Mobile Tectonics Manifesto

1. The next explosion of global productivity will be driven by processes that use the mobility infrastructure currently on the ground, and the waves of new infrastructure soon to become available. This blog is called "mobile tectonics" because the underlying assumption is that through the classical process of creative destruction, we shall see substantial shifts in shareholder value enabled by mobile technology.
2. By "infrastructure" I don't mean merely the millions of base stations that carry mobile traffic, but also the +4billion installed-base of cell-phones and cell-phone users, the enabling Internet infrastructure that has been primed for easy mobilization, the vast store of business processes that have been improved in prior waves of productivity, and so forth
3. As with the last wave of productivity via the Web, the sources of mobile-enabled productivity growth will be ubiquitous. There will be two fundamental themes: (a) improving consumer experience and the quality of engagement between the consumer and the enterprise via mobile technology; (b) improving employee productivity by optimizing the use of company assets (people, technology, real estate, IP) through ever smarter and more pervasive mobile technologies
4. Mobile tectonics is already here - for example, in 2006 Apple and Disney had comparable market valuations (in the $60B range). They both made significant investments in mobile. In Disney's case this included ESPN Mobile and Disney Mobile, both investments that were ultimately pulled, at a combined cost that easily reached $1B. More important than the investment loss, was the opportunity cost of not taking advantage of the new space, which potentially could have added +$5B-10B of market cap to Disney. Notwithstanding many other effective investments in mobile, Disney failed to gain strategic advantage through mobile. Apple in the mean time was spectacularly successful in building a vast growth platform through its mobile initiative, which has arguably added in the order of $30-40B to its market cap (acknowledging the vagaries of stock-market valuations in these interesting times).
5. Is this a one-off event? Far from it: look at how Samsung, Apple, HTC and RIM have been eating into the traditional world of handset makers, setting the stage for $20-50B in market cap shift, or how Amazon (whose shot across the bows of the book industry helped usher in the Internet revolution) is seeking to re-invent publishing through its Kindle initiative. Look at how the traditional console-gaming industry, dominated for many years by the big three Nintendo, Xbox, Sony is being attacked by the disruptive pincer of broadband and mobile enabled gaming. Or how NewGM's core advertising theme coming out of bankruptcy is its OnStar mobile service.
6. You might say, maybe mobile is strategic for some sectors such as gaming, music, cars and so on, but of what strategic relevance is it to ME. I would argue that if you are a Board member or Senior Executive of any Fortune 1000 company, you should be asking yourself, or your CEO, "what the dickens is our mobile strategy" (how does this stuff threaten us, how do we benefit from it). For example, lets say you are a retailer - imagine now that YOUR customers are going to be walking into YOUR stores, asking lots of questions of YOUR employees, and once they have completed 98% of their shopping process, will choose to transact the last 2% on their smart-phone (i.e. writing the "check"), by placing an order with THE COMPETITOR who chooses not to invest in all these assets and sells it for a 20% discount, turning your store into a wonderful museum. Or you are an airline and it turns out that business customers flock to your COMPETITOR because they have a faster and better mobile check-in process or because when THEIR CUSTOMERS are stranded in an airport they can book a new flight and a hotel overnight from their mobile phone without spending 30mts in line at the desk or on the phone behind every other passenger. Should I keep going?
7. If we hark back to sometime like 1996-1997 we had a similar thing going on, lots of interesting stuff going on with the Internet, a bunch of excitement in the Valley, but many in the commanding heights of our global economy were wondering what was the strategic relevance of all that. Some moved early and well, some moved early and badly; some moved late and did fine, some missed the boat altogether. Net/net by around 2002 this wave had largely worked itself into coherent strategies at the majority of Fortune 1000: some came out winners, some losers, some did not see a big shift - but for all the Internet became relevant enough that it merited some degree of Board level attention.
8. If you start asking questions, you will get the usual "we are on to it" response. There are surely various initiatives floating throughout the organization (an iPhone app here, a short-code there, a dot.mobi effort yonder), there may even be someone at a senior level whose role is to shepperd wireless stuff. However, my guess is that in 95% of Fortune 1000 companies there is not a coherent and logical response to this new environment. Interestingly enough, even wireless operators (the people who deliver a lot of this technology) often lack an effective mobile strategy. For example, if one asks the question - how are you leveraging this new ecosystem to ensure you optimize your customer engagement strategy? - 9 out of 10 operators do not have a clear response.
9. Before wrapping this Manifesto, I will comment on TECHNOLOGY. This is a problem area for mobile. The Internet made the world fairly simple - you basically could bring your digital assets onto the web, create a decent user experience and you were up and running. The Internet benefitted from the wonderful standardization brought to us courtesy of IBM, Microsoft, and the Browser guys. Mobile makes the world very complicated. There is a Babelian world of platforms, languages, virtual and physical machines built in to this space that make it really hard to make some choices around. This is one reason why even the purveyors of mobile don't quite know what to do. There are a few places where you can tread safely - SMS is a standard, mobile web can be mostly thought of as a standard though requiring a bit of intermediation, iPhone apps seem to be establishing some sets of standards; however figuring out how you bring it all together remains complex.
10. So to summarize: (1) Mobile will be the next productivity monster; (2) Most Fortune 1000 firms don't have a coherent plan to deal with it; (3) Its actually quite tough to figure it out.
11. What is my interest and why am I blogging about this? I have spent the past 15 years in this industry, first working with mobile operators to get their businesses up and running, then working with non-operators who needed to think strategically about this space. For the past 3 years I have been a venture capitalist focused on wireless, so I have been exposed to some of what is coming down the pipe. I am interested in hearing from those who find any of the above interesting, who want to challenge my ideas or share with me their own thoughts.