Volker on Mobile

I know, I know, there’s a ton of conferences out there at the moment but this one has some real goodies to offer. The Social Media World Forum packs a lot of stuff into one by running no less than five different streams (next to mobile, this is the general one, enterprise social media, social TV, and cloud computing). There is a Facebook Developer Garage to go with it, too.

It’s running on 15/16 March in London (Olympia).

I’ll be speaking on mobile & social, making a case for the gaming side of things but there are some others, too… Companies sending top-level speakers include:

• Facebook
• Xing
• Mercedes Benz
• Mars
• Mattel
• Orange
• Vodafone
• LinkedIn
• Yahoo!
• Cisco
• IKEA
• DHL
• StudiVZ
• Netlog
• CBS
• BBC
• Fremantle
• Endemol
• Beck’s
• Lufthansa
• Shell
• ING
• Marks & Spencer
• Virgin Atlantic
• TalkTalk
• bebo
• Ecademy

I actually feel quite small now! Come along, it should be inspiring and entertaining. Tweet me @vhirsch to meet for a chat.

This week’s Carnival of the Mobilists is out, and it is hosted – very, very fittingly – from Vancouver by the good folks over at WIP Connector.

As always, there is exciting stuff on there. Besides not one but two posts of yours truly (which I trust you have read by now; if not, they’re on the Freemium model for mobile and a look on the web v apps), a lot of the industry’s luminaries are speaking out:

• AJ Wright has an intriguing post on how software and services dominate the overall experience (over and above hardware). A sneak preview into the future…;
• MobiThinking’s Andy Favell looks at if mobile search is working;
• Ajit Jaokar offer us a free download of his latest book on “Open Mobile: Understing the Impact of Open Mobile – Implications for Telecoms/Devices, Web, Social Network, Media and Personal Privacy” (I know the title is a mouthful but the man has a very sharp mind indeed!); and
• Tomi Ahonen, master of stats (and many other things) treats us to an account of Google’s mobile firsts.

Enough teasers, this. Now, go over and read the good stuff here.

The term “Freemium” has been coined first a while ago by Union Square Ventures founder Fred Wilson and has been articulated further by Chris Anderson of Wired fame in his book “Free”. It has since attracted significant interest, last but not least because the concept seems to work…

Ngmoco goes Freemium

Yesterday, Ngmoco, one of the new world’s (scil. Apple App Store’s) giants announced it raised another chunk of money ($25m to be exact) and acquired Freeverse, an iPhone developer that recently announced it had sold (sic!) more than 5m games, which are, alas, not always free – in the contrary. Together with this, Ngmoco announced a push into the Freemium model. So there we are…

To recap: the company had released two titles so far under the Freemium model, namely Eliminate Pro and Touchpets. Both are rumoured to having done, well, OK in terms of revenue (although Ngmoco CEO Neil Young said they were clumsily made). They had previously acquired Miraphonic, makers of Epic Pet Wars and other games, and Neil wants to use the the combined forces of development power to push the Freemium model onto the iPhone properly. Good on him!

What is it about this Freemium?

The term describes games (or apps or services or whatever you can think of) that are initially free to use but use micro-transactions from within the game to monetise it. Eliminate Pro did this by selling Power Packs without which players needed to wait X hours before they could continue. Online, we have had other examples, e.g. Zynga’s Farmville where you can buy hard cash in order to immediately acquire items for which you would otherwise have to play hour after hour after hour. You get the gist… If interested, you should read Chris Anderson’s book since the underlying rationale does not only work in the little work of games.

The principle is simple and also compelling – from both the developer’s and the user’s side: the developer gets a shot at grabbing a multiple of eyeballs allowing for a multitude of chances to convince users that it is the real deal. Users get to look into the mystery bag before having to cough up hard cash. Win-win, you think.

And yes, it is: act honestly and transparently and you shall win over the hearts and minds of your users. IF your product is good and useful, the users will appreciate it, become fans (and maybe even fanatics) and will thus serve as your secondary sales force by recommending things to their friends who are much, much more likely to buy on the recommendation of their friends than from anyone else. What a wonderful idea.

Things to get right

There are two issues with this though, and it is important to get these right:

1. Make sure to get the mechanics right. This does not work for any game or app or service. There must be some initial intrinsic and compelling value. Why would users otherwise use it? There must also be a good reason to buy. Why would users otherwise want to buy premium features? If you get it wrong (i.e. if too many users do not feel fairly treated), your users are gone. And what is the price of user acquisition? Yeah, you get it. It is MUCH more economical to treat users well; they will come back AND they will recommend you and your products.
2. Make sure you get the balance right. Don’t be greedy, don’t be too tight. The aforementioned Eliminate Pro didn’t get the weighting right. The result was a) a couple of seriously upset users and b) sales that were not comparable to the top of the class (anecdotally, Eliminate Pro featured in the top-100 top-grossing list of Apple only very shortly). Remember that you need to deliver value; otherwise users – rightly – won’t feel properly treated but ripped off. And then? See above on customer acquisition costs.

The other side of balance is, however, that giving away too much will kill your business. And that is no good either.

Tools

There are tools to make your (the developer’s) life easier on this: create avenues of the players’ passion, make it easy for them to communicate their passion to their friends (which form the only community that truly matters to most of them) at a time when it is relevant to them, and you’re a big, big step closer to getting the principle right, which is to deliver value. Very, very few users will object to paying for value. But they will only do so (and in this fluid, transparent world more than ever) if the value is true and not some cheap glass pearls conceived to deceive.

Challenges, rewards, and incentives etc have shown to be powerful tools to spurn user activity. If you deliver value, there will not be hard feelings. If you want to learn more about available tools, get in touch…

The Power of Fanatics

74% of users buy things based on recommendations of friends. That is an astonishingly high number. If you manage to convert simple players into fanatics, you turn them into ambassadors and then you just need to do the maths: if the average iPhone user has 100 friends, you have a potential 74 sales (or free downloads with subsequent monetisation) per initial user. Woah!

Most importantly though: this approach does not alienate users. Why not? Because you delivered value. Deliver value and users will appreciate that (just ask Tony Hsieh, he just sold his company for $887.9m; he sells happiness, he says!).

Cartoon Credit: http://www.gapingvoid.com/thisbusinessmodel876-thumb.jpg

Nokia recently shook the world by starting to provide its Ovi Maps app including turn-by-turn navigation for free. And only just under 2 weeks later, it announced that users have downloaded the app more than 1.4m times. Good stuff.

The numbers led some people (Nokia’s Vanjoki as well as various industry pundits) to claim the dawn of Ovi downloads had arrived. I beg to differ, and here’s why:

1.    A mapping application with turn-by-turn navigation cost, until very recently, anywhere between $30-80 a pop. And all of a sudden it is free. It is a little akin selling a Porsche Cayman for the price of a VW Polo: people will jump through any number of hoops for that. This is not proof that the download boom has finally also arrived with proud owners of Nokia phones; it merely shows that this is too good an offer to decline.

2.    1.4m downloads across the Symbian install base of c. 300m is not actually that impressive a number. To put it into context: a simple ad-funded game, Waterslide Extreme by German high-end development house Fishlabs, which is also a free download, clocked on the iPhone more than 10m downloads. As far as I am aware, the developer still sees around 40,000 downloads per day. And this is a long time after its release and for an app that fills significantly less of a need than satellite navigation. But even if one leaves aside this last bit (which is taking a very favourable view – no ceteris paribus here), Ovi Maps would need to hit roughly 100m downloads before it could say it was, pound for pound, as successful as Waterslide Extreme (NB: this is not exactly true because Nokia only supports some 20m devices to date).

3.    It is not actually proof that the Ovi Store works as users can also download the app via the Nokia Website or via the “SW Update” application on the phone. At a time when the store still needs 90 seconds (measured on an N97 running on a Vodafone UK 3G network) and more to even load the opening screen, I struggle to believe that the store will see an uptake across the band.

4.    It is likely being a bit of a one-off: Nokia also announced that, from March, every Nokia will come pre-loaded with the app.

Now, to clarify things: it is great news for boosting awareness of mobile phones as location-aware devices, and the pre-install on future phones will help that. It is likely that this will contribute to the fall of the dedicated satnav sector in much the same way Nokia’s landmark deal with Carl Zeiss lenses (and the resulting higher image quality of photos taken with your phone’s camera) was a doomsday scenario for the lower end of the digital camera market.

Also: Ovi Maps looks like a VERY good app: it covers more than 180 countries (car & pedestrian navigation: 74; traffic: 10), it is available in a whopping 46 (!) languages. It includes 3D landmarks for 200 cities around the world and incorporates Lonely Planet and Guide Michelin city guides. It is good, no doubt!

Finally, Nokia started early with the mantra of location-awareness. It was just that it had not executed particularly well to date. I know there is probably much more in the works than is visible to the untrained eye (or any other eye not from within the company) but the company does need to ramp up here since its hard-earned (and well-deserved) fame is/was beginning to fade quickly.

It would be fantastic if the world market leader would see uptake of applications rise sharply. I would very much like to ask them though not to fool themselves into believing that the store is not so bad after all only because of one successful application on it. There is a lot of work to do. The Ovi Maps case simply shows that one does not have to be a crazy Apple fan boy to be craving cool and useful apps. So, dear Nokia, continue to study the app store and try solve the shortfalls of the Ovi Store. It’ll be good for everyone!

The mobile version of Tetris, the iconic game published by EA Mobile, has now clocked up in excess of 100m paid downloads, cracking a landmark that is arguably miles ahead of everything else. This in itself is to be lauded.

However, in the press buzz around this incredible achievement, I have not seen anyone reminiscing on what brought this franchise to EA Mobile, and the deals leading up to that are something not to be sniffed at either, so here’s to the people who made an audacious move in 2005 when they bought Blue Lava Wireless, the Hawaiian studio run by Henk Rogers (who is also the CEO of Blue Planet Software, which still controls the rights to the game), together with a 15-year license to the mobile game for a rather breathtaking $145m ($137m + c. $8m non-recoupable license advance to the Tetris Company in which Blue Planet Software holds 50%).

The company at the time was Jamdat who some people described as the only company ever to go public on the back of a bowling game (Jamdat Bowling was one of the first run-away successes in the mobile space). Jamdat had just floated on Nasdaq in a $86m IPO (here’s the original S-1) with its market cap at the end of the first day of trading standing at $439m (up 45% from opening). They had struggled a little outside North America (as per their S-1/A nearly 80% of their revenues were North American) and were hence pondering to leverage Tetris’ global appeal to grow their markets outside the US. And how well they did!

At the time, however, few people thought the transaction would amortize ever. This might have been besides the point since the amortization for the original Jamdat shareholders came soon by the $680m acquisition by EA but few people (me included) had thought that the mobile Tetris property could yield a positive ROI (in isolation) on the back of, effectively, one game. This is naturally grossly simplifying since the lever of Tetris into carriers Jamdat did not reach prior to that provided incremental growth across the portfolio but the fact that it appeared to being an extraordinarily rich deal remained.

I do no longer have my numbers on what was needed to provide a satisfactory return but, over the 15-year license term, I believe it stood somewhere around $225m. With 100m paid downloads, EA may very well be there already – and this after only 5 years or so (this is again a simplification since there were of course sales prior to the acquisition).

I therefore tip my hat to Mitch Lasky, Jamdat’s former CEO and now a General Partner with Benchmark Capital (his very enjoyable personal blog is here), who had the foresight and/or luck to score this deal and I bow before the success of Tetris!

On 15 February, one of the most exciting showcases of mobile innovation of the year will be on display in Barcelona: the Mobile Premier Awards in Innovation. The awards are the largest start-up competition in the mobile sector and they are a unique grass-roots discovery tool: each chapter of the global community of Mobile Monday chooses one candidate. 49 candidates have been chosen (have a look further down). An international jury (I am flattered and proud to be a member) selects 20 finalists who will pitch in Barcelona at the Palau de la Musica on the afternoon of the first day of the Mobile World Congress.

It is a wonderful display of the innovation and creative power the mobile industry has to offer and I invite you to have a good look at the candidates.

If you are in Barcelona that week (and who isn’t?), you should make sure to book your ticket for the event here.

I hope to see you in Barcelona to celebrate innovation in mobile!

To stay in touch with everything around the awards, follow them on Twitter (@mobilepremier), become a fan on Facbook,

And, once your in Barcelona, you should not miss Mobile Sunday Barcelona 2010, which has fast become an unofficial kick-off event to MWC for mobile bloggers. It is on on Sunday, 14 Feb, from 7pm CET onwards.

Here’s a list of the 49 candidates (with links here):

• MobileMonday Austria – Mobilizy
• MobileMonday Barcelona – fonYou
• MobileMonday Belfast – SpeechStorm
• MobileMonday Bergen – ComCom
• MobileMonday Berlin – spendino
• MobileMonday Bogota – RedSalvavidas
• MobileMonday Brussels – Getyoo
• MobileMonday Buenos Aires – Beepoint
• MobileMonday Caracas – Consorcio Si-SMS
• MobileMonday Chennai – mobiSiteGalore
• MobileMonday Copenhagen – Cepa Mobility
• MobileMonday Dallas – Wave Integrated Marketing Solutions
• MobileMonday Dublin – Locle
• MobileMonday Dusseldorf – Yoose
• MobileMonday Edinburgh – Mobile Acuity
• MobileMonday Estonia – TaxiPal
• MobileMonday Frankfurt – match2blue
• MobileMonday Hamburg – apprupt
• MobileMonday Hungary – InfomatiX
• MobileMonday Jakarta – dotus indonesia
• MobileMonday Kuala Lumpur – CWorks Mobile
• MobileMonday Lithuania – SendFlow
• MobileMonday London – Audioboo
• MobileMonday Madrid – Tooio
• MobileMonday Malmö – Color Monkey
• MobileMonday Medellin – Wanbee
• MobileMonday Melbourne – Callernizer
• MobileMonday Mexico – Binbit
• MobileMonday Mid-Atlantic – Amphetamobile
• MobileMonday Milan – Soundtrckr
• MobileMonday Mumbai – Umundo
• MobileMonday Munich – Aloqa
• MobileMonday New Delhi – Voicetap Technologies
• MobileMonday New York – PercentMobile
• MobileMonday Oslo – Bipper Communication
• MobileMonday Paris – Presselite
• MobileMonday Rest of EMEA – Layar
• MobileMonday Rio de Janeiro – iMusica
• MobileMonday Rome – Mobnotes
• MobileMonday Sao Paulo – Atope
• MobileMonday Shanghai – mInfo
• MobileMonday Silicon Valley – CloudMade
• MobileMonday Singapore – Just Mobile
• MobileMonday Slovenia – Visionect
• MobileMonday Sofia – Bianor
• MobileMonday Stockholm – MoSync
• MobileMonday Tel Aviv – waze
• MobileMonday Toronto – Fonolo
• MobileMonday Vancouver – Sort Shots

The biggest event in 2010 is, distinct to certain fanboys opinion, the launch of the iSlate or new iPhone or iAnything nor, as Canadians will have us think, the Olympic Winter Games in Vancouver, but the Football World Cup this summer (and, no, my dear American readers, this is not the Super Bowl). And whereas one could already see mobile rearing its beautiful head at the last World Cup 2006 in Germany, many people think that South Africa 2010 will provide a breakthrough in mobile service provision around this.

Therefore, quite fittingly, the wonderful guys at Camerjam have put together a conference on the topic, and a nice one, too. The speaker line up includes some proper rock stars, such as (in no particular order):

• Former FIFA Product Director Rupert Daniels
• Author and Blogger Tomi Ahonen
• WPP Global Client Leader Matt Linder
• ITV Media’s Commercial Director Alex Goudsmith
• Real Madrid’s Head of Mobile Pedro Duarte Gonzalez
• MMA Managing Director Europe Paul Berney
• AdMob VP Russel Buckley
• BBC VP Global Adsales & Strategy Tom Bowman
• Sky Mobile GM David Gibbs
• Layar co-founder Claire Boonstra

and many, many more including yours truly (and as a licensee, I will be cheering the reigning World Champions, Italy, on this time, believe it or not!). Besides all that, the venue is the best: Arsenal’s home ground, the Emirates.

If you want to come, it’s on next week (21 January) and you can register here: http://www.camerjam.com/events/m-football/register/

Gemalto, SIM card maker turned “world leader in digital security” (I wonder how many companies claim that title; it’s like boxing, it seems) announced it would subscribe to a capital increase in Netsize, turning Gemalto’s share (24% pre-money) into a majority position.

This may well signify another move towards a closer tie to highly integrated hardware/software/service solutions on the mobile value chain. Gemalto is one of the leaders on the SIM card side, it manufactures SD cards, USB tokens, smart banking cards, etc. Netsize sits on the service side of things: it provides SMS and MMS delivery, is one of the leading mobile payment providers and provides content management platforms. Glue it together, and it becomes a vertically integrated solution from the same mould. Has someone been reading Apple’s philosophy?

Besides these points, cross-selling opportunities would appear to be fairly obvious, too. The only mismatch could be that Gemalto focuses on digital security (they list mobile connectivity, identity and data protection, credit card safety, health and transportation, e-government and national security). Alas, no messaging and entertainment here, the two main areas of Netsize’s business.

This little mismatch is not unprecedented: does anyone remember the VeriSign acquisition of Jamba? Whilst it seems it may (just) have been paid off, the match between the companies was never really there, it seems. Let’s hope the Gemalto-Netsize story will be a brighter one.

A very happy new year to all of you, and let’s kick this off with a new carnival of the mobilists. This week’s version, the first of the new decade, is hosted by the debutants from Omio. And despite the holidays just being over, there is a wealth of really interesting stuff on there. Posts include:

• Ajit Jaokar on mobile cloud computing and operators;
• David Doherty on mobile phones and health care;
• First-time contributor Alexei Polyakov with a very comprehensive report on the state of mobile social networking in Japan;
• Antoine Wright with a new take on bookmarks;
• Chetan Sharma sticks his head out and shares his 2010 predictions; and
• Steve Smith pleads the cause of comic strips as perfect for mobile.

Go over there now, get yourself a good read to get into the spirit for the wild and exciting ride 2010 promises to be for the space!

Mobile sports specialist Player One, that were acquired (or so everyone thought) by ROK Entertainment in October, seems to have hit the wall or, in proper English, entered administration. ROK is – understandably – said to be fairly unhappy about this.

So: the mere fact that Player One folded is not all that surprising. Many in the sector had wondered for a while how a company that focused largely on niche sports properties (a lot of their licenses where very Brit-centric) could survive for so long. However, that they should bite the dust two months after allegedly being acquired by ROK, which is, at least, listed somewhere even if only on the Pink Sheets (not too healthy looking either, mind you…) is surprising.

How can you acquire a company that is in such dire straits that the directors feel compelled to file for administration? Where is/was due diligence? Or was there foul play, lack of disclosure, anything else? Oh gosh, the joys of the Wild West of mobile content… NOT.