What many of you might not know is that the reason Nokia became the biggest mobile phone manufacturer is because of Apple. When all their competitors were standing still, Nokia decided to think a bit differently. This story was one of the hidden gems in “Fast Strategy“, a book co-authored by Mikko Kosonen, a former executive at Nokia, and it tells the story how Nokia was able to challenge Motorola, Ericsson and other big players of yesteryear.

“When everyone saw mobile telephony as a professional service, Nokia’s leadership saw mobile phones as consumer – almost fashion – products. Rather than predict five or ten percent maximum penetration rate, Nokia quickly imagined everyone in the world having one – or why not several? – mobile phones for personal as well as professional use.” (page 3)

“[On the importance of strategic insight] Some insight may result from intense personal awareness and conviction, such as Pekka Ala-Pieitilä at Nokia being an avid Mac user and seeing the potential for Nokia to turn mobile phones into mass market consumer goods the way Apple was doing for personal computers.” (page 21)

One has to wonder why this Mac-love was only visible in the strategic thinking while Nokia’s Mac-support (PC Suite and other things) has been abysmal throughout the years.

So, what has changed so dramatically that blogs and business newspapers are declaring doom on Nokia? First of all, Nokia’s DNA changed the moment the became #1 mobile phone manufacturer in the world. Before that they were a challenger, trying out

The Nokia 1100, the best selling consumer electronics device in the world

different things and taking risks. But now they are playing defensive, trying to maintain their market share. According to Kosonen, Nokia is trying to counter this by being “strategically agile”.

But it isn’t just that. The backwaters of mobile innovation, USA, suddenly became relevant. I would argue that this is mostly due to Blackberry and iPhone and the huge domestic market. Also, one has to remember that the US is overpresented on the internet, so once the web broke through to mobile devices and Apple started to market the idea of software apps on mobile devices, things seemed to change a bit. Nokia has never been strong in the US, or for that matter in any market where consumers do not choose their own phones and where Nokia has never been able to work with operators. That’s probably the only thing that has been constant.

Couple of weeks ago yet another analyst group forecasted how Apple could pass Nokia in as soon as 2011. Now, this fantasy was based on how iPod users would convert to iPhone users and how Apple should launch low-cost iPhones (especially to developing countries) and sell customized ringtones and overall act in a non-Apple way (and eerily like Nokia). And yet, we’re still talking about smart phones which so far represent a tiny minority of total mobile market.

Sure, Nokia needs to get its act together, especially on the services front, but it’s too early to say that they’re doomed. Especially when you consider that Nokia is pretty strong in the developing countries. My prediction is that it’s not Nokia that will be irrelevant in the mobile phone market in the future, but the US market ’s importance will fade and it is the mobile players that win elsewhere that continue to matter. The sheer size of mobile phone markets in Africa just boggles the mind.

In the new world of the mobile web, Nokia’s biggest problem is their own legacy, something that slowed Ericsson and Motorola down when Nokia was decided to bring mobile phones to the masses. Apple, on the other hand has shown that it can take advantage of market discontinuities in many different markets where traditional barriers to entry are crumbling down.

“For decades, the dominant players were EMI and RCA, and more recently Sony Music, which had built up the assets and capabilities … In today’s digital world, however, companies like Apple, which have none of the traditional music industry capabilities, are becoming leading players.”

In summary, it’s all about bringing technology to the masses. Apple did that for smartphones, but Nokia, inspired by Apple’s success bringing personal computing to masses, did and continues to do that for mobile phones. It’s just Nokia struggles with the US and smartphones for the rest of us. In Fast Strategy, Cisco’s Corporate Vice President Strategic Allainces, Steve Steinhilber is quoted to have said “…five years ago could Nokia really have expected Apple to be the main threat to their high end phone business?”

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In the last two years, I’ve seen more and more people in my social circle starting blogs. Most of which were focussed on a micro-topic, including travelling to South America, to Japan, having a baby, self-help topics, and team-dynamics. All of them with merit, but about 80% of them ran out after a while. What is the problem? How about: finding the inspiration, not getting (m)any comments, balancing it with your actual job, etc. etc. Also, the baby eventually grows up, you eventually return from your trip, and there’s only so much to say about self-help (in my opinion).

But while our perception of blogging has changed over the years, particularly if you listen to early adopters, you could say that in a way blogging has become a mainstream phenomenon. Mainstream not meaning that everyone does it, but that everyone can do it. And the reason for that is I think the popularity of Facebook and Twitter, which is a gateway onto other services (incidentally, not many Facebookers I know that started a Facebook-only blog).

Sure, many companies have entered the game, several blogs have become companies, and many personal blogs have been closed or abandoned.  Consolidation and commercialisation often means that there is no more space for the little guy. But, who cares right? You could still set up 10 blogs in the next hour and nobody would stop you. It’s just, nobody would probably read you, unless you write a really good blog + advertise it a bit. But while traffic is clearly a currency of blogging, as are comments, it does not seem to be driving the adoption of blogs in the short-term.

Looking at the current blogging landscape, I can only conclude that blogging is far from dead. But is is perhaps best to be aware that every blog is not the same. Just take a look at the following categories that I have identified, which I am sure is not a complete selection. There’s:

• The micro-topic blogs, which get started every so now and then, run out after a while, but don’t discourage others from starting their own.
• The small business blogs, for professionals and SMEs seeking to differentiate themselves. Whether these blogs can continue to exist, I think, all depends on whether they can reconcile their short-term profit goals (and needs) with the long term benefits  of blogging, which are far from clear (please don’t take 37 Signals as an example that all SMEs should blog).
• The small media-blog, which is what the Techmeme 100 is all about and which will never go away, as it’s a low-cost competitive approach towards battling/replacing big media.
• The big media-blog, which is really a hybrid of journalism and opinion, neither of which will ever go away.
• The corporate blog, which, similar to the small business blogs, still needs to find a raison d’être for itself. Exceptions are companies that already work on the web, like Google, IBM, Microsoft, O’Reilly.
• The small and large (web-)celebrity blog, which for some is just ego-stroking and for others is an artistic outlet, both of which are justifiable, not only to the people who write them, but I think is also a big driver for the new blood in the blogosphere.

Clearly, no matter what people may say about the rise of micro-blogging and social networks, the blogosphere has become a complex beast, one that continues to attract attention, whether it’s in the form of traffic, comments (those 2 aren’t correlated on Tech IT Easy), or perhaps simple hype.

Blogging is dead, yay, now let’s get blogging!

Vincent

P.S. This marks the 5th anniversary of my blogging, which started in the Summery of 2004. How the time flies by.
P.P.S. Picture is of the St. Louis Gateway Arch, and is meant to be symbolic.

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At the moment of writing, I’m on page XXII, what some of you may recognise as the introductory pages of the book. Not nearly enough to write a review. But I discovered the title in the FT weekend edition and reading a few pages it already feels alive with the buzz of making it big from the bottom up to the most powerful circles of Hollywood. For that is the topic of the book, tales of those people that started in the mailroom and now rule the woods of holly.

What the mailroom made me think about was IBM. I read the autobiography (I think it’s this one) of the founding of IBM around 15 years ago while lounging on the beaches of Cuba. It made a strong impression on me because it was raw. The book was also badly bound, falling apart bit by bit, which no doubt added to the memory. But what made the IBM story so compelling is that it wasn’t about the “consulting biz” it is now, having gotten rid of 95% of its hardware business, but it was about going from typing machines, to calculators, to huge room-filling computers, to the personal computer. Like the Mailroom, the story is maybe a little dated, but both are about dreaming big and thinking about and experiencing the radical steps that life, business, an industry, society can make. As such, still being on page XXII of the Mailroom, I can still say that it is an inspiring read.

The other thing the Mailroom reminded me of is my love for post-1900 history. Nothing like Word War I, II, of the Cold War, I’m not very interested in humanities continuous attempts to destroy themselves. More about the chaos that made lots of adventures possible. Business opportunities like the ones that Ray Croc discovered in plastic cups and McDonalds, crime in the early 20s and 30s which was really entrepreneurism, the development of cinema as discussed in my Hitchcock / Truffaut pieces. The Mailroom, IBM.

When I look at today, (P.S. I’m just lounging in the garden in the burning sun, reading the book and pounding away at this post), it all seems rather dull in comparison. The real opportunities, which often come from unplanned chaos, seem to be more located in emerging economies like China and India, than in European countries like France where when you get fired you get a (scandalous) 50,000 euro “bonus.” Even the Internet, which has attracted a lot of free spirits in the past and present, seems to continue to get more consolidated, structured, encumbered by taxation and the personal interests of national organisations operating in a nationless environment. OK, I’m drifting…

Read the Mailroom! I predict it’s a good read, particularly during the hopefully more chilled out summer days.

Vincent

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This week a Dutch commission on the banking recession to came to an end. Their conclusion: banks should be more customer-focussed (translated article). Wow… If there’s anything this crisis has shown us is that during times of crises, creativity takes a dive out the window. Because I’m pretty sure that people were talking about more customer-focus back when the Lehman brothers went out of business.

Just briefly, before I go on to a more pleasurable topic. Wired Magazine last month had an article on what they identified as the cause this whole crisis: the gaussian copula function (depicted above), invented by a man named David X. Li, which made it possible to model risk down to a simple number, allowing for any idiot out there to label an investment as an affordable risk. As the article states, Mr. Li won’t be getting a Nobel anytime soon, but it only serves to illustrate a simple point: money makes the world go round, and more specifically, money makes the world of finance go round. Banks, until recently, had a nice little formula that allowed them to make money. Now they don’t. Will that formula be found in increased customer-focus, I don’t know. But I do think that we need a better understanding of the complex variables that play a part in our globalised economy, and customer focus alone won’t do the trick.

OK, rant over. My stance for this recession remains: work harder and smarter… and don’t watch the news.

In Hitchcock / Truffaut, Hitchcock tells the story of One-Round Jack, a character in an early film of his, The Ring (1927). Here’s an excerpt from the interview:

A.H. In those days we were very keen on the little visual touches, sometimes so subtle that they weren’t even noticed by the public. You remember that picture started on the fairgrounds. There was a fighter, played by Carl Brisson, and he was called One-Round Jack.

F.T. Because he knocked out his opponents in the first round?

A.H. That’s right. And in the crowd, watching the barker, there was an Australian, played by Ian Hunter. As the barker in front of the tent urged the crowd to go in, he had a little flap and could look back over his shoulders to see how the match was progressing. He used a sign to indicate the round number to the people standing outside. We showed volunteer fighters going into the tent and then coming out holding their jaw. Until Ian Hunter goes in. The seconds were sort of laughing at him and they didn’t even bother to hang up his coat. They just held it, thinking that he would never last more than one round. The match started and I showed the expressions of the seconds changing. Then we showed the barker looking in at the match. And at the end of the first round the barker took out the card indicating the round number, which was old and shabby, and they put up number two. It was brand-new! One-Round Jack was so good that they’d never got around to using it before! I think this touch was lost on the audience.

We all know that Alfred Hitchcock went on to become a great filmmaker, but even he started small, experimenting with different effects, like the glass ceiling I wrote of last, until he understood the effectiveness of his medium. It’s an attitude that I greatly respect, and try to implement both in blogging and my work. You can’t achieve great things without breaking a few eggs.

There’s a pretty entertaining TED video here with the stereotypical mad scientist, Cliffort Stoll, in which he says:

“The first time you do something, it’s science. The second time, it’s engineering. The third time, you’re a technician. I’m a scientist, once I’ve done something, I do something else.”

That’s a philosophy I can also respect.

Back to banking. I think that what is customer focus has changed much over the generations. According to my father, customer focus is having a bank outlet + friendly smile in every neighbourhood. More deeply, back in his day, a bank would contribute more significantly to buying a house, funding well over 50% of the purchase price. I’m not sure how the latter has changed now, but I do now that what is called “customer service” has simply moved online. I haven’t seen the inside of a bank in months and I don’t miss it. To me, customer service is having more payment options, much more innovation, as well as for all transactions, no matter how small or large, to be free, instantaneous, and unencumbered by national borders or currency. I want to see the day where all transactions go via a single device in our pocket. I’d also like to see more funding for things like housing and startups, of course, but I know that a certain measure of reality needs to be in place for that, i.e. how credit worthy is your customer.

I think that won’t be able to count on banks much until they replace the faulty mechanism that was either the gaussian copula function or another one, allowing for banks to regain their profitability. I think that this will entail making mistakes and that room needs to be allowed for that. That banks are supposed to be customer friendly, goes without saying, but that banks are businesses that need a solid balance sheet, goes without saying too.

Went a little overboard there on the text. Sorry about that. Hope it’s readable / entertaining.

Vincent

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