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Why is Europe no longer innovating?
A little test. Name a European dotcom that has changed people’s life in the last years? No clue? With only a minor change, substituting European for American and the list would be long: Google, Facebook, Twitter, LinkedIn, Zynga, etc.
Even when innovations make it over the ocean, Europe is limited to doing business development, sales and some limited support. Look at the job pages of the big dotcoms and you will see the VP of Engineering in California and the business development manager in Europe. So the future is defined in California and Europe is just a market to sell the innovations that have been tried and certified in the USA.
Most people would not care less if Zynga would come from the USA or Tongo [No harm meant to anybody from Tongo]. However Europe is missing out on some major innovations that can boost the productivity of any small or medium enterprise. Think about Square, Quickbooks, Dwolla, etc. as examples.
Europe some years ago was leading the mobile and telecom industry with Ericsson, Vodafone, Telefonica, Orange, Deutsche Telekom and Nokia being clear examples. Nowadays it is Apple, Google, Facebook, etc. that lead the mobile and telecom revolution. Many might not realize it but Google has not only disrupted the mobile operating system market. Google has the first global software-defined network in the world. Google is writing history and being a major driver behind Openflow. Also the USA is leading together with Britain in White Spaces and other future wireless innovations.
What needs to change in Europe?
The European Union and local governments have always had a preference to over-protect the communication industry. Many laws protect former state-monopolies from getting real competition. The European Union should really look at White Spaces as a way to bring much-needed innovation back into the industry. Instead of selling the licenses to White Spaces to the usual suspects, the European Union should declare White Spaces as a “free” WiFi on Steroids alternative to LTE. White Spaces can be the solution for rural areas that want to get 21st century broadband connectivity.
Also the laws that oblige telecom companies to give national service are outdated. We do not have gigabit fiber-to-the-home in big cities because competitors are obliged to give universal service. Why not let 10 competitors fight without obligation to connect everybody? The free markets will connect those people and companies that are economically viable. By obliging universal connectivity, everybody is connected to a slow network. Leading to European broadband mediocrity.
Telecom companies that have started to set-up venture capitalist offerings are going the right way. Unfortunately too little money is poured into new ventures. Telefonica’s Wayra is offering $30-70K during a 6 months incubation. That means €46K to €109K on an annual basis as seed capital. What can you buy for this kind of money? Virtually nothing. Only one or two people teams at most. Great people would earn more money in their day job so they are unlikely to jump on Wayra. More realistic numbers would be €150-200K, which would allow teams of 3-10 people plus potential for hardware and other types of innovation. The chances that a 2 people team on a small budget makes a world-changing impact are very slim because you need multiple skills to really innovate.
Crowdfunding should also be high on the list of the European Union. Let people participate in ventures as very small minority stakeholders via collective seed investment. Give Europe some chance of building a European Kickstarter on steroids. Cross-European laws would need to be put in place for this.
We need European Entrepreneur Heroes as well. Europe needs a European version of Steve Jobs, Jeff Bezos, Larry Page, Mark Zuckerberg and Marc Benioff. People that can convert a vision into a multi-billion industry. People that will be role models for future generations.
If Europe wants to leave the current recession behind, it needs to think about moving away from farming subsidies into investing in innovation. We need modern digital laws and a general legal simplification to allow more entrepreneurs to start innovative companies. European corporations should set-up more venture capitalist funding and crowd funding should be high on everybody’s agenda.
Big Data Apps and Big Data PaaS
Enterprises no longer have a lack of data. Data can be obtained from everywhere. The hard part is to convert data into valuable information that can trigger positive actions. The problem is that you need currently four experts to get this process up and running:
1) Data ETL expert – is able to extract, transform and load data into a central system.
2) Data Mining expert – is able to suggest great statistical algorithms and able to interpret the results.
3) Big Data programmer – is an expert in Hadoop, Map-Reduce, Pig, Hive, HBase, etc.
4) A business expert – that is able to guide all the experts into extracting the right information and taking the right actions based on the results.
A Big Data PaaS should focus on making sure that the first three are needed as little as possible. Ideally they are not needed at all.
How could a business expert be enabled in Big Data?
The answer is Big Data Apps and Big Data PaaS. What if a Big Data PaaS is available, ideally open source as well as hosted, that comes with a community marketplace for Big Data ETL connectors and Big Data Apps? You would have Big Data ETL connectors to all major databases, Excel, Access, Web server logs, Twitter, Facebook, Linkedin, etc. For a fee different data sources could be accessed in order to enhance the quality of data. Companies should be able to easily buy access to data of others on a Pay-as-you-use basis.
The next steps are Big Data Apps. Business experts often have very simple questions: “Which age group is buying my product?”, “Which products are also bought by my customers?”, etc. Small re-useable Big Data Apps could be built by experts and reused by business experts.
A Big Data App example
A medium sized company is selling household appliances. This company has a database with all the customers. Another database with all the product sales. What if a Big Data App could find which products tend to be sold together and if there are any specific customer features (age, gender, customer since, hobbies, income, number of children, etc.) and other features (e.g. time of the year) that are significant? Customer data in the company’s database could be enhanced with publicly available information (from Facebook, Twitter, Linkedin, etc.). Perhaps the Big Data App could find out that parents (number of children >0), whose children like football (Facebook), are 90% more likely to buy waffle makers, pancake makers, oil fryers, etc. three times a year. Local football clubs might organize events three times a year to gain extra funding. Sponsorship, direct mailing, special offers, etc. could all help to attract more parents, of football-loving-kids, to the shop.
The Big Data Apps would focus on solving a specific problem each: “Finding products that are sold together”, “Clustering customers based on social aspects”, etc. As long as a simple wizard can guide a non-technical expert in selecting the right data sources and understanding the results, it could be packaged up as a Big Data App. A marketplace could exist for the best Big Data Apps. External Big Data PaaS platforms could also allow data from different enterprises to be brought together and generate extra revenue as long as individual persons can not be identified.
Social Graph for Big Data just got a new Open-Source member: Giraph
The Big Data elephant just got a well-connected Giraff friend. Putting it differently, Yahoo and LinkedIn have open sourced scalable social graph software. If Hadoop was the Open Source version of the Google File System and HBase the Bigtable version, now it is time for an Open Source version of Google’s Pregel: Giraph.
In Open Source Social Graph Software Not Ready Yet I complained about the social graph not being ready. Giraph should change this.
So why is this important for operators?
Any service that wants to “be social” needs a social graph solution. A social graph links the Twitter followers, the LinkedIn colleagues, the Facebook friends, etc. For operators a mobile social graph can link callers. Who calls who, who influences who, who is going to churn with whom, who might also appreciate this marketing campaign, who should definitely know about this new service, etc.?
The “Hello World” example of Giraph is Google’s Pagerank. Pagerank is the power of Google search and now it is available to everybody that has millions of users. Be sure to keep an eye on this Giraph because the “Apache Zoo” just acquired a new important animal in its Big Data Analytics department…
Thinking differently about monetizing telecom services
Free, the disruptive French telecom operator and ISV, is changing the rules. Via Femtocell and via controlling the WiFi access points of its customers, Free is planning to offload a lot of mobile traffic via its fiber network. This is translated into very sharply priced mobile calling and data plans. Free’s Founder is telling the telecom industry they should no longer try to make money with communication but focus on identity and payment services.
Free is right to change the rules of the game instead of waiting for non-telecom disruptive players to do so. However what else could Free do to generate extra revenues?
Social Mobile Graph
Facebook is talking about social commerce in which friends, family and colleagues are taking an active role in your buying behaviour. At the moment social networks are either for business reasons, e.g. LinkedIn, or for pleasure, e.g. Facebook. However both need a lot of maintenance effort in which you need to send or accept invites from people who you might have known 20 years ago.
What if your calling and messaging behaviour could take away a lot of this burden? If you call somebody mostly during business hours then this person is likely to be a business contact, especially if other business contacts of yours have the same behaviour. Your addressbook and linkedin could be automatically updated. However you could go a lot further and see which restaurants your direct business contacts call more often. Anonymizing this information and creating public APIs and a marketplace for app developers could lead to a lot of innovative services that can be monetized.
Numbering Plan Apps
The numbering plan is probably one of the most under-used operator assets. However everybody knows how to dial a number. Why not let other people make new numbers, e.g. based on non-existing country codes or using the # or * combinations? People would be able to make premium services for everything from voting, surveys, competitions, money transfers, etc. Putting *120* in front of your number could mean that the caller is paying you 1,20 euros per minute to call you. It is up to you to redirect your number to an application that makes people want to call you. You might have a large numbering app market to choose from. Add a # and a number at the end and you could have thousands of applications behind one number. The operator would get a revenue share.
Call Center as a Service
Call centers are mainly used by large corporations. However small groups of ad-hoc people could benefit from them as well. Ad-hoc software support hot lines in which experts can be freelancers could be of interest to some. But it could even be as simple as housewives that can help you with recipes. As long as rating the participant’s value, dynamic joining and leaving of participants, paying participants a revenue share, configurable participant selection rules, etc. are provided, the applications are limitless.
A lot more
These are just ideas but there are a lot more possibilities that you can implemented. Especially if you can control both the mobile device as well as people’s access point. However the past has shown that trying to get a few people pay a lot of money for a service and operator’s trying to do it all by themselves, have not been successful. Innovation is not only needed in the product domain but also in the business domain. Models that should be explored are:
- Freemium, whereby most do not pay but get the traffic to your service and only a minority pay for advanced usage. Many examples in the web 2.0, e.g. LinkedIn, Zynga, etc.
- Long Tail, whereby not only a couple of high paying groups are targeted but instead thousands of niches are targeted via the use of a general platform or third-party eco-system, e.g. Google Adwords, Facebook Apps, etc.
- Revenue Share, whereby others get the bulk of the revenue because they take the risk and the operator gets a small share but gets it from a large group of revenue sharers, e.g. Apple’s App Store
Mobile Social Graph
Facebook is hot. Google is trying to create an equal successful social network. There are specialized social networks like Linkedin, Plaxo, etc. focusing on specific social networking aspects.
If you are not social, you are not Web 2.0!
Why are telecom operators not social?
Telefonica launched Keteke and bought Twenti so operators must be social. However launching or buying a social network does not make an operator social and web 2.0 ready!
Social networking is all about the social graph and what you do with it. Operators have had access to one of the best social graphs for years. However they have chosen to ignore it: the mobile social graph.
If I call you and you call me then we know one another. If the both of us call a third person then we have relationship to a person in common. It is true that the operator does not know what the relationship is between two persons that call one another. But that should not stop them from asking!
What can I do with a mobile social graph?
As soon as I provide an operator with the type of relationships I have with the people I call or send a message to, my mobile social graph will become useful both for me and the operator.
There is a whole list of applications that can be build on top of this mobile social graph. Let me give two examples.
A social addressbook
Just by telling which of the calls are business, family and friends, collective intelligence can do the rest. If I have two colleagues that marked a person as a colleague and I call that person then my addressbook can suggest to add this new phone as a colleague. There is a lot of more advanced features that could be added, but the basic idea is that a better addressbook generates more calls and SMS.
Find the influencer
This service is more advanced. The assumption is that if I call on Friday night a restaurant and during the next two weeks five of my friends call the same restaurant then I might have influenced my friends. Knowing who influences others is already used for churn analysis.
In our case the restaurant owner might be willing to pay a premium to contact me about a new promotion. Afterwards he or she can follow up if I or one of my friends made a call in the weeks after the promotion was send to me.
If you want to learn more about the mobile social graph don´t hesitate to contact the author at maarten at telruptive dot com.
