of each and every feature of the product.

But the more challenging part is actually to do this in a way so that users immediately “feel” the added value of the product. This requires to reflect customer expectations and standard use cases in a very natural way.

We will see this coming even more not only for physical products, but also for processes and customer interaction.

[Update: And here is some insight from Harvard Business Review into the Apple way of achieving this.]

[Update: And the interesting view of Don Norman on Google's simplicity]

The El Bulli of telco service

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Just reading through the summer (actually the second) issue of M/I/S/C (Movement Intuition Structure Complexity) a publication of Idea Couture.  An article about the experience and end of El Bulli, Ferran Adria’s fancy restaurant of molecular cooking and the future of food got me thinking how this would translate into the telecommunication business

What you have is the idea for an innovative restaurant or rather a sensory experience, where people apply and enter a lottery to get one of the 50 places each night for the 6 month of the year it is open.

So it combines a sensational experience with a high level of exclusivity. And maybe just because I’m writing this on a plane, it sounds very much like the top-level frequent flyer class of most airlines. The important part is also that there is something money can not buy.

Start thinking about it from a telecommunications provider perspective and you find that (1) this is not part of their standard offering and (2) it gives you a new angle about what customers desire about the service (hint: it is not free SMS – fails the money can buy test)

Here a just a few thoughts: better quality of service (like a frequent flyer), and this could be faster connect, quaranteed bandwidth, more bandwidth. Or on a more sophisticated level: a cool app that you can not buy for your smartphone, a free contract for the spouse (maybe also fails the can’t buy test), a special phone – immediately identifiable as member of a special tribe.

99$ HP TouchPad: A dent in the iPad universe ?

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Interesting view in Forbes on the impact of 99$ HP TouchPad on the iPad future: “Why The Undead $99 TouchPad Might Portend The iPad’s Doom”

However I can not really share the analysis and conclusion. Clearly the 99$ sale of the remaining TouchPads, which HP announced it will discontinue, was a big hit, but following all analysis in the Internet the price was well below the production costs. And while it is legitimate to sell products below costs, I assume you need to have a plan to recover those losses / costs at a later stage and this is where I miss to see HP’s end-game for this. (Except obviously to clear stock of a discontinued product)
So what is their plan to capitalize on the sold TouchPads? The only one I could see at the moment is getting market share for WebOS, which they announced to continue and potentially license to other HW manufacturers. But then they would also need to create the large application and developer community, something that HP has up to now also struggled to achieve. And they would need to price the HW sales losses into the licensing price, which again appears unconvincing considering the free of charge alternative by Google.
Following the experience the best way probably to put a dent into Apple’s table business would be to away tablets for free:
- Google could be doing it with Motorola acquisition and cross-financing it with their ad revenue, but I’m  not sure what their Android partners would think of it.
- Amazon might be doing it. Reclaiming part of the costs through content sales.
But where is the secondary business model for HP, which could refinance this for a longer term ?
Additionally the analysis is probably also underestimating the excellent cost position – and 25% margin in HW business is clearly a sign of it – Apple has achieved in their tablet business. Apple’s products might be still high price, but they are not high cost as also the MacBook Airs prove. All the competitors with Intel-based ultra-portable Windows notebooks have still to achieve a similar cost and price position.
At the moment it looks more like HP is enjoying the ride as long as it goes (and maybe try to impress future buyers as part of the PC deal to which they could bundle the tablet HW) and clear the stock.

iMessage + Facetime = Skype ?

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One of the more suprising announcements in Apple’s WWDC keynote was iMessage in iOS5.

Besides the already mentioned fact that the operators will not like this replacement of their SMS services, especially as it seems to be seamlessly switching between creating a SMS and an iMessage message (see “Cult of Mac“).
But even more surprising is the fact that iMessage is not better integrated with Facetime. The features iMessage provides are very similar to the Skype Chat/IM function (conversations, typing indication). And now Microsoft (also offering a Mobile OS) will control Skype with it’s very integrated communication suite: voice, video, messaging.
Apple doesn’t seem to have a bigger communication suite strategy in place yet, but I assume it is already in the making.
Think of Facetime + iMessage + Mail (now with conversations in Lion) integration available on iOS and MacOS devices.

iNFC

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The new iPad will have cameras (front- and/or rear-facing), higher resolution (or not), it will be using carbon-fiber or still a unibody and it will support NFC or Near-Field-Communication. So the rumors go.

And NFC is also rumored to be part of the iPhone 5, in order to compete with Google’s Nexus S, which already supports it. NFC is considered one of the key elements of the final breakthrough of mobile payment, replacing credit card with smartphones.

But the much more interesting question is, if the next releases of Apple iOS HW really support NFC, what kind of applications will be bundled with it? Considering the past success of Apple being based on creating a complete environment for new products and features (iPod – iTunes, iPhone – AppStore) I doubt that NFC will be released without any application to make use of it. But will it be mobile payment, e.g. replacing the current partnership with Starbucks around mobile payment or will it be the a big bank or a credit card company that joins the launch? It could be like lining up of media companies and games developers with the launch of the iPod, iPhone and iPad.

Who owns the customer ?

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Again and again I come across remarks about the fight for ”who owns the customer”.

Especially in the telecommunications industry there is a lengthy debate about this with regards to telecommunication operators, device manufacturers, Internet companies, content owners.

My first point is that the question is wrong. It should be ”who gets permission to serve the customer”. Probably very much in line with Seth Godin (see Permission Marketing). Personally at least I don’t want to be owned by any company and if I feel that way they have already lost. I would also assume that most people would not feel owned by Google, just because they use their search engine (although in fact they are to a great deal)

The second point is that if your business is based on ”customer ownership” it might disappear pretty fast.

Most recently this was part of a debate on Apple’s rumored initiative to add a SoftSIM to the iPhone or iPad in one of the next releases. SoftSIM would replace the normal, physical SIM card and would allow customers to switch operators without replacing a card. (Obviously also without the hassle to get the card etc.)

The immediate reaction in the operator community was an uproar, because of the threat to loose “ownership” of the customer. Currently operators spend large amount of money (of which the management and distribution of the physical SIM cards is only one part) to acquire new customers. This obviously only works if the customer stays with the operator for some time so the initial costs can be refinanced by service charges.

That is also why churn (i.e. loosing customer to the competition) is considered to be a bad thing. But what if you re-define the operations to streamline the acquisition of new customers. In saturated markets, i.e. with limited number of additional customers, churn usually works in all directions. You loose some customers and you gain some customers (from your competition). If you could make acquiring new customers more effective than your competition, you could immediately create a business advantage.

So don’t try to own the customer, get the permission to serve them and serve them more efficiently.

Now the GSMA (the organisation of telecommunication operators) seems to have taken up initiative to work on a SoftSIM (or embeddedSIM) standard. However, the officially stated driver is the increasing number of connected devices.

Nokia – Apple – Hardware – Software

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Over at daringfireball John Gruber has an interesting piece on the challenges Nokia and especially their new CEO is facing. The main conclusion is that Nokia today is a Hardware company that needs to turn into a Software company in order to compete on the level of Apple and RIM rather than HTC.

Competing with Apple? The success of Apple is not so much based on either Hardware or Software, but on creating a perfect combination of both with an unbeatable user experience.

The iPod has a cool hardware and a great form factor, but only with the integration in to iTunes and the simple way to synchronize and buy music, did it become the success it is today. The iPhone and the iPad have incredible hardware, but only in combination with the AppStore and the very consistent user interface did they become so successful.

Moving from cost efficient hardware focus to perfect user experience is a big step to take.