Eccosphere Blog

I’ve recently been reviewing an article I wrote on mobile 3D gaming for SIGGRAPH so that it can be updated and published in the ACM magazine in December. The games are very sophisticated now, with high production values. Handsets like the Nokia N95 are hardware accelerated, so 3D should be a highly involving experience and with an audience lapping it up in increasing numbers. But I think there’s something wrong. What struck me was that I didn’t need to change anything; the views I expressed three years ago were still true, the market and audience hadn’t evolved or grown wider and recent financial results from mobile games companies seem to underline this apparent stagnation.

We’re often told by industry pundits that Content is King, but what if that isn’t true? What if Connection is King? Mobile gaming, TV and music are solitary by nature, they’re time wasting activities to fill in the parts of your life when you’re not engaging with other people. What you’d much rather be doing is being close to your friends, family and loved ones, talking to them, exchanging thoughts and feelings and getting closer to each other. Funnily enough, that’s what mobile phones are great at - connecting people wherever they are.

Mobile phone content is what you use when you can’t see and feel what others are doing, so it’s no wonder that it’s a periphery to most people’s lives. It’s not critical, it’s transient and of low perceived value. What has real value for people is staying in touch. Feeling part of the circle of close friends, business colleagues or when they’re in the mood to explore, being part of the wider crowd. None of this needs content, it needs shared values, the means to share those values and the ability to discover others with those values.

A few months back, I wrote to my Board that Google’s strategy in based on maximising advertising rates, and it would therefore not launch a GPhone. The link? It is far more powerful for Google to get something into (many) phones that enable it to add the “where you are” to the “what you like” that it already knows for all your web-based searches. As far as I can tell Eric Schmidt validated this point during his announcement.

For sometime yet, the mobile platform will remain a poor area for advertising: searching “Flight to Thailand” places 11 sponsored links on my web page, with room for (maybe) 2 on a mobile handset. But if you know where I am every afternoon, you may be able to push me towards a local travel agent, willing to pay more when I do the search on my desktop.

I had rubbished the claims in the NYT that Google planned to dominate mobile advertising, saying that that completely missed the point. I projected that the acquisition of Jaiku & others was a move towards developing a spreadable app that people would download for free to feed geo-tagging info. Instead of generating some revenue on a small number of mobile searches, this would enable Google to increase the CPM on the very large number of searches that the user would carry out on the web. Through affinity matching, this could then spread to searches by other users on the web. A far, far more valuable strategy.

I had dismissed GPhone as hype, but not thought that an even easier way for Google (and complimentary to the direct-to-consumer strategy of diffusing attractive apps) would be to give away something that would enable the search giant to get a wide range of manufacturers to put something into the heart of the handsets. As Google’s revenue, and thus return on investment, does not depend on the price at which it sells the OS, it can produce commercial grade stuff worth $5 per handset (upto 15% of the handset cost!) and give it away for free, in a manner that as a byproduct, disrupts that market from the inside.

So the next step? After “what you are interested in” and “where you are”, Google should find out more about “what you actually pay for”. So a G-Card? No, you haven’t been paying attention: a credit rating agency.

Mobile Communications International (that unfortunately does not publish on-line, so no link) has an interestingly cynical view of social networks in the mobile space in “Socially Awkward” by Sean Jackson.  Sean focuses primarily on mobile adapted social networks (ie MySpace or Facebook going mobile) and mobile only social networks (eg Itsmy, moko…).

The interesting thing about the former, he says, is how unattractive they are, full stop.  The interesting thing about the latter is how they seek to mimic on a mobile what the others are doing on the web.

I think that the interesting thing about both is that despite itsmy’s claim that the web ports very poorly over to mobile in terms of customer acquisition, another fact that came out of the m:metric study (not quoted in the article) is that the online social networks have far more mobile users than the mobile only ones.  Why?

a) because all mobile users in the western world do have web access, and like using it

b) because the critical mass is on-line, so if it is to do the same thing, then why not go to the online version 

This is where Eccosphere stands out.  We are not an online thing squeezed into mobile (facebook, myspace); nor are we simply a good mobile implementation of an online idea  (itsmy).  We are a mobile originated concept that looks nothing like its online counterparts, and actually has quite opposite foundations: to the online single identity, single presence, we respond with the real-world richness of multiple personas, and to the online global-view, in which neither time nor place seem to matter, we respond with the real-world here and now.  We are thus creating a new space we call Circles of Life management - and it doesn’t have “mobile” in the title, because it does not need to: mobile is simply its natural home.

Friendster was the VC darling in 2003.  They had built a community of 20M users, and thus reached the holy grail of network effect and critical mass that every VC dreams of, whereby the value of the community rises exponentially with each additional member.  The cost to an individual user of migrating to a new service would be the equivalent of self-inflicted exile, as they would arrive in a barren land, leaving behind all those they once knew.

Then MySpace came along, and within 6 months 90% of Friendster’s base either disappeared, or migrated to the new cool site. So Murdoch bought MySpace.  And then Facebook came along, and Murdoch got upset.

So what happened?  Why did the unassailable barriers-to-entry collapse?  There are two reasons: the first is that the assumption on switching costs proved completely wrong.  Indeed, this had been based on the idea that one company (a single company) owned the user.  It turns out, I can be on two networks at once, and the total cost is an Alt-Tab key press.  So when MySpace came along with a whole set of nifty features that lacked on the dreary Friendster pages, the opinion leaders moved over, set up better window fronts, and the rest followed.

But the second is far more fundamental: LinkedIn, Facebook, Friendster, MySpace all give kudos to how many contacts you have.  Yet the people I relate to at 14 are different to those that I like when I’m 16, and again my tastes for music, travel, clothes, and just about everything else have changed again by the time I’m 18, then 22, then etc.

The only purge mechanism for getting rid of all the deadwood that your earlier social trawling picked up is to set up a new account, and invite your current cool network to join.  This social deadwood means users have a built-in incentive to churn.

Thus social networks, as they are currently designed, can only be as stable as the people that form them.  Time for a new model?

I welcome Vodafone’s announcement that they are endorsing flat-rate data tariffs. As predicted, 3’s announcement earlier this year of the X-series has got the bandwagon rolling.

Or has it? On closer inspection, this is another example of a simple idea that has been through an operator’s tariffing department, where the flatness of the tariff has been remarkably un-flattened through the addition of a long list of exceptions. I am not even sure how workable many of these exceptions are as Dean Bubbley illustrates

But what bugs me even more is the fact that once again marketing and tariffing departments are actually missing the point, and by missing the point, they will once again slow down the market. And their shareholders should be upset that sophisticated excel spreadsheets are leading to the decisions that reduce their value.

* Indeed, flat rates are all about trading off a higher price for security, predictability and convenience. Just think back to your dial-up internet access bill. Mine was around £20/month when I switched over to then £30/month all inclusive ADSL. I actually chose to spend more, but in the knowledge that was it. No hidden charges. Always on, always available. Other markets got this long ago, for instance in the packaged holiday offerings promoted by Club Med.

* What these operators are doing is not “flat rate” at all, it is “bundling” a thing they know loads about, because this is how they sell minutes. Bundles are used in existing competitive markets to show you a cheaper way of doing something you already do. So now, you can buy 60, 120, 200, 500, 1000 minutes or even unlimited minutes to certain numbers bundled into your monthly bill. You simply look at how many minutes you consume, and get the appropriate bundle to reduce your monthly bill.

So while flat rates are about reassurance in semi-tested markets (I would argue that pay-as-you-go is better for initial discovery), bundles are for well established markets with competitive battles going on. By getting these two concepts so mixed up Vodafone is setting the consumers mindset, then disappointing them with such an obvious half-truth. And, as always, if consumers don’t benefit from the service, then in the long run, neither will the operators nor their shareholders.

This is Eccosphere’s blog going on-line, so time to say a bit about the blog, if not the company (that will come later). For reasons that will one day become apparent, we are going to focus this blog on social networking and new forms communicating with mobile devices.

In this spirit, we will scan wide, looking at what other companies are doing (the stuff we love, the stuff we hate, the stuff we simply don’t understand), what other companies should be doing (mainly our ecosystem partners: operators, manufacturers, standardisation bodies), and what other thinkers are thinking about all this.

As we become bolder, we will talk a bit about what we are up to, too. But we will try to ensure that this blog remains a place for sharp, controversial thinking, rather than (boring) press releases, though at some point you ought to be able to find a few of them somewhere in here too.

So that’s the editorial line set. Now lets see what happens.

G.