Category Archives: CEO

Biggest Patent Goof in History?

The history of the original Bell Telephone patent for the telephone is thick with claims, lawsuits and races to the patent office. In the midst of all this, the information giant of the late 19th century had a perishable opportunity to become the information leader for another century. They blew it!

This has to be one of the biggest examples of “Innovators dilemma” in history.

AlexanderGrahamBellFacing competing patents and an incomplete invention, in 1877, Bell and his supporters offered to sell the Patent for the telephone to Western Union for $100,000. The offer was refused.
In 1876, Alexander Graham Bell and his financial backer, Gardiner G. Hubbard, offered Bell’s brand new patent (No. 174,465) to the Telegraph Company – the ancestor of Western Union. The President of the Telegraph Company, Chauncey M. DePew, appointed a committee to investigate the offer. The committee report has often been quoted. It reads in part:
“The Telephone purports to transmit the speaking voice over telegraph wires. We found that the voice is very weak and indistinct, and grows even weaker when long wires are used between the transmitter and receiver. Technically, we do not see that this device will be ever capable of sending recognizable speech over a distance of several miles.
“Messer Hubbard and Bell want to install one of their “telephone devices” in every city. The idea is idiotic on the face of it. Furthermore, why would any person want to use this ungainly and impractical device when he can send a messenger to the telegraph office and have a clear written message sent to any large city in the United States?
465 “The electricians of our company have developed all the significant improvements in the telegraph art to date, and we see no reason why a group of outsiders, with extravagant and impractical ideas, should be entertained, when they have not the slightest idea of the true problems involved. Mr. G.G. Hubbard’s fanciful predictions, while they sound rosy, are based on wild-eyed imagination and lack of understanding of the technical and economic facts of the situation, and a posture of ignoring the obvious limitations of his device, which is hardly more than a toy… .
“In view of these facts, we feel that Mr. G.G. Hubbard’s request for $100,000 of the sale of this patent is utterly unreasonable, since this device is inherently of no use to us. We do not recommend its purchase”

Western Union quickly regretted this decision and hired Thomas Edison to invent and patent devices to gain control of telephony. These patent efforts must have made money for lawyers, but in the end Bell prevailed.

William Vanderbilt – the son of Commodore Vanderbilt, controlled Western Union. They made their fortune from the railroads The telegraph’s biggest use was as a mechanism to enable better train scheduling, and secondarily as a general communications device.

William Vanderbilt sold Western Union to fellow railroad tycoon, Jay Gould, in 1880 for $10,000,000. The Great-Great-Grandson of Jay Gould founded Upoc Networks in 1999 and served as CEO through 2004. Entrepreneurial genes must run in that family.

In 2004, I joined Upoc as CTO and was appointed CEO in 2006.

dada_index3Dada S.P.A, an Italian based company, acquired Upoc. To the best of my knowledge Dada has no connection with railroads, but is a world leader in provider mobile media to cell phones, a distant relative to the original Bell Patent.

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Cheers and Jeers for Mobile without Numbers

My article “The Future of Mobile – without numbers” created a large reaction.  I received a full inbox worth of cheers and jeers.  For those who cheered, I say “thanks.”

comedy-tragedy-maskFor those who jeered, I say, “Thank you very much!”  I have always believed that when people challenge your thinking and your logic, you have the opportunity to learn and make your own arguments better.  With this in mind, I have created a couple of broad categories of challenges from my critics.   (If you have not read the original article you should first check it out with this link)

 These areas are:

1-The sociological, technological and economic feasibility of my hypothesis that social networking and VoIP will fundamentally change the mobile industry

2-What should the Wireless Service Providers do to counter this threat?

Item 1:

To explain and expand on my logic more fully it is useful to look at some history.

What was the key invention that made the Internet a global phenomenon?

It was not TCP/IP, or browsers or even Google.

barilan_internet-thumbThe key invention was the Domain Name Server (DNS).  DNS translates a domain name to an IP addresses.   It is much easier to remember www.nytimes.com, instead of its IP address (170.149.173.130).  DNS servers are continuously updated around the globe as Internet services switch IP addresses; add new destinations or new web services are created.

DNS is also what makes email possible.

Prior to global DNS services the translation of a name to an IP address took place (if at all) in the equivalent of a local address book on your computer.  You would update this local file with new IP address/Web name pairs as you discovered them, with the obvious problem that your local address book did not automatically update to track changes.

 Does this sound familiar?        

For nearly 100 years telephone services have been in the local address book mode.  As a telephone subscriber, the implied requirement was for you to carry your own version of a local DNS in your pocket. Antique telephoneYour phone contacts would only update if you physically made a change to your address book.

The phone company would issue all subscribers a regional, printed, version of DNS on a yearly basis, the big phone book.

This fundamental use case did not change until the introduction of phones with imbedded contact lists.  With embedded contact lists you could scroll through a list and click to call.  This feature eliminated the need to dial or punch all the digits yourself, but was still limited to your personal updates.

Prior to the ability to look up and retrieve phone numbers for people and businesses on the Internet, the only global DNS equivalent for telephone service was “411”, information service.

The use case for smartphones is the start of a fundamental change.  With their larger screens and easy keyboard entry, you just type the name of the person you want to call and press send.  The connection with the phone number is further eroded.  The contact list still, however, must be maintained personally, just like our Grandparents did with their paper versions.

I can still remember the phone numbers from my friends in high school, but have to look up my kids’ numbers.  The reason is that I never use my kids’ numbers; I just type their name.

The ability to take your phone number with you when you change providers (landline or wireless) was a big boost to the manual updating of address books.  This was made necessary because of the lack of Global DNS in telephone service.

The emergence of large, ubiquitous social networks is the final missing puzzle piece that will finally alter this 100-year pattern and make phone calling similar to typing “nytimes”, instead of its IP number.  These social networks provide several key elements.

They are a collection of your friends, family members and business associates.  Your network(s) contain the majority of people you need, or want, to communicate with on a regular basis.

fhw1uoifmega5hwmediumSecondly, your networked friends should give you permission to view and have access to their actual phone numbers.  This access will give you the equivalent of global DNS for your contact list!  The updating of the phone numbers will no longer be your responsibility, but the responsibility of your friends.  This is the same scenario as a Webmaster updating their web services IP address for DNS.  Even if Voice over IP (VOIP) services do not emerge as a dominant mobile trend (I believe they will), then the social network aspects will be a major force unto themselves.

So, at least to this point the logic is that Social Networks = Global DNS.

The last aspect of social networks is that they can easily provide an “always connected” status.  This is the way instant messaging services (AOL, MSN, Yahoo, Skype) work today.  This always-connected feature creates a direct IP path between any two (or more) members.  If you have a direct IP path, you can easily create voice and video communications services.

The combination of social networks providing DNS-like service and IP connectivity is the core of the technological argument.  The fact that the Internet has trained a large segment of the world to access sites and services by name, instead of by IP number is my proof point that there should not be a sociological issue with my scenario.

The economics of this scenario are more difficult to predict.  I agree with those who said that the social networks and VOIP providers such as Skype would not run a global communications network without significant revenue and profit.  The issue to consider is:  Have the economics of providing a significant portion of this service forever altered in a significant manner?

VOIP service for home or business is significantly less expensive for the consumer than a direct-wired solution using 100-year-old twisted pair telephone technology.  The ease of provisioning and maintenance, and the lower cost of transmission and billing, has changed the economics of landline services.   It is less expensive to transmit and manage a very high bandwidth data path using Internet technologies, than to maintain individual transmission paths.  

Why not the same for mobile?

Item 2:  What should the Wireless Carriers do?

If I were the CEO of a major service provider I would execute the following strategy:

vzw_logo_1024Recognizing the importance of the trends that I discussed, the game that is now being played puts this mobile carrier at a structural disadvantage.  If you think you are going to lose at the game that is being played, you change the game.

The Carriers should obtain their own DNS service for their subscribers that updates continuously and allows for one click friend calling.  This service should be a collection of the key social networks.  

The Carriers should Interface/partner with Facebook, LinkedIn, etc and create a superset DNS of their subscribers’ contacts.  Then they should build the social networking application(s) directly on the phones to permit IM, voice, and video communications. The existing mobile numbers can be used as the equivalent IP addressing scheme.  The integration with the social networks will also permit contextual communications as the subscriber has access to their friends profile and status.

The strategy of partnering with the social networks for calling DNS functionality and contextual communications would create tremendous value. 

The marketing possibilities for a Wireless Carrier with this strategy are huge.

If this strategy was implemented by just one carrier (Verizon for example) then they could market to your friends list to switch and get In-Calling rates (free) when they call each other.  If 98% of your calls were within your social networking contacts, then it would make sense for that group to be on a single carrier.

The Carriers have tried viral marketing in the past with In-Calling and T-mobiles Fav-5 program.  What I am suggesting would be many orders of magnitude more impactful.  The first carrier that figures this out and executes will steal many of their competitor’s subscribers and really change the game.

The last issue for the Carrier strategy section is to counter the VOIP threat.

My strategy would be to embrace and profit from it.   There are two obvious moves to capitalize on mobile VOIP.  First, follow the strategy of the landline providers by creating your own VOIP mobile service that utilizes your connections into the social networks.  You can have a flat monthly fee for VOIP calls.

Secondly, you can also provide a “bring your own VOIP” service plan.  The Carrier would charge a lower monthly fixed fee that would reflect their lower costs in servicing these 3rd party subscribers.

theatre_and_the_internet

Over the past five years the bulk of new mobile service investment has been on mobile data applications. Mobile  voice services have not evolved beyond the basic voice call, callerID, voicemail stage.  This is the opportunity to merge the data application investments directly with the core voice service.

The real issue for the Wireless Carriers will be in the recognition of this threat and the real opportunity that this fundamental disruption in the market it creates for a first mover to capitalize on the changes and redefine how people communicate.

I hope I have addressed many of the Jeers that I got last week.  I welcome your comments on these expanded explanations and logic!

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Filed under android, Apple, blackberry, CEO, Content, Distribution, E-Commerce, economy, Google, mobile, mobile advertising, Mobile Application Stores, mobile commerce, mobile games, Open Network, reviews, Ringtones, skype, smart phone, Smartphone, Social Media, social networking, subscription servcies, Web2.0, widgets

Yes Virginia, Santa does TXT!

santa-text1

When I was leading Upoc we would create “Themed” social networking groups around different holidays.  We had particularly interesting groups, and results around Thanksgiving, Valentines Day, New Year’s, Hanukah, Kwanza, MLK’s Birthday and Halloween.  The most interesting, and memorable group was the Christmas group of 2007.

Each social network had a particular question that the members were asked to answer and comment upon.  For Thanksgiving the question was simply, “What are you giving thanks for this year?”  For Christmas it was, “What do you want from Santa this year?”

These social networks were created from the existing Upoc community.  We used our in-house tools to invite members to join.  When a network reached a critical mass of between 500-1000 members, we had a vibrant group.  Since I enjoyed the social networking, group psychology, and the pure fun of these networks, I was often the group moderator and owner.   The majority of the messaging within the group was done via SMS text messaging.  It was not unusual for one of these group to generate millions of messages during its life.

So you probably guessed by now.  I was “Santa”.  I would watch the group discuss their  various needs and wants, and then once or twice a day, as “Santa”, I would interject some pithy (hopefully) comment.  My username was “Santa”.  As Santa I would also boot from the group anyone who wanted nothing more than carnal contact with Santa!

This pattern continued for about a week, when a particularly classic desire bubbled up from a member.  She was a single Mom, with another baby on the way.  She lived in a very rural section of a Southern State.  To protect her identity I will call her “Virginia”.   Either Virginia thought she was text messaging with the real Santa, or she was really good at role-playing.

She texted Santa and said she “really believed in Santa”.  We had several text conversations about her living situation and she would ask about the reindeer.

After communicating with Virginia for two days I decided it was time for Santa to practice some real  holiday spirit . I messaged her that if she really believed ielf_poster1n Santa, then she would get a call from one of Santa’s helpers, “Charlie the Elf”.

In terms of full disclosure,  “Charlie” worked in our customer service department and was eager to play the role of an Elf.  Charlie called Virginia and got her address.  She was a little curious why Santa did not already have her address since he visits every house on Christmas Eve, but we and she let that one slide.

Once we had her address, I went to the web page of the real Santa helpers – Toy’s R Us.  I purchased various items to brighten her holiday- some toys, books, and baby clothing.  These items were shipped directly to her home.

After I made the order I checked out her home on Google Maps.  Using the Satellite view I discovered that the address was in fact a trailer on a secondary dirt road, connecting to the main dirt road, that connected with what may have been a paved road about 5 miles away.

toysrus-logo-high2Santa sent a message to Virginia to tell her that her package was on the way and that it would come from Toys R Us.  She messaged back asking why Santa needed to use Toys R Us.  I thought about sending an explanation about outsourcing and the global flat economy, but instead just told her that Santa needs a little help in reaching the most rural areas.ups-logo

As Santa, I used another of Santa’s helpers – UPS- to track the package.  When the UPS service send me a message that the package had been delivered, I texted Virginia to ask her about her gifts.   She got back to me and messaged that there was no package by her door.   I went back to the UPS web page and it informed me that the package had been left behind the carport.  Santa then messaged Virginia to look behind the carport.  She messaged back in a couple of minutes, totally amazed that I was able to tell her exactly where to look.

If she did not believe in Santa as a magical figure before that, with the help of text messaging, Charlie the Elf, Google, Toys R Us and UPS, she was clearly a believer now!

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Filed under advertising, blackberry, CEO, Christmas, Google, hockey, location based services, mobile, new media, politics, Santa Claus, social networking, wireless

Traditional Media Goes to School on New Media

The traditional content companies (NBC, CBS, FOX, ABC, etc) have used the research, development and “trial and error” investments of many new media, web and mobile oriented companies to learn what networks4works in digital content, commerce and advertising.   They have transitioned from fighting the term “new media”, to adapting it, and in many cases becoming dominate players.

I was a witness to the first stages of this schooling in the early days of the dot.com explosion.

jay

Jay Chiat

In April of 2000, I had just joined the quintessential Silicon Alley content company, ScreamingMedia. Our well-funded company, had h the superstar and Ad icon Jay Chiat as Chairmen and a hard driving entrepreneur founder, Al Ellman.    Jay Chiat was famous for such ads as the 1984 Apple Superbowl commecial and the still-going  Energizer bunny.  

The company  hosted  its own new media content conference at the Chelsea Piers.   This was called the “Malcontent” conference.   The conference was organized to be a debate of new (web oriented) vs. old (TV, Radio, Newspaper) media.

alan_ellman2

ScreamingMedia Founder, Al Ellman

We had luminaries from both sides of the assumed divide, including Dan Rather.   As a new executive at ScreamingMedia, I gave the case for mobile and its role in this new media landscape.   The one thing I was sure of, any media or content on a phone would have to be “new media”.

The value of ScreamingMedia was grounded in content syndication.   At the timeit  was technically and legally difficult to syndicate content on the Web.   ScreamingMedia (aka Pinnacor) was eventually acquired for about $150M.

Of course, this was pre-RSS days.  By today’s standards the media giant of syndication would certainly look old.

The debate (new vs. traditional) lasted well beyond this 3-hour event.  The crash of the dot.com industry in 2000-2001 took this off the techno blogs and webmags for a while, only to emerge again and again throughout the last 8 years.

Initially “new media” – which is loosely defined as anything related to the Internet started to make inroads against old media in digital ad spending.  Viewership, commerce and piracy flourished in Internet land.  My observation was the traditional media sources were slow and ineffectual in their digital  efforts.  

This had had the appearance of the classic innovators dilemma.  Traditional media profited from their “traditional” revenue sources.  Any admission that the model was changing threatened the status quo, or more likely the careers of those who made their fortunes in the pre-Internet era.

For the media giants, innovation was largely a content and storyline effort. Distribution was the means to theater tickets (movies), CD sales (music), and Ad dollars (TV and radio).  Innovation in distribution was in cable television, DVDs, and some simple web sites. The new media models were the domain of those who wished to destroy this traditional model.

Over the past couple of years I have met with many in the media industry on this topic.  I have to admit trad1that I have been perplexed that it took them so long to come around and really capitalize on the new distribution models.  My advice back then, and now, is that the big media companies still have the best, most wanted content.

The strategies and techniques that were pioneered by the new media innovators, such as ScreamingMedia have been adapted and extended by the general media industry.

With all due respect to a dancing baby on YouTube, a Tina Fey SNL skit on Sarah Palin will get more viewers, on the NBC website, then watched the actual Katie Couric interview.

All the TV networks have embraced online video of their shows, big time.  The online video versions of their lineups are ad supported and provide a much better experience than the pirated versions that float around the Web.  By embracing the model, they do it better than the previous amateur attempts by others.

So now what was “old” is “new”, and what was “new media”, is just another distribution channel for creative content, most of which comes from the media giants, with a secondary node to the entire world of user generated content.

We have now come full circle.  Good media companies observed what worked in the digital domain.  They capitalized on the considerable investment made in companies that originally were designed to compete with them.  In today’s market some of the most compelling digital content and applications are coming from the “traditional” media outlets.

Good Content is Good Content- From the days when the distribution model was cave drawings, to biblical stories, to the art and literature of the Renaissance, Shakespeare, Novels, Radio, TV, Movies, Internet and yes, mobile.

screamingmediavig

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Note to the New CEO of Yahoo – Mobile desktop matters

What is your mobile homepage? And does it matter?

jerry_yangThe exit of Jerry Yang from Yahoo got me thinking about the implications, if any, it would have for mobile.    In the desktop browser world, the fight for your homepage has been waging for years between Yahoo, Microsoft, Google, AOL, and anyone else who managed to hijack it.  The theory is your homepage selection drives page views, which in turn drives advertising revenue.  More views equal more bucks.

So, what does this mean in a mobile device context? Does homepage matter?

What is particularly interesting in the mobile domain is the competing paradigms for driving traffic.  There is the “traditional” browser homepage war, the mobile desktop icon, a range of Java or Brew applications, and widget portals.

The key question is what to you want to do with your mobile device when you access the Internet and how best to get the answer you want.

A second factor is despite the proliferation of full keyboard mobile devices; the long-winded entry of URL’s and the point and click model of a desktop still does not translate well in the mobile arena.

The specific models at play on the Blackberry are:

1-    Set your homepage
2-    Download bookmarked Icons for specific sites and services
3-    Java Applications that mange collections of information feeds
4-    Widgets and Portals that are a collection of widgets.

Here is my solution – let me know if it matches what you have or you have a different use model.

When I access the Internet on my mobile it is usually about answering a particular question or reading a specific newspaper or blog.

I have my homepage set to the minimalist Google mobile.   I can enter anything I want in the search box, from a website I want to visit to a question.  This is a very functional model for me when I need business information or just want to impress family and friends with some arcane trivia.  Did you know that the state bird of Alaska is the Willow ptarmigan?mybb1

For routine information and entertainment I use the very easy downloadable bookmark icon.  The icons I have on my device are:  NY Times, Washington Post, ESPN, MLB, NY Yankees, Weather Channel, CNN, CNBC and ABC News.   This library of information is great for those commuting train trips.  In 25 minutes I can catch up on the news, read my favorite editorials, and follow the local sports teams.  This is very efficient for sites I visit often, and much better than bookmarking these sites within the browser.  This is another good example of the difference between the desktop and mobile experience.

Next, I have certain downloaded applications that I use often.  My favorites are VZW navigator, followed by Google maps and iskoot (for Skype).  For navigation applications I am asking my device a specific question and getting a specific answer.  It is either, “How do I get to….”, or “ Where I am and how did I get here?”  I use Skype on my desktop and there are rare occasions that I us it contact a business associate.  Iskoot works well and is free.

The next category of applications isthe content aggregation portal.  I have two examples that I have on my device.  The first is a very good RSS reader called Viigo.   You can easily set up the blogs that you follow and they also have pre-loaded feeds that you can keep or easily delete.  If you want to follow this blog on your mobile device, this is the solution.

I have also downloaded a specific RSS reader from “The Hockey News”.  If you read this blog regularly you know I am a big Hockey fan.  I am sorry to say the Hockey New RSS portal is poorly executed and rarely gets used.  This should be bad news to the editors at the Hockey News.  If a diehard mobile guy who is also a diehard hockey guy finds your mobile application to be poor, it is time to rethink.

Note to the Hockey News:

I make the same offer to you as I did to the New York Rangers.  I will volunteer to fix your mobile application.

yahoo1Lastly, the widget portal that I have downloaded is “Yahoo Go! “.  In my view, this is a good implementation for the wrong paradigm.  Yahoo Go! Is a mobile version of the  “My Yahoo” desktop homepage.  It has lots of general information categories in a very slick carousel interface.  What is interesting is that, although I have used Yahoo as my desktop homepage for 10 years, I almost never use “Yahoo Go!”.   The reason for my low use of this service is simply that I have no reason to use it.  It does not function as a way for me to get quick answers (Google), quick information (Icons), or navigate (VZW).

It is interesting to speculate what Obama had on his Blackberry?

The Iphone, G1, HTC and other large screen devices can easily enable similar models.

With advertising revenue the ultimate goal, understanding the mobile desktop paradigm is step one.

We can hope that the successor to Jerry Yang will re-think the mobile environment to be truly mobile and not just a transposition of the desktop.

Will the Yahoo and Google be the only advertising game in down, or will quick footed start-ups like Mojiva make even bigger inroads in this lucrative market?

Please share with me what you have on your mobile desktop.  I will collect the input for a future blog article.

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Filed under advertising, CEO, Google, hockey, mobile, obama, portal, widgets, wireless

Truth – better than Fiction

There are times when we can have a completely and seemingly normal and logical conversation in the context of mobile technology that, if you stop and think, would have you locked up in a mental institution a couple of years ago.  Let me explain:

 

I was sitting ay my desk this morning, minding my own business when I get phone call from a family member.  For the purposes of keeping this person’s identity anonymous    I will randomly call her “Wife”.  The conversation went something like this:

 

“Hello dear, how are you?”

 

“Fine, what’s up?”

 

“I’ve lost my phone, can you call me back so that I can find it?”

 

“Sure, no problem”

 

I then called the exact number that had just called me.

 

A couple of  rings later “Wife” answers.

 

“Thanks hon, you’re the best, have a good day”

 

“Bye”

 

It all makes perfect sense.  If you can figure out why – send me a comment in the blog.  I will think of a prize for the best explanation.

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Filed under CEO, mobile, social networking, wireless

Social Networking, Vegas Style

Now that I have recovered from the whirlwind week at the CTIA show in Las Vegas, I can reflect on some of the events of the week.   I have to plead guilty to “stirring the pot” and creating some interesting debate in my panel session on social networking. 

  The topic of monetizing social networks on mobile networks was discussed, with the obvious conclusion that advertising will have to pay a key role in any sustainable business model. The debate ensued on the relative roles and economics of this model as it applies to the network operator and the social network owner. Network Operators have a tremendous database of potentially useful marketing data for third party application providers to utilize in maximizing the ad inventory of their products. In the past, and for good legal reasons, the privacy of this data has been honored and not exploited in a maximum economic manner. Now enter the social networks.

 

 
A social networking profile has more information than exists in a carrier marketing database. Profiles are volunteered, are deep with interests, preferences, activities, relationships, friends, etc. The data housed by the social network is a potential bonanza for advertisers. The inability of network carriers to fully exploit their consumer data could become a moot point as the mega social networks integrate their data with mobile ad networks.
The next issue that was debated was the relative power between a social network that may have over 100M members and a network operator that has 60-20M subscribers. Most business discussions with operators have a clear pecking order. In general the carrier is picking and choosing the best partners, from many, that will maximize their revenue and customer’s needs. 
  There are very few application providers who have this discussion with an operator as an equal or superior level of relative strength. One example that obviously leaps to mind is Apple. The Iphone introduction and partnership appears to be a relationship between “equals”.   The existing introduction of large social networking onto mobile devices seems like a partnership of equally motivated and powerful partners, each bringing significant assets to the table. In the future, will the large social networks try to cut similar revenue sharing arrangements as Apple? Will they be able to? And lastly, will it matter. 

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Filed under blog storming, CEO, CTIA, social networking, wireless