Live to Innovate

If you really want to innovate, then endeavor to make a life, not a living.

We achieve greatness when we pursue our passions, and that which will make an impact.

Just remember:

"Greatness follows those who lead the way."
- Braden Kelley

Happy Innovating!

Long Live the Mobile Operators (update)

Yesterday Clearwire and Sprint agreed to partner together to build out a nationwide WiMax network instead of competing. As a consumer this feels very anti-competitive, but hey, call something a partnership and you can get away with anything.

This Seattle Times article states that Clearwire will focus on building out access for 115 million people in small and medium cities, and Sprint will focus on building out access for 185 million people in the 50 largest cities. They hope to have WiMax access available to 100 million people by the end of next year. There was no mention in the article when they hope to complete the network. Paired with Sprint's 3G network, mobile data subscribers will have the ability to use WiMax when available and switch to 3G when no WiMax signal is available. Clearwire started with an external access device, but recently obtained FCC approval for a PCMCIA access device suitable for laptops. I'm sure in the future they will be able to slim it all down for direct integration into laptops and other mobile devices.

AT&T may have the iPhone, but Sprint has the vision for the future. As people get used to only having a mobile phone after ditching their landline, they will then start wanting their data to go with them. This Business 2.0 article mentions that in Seoul, South Korea, 90% of the population already utilize data services. The iPhone may help move American consumers toward the idea of their data going with them, but iPhone users will tire of the data speeds they have with AT&T and yearn for faster access. AT&T has a five year exclusive on the iPhone, but don't be surprised if Apple and iPhone users force AT&T to unbundle data access or if AT&T does a deal to MVNO Sprint/Clearwire's data network in place of their own. Sprint will have to make the decision of whether to maintain their WiMax/3G network as a closed network or sign some of the biggest MVNO deals in history.

Sprint has staked out a great technology position and has the potential to build a lead and then use competitor's money to maintain that lead. Or, they could maintain a closed network and try and copy the iPhone as closely as possible and hope customers will switch to their network because of the faster data speeds. AT&T is getting switchers with the iPhone, but the iPhone is a tad bit sexier and easier to sell than a faster network. Sprint has a faster data network already and people still buy data access from AT&T and other carriers.

I believe Clearwire will want to allow other carriers to MVNO, but I'm not sure about Sprint. If Sprint/Clearwire allows others to white label their WiMax/3G data network, they could cripple the baby bells and potentially kill the cable companies. Baby bells would be all but dead in the consumer space and relegated to a business focus. Cable companies would start to see the second leg of their triple play disintegrate, pushing them back to multi-channel television. With baby bells and the Internet eroding the multi-channel television market, and no substantial business voice or data markets to fall back on, I wouldn't be shocked if some cable companies went dark in the next ten years.

That leaves us with a few questions:

1. Who will fight the Clearwire/Sprint WiMax monopoly?
   
2. Will Sprint have the wisdom to MVNO their data network?
   
3. What will the cable companies do?
   
4. Can Sprint overcome their reputation for shoddy service and stop bleeding market share to T-Mobile and the rest?

What happened to smart advertising?

For a television advertisement to be effective, do you need to lay out everything for the viewer and make it obvious? Or, is an advertisement more memorable if you let the viewer connect the dots themselves?

Here are two examples of television advertisements that promote the product in a slightly more intellectual/emotional way that promotes engagement and curiousity:

Wind

People

Did they engage you? Or should the advertiser just have gotten straight to the point?

Invention versus Innovation

From a body of work I currently have in development:

Continuous innovation requires that innovation is placed at the center of the organization and that all parts of the organization are changed to support it. To effectively place innovation at the center of the organization, people must know what innovation is, what it looks like in their organization, and how they can contribute. Most people easily confuse invention with innovation, and wrongly chase invention in the name of innovation. Let's look at the two side by side to clear up the confusion from a common source, the American Heritage Dictionary:

Invention - A discovery, a finding
Innovation - The act of introducing something new

In short, invention is coming up with a great idea, but innovation is the act of introducing that invention successfully to the world. Innovation is truly about transforming the useful seed of an invention into something valuable.

For more on this distinction between useful and valuable, stay tuned!

In the meantime, check out an example to ponder posted previously on the blog:

http://www.business-strategy-innovation.com/2007/07/invention-versus-innovation-auto.html

The Network Operators are Dead - Long Live the Mobile Operators

There is little doubt now that the telecommunications industry is a tumultous and precarious place to be. On the wireline side, baby bells and cable companies are engaged in a necessary but costly arms race. Both are forced to invest in increasing broadband capacity and coverage while simultaneously facing increasing competition from wireless service providers. At the same time, baby bells and cable companies are invading each other's space with baby bells beginning to offer television service, and cable companies offering voice services via VOIP (Voice Over Internet Protocol) as part of their offer.

In the past couple of years, we have seen the rise of the triple play bundle:

1. Multi-channel Television
   
2. Internet
   
3. Telephone

And the rise of the quadruple play through MVNO's (Mobile Virtual Network Operators) or partnerships:

1. Mobile Phone
   
2. Multi-channel Television
   
3. Internet
   
4. Telephone

The wireless carriers are smart to sit back and let the baby bells and the cable companies (and even the satellite operators) fight it out and here is why:

Which of the quadruple play of services (Voice, Mobile Voice, Internet, TV) are consumers most likely to abandon?

The answer of course, is traditional voice services, and it's already happening. Many of you probably know someone (or are someone) that doesn't have a traditional phone anymore - now having just a mobile phone. Why are people abandoning traditional phone lines?

Abandoning the fixed line telephone provides an opportunity to save money, and a large number of mobile phone calls are made at home anyways. I can understand the attaction as I've got the cheapest service Qwest offers in the Seattle area, and it costs me about $25 per month ($300/year).

We use the landline for local calls, our mobile phones for long distance calls (especially during free nights/weekends), and Jaja or a calling card for international calls. We've maintained the traditional line for improved call quality, redundancy, call comfort, and to reduce brain radiation. But, with mobile call quality constantly improving and the convenience of a bluetooth headset (with lower emissions), I'm starting to wonder if we should cut the chord. We could save that $300/year we spend on a land line, or invest part of it in a bigger mobile plan.

People dumping landlines in favor of mobile telephony, hurts the baby bells more than it helps the mobile operators. People dumping landlines typically have mobile phone contracts already, and may not spend spend more as a result of dropping their landline. There is also more competition amongst mobile operators, unlike the tacit collusion that exists amongst the cable companies and baby bells.

But not even the Internet or Television honey pots are safe as revenue sources for the baby bells and cable companies and here is why. Imagine the following scenario:

1. Consumer purchases an Apple iPhone (or equivalent) with an unlimited data plan
   
2. Apple delivers wireless modem functionality via software update, allowing the iPhone to cable to a laptop or a desktop and deliver Internet Service (effectively for free)
   
3. AT&T and other mobile providers upgrade their networks and Internet access speeds
   
4. Consumer can now not only dump their landline, but also their DSL or Cable Modem

Taken a step further, television shows are free on network web sites like ABC. The ABC model of providing their shows free on their Web site for free (supported by advertising as always), will only spread. It is better for both advertisers (they can sponsor shows as the only advertiser and create richer interactions with viewers) and consumers (reduced quantity of commercials). The network also wins because they can archive all of their shows up on their web site and continue to earn advertising revenue - forever. The power of the long tail will fatten the television content providers' wallets, while threatening multi-channel television service providers.

You can see where I'm going...

In this increasingly mobile world, consumers will come to choose mobility as the primary reason for purchasing access to a network, and entertainment applications will be provided over the Internet. This will not happen overnight though:

1. Mobile Voice transition is already starting
   
2. Mobile Internet transition will come next (helped along by municipal and advertising-supported WiFi and WiMax networks) over the next 3-5 years
   
3. In 5-10 years the cable companies and multi-channel television will become irrelevant unless they manage to establish themselves as content portals before their current customers abandon the service

Now, you may say that people will not want to abandon their high-def televisions and surround sound systems for watching television in a little window on their laptop, and you're right.

Television provided over the Internet will be viewable on mobile devices, laptops and desktops, and the TV set. The timing is not right yet, but it will be in the future when people are mentally ready and the offerings are right. The Apple TV is the first step down this path, but it has bombed because it was launched too soon. People are not ready yet, and it is not the ideal solution. The concept will succeed eventually though.

In 3-5 years, TV's and laptops/desktops will come standard with WiFi and/or WiMax antennas and enough flash memory to store as much content as the current AppleTV. TV manufacturers may even create content portals that their televisions will connect to by default for their menu of entertainment options. Don't be surprised if Apple gets into the television business to build these types of devices. Apple already builds a 30-inch Cinema Display so it would not be much of a leap.

As a consequence of changes in people's behavior and improving technology, the mobile phone will be seen in the future as our mobile access point to content that we use for:

1. On-device content execution
   
2. Laptop/desktop content execution
   
3. Content execution via TV/Home Stereo

What will the network operators (cable companies and baby bells) strategic response be?

Invention versus Innovation - Auto Industry Example

Here is an invention that never became an innovation (for sale on eBay):

Want to buy a car with disappearing doors? (check out the video)

Up next week - "Invention versus Innovation"

How do you think invention and innovation are different?

I'll give you my point of view next week.