Mobile Video

Kevin Werbach writes that “video will be a significant driver for next-generation mobile networks. Just not in the ways most operators and analysts are expecting.”

The upshot is that handheld devices will never be a major market for one-way distribution of commercial broadcast video.

The good news is that mobile phones are not just video playback devices. They are, increasingly, video recorders. More cameras will be sold worldwide this year in mobile phones (an estimated 150 million) than in digital cameras (50 million) and analog film cameras (60 million, excluding single-use boxes) combined. And that gap will only grow.

Since video is, in essence, just a stream of still photos, the same basic hardware that allows a phone to take pictures allows it to shoot and display video. Many popular cameraphones, such as the Nokia 3650, already offer video capabilities. The biggest difference is the storage required. With increasingly capacious flash memory and miniature hard drives, however, that limitation is easing. And don’t forget the millions of laptops with cheap add-on webcams or digital video cameras, online through wireless hotspots or 3G data networks.

Using the mobile device to record changes the video from a form of content to a type of communication. There are plenty of other ways I can watch the highlights from last night’s football game. Most of them are more convenient, a better experience and cheaper than my mobile phone. However, if I want to give my wife a virtual walk-through of the apartment I’m looking at right now, or show my parents how their granddaughter is starting to crawl, or show my friends that I was just standing across the street from Madonna, there is no better alternative.

Journalists and would-be journalists will use the same technology to cover news stories live from the scene. Users will share popular video clips as MMS messages, the way they ship them around to PCs as email attachments. People will record how-to guides, recipes, and video tours. And they will share their daily experiences in video weblogs, or videoblogs, which are already springing up. A video-enabled cameraphone with the right software and back-end hosting becomes an instant videoblogging factory.

In short, a video-capable mobile device is an extension of its owner’s eyes and ears. It means that you can transmit what you see, anywhere and any time, to nearly two billion Internet users worldwide. Suddenly, we’ll be living not just in a global village but a global auditorium. Some of the consequences are frightening and some are trifling — imagine the audience of mobile users who will share a future equivalent of the Paris Hilton sex video. Too bad; it’s inevitable. Similarly, operators won’t like the demands that two-way video puts on their networks. Having built and promoted fat data pipes and needing something to replace falling voice revenues, though, they will have little choice but to go along.

Russell Beattie calls it “personal broadcasting” and adds: “Even though I generally agree with Kevin’s post – Personal Broadcasting will be key – I have to say that 1) On-demand mobile video will be huge. This isn’t MMS or some other non-proven system, this is TiVo in your hand – both convenient and compelling. And 2) The carriers and manufacturers are exploring every possible avenue to generate higher ARPUs. It’s a feeding frenzy right now as small companies compete to get a piece of the action. Now, how long will this take to happen and how long before my mother is sending me videos and making video conference calls from her mobile? That’s a hard thing to guess. But I think with the carriers starting to push mobile video capable phones, launching mobile media online services and the general public starting to use mobile data services more, the tipping point could be a lot sooner than you would think.”

Small Fish Strategy

HBS Working Knowledge has an excerpt from a new book “The Keystone Advantage” by HBS professor Marco Iansiti and Roy Levien. “Think of the business environment as a series of ecosystems, they urge, with ‘keystone’ companies such as Microsoft and Wal-Mart providing for the health of all who do business with them. What are the best strategies for companies living in these ecosystems? This excerpt focuses on strategies for niche players.”

The essence of a niche strategy is to achieve specialization by taking explicit advantage of the opportunities provided by the ecosystem while avoiding the kinds of traps that challenge firms in such environments. Our observation of a variety of niche strategies in action highlights a few critical components.

The first driver of an effective niche strategy is value creation.

An effective niche strategy creates value by selecting a specialization that is truly different and whose differences are sustainable over time. A classic mistake made by a variety of new ventures during the venture capital boom of the late 1990s was selecting areas that had no staying power, such as Web calendars or Web-dispatched limousine services. Over time, it was inevitable that these new niches would merge with existing ones. The services are now broadly offered, but the firms that started developing them have ceased to exist as independent entities. In those cases in which the skills and capabilities that characterized new ecosystem domains were distinct enough to justify a truly focused strategy (for example, personal financial accounting or customer relationship management software), these strategies have endured for many years and enabled the growth of large and successful firms (such as Intuit and Siebel Systems).

A well-executed niche strategy, because of its focus, will exhibit strong defenses against a keystone and dominator trying to expand. Intuit is again a strong example here, with the continued success of its Quicken application against Microsoft Money. The key is finding a large enough market that requires specialized capabilities.

TECH TALK: From Employee to Entrepreneur: Next Steps

I have spent quite some time emphasising the need to build the right mental models for the industry we are choosing to operate in. I have not discussed the importance of specific ideas. There is a good reason for this.

I believe that mental models are more permanent in the sense, that they help us place events as they happen in context, and provide the framework for our decisions. They are not constant they must keep evolving. Ideas, on the other hand, are ephemeral. They come and go. It is dangerous to start a new business of the basis of a single idea. Every idea needs the foundation of a mental model to stand a chance of being successful.

In an entrepreneurial venture, it is rare for the first idea to be successful. What we will find is that the first idea is just the key which unlocks the doors to a new kingdom where more doors await us. Think of the first business idea as an alarm clock it’s only purpose is to wake us up to the new dawn. How we live the day is up to each of us.

The transition from employee to entrepreneur is also a shift in mindsets. What we will realise when we do decide to make that switch is that we will start seeing the same world very differently. We no longer have blinkers on. The lens we use now is one where we know that each mistake could be fatal for our fledgling journey. We will find a heightened sense of observation. It is like finding oneself in a forest. Either we hunt or are hunted down. We will find survival instincts that we never thought we had coming to the fore. The game is now afoot!

Much of what I have written in this series is easier said than done. It is hard work. It is different work. But that is also the fun part of it. It is not something that every one enjoys and that is perhaps why there are more employees than entrepreneurs. To each his own. Once you make the decision of being an entrepreneur, don’t look back. Success and failure are but two sides of the same coin. Focus on the journey.

I remember the summer of 1986. I had just completed two years of my undergrad at IIT-Bombay. That was the time I made the decision to go on Himankan, a two-week odyssey through the Himalayas. I had never done any significant trekking before that. I worried first about whether I would manage what if I become tired and could not walk more. I worried about the food I’d have to eat. (Those who have cooked dinner for me or gone out with me will realise how difficult I am to please!) I worried about not having an exit route I’d have to go through the entire trek as a whole. But I decided that the experience of Himankan was more important I had heard others talk about it. So, I decided to go ahead.

It was a tough journey. But once the initial decision was made the first steps taken there was no looking back. Yes, it was tiring. Yes, I hated the food. Yes, there were times when I wished I was back home sleeping in my comfortable bed. But, when I saw the breathtaking beauty around, when I walked for hours with my own thoughts on snow-capped peaks and through the greenest of valleys, when at the end of a long day I chatted with people I had only a passing acquaintance with prior to the trek even though we lived barely a few rooms apart all of this was a life-transforming experience.

That is what entrepreneurship is about. Give it a try at least once in your life. Things will never be the same again. Whether it is a successful venture that results from it or memories of things that could have been been, it is an experience that is unforgettable. Best of luck!

Sharing Business Ideas

Steve Neiderhauser points to a comment by Guy Kawasaki: “The only thing worse than a paranoid entrepreneur is a paranoid entrepreneur who talks to his dog. There is much more to gain, feedback, connections, opened doors by freely discussing your idea than there is to lose. If simply discussing your idea makes it indefensible, you don’t have much of an idea in the first place.”

I couldn’t agree more.

Google and Software-as-a-Service

Steve Gillmor looks ahead to what we can we expect from the likes of Google and Microsoft:

One way to handicap Google is to deconstruct the notion that Googles intellectual property is bound solely to search. In fact, its bound to the emerging platform known as software-as-a-service. Fellow IPO offers a hosted software service, which can easily plug into legacy enterprise systems. The underlying fabric for enabling software-as-a-service is XML Web services, which are commoditizing the cost of integrating disparate hardware and software systems, and enabling a service-oriented architecture (SOA).

A new browser-based services fabric such as Googles not only makes it possible for companies to avoid the big-ticket costs of deploying applications inside the firewall, but could allow supply-chain partners to take advantage of a common architecture across enterprise domains. Security and application updates are centralized without the need to touch multiple clients, and companies can shift from managing IT as a cost center to developing revenue sources from packaging and syndicating corporate data along the supply chain.

Googles home-grown infrastructurea powerful, highly scalable server farm built on standards-based, open code, the virtualized extension of Scott McNealys famous big honking Webtone switch–also gives the company a strategic advantage. Google is the very personification of software as a service, with huge brand recognition and a vibrant business model that is rapidly sucking plenty of the oxygen out of traditional media advertising revenue models.

In moving toward this software-as-a-service platform, Google has some interesting partners-in-waiting-the carriers and their partners (Sun, Motorola, Nokia), the increasingly Web-focused broadband players (TiVo, SBC, Dish Network) who are circumventing cable and record companies with direct-from-Web downloads to personal video recorders, and micro-content creators (exercise left to the reader.)

The Indian PC

Vivek Ravindran has an interesting perspective:

If you start to profile the average Indian PC buyer what stands out notably is he is more often than not a he. If we regard women as the central figure of an average middle class Indian family, what are we specifically doing today to ensure that the PC addresses some common scenarios around Indian housewives? How do we motivate a housewife to want a PC for her home badly? Move from nice-to-have to must-have?

For the PC to be treated like a household appliance few things have to happen

The PC has to become an Appliance. (Long term and oft repeated but worth keeping in mind) What if the PC is re-branded and re-tooled from a generic computing, word-processing device into a specific scenario-addressing tool?
Internet/Email PC, Gaming PC, Entertainment PC are terms which are very used in a limited sense today we need to re-think on how intuitive the interface is for an end user when he/she turns one of these devices on and how quickly he/she is able to start using it effectively without getting mired in esoteric terms and concepts. Think TV/Food Processor/Microwave when thinking about intuitivity.

2. More importantly, the PC has to evolve (by way of content, services) to address scenarios around Indian housewives. Take some scenarios as listed below

1. With telecom costs still on the higher side, can the PC help the smart housewife, separated as she is from her parents/brother/sister/cousin/ etc, re-connect with her family everyday by helping her chat, email and speak to her loved ones without impacting her household budget?

2. Childrens education is probably the highest priority for her what if there was a service which in agreement with schools and faculty help the housewife track her childrens academic and behavioral progress, review teacher comments/notes, interact with faculty, help her help them with their homework, art, crafts and so on?

3. How about content around local residential communities, online ladies clubs and so on? (A little far out but hey this is “women” we are talking about here! 🙂 )

Consequently should we be selling to the Indian wallet (price) or should we be selling to the Indian psyche (nature of use) so that the size of the wallet becomes moot?

Videophoning goes Mass Market

WSJ writes that videocalling is finally hitting the mainstream:

Video chatting is one of a slew of Internet-calling services that are becoming more attractive in large part because of the cost savings over traditional landline phone calls. As of the end of last year, only about 100,000 people were making their phone calls over the Internet, also known as voice over Internet protocol, or VOIP. But that number will balloon to about 10 million by the end of 2007, according to Yankee Group, a consulting firm, as more people are enticed by calling costs that can be 30% cheaper than normal local and long-distance rates.

Seizing on this burgeoning trend, some companies are hitting the market with new videophones and service options. The small Internet phone company 8X8 Inc. is, for now, the furthest along in that effort. It makes a videophone that sells in electronics stores for $299, or $499 for a pair. Unlike some of its competitors, it also offers a service package: $29.95 a month for unlimited local and long-distance calls. That means consumers can use the phone both for videocalls and regular voice calls, which isn’t the case with some of the other videophones.

Motorola, meanwhile, plans to come out with a $700 videophone called Ojo later this year. The upside is that owners can make videocalls to any other Ojo user, anywhere in the world, for free. But it can only be used for videocalls, because the company has yet to reach an agreement with a service provider. (The Ojo was developed by a startup company, not by Motorola.)

A middle of the road option is the VisiFone, from Viseon Inc., which sells for $599. It has less “latency” — the lag time that can occur between when a person says something or moves and when that action shows up on the screen — than some other videophones.

The videocalls, instead of using a regular phone line, are routed through the Internet. Users connect their videophones to a cable or DSL modem and then dial a phone number, just as they would with a traditional phone. For the service to work, both parties have to have fast Internet connections and, in most cases, the same type of videophones.

In a related story, NYTimes writes: “Linksys and Netgear plan to announce that they are selling equipment designed specifically for use by Vonage, a start-up company that has become a pioneer in providing so-called Internet telephony. The announcements underscore the continued growth of Vonage, which is based in Edison, N.J. More generally, the development underscores the idea that Internet calling is slowly beginning to creep out of the fringes and into the mainstream, according to Michael Wolf, an analyst with In-Stat/MDR, a market research firm. Mr. Wolf noted that Internet calling was used by only a small fraction of people in the United States, compared with the hundreds of millions who rely on traditional phone service. But he expects the number of users to grow from around 600,000 at the end of this year to 1.5 million at the end of 2005.”

Internet2 offers a glimpse into the applications of tomorrow by looking at the next-generation network that connects many US universities:

Internet2 was developed by a consortium of universities and technology companies in 1996 to provide vast improvements in connection speeds. The goal of the project has always been to stay three to four years ahead of what is commercially available through the public Internet. The network itself is in its third generation of design. Earlier this year, the backbone was upgraded to 10gbps (gigabits per second).

More than 227 universities, libraries, public schools and research institutions are connected to Internet2. The network connects to more than 57 international high-capacity networks. It provides a test bed for new technologies such as IP version 6.

Peer-to-peer applications, high-definition videoconferencing, remote manipulation of lab equipment, and distributed computing are all applications that are enabled by Internet2.

TECH TALK: From Employee to Entrepreneur: Two Good Books

The Power of Impossible Thinking by Yoram (Jerry) Wind and Colin Crook is subtitled Transform the business of your life and the life of your business. As it turns out, entrepreneurship involves both! The authors explain how your mental models stand between you and reality, distorting all your perceptions … and how they create both limits and opportunities. Here is what the authors have to say:

We use the phrase mental models (or mindsets) to describe the brain processes we use to make sense of our world…The ways we make sense of our world are determined to a large extent by our internal mind and to a lesser extent by the external world. The model inside our brain is our representation of our world and ourselves.

Mental models are broader than technological innovations or business models…[They] represent the way we look at the world…Our mental models are often so deep that they are invisible.

Constant training shapes and refines our models. A number of forces of nurture shape and reshape our mental models, including education, training, influence of others, rewards and incentives, and personal experience. We also develop capabilities for learning how to learn that help us make sense of our experiences.

At any given point, we have a choice in how we view the world. But we are not aware of these choices…In a changing environment, we can either transform ourselves or we transformed. Every day individuals in their work and personal lives prove that it is possible to change before life itself gives them a painful wakeup call. Our mental models determine what we are able to see and do.

More than specific ideas, it is mental models that we need to develop. Another book, Seeing What’s Next by Clay Christensen, Scott Anthony and Erik Roth, provides insights on using theories of innovation to predict industry change. The books builds on Christensen’s previous two books ‘The Innovator’s Dilemma and The Innovator’s Solution. Using case studies from telecom, education, aviation, semiconductors and healthcare, the authors argue that even those without proprietary information can use these theories to develop powerful insights into how the future will unfold in a given industry and to make wiser choices based on those insights.

The authors write about the importance of theory: The only way to look into the future is to use [the right] theories, because conclusive data is only available about the past…The best way to make accurate sense of the present, and the best way to look into the future, is through the lens of theory. Good theory provides a robust way to understand important developments, even when data is limited. And theory is even more helpful when there is an abundance of data. This is the critical challenge of the Information Age. With more information, it is harder to discern what information really matters. Theory helps block out the noise to amplify the signal…Using theory allows us to see the future more clearly and act more confidently to shape our destiny.

Read the two books together. Answer the questions that the authors ask. Start building models and maps about the industry in which we want to operate in. And then follow Alan Kay’s advice: The best way to predict the future is to invent it.

Tomorrow: Next Steps

Bus. Std: The Next Computing Kumbh Mela

My latest Business Standard column:

In the previous column, we looked at how every twelve years or so, the world of computing sees major breakthroughs which transform the landscape. Think of this as the computing equivalent of the Kumbh Mela. The last major breakthrough was during 1992-94 when the launch of Microsoft Windows 3.1, Intels Pentium processor, SAPs R/3, and the web browser Mosaic heralded an unprecedented period of all-round growth until the slowdown in the early part of this decade. The next computing Kumbh Mela should be just around the corner. What will it be?

Consider the present. The installed base of computers in the world stands at over 600 million, and is estimated to touch 1 billion by 2010. Cellphones already have over a billion users worldwide. More than 500 million new phones with an ever-increasing array of features are being sold every year. Broadband networks both wired and wireless are proliferating. Devices like Apples iPod are becoming status symbols in the US. There is even talk of Apple becoming the Microsoft of music.

Search engines are now the window to the Web, as evidenced by the black swan Google. Internet advertising has been reborn via the search engines and their ability to provide contextual links. eBay is working to make inefficient markets efficient globally and considers its market opportunity at about $2 trillion. Application Service Providers are making a comeback as software becomes a service, even as the enterprise software industry faces consolidation. Outsourcing to India and other countries continues growing. Bangalore will soon have a greater concentration of techies than the Silicon Valley. Telcos are shifting voice to IP networks. Radio Frequency IDs promise a world where machines will talk to other machines.

As we look ahead to the next computing Kumbh Mela, consider a couple of thoughts.

Following the announcement of Googles Gmail in April, Rich Skrenta wrote on his blog at Google is a company that has built a single very large, custom computer. It’s running their own cluster operating system. They make their big computer even bigger and faster each month, while lowering the cost of CPU cycles. It’s looking more like a general purpose platform than a cluster optimized for a single application. While competitors are targeting the individual applications Google has deployed, Google is building a massive, general purpose computing platform for web-scale programming. This computer is running the world’s top search engine, a social networking service, a shopping price comparison engine, a new email service, and a local search/yellow pages engine. What will they do next with the world’s biggest computer and most advanced operating system?

This prompted a post by Tim OReilly: In a brilliant Copernican stroke, gmail turns everything on its head, rejecting the personal computer as the center of the computing universe, instead recognizing that applications revolve around the network as the planets revolve around the Sun. But Google and gmail go even further, showing that once internet apps truly get to scale, they’ll make the network itself disappear into the universal virtual computer, the internet as operating system Pioneers like Google are remaking the computing industry before our eyes. Google of course isn’t one computer — it’s a hundred thousand computers, by report — but to the user, it appears as one. Our personal computers, our phones, and even our cars, increasingly need to be thought of as access and local storage devices. The services that matter are all going to run on the global virtual computer that the internet is becoming.

I believe that the future of computing will be driven not by the existing users but the new users. These are going to be from the worlds emerging markets. They need computing at the price of a cellphone. They need computing as a utility. The next big thing in computing will be about building a platform which makes the two most important creations of the past the computer and the Internet available to the next users at a fraction of todays prices. It will be about making hardware, software, broadband connectivity, content and support available for Rs 700 ($15) per user per month for the next billion users of computing. This is a global market of $180 billion per annum which does not exist today.

To address this market needs a reinvention of the computing ecosystem. Luckily, all the elements needed to make it happen exist. Whats needed is for entrepreneurs in countries like India to look within at homes in their neighbourhood, at the small- and medium-sized enterprises in their city, and the schools and colleges which educate the next generation. Look around, and imagine the future one in which computing is ubiquitous, and a platform which can touch and transform peoples lives.

What emerging markets like India need is the equivalent of a tech utility which makes available commPuting as a utility to the masses. A centralised platform that makes available computing as a service and accessible via thin clients over a high-speed broadband infrastructure, neighbourhood computing centres that provide access on a pay-per-use basis, a community-centric content platform which makes available local information and helps small businesses connect with each other, and investments in education and healthcare to make sure they reach rural people these are the elements of the tech utility.

The computing Kumbh Melas of the past created innovations which diffused computing and the Internet across the developed markets. This first phase of the technology revolution over the past few decades touched the lives of the top of the global pyramid of consumers and enterprises. The next breakthroughs will take information technology across the digital divide. As William Gibson said, The future is already here its just unevenly distributed.” The next computing Kumbh Mela is happening. Can we see it?