What do you do when your platform’s burning?
There are plenty of quick and easy tricks you can use to get a boost to your share price when you are a young entrepreneurial start-up on the up and up funded by a VC with mates in the media (Think: Move into new office space that is 2 to 3 times bigger than you need or buy the world’s biggest, fastest and most expensive web-server that sits idle in the store-room after the Press Conference). So long as everything you do implies growth the markets will smile benevolently upon you and your share price.
The game changes however when you are the market leader defending an unassailable position. Even the hint of a loss in market share or a delay in a new product launch can send the press baying for blood and the share price into minor free fall.
With this in mind it come as no surprise to discover the leaked Nokia email posted by Engadget has the blogosphere once again revisiting the challenges facing Nokia.
Assuming the source email to be reliable then the most interesting thing about the email isn’t the message (i.e. The Competition we face today is getting Faster, Smarter, Cheaper and more Agile and we need to respond quickly to the challenge) but the story that was employed to illustrate the choices moving forward. The platform is on fire? The one man managing the platform can stay and try to put it out or he jump into the cold freezing water? Sounds like a lose:lose proposition rather than a win:win scenario to me.
Surely the message should have been we are all in this together and if we work together we can find our way out of this together? After all it is the iPhone that is red hot at the moment. Nokia isn’t burning. If anything its problem is its market appeal that has gone ice-cold.
Nokia is still the market leader. The game is still its to lose. The problem with “Burning Platform” analogies is it suggests the fight is already lost and it is time to abandon ship.
The simple message should have been Forget about yesterday. Forget about today. We just need to get the market – and more importantly ourselves - excited about what we are doing tomorrow. And then follow it up with a “and this is what we are going to do about it” statement.
As I have said before the challenge Nokia faces isn’t one of innovation. They have consistently brough new ideas to market quicker than the competition. Even in a head to head innovation count with Apple Nokia wins hands down. The problem is Nokia has spent most of the past decade trying to become a mobile media platform rather than an mobile convergence platform. The folly of that strategy was exposed in 2008 when Apple created a world of unlimited content without having to invest in developing any content.
Moving forward the easiest way for Nokia to disrupt the market is for it to forget about Apple and redefine the market in its own image. As I have said before Nokia needs to abandon its iClone strategy - its Apple envy - and start building the next generation mobile device platform. A platform that makes Apple’s blank slates look and feel like Retro 20th Century Relics.
The problem of course is the future of the mobile phone is probably a lot like the future of the newspaper. As Apple proved just 3 years ago, chances are it will look and feel nothing like the past. So the challenge is to forget everything you thought you knew about your industry and start a fresh.
To this end I was reading Tomi T Ahonen’s thoughts on what it would take to turn Nokia around and I stumbled across a couple of interesting points on the value of SMS to the mobile phone business.
Firstly Tomi tells us that University studies have found SMS to be as addictive as cigarette smoking and SMS text messaging delivers half of the operator profits. So with 4.2 Billion active users, and now 18 years after its introduction, SMS remains the killer mobile phone app.
Needless to say the crux of Tomi’s turn around strategy centers around the idea of delivering the best SMS device on the market.
The problem of course with this strategy is it is like saying the future is Voice. It is very difficult to excite the market with a vision of the future that is a reflection of the past. Particularly in a market that is flush with excitement over App Stores and iClones.
Let’s face it a future of video phones and unlimited apps is infinitely more interesting than a future of SMS and Voice.
At the heart of Tomi’s SMS strategy is the simple idea that mobile phones are first and foremost mobile conversation platforms and that the future of the mobile phone is going to be about being the conversational platform of choice for 5+ Billion people around the world.
At the heart of the Apple strategy is the simple idea that the iPhone, the iPad and the iPod are portable Digital Nests.
Moving forward it would appear than Nokia is faced with the choice of delivering a better mobile communications platform or a more exciting portable Digital Nest. As market leader it should have the resources to deliver both and maybe even a few variations in between.
What I also find interesting about Tomi’s SMS strategy is that Twitter is only mentioned once in the article.
A key reason why SMS equates to 50% of the operator profits is because the handset owner is interested in keeping their conversations private. It is also a key reason why Twitter and Facebook are struggling to disrupt the killer mobile phone app.
At the moment we equate Freemium = Public =! Privacy.
While Premium = Private = Privacy.
If we compare SMS to Twitter we discover that the Web’s ‘SMS on Steriods’ start-up has an estimated 200 Million active users. That’s about 5% of the market reach of SMS.
The key difference of course is today we can monitor, measure and map the global activity of the Twitterverse but we can’t do this with the global activity of the SMS market. So, although Twitter only represents a fraction of the SMS market, its media influence is significantly greater.
The key advantage that Twitter has over SMS today is it offers us the ability to visualise trends in the conversational activity.
For example, Twitter has released today a chart illustrating the frequency of Twitter activity during the Super Bowl. Meanwhile, back in 2009, The New York Times provided us with an interactive chart mapping the Twitter conversation flow during the match.
Imagine how much more valuable a visualisation layer on global SMS activity would be.
I say that because one would expect significantly more people are using SMS than Twitter to communication their impressions of the game.
Prior to this years game Light Speed Research undertook a study on behalf of Greenfield Communications on what people would be doing during this years Super Bowl broadcast. The research paper is full of interesting insights like 21% of females watch the Super Bowl for the ads and only 2% watch it for the half-time show. 18 percent said they would be checking out ads online from their phones.
The most interesting insight in relation to this post is the news that 59 percent indicated they would be sending emails or SMS messages about the game from their mobile phones.
Imagine being able to model that SMS data to discover who the influencers are across the Global Text Messaging network in the same way that the UK based 2009 start-up Peer Index has modeled the raw Twitter data to reveal who are the Top 50 UK fashion insiders using Twitter.
The problem of course is the Telcos and the handset platform providers will struggle to commercialize the Social Graph embedded in the SMS data simply because of the privacy issue.
This also illustrates the obvious limits of social media as a tool of choice for mapping the social graph. When the majority of conversations – and certainly all of the important ones – are conducted privately (i.e. via email and SMS) then the value of the social graph is marginal at best.
The challenge for Nokia, and for any player in the mobile devices space for that matter, is to build the next generation public:private conversational platform. A device that allows the handset owner to seamlessly navigate between their public and private persona.
You could describe it as a mobile dashboard for generation me. A place where they can monitor, measure and manage their public and private personas. Both in the digital and the real world.
