Mobile Phones and Economic Growth

The Economist writes about a paper by Robert Jensen, which has the story of how mobiles helped the Kerala fishermen increase incomes and pay for the mobiles:

Fishermen’s profits rose by 8% on average and consumer prices fell by 4% on average. Higher profits meant the phones typically paid for themselves within two months. And the benefits are enduring, rather than one-off. All of this, says Mr Jensen, shows the importance of the free flow of information to ensure that markets work efficiently. Information makes markets work, and markets improve welfare, he concludes.

Why Many Tech Products Fail

Michael Mace writes:

Most of our companies tend to focus on building what I call how products. That means products that focus on enabling technologies to let people do a wide range of tasks. For example, building a web browser and a WiFi connection into a product that doesnt currently have them is a classic how move, because it enables the user to potentially do a lot of different interesting things.

The problem with the how approach is that normal people dont think this way. They are much more focused on what, as in What does the product do for me? Because they dont understand technology at a deep level, they cant see the possibilities created by a great enabling technology. And even if they could see the possibilities, they dont have the skills necessary to adapt it to their needs. Even an (allegedly) simple act like pairing a wireless device to an unfamiliar WiFi router can be enough to give a typical user hives.

In competitive situations, how products usually lose to whats…

Rural Payments

The McKinsey Quarterly writes:

The good news is that mainland China can tackle the problem by using existing technology, without a hefty price tag. McKinsey research shows that the mainlands existing mobile Short Message Service network could be quickly and cheaply deployed to provide an SMS-based payment system in rural areas.

Because the most expensive parts of the infrastructurethe mobile network and millions of mobile phonesare already in place, we estimate that the cost of this solution would range from less than $40 million to $60 million. A payment-settlement system among merchants, banks, and mobile-phone network providers would account for the bulk of this expenditure. The initial investment would quickly be recouped through transaction commission fees and mobile-phone usage charges.

An SMS-based payment system, aside from its lower cost, is versatile and ubiquitous. Users simply send an SMS message specifying the mobile-phone number of the payee and the amount to transfer, along with a personal identification number. Within seconds, the payee receives both a confirmation message by SMS and the money in the designated account. The payer receives a confirmation message.

Micro MVNOs

WSJ writes:

Sonopia Corp. allows any organization or club to start a wireless company “in 15 minutes or less” online. The company, based in Menlo Park, Calif., has signed up nearly 900 organizations to create their own service, with relevant features, news and content for members of their respective groups.

Sonopia helps each organization design custom phones based on existing handset models from major manufacturers, and it helps the groups lease network access from Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, to carry phone calls and data. Sonopia also manages monthly billing and customer service.

Most of the micro-niche providers aren’t in it for the money — and that’s a good thing, considering they only get about 3% to 8% of the revenue from monthly service plans. The rest goes to Verizon and Sonopia. Instead, most of the groups use the service as a self-sustaining way to promote themselves or their causes and keep members or customers engaged.

Software 2007

Tali Aben writes about the recently concluded conference:

SAP: Hasso Plattners key message: not only small companies can innovate. As he presented SAPs new offering for SMBs, what I heard was not innovation but rather catch-up. Sorry however, its still impressive (since often, large companies cant do that either), but SOA, On-Demand, Collaboration, Community, Standards, etc. are themes weve been hearing about for quite some time. Marc Benioff is a great presenter. During his session, I kept thinking of my Israeli entrepreneurs why cant they speak like him! He reminded all of us that was a catalyst for change in the software industry. Very true. Initially, the users were SMBs, but now, thats not the case anymore. Marc then went to pitch a new platform that will allow anybody to create and then run new applications on top of this platform, empowering users and ISVs to build next generation apps. This company is moving beyond just being a single application, to providing a platform, with multiple applications. Sounds like a familiar strategy. perhaps, they should rethink the name of the company

TECH TALK: The Emerging Internet: From PCs to Mobiles

The epicentre of innovation is shifting. One of my core beliefs is that it is going to be the emerging markets like India and China that will give rise of the next set of global technology companies. These companies will create solutions for a mobile-centric world. Mobiles will be the dominant form of Internet access devices in the developing markets.

Even though the idea of the mobile Internet has been around for a long time (since early 2000), much of the focus has been on usage in the developed markets where many alternatives already exist. Also, at that time, neither were the devices good enough nor were the networks fast enough. Today, mobiles masquerade as handheld multimedia computers (see the campaign for Nokias N95). Wireless data networks are near ubiquitous because they are layered on an ever-expanding mobile infrastructure. For consumers in emerging markets, the mobile has rapidly become the centre of their lives, an extension of their body.

This new world is very different from the wireline-centric broadband world dominated by thick desktops with Intel chips inside. True, people have the best of mobiles and there is as good a wireless infrastructure in many of the developed markets also. But there is a key difference the mobile is for the most part an adjunct to the desktop in the developed world. In emerging markets, the mobile is the primary, if not the only, interactive device that people own. This Mobiles First and Only Mobiles environment and lifestyle is going to very different from that of the developed markets. For example, SMS and not email becomes the dominant form of asynchronous communication. The Contacts on the phone and not the IM Buddy List is at the centre of social interactions.

I have seen the Internet since its early days in 1994-5 from my base in Mumbai, India. For the first five years, I was in the thick of things as an Internet entrepreneur managing a growing set of portals for the global Indian community. For the past two-and-a-half years, I have been working in the mobile space imaging and creating a platform (and investing into an ecosystem of companies) which reflects my belief that the services we will see on the Internet that is being created in emerging markets are going to be very different from the ones that we read about in a media dominated by the activities of companies in the developed markets.

Behind the PC to Mobile shift, there are four key elements to my philosophy about this Emerging Internet that I want to elaborate on in this Tech Talk. First, even as the PC Internet has been wonderful in helping us navigate the Reference Web, it is the mobile Internet will help us build sensors into the Live Web. Second, what search was to the PC Internet, subscriptions will be to the mobile Internet. Third, advertising as the dominant business model on the Internet will give way to invertising on mobiles. Finally, this new world will first be visible in emerging markets like India and in this new world will rise the next Google.

Tomorrow: From Reference Web to Live Web