Gearshift’s Partner Dr Jussi Autere writes a blog on the Web pages of the leading Finnish technology business weekly Tekniikka&Talous. He evaluates potential ways to monetize patents from the point of view of a small Finnish start-up. His recommendation is to use structured auction managed by a well-connected advisor.
See Jussi’s blog (in Finnish): here
Posted by Jussi Autere: A year ago I wrote on this blog (http://www.gearshiftgroup.com/why-windows-phone-will-fail/) about the reasons why Windows Phone will have problems in gaining popularity. As parts of the initial difficulties have been won, it is time to tell why Windows Phone has possibilities to win.
There are currently two visible trends in the use of ICT. The one that is approaching its highpoint is so popular that is has been given own acronym, BYOD (Bring Your Own Device). The second that is still emerging has multiple names depending on the background of the person speaking about it. It is the need to provide consistent user experience on a service independently on the device that the user has.
The consistent user experience covers both inside the corporate services like shared calendars or CRM systems, but more importantly also the services that a company provides to its customers. For instance, a company selling books wants its appearance to be the same across the platforms, and book buyers to be able to change a device while they are in the process of selecting a book.
BYOD has been driven by cool Macs, iPhones, and iPads. Highly paid executives and professionals have used them for working, even though they had been given corporate standard tools. The corporate IT departments have decided that it is better, from security and minimizing wasted working time standpoints, to support the BYOD devices instead of suffering the problems caused by smuggled-in devices.
But the very reasons that have made Apple the winner in the BYOD trend are going to be sources of problems for it in the consistent user experience trend. Even though the user interfaces in Apple devices resemble each other, and the user can share data across the devices all by him/herself with the help of iCloud, from a service provider view each of the Apple devices is a separate empire. The user has to download a service provider’s app separately to each device and the service provider has to cope with different rules of providing apps on different platforms. If the service provider chooses to use a Web browser instead, Apple environments do not offer any specific advantages for him.
Microsoft has approached the challenge differently. It aims to provide a consistent user interface across the platforms for basic services. Corporates can then build their own user experience by using HTML5, which works also on Apple and Android phones.
During recent years, while Apple has been conquering the end-user mindshare, Microsoft has quietly won an increasing position in the plumbing department. For instance, telecommunications operators have taken Microsoft technologies like LYNC as part of their offering. Thus, when the corporate IT guys want to improve the security and management over the BYOD devices that the users have selected, they tend to lean on Microsoft approaches.
Even though right now Microsoft appears to be a good guy using standards based solutions like HTML5, the history has shown that they know how to build a hidden agenda to gain long term competitive advantage. We will start to see it only in a couple of years.
To put money where my mouth is, I have purchased Nokia shares this fall.
Inno-barometriseminaari pidettiin 15.2.2012 Tampereella, Vapriikin auditoriossa. Tilaisuudessa pidetyt esitykset löytyvät ao. linkeistä.
Markku Nurmela, toimitusjohtaja, Gearshift Group,
Pekka Rintala, Inno-barometri-hankkeen projektijohtaja, Gearshift Group:
Harri Kulmala, toimitusjohtaja, FIMECC
Petri Räsänen, johtaja, Innovaatio ja tulevaisuustyö, Pirkanmaan Liitto
Posted by Antti Pekkanen:
Nokia’s epic fail with Symbian, Elop’s ineptness to communicate a new smart phone strategy and a general slowness in operative execution in all fronts, has left the outside observers in a state of full and total confusion. What is happening and why this ‘fly-or-die’ WP strategy were chosen even though many other less risker, but still potential strategies would have been on the table.
Situation goes even more twisted now, when the only Meego phone, N9, has been recently launched and almost all reviewers has given it a very postive feedback – even Engadget.com, which is well known of its biased and patriotic views. User experience based on buttonless swipe action has been described as – really intuitive, natural, fluid, fresh, completely and utterly irresistible and, as natural as anything the smartphone world has yet introduced. Clearly Nokia has created something that would be far too stupid to just throw away.
Fortunately, there is path that can make sense and explain at least some of these oddities. What if it is so that that the increased R&D efforts in low end mobile phone range, the propriatery S30/S40 OSs, are related Meego or better to say Maemo 6 and its next versions. Namely, N9 is not actually a Meego phone, it is Maemo 6 with a very distinctive separation with Meego OS. Instead of it being Fedora based and having an RPM package management like the true MeeGo OS, Nokia N9′s Meamo 6 OS uses a Debian-based linux with DEB package management just like the N900. This means that Meego never reached commercial level, N9 is just a next version of Nokia’s Maemo Linux project which started already five years ago. So if Meego was too late and too little for smartphone segment and therefore deserved a death sentence, why not to keep Maemo 6 and make it the next low end segment OS. Meego is dead, long live Maemo!
Maemo could replace S30/S40 operating systems while HW performance are increasing and low end phones are able to run it. This is not in a distant future but is here today. Nokia just revealed new Asha series which runs on S40 with 1GHz processors, just like N9! Low end mobile phones are more like smartphones very soon. Maemo is a license free, lightweight and easily down- and upscaleable for each and every HW setup and price point. Qt development tools would be ready to compile Symbian and linux apps, forming already a sizeable low end application ecosystem. A simple fact is that WP7 can never be really profitable in sub 100$ phones. Already Microsoft licensing fees make sure of that in addition to resource requirements and processor architecture restrictions WP7 puts on mobile phone hardware.
This would also really leverage Nokia’s undisputable asset: Clearly over 1 billion daily Nokia users, a number that will easily be 2 billion by 2015. Recent 3Q2011 figures show that Nokia’s low end phone business is running strong. It is selling in high volumes, with a very low average price point (32eur) but still making over 10% net margin. That is something Chinese copy cats can’t do.
There are already some hints to this direction. Nokia is porting a very popular maps applications to S40 making it more like smartphone kind of OS.
However, the ‘project Meltemi’, which leaked out lately, shows that Maemo adoption to the low end phones is really strongly on cards. Meltemi is most probably Maemo 7, just like Harmattan was a code name for Maemo 6. That way Nokia could utlize all remarkable R&D efforts they put on N9 development, like the praised swipe UI, and really leverage it through “next billion” users.
This strategy is wise also in terms of competing against Apple IOS and Google’s Android. As it is well known, it is much easier to move up from low end market than to move down from high end market, basically in every high technology sector.
What about WP7? Honestly, I don’t know. It’s entirely different story and just as risky as market currently considers it.
Inno-barometri-hankkeen käynnistysseminaari pidettiin 9.11.2011 Sitran Atlas-salissa. Paikalle saapui yli 40 innovatiivisuuden mittaamisesta kiinnostunutta. Tilaisuudessa pidetyt esitykset löytyvät ao. linkeistä.
Markku Nurmela, toimitusjohtaja, Gearshift Group,
Pekka Rintala, Inno-barometri-hankkeen projektijohtaja, Gearshift Group:
Pekka Berg, Johtaja, Aalto Yliopisto, Innovation Management Institute:
Mark Brown, CEO, Innovation Center Europe Ltd.:
Posted by Jussi Autere:
The verdict is still open, whether Windows Phone will become a success story or not. But the reasons why it will fail, if it fails, are already visible. Unfortunately, the reasons are the very familiar ones for all the large, mature organizations pursuing innovation.
A week ago, I was in seminar organized by the Finnish Software Entrepreneurs Association to present Microsoft-Nokia ecosystem. In the presentation of the concept of the ecosystem, there was striking but at the same time expected phenomenon. The figure presenting different players in the ecosystem obviously had all the important players like carriers and application developers presented. It obviously presented the view of the important parts of the ecosystem by its sponsors.
There was still one player vital for the ecosystem that was not presented in the figure. This, obviously not so important player, was—the customer.
The fact that the understanding of customer needs is not in the driver’s seat for the builders of Windows Phone and Microsoft-Nokia ecosystem is already producing consequences.
One example is the data protection policy of the operating system. The different applications have direct access only to data that is produced the application itself. If the application wants to access data belonging to other applications, it has to ask the user explicit permission, always. This will mean that the user becomes a rubber stamp giving Oks, if someone does not develop an illegal bypass for that.
Another example is the certification principles of software developers. As its common practice has been, Microsoft is building different certification processes for its partners to increase their sunken investment, and mental barriers of exit for developers. The applications will be checked and accepted by Microsoft or Nokia before they can be published.
What is currently lacking in the mobile world is a way for smaller companies to present their services and products. The teenaged nephew of a small business owner should be able to produce it and publish it immediately. The planned certification and acceptance processes do not address this need.
If Microsoft and Nokia want to improve the success probability of Windows Phone, they should put their focus on the area that is always the key source of innovations and growth: understanding customer needs better.
Posted by Jussi Autere:
It was announced today that Veritas Eläkevakuutus and Ingman Finance Oy have invested in a Finnish company M-Brain Oy. M-Brain is a business intelligence company monitoring and analyzing social and editorial media.
This is a sign of market development that we have seen also in our M&A and consulting projects. The area of demanding analysis of data has become a serious business with multiple successful start-ups even in Finland. Besides M-Brain one can mention, e .g. Kwantic and Analyse Solutions Finland. This development has partially changed the old wisdom that it is difficult to build good businesses based on mathematical or statistical algorithms.
There seems to be three reasons behind the development:
- The investments of corporations on data warehousing and business intelligence technologies have made finally the needed data available for analysis;
- The emergence of businesses, where success demands systematic analysis and understanding of masses of data, e. g. digital media;
- Most importantly: some of the experts in data analysis like M-Brain management have learnt that the crucial thing in business is to understand customer needs and build solutions that help customers to either generate more sales, higher prices, or reduce costs.
The last phenomenon is especially delighting, as it has been a typical problem for all the Finnish technology based start-up, not only those operating in the area of advanced analytics.
As the business originating from Finland is starting to boom, the next question is whether this area of competences would become an internationally growing industry for Finland. The answer is not straightforward. The majority of the successful companies have customer intimacy as their key resource. This makes it slow to expand to markets, in which the companies do not have yet customer relationships.
There are three ways to overcome this challenge:
- Just selling by self. This is the slow approach;
- Raising venture money to be able to recruit sales organization. There are plenty of challenges in this approach. People who have experience on building fast foreign sales organization are crucial for this approach to succeed;
- Finding partners that can help the companies to forge customer relationships. This is many times the most cost-efficient way, but Finns do not have a good track record on working with foreign partners.
As the crucial things facing the Finnish advanced analytics companies in their internationalizati0on approaches are similar like in many other industries, their success in going abroad will show whether we Finns have been able to learn from our experience, or not.
Posted by Jukka Kotovirta:
I will be sued for treason but I say it anyway. The biggest current-day business innovation is IKEA. Here are the reasons why:
Their share of a customer’s wallet must be 10 times higher than that of an average Finnish furniture vendor. IKEA’s customership is a lifetime affair. At every turning point in your life (moving out from your parent’s house, moving in with somebody, moving on your own again, meeting somebody else, getting married…) you’re supposed to refurbish your entire apartment or house. Often you will, too.
As we all know, the first thing that IKEA plans about a new product is the price tag – the price tag that fits into a certain change of civil status of an average customer’s lifeline. With matching side products that lure the customer to actually renew the entire furniture in one go, with tempting showrooms in the stores to help materialize it.
In the US, going shopping at IKEA with someone equals going steady with that person. That is why I claim our former prime minister lied when he said he met this lady at IKEA. No – you don’t go there as a bachelor unless there is a turning point in your life that has already taken place. Yes – you go there together to dream about your new home together.
You think you have lots of choice at an IKEA store, but do you really? Actually you have been carefully segmented before even entering the store. What is the stage of your lifeline you’re in? Good. So you supposedly have this much of a budget. Good. Let’s top that budget by 30% and you’ll find everything you need at the store. Why not do it all at once, we have readily combined it all for you.
Articles look cheap but actually they’re not that cheap. At the kitchenware department you can spot the ridiculously cheap wok pan, and, while waiting in the queue to pay, there are oodles of cheap, mostly useless items. Their sole purpose is to be eye catchers to alter your perception of price. Much like after a stint on the motorway our perception of speed is greatly altered.
The cheapness is further punctuated through their mythical founder and forefigure. Grownups are not supposed to believe in Santa Claus, but somehow we all buy the story of Ingvar F. Kamprad fighting for us customers’ benefit in everything. Really?
Ecological they definitely aren’t. Helsinki city dumps must be flooded with not so old IKEA furniture that cannot be recycled. Our 3-year-old meeting room table is there as well, as no recycling company accepted it any more. But somehow they are getting away with it. At least I haven’t heard of Greenpeace attacking any IKEA store or subcontractor. Their members must shop at IKEA, too.
So if you add up high volumes achieved through customer lifecycle management, tough segmenting, showroom packaging and the overall concept of disposable furniture, but with high customer satisfaction through pseudo-choice, cheap-at-first-glance and whitewasted corporate ethics you’ll end up making wonderful margins.
To use the Geoffrey A. Moore’s terminology, in Main Street, which means the day-to-day highly competitive environment where most businesses are, most of the innovations are actually marketing innovations. This is where IKEA is King.
I’m not critical to IKEA. Instead I’ll take my hat off and take a bow. These are the things you as an entrepreneur should be thinking as a next step to leapfrog your business, outside the current box.
It’s never too late to innovate.
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