Some weeks ago, I spoke at the most excellent Mobile 2.0 Europe conference in Barcelona (I had posted a slideshow of the slides to the talk). Now the good folks of Dotopen, who organised the event, now made a video of my talk available. After watching it, I will say that one never stops learning 
. However, perhaps you will enjoy it anyway. Here it is:
Volker Hirsch from dotopen on Vimeo.
As now is good tradition, here are the slides to the talk I delivered at Games Convention Online last week in Leipzig. Have fun and remember that sharing is caring…
Yes, yes, do we remember the good old days in Leipzig? Yes, we do. Since the German games industry did however decide that the travel connections weren’t up to scratch, they moved on to Cologne (in August) but did this bother the good folks in Leipzig? No, it didn’t. Not in the least. Instead they set up their very own Games Convention (with the added “Online” bit) and stage a very successful show in spite of all the adversaries.
I will be giving a talk on “Gaming with the World” (yes, I know, it sounds a bit grand) but there is also (!?) a lot of other good stuff to look forward to, i.e. valuable insights from leading players, such as:
- Mindmatics
- Nokia
- Bigpoint (they of 100m+ online gamers)
- VZNetzwerke (who successfully took on Facebook)
- Playdom
- Digital Chocolate
- and many, many, many more.
So make your way to Leipzig, one of the prettiest German cities and home to Johann Sebastian Bach (who was cantor at St Thomas) and host to some venues of Goethe’s famous Faust (Auerbachs Keller). It is well worth it. Bach thought so, Goethe thought so. So who are you to doubt them? Register here and be quick…
I hope to see you there!
This should have come a week earlier but, alas, I was on the road – quite literally – en route to San Diego and Qualcomm’s most excellent Uplinq conference.
Life of course did not stop, and amongst the things you should not miss was (and is!) the last iteration of the formidable Carnival of the Mobilists, hosted by our very own Peggy Anne Salz on her award-winning MSearchGroove blog. Amongst the gems not to be missed were:
- An interview of a company focused on Windows Phone 7 (yes, you read that right!);
- Tomi Ahonen with another go at the app economy (which he claims isn’t much of an economy; read my comments on this here);
- A look on web bookmarks as an alternative to apps (to which I still not agree; cf. here);
- A couple of posts on Android, and specifically Motorola’s Droid X (and the future, if any, of Motoblur);
- And many, many more…
Finally, my post on Vodafone’s pondered changes to its revenue share structures featured, too.
The carnival is here, and well worth a read! And, again, my apologies for the late posting of this. But the old Highway 101 along the Pacific just had me in its grips… 
Sluggishly reacting applications, latency in almost everything you do, crashes, blank screens, long lag to pick up networks, buggy settings. Do you remember any of this? Sounds like some old-fashioned feature phone that was somewhat overloaded by its ambitious maker, doesn’t it? But, alas, no, it is not. This is the user experience with a one-year-old iPhone 3G, 16GB since 24 June 2010. Do you recognise the date? Then luck will have it that you have experienced the same: the grandly titled “iOS4″ update that was being pushed down your throat (or rather iTunes) to your iPhone 3G.
Apple has been hailed for poking everyone else making handsets in the eye when it came out with the iPhone: here is a newbie that got it all right and venerable industry leaders found themselves with cartons full of ostrich egg on their faces: here was someone who got it all right: combining great build quality, maybe only OK-ish specs and unsurpassed UI with a vertically integrated publishing and distribution system that made for a leap in usage of mobile devices. It was a bad slap for the Nokias etc of this world and a revelation for millions of users (even if they were not Apple fanboys).
Software and hardware need to blend well
And then it came back to bite them! I am not a techie but iOS4 on the iPhone 3G feels like someone put a little too much luggage onto too frail a porter: the things creaks and aches at every corner. Gone are the days where one could switch from one app to another in seconds, where the iPhone – in good Apple style – did what you wanted it to do without much ado but breathtaking efficiency and speed. Now, it is clunky and, well, very old-fashioned. It could of course all have been avoided: just don’t push iOS4 to the iPhone 3G (or older models). No one would have cried, you should think: if the hardware cannot handle it, it cannot handle it. Users understand such things one should think. Keep iOS4 to the iPhone 4 (even the numbers match, doh!).
Allowing iOS4 to be pushed to the iPhone 3G was one horrendous mistake!
So is this the latest marketing trick of Apple? Go and spend another £600 to buy a new one, you say? This would be utter and incredible cynicism on a scale that would put Apple right on top of the current bad-boy scale! After all, I am not talking about an old, well-worn something-or-other device; I am talking about something that was only a year ago (which is short in terms of device replacement even in the mobile space) for a considerable amount of money!
However, I think that is not it. My suspicion is rather more frightening. It very much feels like Apple starting to overextend itself and learn how complex and fragile it is to deal in the mobile space. Pushing iOS4 to devices that obviously (not only under some special and hard to find circumstances) cannot cope with it is just shoddy. Every game or app developer in the market for more than 2 years would have caught this in QA. Does Apple not have QA? Or not anymore? Or at least not enough? It might happen to you when you try too much too quickly. Apple’s passion (or paranoia?) that drives it to try and do everything itself appears to haunt it now: I mean, QA is really simple. You don’t need cohorts of phDs in elementary physics to do this. It doesn’t take you 3 years to build it up. And – last but not least – Apple appeared to being very much on top of this in the past. So what happened?
A great showcase on the importance of User Experience
I have been throwing this into the faces of Nokia lovers who never fail to point out how technically superior Nokia’s hardware is: users do not give a toss about hardware specs. They care for the overall user experience. The unhappy marriage of the 3G with iOS4 shows what this does when it goes wrong: all the fun of using an iPhone is gone. What good is it when my phone lets me down every 10 minutes? What fun if my e-mail doesn’t open for 20 seconds? How exciting if applications appear to be frozen only to open just seconds after I pressed the home button (that will kill them just in time after I saw that it did, at the end, react)? Utter frustration. Rotten user experience. Complete fail.
Apple shows us, hence, accidentally how important the overall user experience is, and this may well be my final example on this: a simple (well, maybe not so simple) piece of software turns the most coveted consumer device of the day into a somewhat lame brick! However, it also shows how incredibly important it is to match the hardware (and network environment) to what the overall product (here: iOS4) promises to deliver (non-Apple case in hand would be video-calling on the Nokia N70 back in 2005: there was just no way this would work in practice; the experience was just too horrendous).
So, dear Apple, back to the drawing board. And if I may make a humble suggestion: just push the last pre-iOS4 version back to the older devices tomorrow! First thing! Promise! Please!
To all the others: this is a great opportunity! Catch up! Double your efforts! But don’t forget that the coolest frigging hardware (12 MP cameras anyone) is useless if the UX is not matching it either!
Last week, I moderated a panel at Mobile 2.0 Europe in Barcelona on “How to Make Money as a Developer”. Interestingly, there was no developer on the panel… However, there were representatives from Orange’s Partner Programme and from Telefonica, and I asked them if they would move from the “classic” 50/50 carrier revenue share (no one confirmed or denied the accuracy of that classic share of course) and, whilst they were clearly not willing to confirm anything (they probably couldn’t, to be fair), they did indicate that a revision of legacy models was under way in view of the not so new anymore challenges of app stores with their – now prevailing – 70/30 split in a developer’s favour.
This week, Vodafone came out a little more openly: at MEM, their Content Services Director pondered to
give [...] it back to the developers to let them monetise it.
The big one then followed. She said – and this must be close to an industry-first – that carriers
don’t necessarily have to drive towards revenue for all of that content.
And that is the real point: I have long been arguing that the real value of (great) content to carriers may not lie in incremental revenues (be it 50% or 30%) but in softer albeit much, much more important values, namely marketing, positioning as well as customer retention.
An example: a couple of years ago, we shipped a whole suite of X-Men 3 content, game, wallpapers, tones, you name it. The launch was, of course, around the movie launch (which was tremendously successful) and we had carefully crafted marketing plans including many brand partners (20th Century Fox, Activision, Panini, etc). We managed to drive some exceptional campaigns to which carriers in a lot of countries contributed serious marketing dollars. Did they do this in order to obtain an SMS-margin-matching ROI? Not in the strict sense. To them, this was brand extension and affiliation. And, boy, did it work!
Carriers biggest trouble is ARPU and customer churn. I am not sure about the latest numbers but for years the annual churn was reaching towards a third. And that is real money. If you can reduce churn by only a few points if you provide your users with great content services, you will see your money back many times. It is (brand) marketing, not incremental revenues that make it.
Now, as long as the content guys have revenue targets, the (normally very mighty) CFO of a carrier will ask painful questions on ROI and margins; and they will always come up short. Classify it as a marketing task though, and you’re looking really good: effective marketing that should yield measurable results at no cost. Hang on: at negative cost. How cool is that? I know that many a content guy at a carrier agrees with me here. Would they ever admit as much in public? You must be kidding me.
It is therefore good to see that Vodafone starts thinking publicly about alternative approaches with a view to strengthening and/or supporting their core business. Now put it in motion, folks!
Tomorrow, I will be heading to London to attend and speak at the Virtual Goods Forum. I will be delivering a completely shiny new and all around better iteration of my “Mobile + Social: Show Us the Money” talk.
The conference is organised by the same fine folks who have made the Mobile Games Forum such a stalwart of industry networking, and I am looking forward to learning more from what looks like an excellent speaker line-up. Here’s some of their speakers:
- Mark Curtis, CEO Flirtomatic (and great presenter!)
- Ray Anderson, CEO Bango
- Phil Guest, EVP Ad Sales Sulake (the Habbo guys)
- Benjamin Joffe, CEO +8*
- Alex Krug, CEO Softgames
- Alex Brutin, VP Biz Dev Offerpal
- and many more…
If you are getting the appetite, Osney Media did give me a promotional code, which gives you a 50% discount. It is C0015SPK. I hope to see you there!
And if you cannot make it, you can at least follow the thing on Twitter: @virtualgoodsuk.
It’s been looming and was long expected but today Vodafone announced it would embed its Vodafone 360 app store on two Android devices next to Android Market. Vodafone says their store would give partners a richer retailing experience than Android Market – but then they would say that, wouldn’t they?
But cheap puns aside, the move does have some legs: Vodafone uses Qualcomm’s Xiam personalisation engine, which provides recommendations based on user behaviour. They claim – and you may have heard that before in any number of my talks – that recommendations are a much stronger driver than promotions, stronger by a level of 4x to be exact. This ties in with my preachings: nearly 3/4 of all purchasing decisions (not only mobile, all of them!) are made on the recommendation of friends. And, alas, this is where “user behaviour” as the applicable pattern comes short: do I care how many, say, Amazon buyers of Grisham novels are also buying other authors’ crime thrillers? No. Why not? Because I don’t know these people. Do I care what my friends may think I like? You bet! Why? Because they know me and my tastes. Doh!
Anyway, back to Vodafone. They have realised (and, credit to them, admit it!) that a vertical implementation where you only get the full scope of 360 services if you have one of two phones doesn’t work. And, well, that’s somewhat obvious, isn’t it? Or is it a reasonable assumption that all my friends will all of a sudden (and at the same time) exchange their various handsets for a Samsung M1? No, I thought not either.
Vodafone did divulge a little data sniplet that must encourage them though, and that is that 360 customers have a 3x higher ARPU than others. If you look at the above (recommendations, friends, etc), that is not completely surprising. So now the next hurdle is to roll it out across their whole range of handsets. And let’s face it: a simple store won’t cut that on its own. Going cross-platform also means that – depending which handset you fancy – you may find different app stores of differing attraction competing with Vodafone’s own for attention (e.g. does Nokia’s Ovi offering seem to have more traction than, say, Blackberry App World but the latter has – from a publisher’s perspective – vastly superior price levels). All in all pretty sub-optimal, I think.
On a sideline: I will be moderating a panel on “How to Make Money as a Developer” this week at Mobile 2.0 Europe in Barcelona and I will be having the immense pleasure of having two operators on the panel (Orange and Telefonica-O2) as well as Microsoft (representing the OS side). This Vodafone announcement highlights some of the challenges the industry is facing. Interesting times!
This week’s Carnival of the Mobilists is up and running. It features inter alia:
- a podcast on mobile ticketing;
- a recap of the M-Publishing event organised by the excellent Camerjam guys (which I so sadly missed due to illness);
- an interview with Tomi “Rat Hat” Ahonen on LBS and mobile marketing;
- new research on the growth of mobile data and its impact on the various parts of the value chain;
- Tomi Ahonen’s take on the iPhone 4
- and much, much more.
Oh, and they were also good enough to include my (very) recent post on people-centric design. Thank you.
The carnival is hosted over here and it is – as always really – well worth a read!
Apple’s iPhone is only a marketing fad for vain urbanites. True purists go for Android. Those who see the light in volume go for Nokia or Samsung.
All this are points often heard when one dives into the deeper echolons of most mobile tech blog or forum. Engineers throw up their hands because those “American-centric media types” “don’t get it” and only wave their flag for whatever Steve Jobs, turtle neck and all may put up onto the big screens of his church.
I am not American and I am not a media type. And I don’t wear turtle necks (well, not since c. 1989 at least). And yet, I do prefer my iPhone (3G) over my Nexus One. And this despite obvious advantages of the Nexus: better screen, quicker, haptic feedback (yes, Mr Jobs, I do like that), the concept of open source, etc, etc. So why do I stick to the iPhone? Fanboy? Marketing fad? Vain urbanite?
Here’s why: I have been trying to set up my Nexus so it will do what my iPhone does, and I am not talking of playing a fancy game or running some other app that is not (yet) available on Android. I am talking about the two key things I need a phone for (41-year-old non-techie I am), and that is phone calls and e-mail; calendar (with sync) is important, too. For the former I need my address book, and I need it to sync properly. For the latter, I need my (admittedly too many) e-mail accounts set up on my device and syncing properly. As to calendar, wait for it below. Alas, two very different experiences:
- On the iPhone, you do the following: 1) plug the phone into your computer, 2) answer “yes, please” when iTunes asks you if it should sync contacts and e-mail addresses, 3) get yourself a cup of coffee, 4) walk off.
On the Nexus, you’re OK (-ish) if your life evolves around Google. With a Gmail account and associated contacts (and/or calendars), you’re sort of OK. It does all that. Now – shock, horror – I do not actually send all my mail from Gmail and my contacts are mainly dealt with in my address book (take Outlook or whatever you want if you’re a Windows user). And I use iCal and not Google Calendar. And so it starts: there is no desktop application that would help me do this. On a Mac, the phone is not even recognised when you plug it in (and that is a rare thing on a Mac; is this another piece of Apple vs. Google? I don’t know but I doubt it). So you are finding yourself setting everything up by hand! Entering the POP3 and SMTP (or IMAP) server addresses, user names, passwords, etc, etc for seven e-mail accounts is no fun. And (remember I am not a techie) invariably leads to some box checked wrongly here or a typo in a password there and, kawoom, nothing works. I can set up a Google Calendar/iCal sync BUT that will only sync the specific Google Calendar bit between the two, and not any of my other (work, home) calendars. I can sync my address book with Google, so that works. The whole procedure took me the better part of 45 minutes, including lots of corrections and swearing and led to me abandoning a half-configured beauty of an Android phone. Great result.
So why is that?
My answer is: because they design it with engineer-centric design. And that is wrong! Why? Well, because most people are not engineers! An engineer thinks something along the following: I am Google and we love the cloud. Therefore, I will design everything so that it will adhere to that principle and will – in a purist kind of way – design everything in a way that you can beautifully and seamlessly set everything up – if and as long as you use all the wonderful Google services we have. And if you don’t get that, you’re not worthy.
The same works with Nokia: we’re Nokia and we have the best hardware, the best distribution and an incredibly good and powerful plethora of services around it (we did spend time, resource and money after all to become mighty competitors in maps [Navteq], music [Comes with Music], apps [Ovi - and the many iterations before it], etc). I will therefore design everything in a way that I can let this hardware shine as best I can; I mean: we had video calls since 2005, for elk’s sake! And if you are too dumb to configure everything in a proper way and cannot find the destination to where your downloads were stored, you’re not worthy.
Apple looks at things a little differently (and it is not only for the better although, for most people, it is): they provide a tool that brings everything I need over to my phone just like that. Job done. Easy! They will look at whatever tools they need for this. And if it means extending iTunes (which, yes, I know, they had already) to accommodate syncing data other than music and video to something other than a computer, than so be it. In that, they follow their own philosophy as slavishly as the other guys do but they do design it from a people-centric rather than an engineer-centric point of view. And that is why it works so well for people that are not (also) engineers.
They key point is this: Apple does not try (or at least not in your face) to change what people do. If I want to run my e-mail off 5 different domains, then so be it. If I prefer my contacts to sit on my disk rather than in the cloud, that’s fine. They’ll give me tools to facilitate doing what I do already and don’t lecture me on what I have to do to make it work. That this brings about subtle changes in user behaviour is fine: if you convince me gradually that things work better one way rather than another, I might be converted. But to tell me “my way or the highway” does not work! Ever!
The downside is Apple’s control mania, which blocks things (sometimes fairly questionably) because they are (or only might) be out of their control. And this is where Google, Nokia and all the others could score: try to combine things! If you would look at how Apple does things, and then – at the very end – you provide a door (doesn’t have to be a trap door, can be a flashy entry portal) to the innards and machine room of your device, so you can show off whatever you want and open the marvels of technology to those who can and want to handle it – so they can turn their super-smartphone into an uber-super-smartphone. But do leave normal people alone.
In the post-iPhone era, things have changed already (a little): you now get hidden installers (that do not ask you 100 questions on where you want to do what and where and under what penalties and with which risks), you get better interfaces, etc. BUT the default is still engineer-centric and not people-centric. Improve this, and the iPhone killer can be yours!
Image credit: http://www.ntamco.com/main/images/stories/design-is-a-behaviour.jpg
I stumbled across an interesting piece of intelligence today, which looked at the development of virtual goods in the market place. According to this, median spend on virtual goods by users in North America has climbed a whopping 67% year-on-year to $50 p.a.
Equally interestingly, males are the largest spenders and, broken down by ethnics, Asians (26%) lead Hispanics (20%) by some margin over whites (11%).
So far (sic!), most virtual goods (how many? I don’t know) are purchased from stand-alone web-based games (World of Warcraft anyone?) but 31% had bought items in social networks (that would be the Zyngas and Playfishs of this world) with 29% in “network-based games” (what are they, I wonder). Facebook credits were used by 16% of buyers. Mobile? No word. It’s coming though: do bear in mind that there are 3x more mobile subscribers in the world than Internet users! And, yes, that’s true…
Taiwanese handset maker and Android maven HTC has bought French idle-screen specialists Abaxia for $13m (or so industry sources say). Abaxia says it increases ARPU
by putting services at a zero-click distance to the user and pushing services directly to the front screen.
Think push notifications to a J2ME feature phone. Abaxia works with carriers and OEM to optimize the interface across multiple devices from different suppliers, which seems an apparent benefit to carriers as it will allow them to make their on-device brand communication consistent throughout the handsets available through them. That an OEM should then buy the company could therefore surprise…
And as to the use of idle screens? Hm, I am not totally convinced: an idle screen is, well, idle. I may be tempted to jump to it if an app sends me something from a friend (because, hey, it’s a friend in need) but I am not sure if the same attention can be garnered from the latest and greatest service offer from your operator. This is however what Abaxia claims it excels in. According to its website, the company helps
to drive not only data revenue but [...] to recover failing voice ARPU and secure advertising ARPU.
And here, well, show me the money. I have yet to see a convincing solution for this, and I am not sure if an attempt to capture the idle screen is the way to go.
However, when it comes to interface improvements, it might just work. So all might not be lost. And, in any event, congratulations to the teams at Abaxia and HTC!
This is (slightly) off-topic as it looks at a new book written by a guy who has come to fame not in the mobile but “only” in the online world (or click-and-mortar as would be more accurate). But it is a book that will give everyone who has to deal with value chains, investors and people (vendors, customers, employees) a couple of interesting insights on how it can (also) be done.
The book, of which I received an advance free copy (which I was told I needed to disclose here), is by Tony Hsieh, the iconic CEO of Zappos, and it is called – unsurprising to anyone who has ever heard im talk – “Delivering Happiness”. It is available for sale from today.
The book has two very distinct parts. The first one gives you an interesting and humorous account of the journeys of an entrepreneur – all the way from a worm farm when ickle Tony was 8, via LinkExchange, which he managed to sell to Microsoft for $265m, through the start, near-death and eventual exit with Zappos, which sold to Amazon when it was valued at some $1.2bn on the day of closing.
Part 2 could be termed the introduction to the Church of Hsieh. Tony is famous for preaching the importance of happy employees in order to run a good business, and there is many an example from the world of Zappos that raises eyebrows elsewhere in the corporate world (to pay new employees $2,000 should they leave within X weeks being one of them). Most of it comes from one of the 10 core values Zappos set itself, namely the “be fun and a little weird”, and I find it almost insulting to judge a company or its policies by random examples alone.
At the very least, the book shows you that there is much more to it than the wacky ideas of a driven entrepreneur (and I’ll get to more in a moment). If you take, for instance, the story of the $2,000 leaving-bonus and look into it a little deeper, some very sound thinking reveals itself:
The idea is that people should only stay if they really feel aligned to Zappos’ vision and principles and the idea is that only people whose mindset is a real fit will not be tempted enough not to take it; it also shows a lot of respect to the nature and common sense of their employees: if the job [and the company] is really that good, $2,000 is very little! According to the book, less than 1% take the cheque.
So what do you get from that? 1) employees that should be a better fit than average, and 2) reduced recruitment cost. The first part is invaluable whenever you run a business that has customers (so, always) because employees that fit with your culture and vision should be better enabled to communicate this – internally and externally, which helps the business. The second part is self-explanatory.
The relentless focus on company culture is as awe-inspiring as it must be spooky to some. And it is, arguably, amongst the reasons for their sale to Amazon (or so VentureBeat interprets this part from the book). Sequoia pocketed $248m on $48m investment and were keen to liquidate (and, according to Hsieh, his board was not entirely convinced of “Tony’s social experiments”).
One should however not forget over this that Zappos operating principles are based on hard-nosed facts (from vendor relations, logistics, finance, employees to customer relations), and the “secret sauce” might then indeed be the company culture (Tony Hsieh is of course not the first one to propagate this). If he tried to take things too far is beyond me to say but I would say that a company that strives to make its customers, vendors and employees happy is not following a necessarily wrong path – even under cold-nosed corporate standards:
- Happy customers will help you by coming back to you (low retention costs and follow-on revenue) and by recommending you to their friends (low acquisition costs and incremental revenue);
- Happy vendors will be more likely to accommodate your requirements as to your stock (lower cost of supply), delivery schedules, etc, etc.;
- Happy employees reduce your employee churn and will – arguably – provide for higher productivity of the company as such (lower operating cost).
It is, in short, a very worthwhile book to read. And if you read it with the right glasses on, you will be able to look through what might sound like the preachings of Hsieh to find some real benefits for your own company (whether it exists already or is in the formation stages in your mind only and whether it is mobile, online or good old brick and mortar). If you are then still a believer, check over here for more…
And if you want to buy it?
