Yes, it sure was a surprise to arrive at iWireless World last week and see hordes of techies, sales folk, and executives walking around the show in suits (not just sport jackets… puh-leez!), sitting attentively and soaking up info from panel after panel like Brooks-Brothers-attired sponges. It was a far cry from the last few years’ Net conferences, where you were considered dressed up if your polo shirt was tucked in. Ties? Forget it!
But the times, they are a changin’, and the word for the day seems to be “serious.” No longer are we to be led by high-flying “visionaries” with crazy ideas or twenty-somethings with multiple piercings and rainbow hair. Nope, the Net is now serious business, and concepts such as “profit,” “sales,” and “revenue stream” are again seen as positives.
There was little or no kidding around at iWireless World. Nearly every speaker began his or her comments by quoting the latest Nasdaq figures, and everyone seemed focused like the proverbial laser beam on monetizing the wireless space. In fact, one hapless panelist who made the mistake of revealing that his company wasn’t making money (“We’re on the path to profitability” was his defense) was nearly hooted off the podium. Different times, indeed.
But at the core of all this seriousness was an odd mixture of hope and desperation. The wireless “hope” theme basically says, “Look. We’ve got a new medium here. It’s like the Web was five years ago. And now we know better. We don’t have to make the same mistakes. This stuff’s gonna change the world, and we’re in on the ground floor.”
A good point. But the “desperation” theme can’t help adding, “Yes, but we’re still not seeing huge amounts of consumer acceptance for wireless application protocol (WAP) in the States. Sure, plenty of people have cell phones, but how many of them are going to use all these wonderful new apps or read all this content we’re creating?”
Also a good point. Over and over again, as every panelist and keynote spoke about the promise of wireless, most of their talks were also tinged with some serious reality checking. Even though the projections for wireless show constant growth in the number of devices, the actual usage of these devices for more than voice hasn’t been growing at the rate people expected. Sure, Europe and Asia are showing strong growth in wireless messaging and WAP/i-mode applications, but the U.S. still seems to be lagging.
Why? Some panelists blamed the carriers for their “walled garden” approaches, which basically make it impossible for sites not on the main menu (supplied by the provider) to be found by an average consumer. Other speakers seemed to place the blame on the consumer; “we’ve got to change consumer behavior” was one overriding theme. Others seemed to place the blame on the devices’ lack of usability.
But above all, what continually struck me was the absolute “consumer cluelessness” that so many of the speakers exhibited. “We don’t know what consumers want” seemed to be a common theme. “What’s the killer app? We don’t know yet, but we’re working to find it.”
It’s not like they’re not trying. Futuristic visions of remote latte ordering and flight scheduling, news alerts, device interoperability, and car-borne telematics flew fast and furious. But when tough moderator (and conference founder) Michael Stroud pressed speakers for usage figures or real-life case studies, few had any answers. They don’t know what consumers want… but they’re gonna keep trying until they find out!
Which is what really worries me. As I was writing my most recent book (due out in July or August) about lessons learned from dot-com failures, I expected to discover some complex series of business reasons why so many dot-coms have become dot-bombs. And although I did find that a fair amount of them burned out because of greed and stupidity, even more seem to have died for one main reason: They didn’t understand their customers — who they were or what they wanted.
So many dot-bombs subscribed to what Garage.com founder Guy Kawasaki calls the “Chinese soda” business model: “If there are 1 billion people in China and I can sell my brand of soda to only 1 percent of those people, I’ll be rich!” Yeah, right. But in the dot-bomb world, the business plan usually went like this: “If there are X people on the Internet and Y percent consume [insert product here], then all I have to do is grab Z percent of that market, and I’ll be a billionaire!”
Unfortunately, these models, though they look good on paper, often don’t account for the nasty details of business, such as promotion, inventory, shipping, logistics, and employees. Even worse, although the numbers predict that a market segment exists, those numbers don’t say anything about behavior. Will people actually buy (or read or participate in) your stuff online?
Probably one of the most obvious examples of the Chinese soda fallacy was in the rapid boom and bust of the online pet food segment. Sure, a lot of online users have pets. And sure, a lot of them may purchase goods online. And yes, many of them are busy and would seemingly love the convenience of buying Rover’s kibble from their desktops. It makes perfect sense.
But as Pets.com (and plenty of others) found out, many folks found it a lot easier just to toss a bag of Doggie Chow in the basket at the market than to go online, find the site, navigate the intricacies of an e-commerce engine, then wait for delivery. The value proposition just wasn’t there, and the boom turned to bust.
We’re at the same place with wireless right now. There are a lot of great ideas and a lot of money still flowing into the segment. But there’s one major piece missing: knowledge of the consumer. Do people really want this stuff? How will it fit into their lives? How will they use it? What are they willing to pay for?
As many global companies know (and as their representatives pointed out at the iWireless World conference), culture plays a huge role in how people interact with their wireless devices. We can’t just look at Japan and Scandinavia and assume that what works there will work in the U.S. It might. It might not.
What do people want out of wireless? There’s one way to find out: Ask them! Get out of the engineering labs, board rooms, and conferences, and see what people are doing. Do real-world tests before full-scale deployments. Spend some time actually (gasp!) talking to your customers.
People come first. Know them.