You Are Not The Sun: How Business is Changing

This past week I attended the Mobile World Congress in Barcelona, Spain.  The show has quickly taken on gargantuan proportions, with approximately 70,000 attendees at this year’s event.  From Islamabad to Tel Aviv, from San Francisco to Mumbai, from Shanghai to Sao Paulo, the mobile world is exploding.  And as connectivity expands throughout our lives, from the cars we drive to the devices in our homes, the current number of mobile connections (6.8 billion, according to the GSMA) will quickly surpass the number of humans on the planet.

As I was talking with people at the event, I recalled a meeting I had roughly 15 years ago.  I was working for a software company, and my company had entered into a strategic alliance with another large software company where the two companies would cooperate in the market and tell customers a unified story.  Shortly after the deal had been struck, I had a meeting with one of my sales counterparts from the other company so we could agree on how we would jointly describe how our products and joint business value to customers.

As the meeting started I asked him to describe how he saw our joint solution being presented to the customer.  He then, over the next 45 minutes, stood at the whiteboard and drew an elaborate picture that anyone in the technology industry has seen a million times.  The picture started with a large box in the middle of the empty whiteboard (his company’s product), and then had a series of connections to other, smaller boxes (one of them, my company’s product), which in turn connected to other boxes, etc.  After his extensive drawing and explanation, he sat down and said “that’s how we see the world”.

It was then my turn, but instead of taking a similar amount of time, I walked up the board, and with the eraser and marker simply switched the company names, sat back down, and said “that’s how we see the world”.

In addition to my version of the drawing being totally accurate from my company’s perspective, I personally thought the exchange was pretty amusing, although I remember that he didn’t.

Anyhow, many business partnership discussions start with some big circle or box in the middle of the whiteboard – I like to call it the sun – with numerous, lesser companies and components orbiting around it’s fixed and luminescent presence.

While I am not predicting immediate changes to our solar system (sorry, Pluto), I can say with certainty that the “hub and spoke” model of business partnerships is dead, and walking around Barcelona this week demonstrated to me again how true this is.

Why?

• Yesterday:  Expensive infrastructure and time required to “turn on” new content.  Today: Cloud services reduce barriers to entry.
• Yesterday: Complicated and expensive integration between content points. Today: Standards make it relatively easy to connect.
• Yesterday:  Brand loyalty (JC Penney). Today: Simplicity & Cost (Amazon)

So here are some tips for how to win in this world…

1. Involve a paying customer at the beginning.  Too many business partnerships have customers represented during the planning period in spirit only.  If you can’t get one customer to work on the idea, then it’s probably not worthy of significant effort anyway.
2. Have an organizational bias toward action.  This is very hard for companies of any size, where issues related to IP, costs, and resource allocation frequently kill innovation.  But I am convinced that companies come up with plenty of good ideas, but kill those ideas by making it too hard for customers/partners to engage quickly.  The smarter strategy is to get as many people using an imperfect solution as quickly as possible, gather data, report results to the industry, and watch the fast followers come to your door.  You can have the pricing model baked by then.
3. Remember that suns burn out.  And it happens on internet time, not geologic time.  To see one example of how an incoming CEO of one of these flaming-out suns addressed his own employees, read this famous “burning platform” memo from Stephen Elop at Nokia.  If you believe everyone will continue to revolve around your market dominance, you’ll be disappointed, and if you base your strategy upon a single heat source, you’ll also be disappointed.

The mobile world of today is a web, not a solar system.  Don’t get burned.