Cell Phones, Continued - Business Model Innovation

If everyone knows that cell phones are both a boon and pain, then why haven't the phone companies made the pain go away? It's only a matter of design, after all.

One reason is that the makers and providers of mobile phones are in a huge race for market share, so short term thinking dominates the drive to sign up more subscribers. Hence, they're putting their money wherever they think they'll sign up the most users, so they probably won't get around to fixing all these annoyances until subscriber growth hits the wall.

Another reason is that different segments of the market have very different needs, and technology adoption tends to follow a classic curve that is largely driven by fashion first, and function second. Here's a thumbnail view of the 3 major market segments, only slightly tongue-in-cheek:

Fashion phones: Booming market. For the young, who have no trouble learning how to use technology, cell phones like Razrs are fantastic for fashion, fun, and nonstop IM. Every year there are millions more youth who can finally get their own phone, so this is where the attention goes.

Function phones: Static market. For those approaching middle age, cell phones are all about functionality. If it's simple and it works and I can figure out how to use it, fine. Is this a fast-growing market segment? Probably not.

Fogey phones: Niche market. The older you get the more difficulty you have using technology - ergo the running joke about the 4 year old who programs the VCR because the parents can't figure it out. Thus, a lot of older people find cell phones incomprehensible - remember the time you called your grandmother (or uncle, aunt, parent, etc.) on the cell phone she borrowed, but she never answered because she couldn't figure out how to use it? GM understands this, so their OnStar service is REALLY simple - all you have to do is push one button to talk to someone who will help you.

The innovation opportunity here is clear enough. Sooner or later when the market is saturated a new business model will emerge in the cell phone industry. A handset maker and a service provider will team up to segment the market by needs, and they'll focus on the different types of functionality that people really care about. And how will they learn what people really care about? It's all about research, and the difference between the stuff everyone knows and the stuff that everyone experiences but can't actually articulate very clearly. More on that in the next post.

In the mean time, keep that arm loosened up for the cell phone throwing contest (see yesterday's post).

For more on innovative business models, check out my white paper "Business Model Warfare."

There's also about 10 pages on Business Model Innovation in Permanent Innovation. Click here to go to the download page and then see Chapter 7.

Cell Phones - Love'em and Hate'em

Frustrated with your mobile phone?

You’re not the only one, apparently. Last week the Finns, those clever and lighthearted masters of innovation, held their seventh annual Mobile Phone Throwing World Championships in Savonlina, Finland. Aside from the fact that it’s fun, the organizers note that Mobile Phone Throwing is the “only sport where you can pay back all the frustrations and disappointment caused by these modern equipments.”

All kidding aside, the very existence of an event like this, and all the attention it gets (which it deserves!), bespeaks a great gaping hole in the market, and thus a tremendous opportunity for some future innovators. Because why should so many people be so frustrated with these devices? Well, our phones drop calls, and we lose the phones; they’re hard to use, and confusing for many people. Badly designed interfaces, annoying and confusing calling plans from the likes of Cingular, Verizon, and so many others, bad or non-existent customer service leads us to wonder, do they ever actually test these things with real people?

Most of us love what our cells phones do for us, we just don’t like HOW they do it. All in all, quite a few real opportunities for innovation here, both in the technology and in the business models of the providers. How long will it take until each person can design the interface to their own cell phone? When will we have unified address books across all these devices? How about proximity detectors so we don't lose them? All, we suspect, in due time; but whoever gets there first might have a sigificant advantage.

And if you want to take our your frustration next year, remember this date: August 25, 2007.

http://www.savonlinnafestivals.com/en_index.htm

Job Opening

Job Opening: CEO of a big R&D Lab

Just when you thought that none of the good jobs are advertised in the newspaper any more, here’s a nice opportunity if you happen to be looking for a high level R&D management job. There’s an opening for a new CEO at the UK’s top R&D agency for spies, the Defense Science Technology Laboratory near Salisbury. You can read the full ad in The Sunday Times of London.

This raises two quite interesting questions.

First, can you imagine recruiting for a job that like through the want ads? It seems highly implausible. Does a government regulation require them to post this ad in the paper? Ah, bureaucracy!

Second, and more interesting, is the job itself: Running an R&D center with 3000 employees and a budget of about $700 million in a world of increasing divisiveness and terrorism. Key technologies they’ll be working on in the coming years would have to include bomb detection, surveillance, satellite imagery analysis, satellite photography, etc. Great technical challenges, and solving them brings great benefits to the broader world..

The challenge, however, is that an R&D agency like this - and indeed any R&D outfit - eventually answers two very different masters, the demands of the bureaucracy (yup) and the demands of innovation. There’s a conflict between these two, a very difficult conflict to manage. The bureaucracy - remember, it’s a government job! - will create pressure for regularity, conformity, and standardization, all innovation-killers. The culture of innovation, on the other hand, requires openness to novelty, risk-taking, curiosity, lots of trial and error, and a heavy dose of failure, none of which go over well in a bureaucratic setting.

Will they find the person who can bridge these two worlds, and provide some sound leadership in the technology domain as well? Perhaps they will. And perhaps the right person is you! Don’t procrastinate, though - the closing date on the position is September 4.

To see the newspaper ad: http://www.timesonline.co.uk/Class/Jobs/job/0,,599849,00.html

To see the headhunter site and download the full brief: http://www.odgers.com/c/@ssBLYXu2TOz4Q/Pages/positions.html?job@10879

Good luck!

Permanent Innovation

InnovationLabs is pleased to announce that our new book, Permanent Innovation, is now available for purchase or download.

We welcome any feedback you may have on the book. Please email your comments to Langdon at LMorris@innovationlabs.com. Enjoy the last few days of summer, on the beach or wherever your summer travels take you!