One of my favorite innovation operators and a real champion of corporate Irving Wladawsky-Berger wrote about MMV in his blog recently. He also talks about working with Citi at large which is exciting and timely.
I have not been posting up here in the last few months because I’ve been working on a new venture (not to mention a new, walking 1 year old.) We announced today: Mobile Money Ventures, LLC.
So for the last 6 months, I’ve been cooking up a joint venture, spinout, between SK Telecom and Citi. Our focus is to build the mobile banking and payment experience that will define the standard for this emerging market. I am extremely excited to start on a new venture (it’s been a few years since my last start-up).
Here is the press release.
Now back to our regularly scheduled posting.
UPDATE: I will be at Finovate tomorrow. This looks like a great event and I will post photos and comments.
Jim Bruene of Netbanker fame has organized a much needed event in Finovate 2007. Speed dating for venture capital ala the DEMO conference. I am sorting out my attendance, but I know some other folks from my team who will be there. There also seems to be a dearth of tickets (sold out!).
On October 2nd, 2007, twenty of the most innovative companies in the financial, banking and lending industries will gather in New York to offer a glimpse of the future of mobile, personal and online finance.
The presenters are:
CheckFreeClairMail This is the type of event that we need to see happen frequently in order to support innovation in the financial services space.
Just think, instead of paying for four Internet connections in your home (phone, cable, wi-fi, mobile), you could actually have the one that makes the most sense at the time. Google’s proposed bid to make this happen with the upcoming 700 MHz spectrum auction is making waves. The kind of waves that severely rocks the boats of telecom incumbents. It’s clear when they use meaningless, bourgeoisie responses such as “corporate welfare” to describe the FCC’s interest in utilizing Google’s free, neutral and consumer-centric rules that the protected hegemonies that so unceremoniously charged me $1.00 per minute to call home from London last month are about to start breaking.
The facts are pretty indicative that Google is serious:
1) They have the cash and have committed to meeting the minimum $4.6 Billion reserve for the auction.
2) They have been buying dark fiber since the 2005 bust. This fiber is key for the economics of running a mobile telecom service. The signal received by one tower needs to be transported by land-based fiber lines to the destination tower.
3) Mobile apps are all the rage at the GOOG. Every one of their consumer facing successes have been ported to mobile including maps, gmail, blogger, picasa and now YouTube as well.
4) Google has a deal with LG for an integrated Google button (and apps) on “millions” of phones.
Google’s openness requirements for the spectrum, favor a company with diversified revenue streams rather than a retail model that relies on access fees only. This is the source of much twitching and bitching from the telcos. What is interesting is that it is absolutely evident that should AT&T or Verizon win this auction, consumer won’t see a single kilobit of wireless data for some time. Their business models have not been evolving because of a non-competitive environment in the US. The consumer, as a result, has been suffering. Take a look at the mobile web on a normal everyday Verizon phone. The “home deck” will take you back to the 1990s. Why would anyone use such a service when rich, interactive, developed environments invite you on the real Internet. Yet the mobile phone is the device most people carry with them all the time.
I would expect that non-incumbent handset manufacturers would get on the Google bandwagon right quick if they win the spectrum. With little legacy carrier volume to protect, why not roll out the pipeline of devices that cannot be used in the US. Apple will probably make a good partner, after all Eric Schmidt is on their board. And what’s AT&T going to do, drop the iPhone? The second tier of US carriers could see the light and through their hat in the ring. I personally vote for Sprint, since they have shown the ability to deprioritize legacy voice revenue defense in favor of WiMax, a better last mile technology, but an open standard. Throw EBay and the trifecta of commerce, cash and communications (auctions, Paypal and Skype) into the mix and who knows where it can go.
I am wary of Google’s growing dominance and reach in various spaces (I recently saw a proposal for small business services from them). However in this case I am more wary and tired of the telco’s abusive consumer policies and the spoonfed pace of innovation in US wireless. Google and Co. would improve the consumer’s experience and drive new value on an already ubiquitous platform. More power to them.
The recent Vodafone acquisition of Hutch Essar for $11 Billion has been garnering a tremendous amount of press globally. In India, the media has been heralding the size of the price tag as the price of a ticket to the Indian consumer market. In the West, the academic and management consultant skeptics suggest that the Eastern bubble is growing to unmanageable proportions with an impending correction as these valuations give way to margin compression and delayed infrastructure modernization, etc. The M&A bankers are test driving Lamborghinis with gold-plated shifter knobs.
With the emphasis on customer franchise size and lifetime valuation of customers, we are kind of seeing a bubble ala the Internet days, inasmuch as the distorted lifetime value numbers in the current context. Google is the only model that emerged with the lifetime economics even close to its original estimates, because its search became the start point of virtually every web session. However, given mobility’s inevitable centrality to emerging market Internet strategies (see NetCore CEO Rajesh Jain’s comments last October), should we be discounting the future Google + Verizon’s of the emerging global economy?
The question that does come up is how do these companies avoid commoditization and business model decay as it should happen even faster in markets with lower margins than the US and EU. One cans see the need to welcome true customer service providers such as banks and health services to the network in a strategically significant manner. Co-developed, innovative solutions that bring traditional services to a secure, mobile, customer centric platform can feed both heads of the beast, allowing further capitalization of the networks, allowing them to fulfill the dream valuations they have today.
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