Does @O2 Hate It’s Customers?

I’ve had another awful few days as a customers of O2. And this experience is not unique to me. 

I am a customer of 15 years at O2 yet they are incapable of providing a consistent quality of service. I wrote a similar post about O2 in February 2008 yet here we are again – and inbetween I could have written many more.

My biggest gripe is that their incompetence costs me money, time and a deep amount of stress. Yet importantly, there is no policy of fair compensation when things go wrong.

Hypocrisy

Companies make mistakes, because people make mistakes. Computers make mistakes because people that program computers make mistakes. This is life. Yet if I make a mistake and don’t pay my bill on time, I am penalised. Credit card companies charge late fees, telecoms companies cut you off.

What happens when a company who has committed to you to provide a service, fails to deliver? The answer sadly is very little, if anything.

oh-nooooooo

Problems, Problems, more Problems

My general complaint about O2 is that most months last year I had to call them to have data charges credited back on to my account (I have a older Blackberry tariff, which includes international data roaming, unlimited. Despite this O2 regularly charges me for data).

Additionally, I spent weeks in the USA last year with no data, where O2 bounced me back to AT&T blaming them, and AT&T blamed O2 saying it was an issue of barring with O2.

O2 when questioned claimed “we cannot guarantee service when roaming” …So what am I paying my £70 a month tariff for exactly then?

And OK, that’s fine. You can’t guarantee it. But since I’m paying for it, are you going to credit me a portion of my bill when I cannot use the service I am paying for? This would be fair. But of course, O2 refuses to.

O2 Promise To Compensate Me

Ultimately, after investing literally hours of conversation and correspondence, I was promised 3 months credit.

O2 Go Back On Their Promise To Compensate Me

The credit never arrived. When I chased up the credit, O2 claimed they had no record of the call. I refused to pay my bill until it was fixed, because last time the promise of a credit was made, it didn’t materialise.

O2 then cut me off.

After a few months of using my iPhone (registered with 3) I missed using my Blackberry (I find the messaging, the physical keyboard and battery life, all far more efficient).

In another exhausting effort to get to the bottom of the problem, I re-engaged O2 to have it sorted out. O2 then claimed “we have no records of calls after 6 months” Is this true? I suspect it’s a lie. I am confident if ordered by a court to reveal conversations prior to 6 months, OR if they wanted to use evidence of a call to their benefit, O2 would find the recordings of the calls.

In frustration, I capitulated, paying my bill in full in order to get back my global data roaming.

O2 Promise To Look At A “Good Will” Credit

I was promised that O2 would then look into providing a credit.

O2 Break Their Promise Again

I’ve heard nothing. On calling back an enquiring, guess what? There is no record of the call or conversation.

AND Another Problem This Week

That was all last month. This month again I’ve been charged data roaming when I should not. On Tuesday 20th August at around 6pm I called (at my own cost, from Sweden) to enquire about the incorrect data charges.

After I went through the usual process (of explaining that my account was an older account on their “DICE” system and that I had bundled data … 10 minutes of my time, and cost for the call I’m never getting back) eventually it was concluded that the issue would escalate the problem to Credit Control who would text (SMS) me within 5 days to confirm the credit amount. At that time I could then pay my bill.

I also double checked with her both that I would NOT be barred or cut off and also that as I was travelling to the USA I would also not be barred. All seemed well.

O2 Breaks Their Commitment And Promise, Again

Wind forward 48 hours later. Thursday 8am, guess what? I wake up my phone is barred. I can’t get data. Or call.

I try to dial out – the phone says “Your calls are being automatically transferred, please hold”. Instead of transferring me -as promised- I then get another message saying “The speed dial you have called is no longer available. Please call your team manager for help <hangup>”.  In other words, their call system was broken and I was arriving at an internal automated message.

I had to borrow a phone to call O2. I then had the usual 10 minutes explaining I have global roaming, that I on the DICE system, and that I should not be charged. “If you’re using your phone abroad, you’ll be charged for data roaming” says the woman. “No, really, I won’t, and I have not been for 5 years. Check my tarrif” I exhaustively retort.

O2 Magically Loses All Call Records Again

I then also explained that I had a call only two days before, dealing with all of this. The lady said there was no record of my call “The person has not tagged your account” she said. Unbelievable.

“Didn’t you ask her name” said the O2 operator; “No” I replied, because even if you do, the operator will not give their last name, so you have the first name of someone who could be in any one of numerous call centres who is impossible to track.

The Incompetence Is Laughable

Not only that, but gallingly, O2 had sent me a text customer satisfaction survey to ask me my opinions of the call, which I had responded to. Yet, now, despite sending me texts from the number “24442” asking me about the success of the call, this very call was untraceable and did not exist!

So just to clarify: O2 say there was no call, or at least, there is no record of it. Yet they are sending me SMS texts asking me to complete a survey on the quality of the call they have no record of.

Eventually she passed me to her supervisor who explained that something on my Blackberry was doing something routing data the wrong way, that they couldn’t tell me what, but that if I carried on doing whatever it is I was doing, I would be charged.

I am not tethering (I appreciate this attracts charges) and I am only using the regular BB services I have always used.

I understand that Blackberry, having their own proprietary international network integrated with the telcos use their own APNs etc so that yous have to use Blackberry’s conduit to carry data. But I have not changed what I’m doing in 3 or 4 years. I still simply use email, the inbuilt browser, Twitter and my Facebook apps. And Google Maps. That’s pretty much it.

The Crux

None of these things should be my problem. O2 have now raised the bar, temporarily, while the credit team look at my account (which they were already looking at, allegedly). But I have no recourse if they don’t, or if they cut me off again.

O2 owes ME money

And meanwhile, as a consequence of the call (which I had to do as I needed my phone for meetings first thing so needed it unbarred) it has meant I missed a train, which meant I missed an appointment (£45), the attendance of which I’d lost half a day of consultancy (a few hundred pounds, which ironically is on an mobile app project for O2!), paid train fares to get to Cambridge from London the previous night, and back this morning (£35) for an appointment I missed. Not to mention the costs of calling from Sweden two days before, which O2 will no doubt bill me for (another £10?)

Who is going to pay for my time and expense, dealing with O2’s incompetence?

Yes I can take my business elsewhere, only to run in to the same problems across all the mobile networks.

Competitive Pricing, Awful Service

“Competition” for quality of service, is not working. Pricing, may be. But there is no recourse for the average customer.

I must be in the top 3-4% of O2’s customers in terms of expenditure. Over the years I’ve been called an “O2 Select” customer, or “O2 VIP”. My bills are frequently over £200, despite the bundled roaming data (even when O2 don’t charge me!). But I’m sick of being promised a reliable service and being delivered the contrary. I’m sick of the contract I enter in to with O2 and other corporate business not being a two-way street. I’m sick of being treated like I’m an idiot. You can’t track that there was a call? Balderdash. Your computers have a record of my incoming call two days ago, your computers are recording my survey answers which I’m STILL answering, and I’d be amazed if actually, you only keep call records for 6 months.

No engagement by people who will solve the problem.

Worst of all I’ll get no response from this complaint, even if I send it to the head of customer service, let alone the CEO.

Today were I running Fortune 500 company with 1000’s of staff, I’m so annoyed I’d switch telco. At least that business might impact O2’s bottom line. Instead, as a lone mobile subscriber, there is no recourse to taking my business elsewhere except to another telco that will care equally little and I won’t even have the retort that I’ve been a customer for over a decade.

All I can do is post here, to my Twitter feed and to Facebook, which is a combined reach of 12,000+ excluding reposts or RT’s. I’ll put it on LinkedIn too, and the MomoLondon list – a list of telco industry luminaries.

The Cost To Shareholders of Bad Customer Service

It’s a sad day that companies who spend so much money to convince customers to purchase or switch from another provider, have such a poor ethos to supporting their existing customers.

When was the last time a large company caused you to react “Wow, what amazing customer service?”

This is caused by many things, but includes a lack of ownership of problems by the staff at the coal-face, those dealing with customers directly. That in turn is because the leadership at O2 and other corporates favours ignorant process over staff who have real authority to make sensible decisions, who have been devolved responsibility, and thus would care more about what they do, when they do it, why they do it, and for who.

I discussed this corporate customer service problem years ago here and how it actually how problems provide an opportunity to create a more loyal customer.

Company Culture (and Customer Service) Comes From The Top

The biggest problem is that if you’re aiming to capture the mass market, giving bad customer service -even pro-actively rude and contemptuous service- often works. Just look at RyanAir (who I refuse to fly with on principle!) and the attitude of Michael O’Leary.

The culture of a company comes from the top. And not getting a response of any kind, or a true resolution, or the financial credit that I deserve as a consequence of the incompetence of O2, is atypical of corporate customer service today.

Long may the social media revolution grow – and power to the people in doing so. We pay your wages César Alierta (CEO, Telefonica ..who of course isn’t on Twitter himself). You should be doing everything in your power to make us feel good about doing so, not hating your brand; because THAT is the way to maximise your share price and shareholder return, not the equivalent of slash and burn.

Meanwhile, if you want strike a blow at corporate greed and incompetence, and champion the voice of consumers, why not re-post this blog CC-ing O2 ..and do me a favour in the process! 😉

The Life and Death of Colonel Blimp

This is a blog post about Rummble, a tech start-up which the author founded. Written further to an article published in The Kernel 0 subsequent to an employment tribunal for unfair dismissal 1. The author instigated the tribunal claim against Rummble, his own company, after being removed involuntarily as CEO in December 2010. 

Discussing problematic times in a business publicly is a balance between remaining professional while ensuring the information which is in the public domain is accurate and / or has the appropriate background for people to draw sensible conclusions. Some may consider me publishing any thing at all inappropriate, an opinion which I understand but I also feel the events 2 years ago were unusual circumstances and the decision to write this -very long- blog post was not taken lightly. I have until now, stayed publicly silent on the topic.

Often people choose a cautious route, making no comment or issuing an appropriately inert corporate response. Since leaving Rummble, the author has remained quiet publicly on the topic. But with more information in the public domain regarding events, the author finds himself more in agreement with the Duke of Wellington

The Kernel article outlines the life of Rummble after it’s marriage to M8 Capital until the authors departure. This blog post provides some background and mitigating circumstances (on behalf of all involved) to the events mentioned in The Kernel’s article, while also responding to Steve Karmeinsky’s (aka Steve Kennedy’s) comments made on that article, which the author feels lack context 2 [Since posting this blog Steve has removed the comments].

Everything is better with two m’s

For the uninitiated, from late 2006 to late 2010, I created and ran a product and service called “Rummble” which enabled you walk out of the door and within 30 seconds show you recommended places nearby that you’ll love, via your mobile.

The technology arguably delivered better, more accurate and more personalised recommendations for places than most other services, using very little base data. It also solved the cold-start problem which many of these services suffer from.

In geeky terms, it was a mobile location based personalised recommendation engine, deployed across web, iPhone, Android, WAP, mobile web, Windows Phone and even (gulp) Vodafone 360.

Clarifications

Before this blog was written and posted, I offered the team at Rummble Labs to issue a joint press statement after the publishing of The Kernels article, an offer which was ignored.  I felt therefore this was my only right to reply. It’s certainly not an attempt to dodge blame for the financial difficulties Rummble got in to in 2009 (and perhaps instead of determinedly pushing on I should have just given up and shut up shop rather than roll the dice further) but it hopefully does provide insight into what can happen when things break down. Had I read this post back then I might have made different decisions, hopefully it inform others.

Two addendum’s to the content of the Kernel’s article.

Firstly Clive Cox was my long-time employed CTO not my Co-Founder (I believe this has been corrected in the article after I responded on Twitter).

For better or worse I founded Rummble on my own and as most lone Founders, took the ultimate burden of responsibility. As some commentators rightly point out, I was thus culpable for the destiny of Rummble, including ceding control of the business. Brownie points perhaps, for stating the obvious 😉

Secondly, while it’s true Alex Housley and I had some tough times during a challenging period for the company, on the whole we got on well. He recognised the potential of what Rummble could be. After all this is why at the end of 2009 he sold his company, Total Hotspots, to me and why I chose to buy it.

It is though also true (as reported in The Kernel) that latterly I was frustrated with his performance. Nonetheless, it is a difficult job to create success with limited resources. Were it easy, most start-ups would not fail and more people would want to work in this challenging environment. Thus, I kept him employed during this trying period for three reasons:

  1. I felt we could still find a role that worked for he, Rummble and I.
  2. He did add a level of value to the business and was a trusted, reliable colleague. Hiring new people is disruptive, never easy, often expensive and finding truly entrepreneurial committed people to employ in London is pretty difficult. Alex ticked those boxes.
  3. I felt a greater responsibility toward him than the average employee because firing him would have been not entirely dissimilar to the experience I had a few weeks later (i.e. being removed from my own company, Rummble, involuntarily. A vexing experience). I had bought his start-up and his being fired from Rummble would have meant him being separated from his own start-up, which had been incorporated into Rummble less than twelve months earlier.

Humans Are Selfish

The disappointment to me is not that Alex remains with Rummble Labs or indeed had aspirations to do so, but the way in which he ensured his position there.

Dacher Keltner of the University of California wrote in this paper that “In my seminars I ask my undergraduates to complete the following clause: ‘Human nature is…’ with as many ideas as they can. Typically about 70% of their responses refer to some form of selfishness, competition, or aggression.”

He goes on to write:

Learning theory made famous by BF Skinner starts from the assumption that the organism moves towards self-serving rewards and away from punishments. Within evolutionary psychology all human traits ultimately benefit selfish genes. In economics, it is axiomatic that humans are rational pursuers of self-interest.

I generally subscribe to this, which is why we have wars, the boom and bust of the stock market and bank bailouts. This said, humans are also capable of love, generosity and great demonstrations of compassion (the paper goes on to discuss this).

I consider myself to be pretty cynical and generally view people with – if not suspicion – then a healthy scepticism. It was with surprise then when my mother told me a few months ago that “You were incredibly trusting as a young child, far too much so. I used to worry about it.”

This perhaps explains why I subscribe to an admittedly somewhat woolly concept of certain reasonable conduct between start-up Founding entrepreneurs, when doing business together.

While Alex was not my Co-Founder at Rummble, as a Founder of his own start-up I expected honesty and loyalty from him, things which I felt were grossly lacking when Alex  opportunistically slid in to my role leading the renamed “Rummble Labs”.

Alex registered “Rummble Labs” as a domain name even before my consultation period (during my dismissal as CEO) had completed. He did not mention the fact to me and what he did say told a different story to that which was, with hindsight, actually going on. While M8 Capital probably told him, quite accurately, that the writing was on the wall for me, breaking rank in this manner very much enabled their strategy.

A bit of alternate manoeuvring might have meant a more constructive conclusion to events for everyone (as I discuss in a few moments).

In short I trusted him as a right hand man to have deeper knowledge of the business in order to accelerate our progress, but as most people do, he ultimately prioritised his own career ahead of other considerations.

Disloyal?

As an employer, one should never be surprised by someone prioritising their own progress. As you grow your start-up, devolving deeper responsibility becomes a necessity. I observe that some  Founders in smaller start-ups find this transition difficult, especially if they have been bootstrapping for some time. But it is a leap one has to make emotionally or one’s company doesn’t grow.

You need instead to protect your Founder position in other ways, rather than attempting to remain safe by controlling knowledge or responsibility.

In a word, a good CEO should almost be trying to hire himself out of a job.

Other members of the team from 2010 also stayed on at Rummble Labs but I naturally bear no ill-will towards them.  They were also employees. This was their career and their job, their security; not their responsibility.

The lesson here then is are you expecting someone to behave like a friend, or an employee of your business? Early stage start-ups with very small teams can get this confused.

Namby Pamby

While to many from the cut-throat school of business thinking, my talk of loyalty and respect might  sound naïve, I’d actually argue in Rummbles case, that everyone (Alex, Rummble Labs, M8 Capital and myself) would have benefited from a more candid (albeit challenging) conversation about their genuine plans for Rummble and their own intensions, selfish or otherwise.

This is after all, business. One should strive to be practical and particularly as M8 Capital had majority control, they risked little by doing this. In fact they – and Rummble Labs – only had to gain.

Investment

Steve Kennedy makes some comments below The Kernel’s post which are roughly accurate, but do not address why Rummble was in such financial difficulties to start with, at the end of 2009.

As CEO I must of course ultimately carry the can, but life is rarely that straightforward and to suggest it was only my decisions which precipitated problems, I think is both a simplification and somewhat disingenuous.

Steve neglects, for example, to mention that a small investment vehicle Highgate Associates had been due to invest £300,000 ($470k) for a 10% shareholding as early as October 2009 (the M8 Capital investment closed, after lengthy DD and contractual wrangling, in April 2010).

Highgate Associates, then a group of three angel investors (to my knowledge with limited experience angel investing in technology start-ups) spent a few days on-site in the Rummble office performing due diligence with intention to invest.

They were given access to all accounts including our list of creditors, which for a small start-up with no significant revenue I concede totalled a significant figure. But not one which was unrecoverable per-se, if investment was found. Many tech start-ups of course fail abruptly without having reached profit or break-even, by failing to reach the next investment milestone.

To cut a long story short, HMRC (the UK tax authority) had as Steve suggests, been threating legal action because we had a backlog of dues. This was communicated to Highgate Associates. However, we had also received agreement from HMRC for a rest bite in order to close angel funding (quite unusual for HMRC as it happens) and this was to be executed at the winding up hearing some weeks later.

False Start

With Highgate Associates in full knowledge of the company’s financial position, contract signing vacillated until a few days before Christmas, at which point I received an email from Highgate asking for more than the original equity agreed. They sighted the reason as being the risk of investing £300,000 ($470k) in a company with over £100,000 ($150k) of liabilities.

I responded to this at length explaining why I felt this was an unreasonable, in summary because:

  • they had been in full knowledge of the facts since DD weeks previously (something which Highgate Associates dispute)
  • and we had had confirmed that RBS would provide a SFLG scheme loan of £250,000 ($390k) if we closed the said funding, negating the risk

Despite my frustration, myself and Rummble’s board proposed a compromise stating that Highgate could have the increased equity if the loan was not closed, but they would not receive this if the loan came to fruition.

This was a logical resolution to our mind, based upon Highgate’s stated position that it was the reduced cash flow runway, due to Rummbles debts, which worried them. In actual fact for this position I had some sympathy, if not the manner of communication.

An email came back stating that if I did not accept the contract as they proposed almost immediately, Highgate would attempt to have the company wound up (i.e. to apply to the courts to have a company liquidated because it owes money it cannot pay).

This revealed Highgate Associates as using first a tactic (our weak financial position) in my personal opinion to improve the deal, then a threat (of winding up) to force us to accept the deal.

Their claim was (and probably still is) that we had not been clear with the situation surrounding HMRC. I dispute this, as does Rummble’s Chairman from that period John Paterson. An experienced businessman whose reaction to their conduct I won’t repeat verbatim here because it’s before the 9pm watershed. Consequently, neither of us found favour with Highgate’s approach.

Someone else who was close to the deal at the time described the negotiating investor from Highgate as having, in his personal opinion “an anger management issue” and that they felt the deal had failed because in their opinion Highgate’s negotiator was “… unable to respond to a logical argument calmly, subsequently distorting facts and issuing commercial threats”.

Six of one, half dozen of the other

As with most things there are two sides to every story.

In my view, generally in life one’s opinion of peoples actions are based upon:

  • one’s own previous experiences (e.g. as investor or entrepreneur)
  • one’s own bias (friendship, association or vested interest)
  • and one’s cultural empathy (religious, moral point of view or belief system)

..which coalesce to create an expectation which is then fulfilled or not.

An opinion of right or wrong is consequently formed.

Whoever was right and wrong – and I of course have my own opinions – any investment made under such circumstances in an early stage business is setting itself up to fail, if both parties are at each other’s throats before it closes.

Egos are big and the pressures are high. Accordingly, negotiations for VC investment can be tough (read: they usually are). The VC have their Limited Partner(s) and sometimes their own, money at stake and for many deals (except perhaps the top 1% where VCs are clamouring to get in the investment round) sometimes one might be mistaken for thinking their almost doing the entrepreneur a favour. The more likely truth is they see risk all around.

Entrepreneurs only see their vision which the obstinate VC is  failing to fulling grasp and can’t for the life of them understand why they don’t just right them a cheque because  clearly the next big thing is “e-Hummblr” the LBS IM VOIP AR chat client….

When a deal is done the entrepreneur can feel they are being asked to chop off the arms (and possibly legs) of their child and then assign custody of it to a monster.

I jest but you get my point. Founders and VCs start aligned but negotiations if not VERY carefully managed on both sides can cause a lot of damage. Aggressively threatening the other party is never going to work out well for anyone (as we’ll read later).

I’m not saying don’t be tough in negotiation. Actually I’m a subscriber to the idea that you not only have a right to be tough in negotiation but a duty to be so, for your shareholders, perhaps also your seed or angel investors (to get a good valuation) and your customers.

What is key is having built a stable and trustworthy enough relationship (dare I say even, friendship) with these people beforehand, so as to treat the other person with respect. Later stage and growth deals are different, but a first institutional round is more akin to a marriage than a business deal, that is why some early stage VCs fresh from a career in Private Equity or the corporate world don’t easily flourish when switching to the emotive world of bootstrapping tech start-ups.

But none of this is an excuse to leave your moral compass at the door when you leave your home and your loving family, to go to the office.

Many seem not to adhere to this thinking, or perhaps never had a working compass to start with. As a human being I am certainly entirely imperfect, but I hope I make at least an equitable attempt at playing fair in life including while doing business.

You’ve now at the official half way point of this ridiculously long post. Yey.

What happened next?

With my company out of money and a spirited investor trying to sue Rummble, including us personally as Directors for costs (a silly idea given in my view given it was an investment negotiation which went awry) I still had to go out and raise not insignificant money from a large angel or a VC.

With a shit storm circling this was not an insignificant challenge. Raising Venture Capital investment for consumer facing products which are pre-revenue is painful enough (read: almost impossible) in Europe anyway, let alone with your start-up smelling like a cow shed.

Steve also mentions that at this point I had to secure emergency loans from two shareholders to keep the lights on. This is also true.

Anyone who has run a start-up or two (I’m on my sixth now) will probably have been there or somewhere similar, at some point (i.e. if not asking shareholders for cash then begging at the bank, or negotiating with the wife to re-mortgage the house). Even Richard Branson had to do this, for Virgin Atlantic, a few years after it started.

If you’re highly successful without ever reaching panic point financially, more power to you.

In fact I still have personal guarantees for these loans despite leaving the company operationally, because Rummble’s executive team after I left have at the time of writing, been unwilling to release me from that liability. I actually never invisaged ever being removed entirely from the company, so it didn’t seem a particularly grave issue at the time. Entrepreneurs do have a terrible tendency to be unreasonably optimistic; but then perhaps it’s a requirement in order to stay sane.

The reason for mentioning this? Never, ever take on personal guarantees on behalf of your start-up (something I have advised many times against doing, but then chose on this occasion to ignore my own advice).

A Few Good Men

So, next up I had to go and appear at the HMRC winding up hearing, regards our owed PAYE (company employee taxes).

The lawyer for HMRC stood up as the only creditor in the room (all our others creditors/suppliers were being fully supportive) and said he believed that Rummble should be given time to pay and the winding up petition thus removed. This was granted by the judge, but seconds later Mr Andrew Muir from Highate Associates (who was at the back of the room) piped up that the company also owed him money.  This was not true, at least not for him to have the right to petition for Rummbles winding up.

Mr Muir from Highgate Associates had offered to provide the company £20,000 ($30k) of the £300,000 ($470k) in advance of closing the then pending investment, in order to help cash flow (this was before he demanded the extra equity). But the terms of the loan were that it was due to be repaid only on an equity investment event of more than £20,000 ($30k). This event had not yet happened, so the loan was not due, so he was not a valid creditor for the purposes of a winding up petition.

Rummble’s Barrister to my horror, did nothing. This was a grave error. As a direct consequence the Judge allocated lead petition to Mr Muir, because the Judge was not instructed otherwise.

I was now quite frustrated. Thankfully at the very least the Judge still gave us some weeks before the petition was to be served.

Sadly it then took further precious time for our lawyers (not the lawyers of my current start-up I hasten to clarify) to come up with the solution, which was to issue a Strike Out of the winding up petition on the grounds that it was not valid. Had this occurred (which I was all in favour of serving to deal with someone who I now viewed as a bully) the petitioner would have been liable for all costs.

Unsurprisingly perhaps, at this threat Mr Muir backed down, opting to – wisely for him – take his chances of negotiating a settlement from a future investor thus getting all his money back and possibly more, while avoiding the risk of costs. Ultimately, this is what indeed happened with him receiving an extra £6,000 ($9k) to go away quietly, much to my consternation, when we closed Series A.

M8 Capital comes to the rescue

Via an introduction from Joe Neale, I met with the M8 Capital team a few times in Q1 2010; indeed I had done once before Christmas if my memory serves me correctly.

They seemed enthusiastic for Rummble’s vision and I was particularly impressed with Joe Kim, who was articulate and clearly experienced in business.

I will give some credit to Joe Kim at that time for having conviction enough to consider investing in Rummble and consequently engaging in negotiations, despite the swirling problems, in order to get us off the proverbial sand bank which as a crew we had navigated our ship on to (albeit with the additional misdirection of some metaphorical pirates).

I think as a brand new early-stage VC firm (Rummble turned out to be their first investment) which had limited experience dealing with scrappy, dirty start-ups, the Principles (at that time having had virtually no hands-on experience either investing in or running such companies) struggled to understand some of the decisions that had been made, in reality simply to keep the start-up afloat. The banking crash in 2008 caused nearly all angel investment in the UK to disappear for a period of time and this had taken it’s toll on Rummble’s attempts to maintain momentum. So the bootstrapping corner-cutting-to-survive nature of Rummble at that stage I feel came as a bit of shock to them (although I’d argue that on balance, we still had many more processes, checks and balances in place than a lot of similarly sized and funded start-ups!)

As an aside, this lack of hands-on experience at some VC’s within start-ups can cause problems for the VC/Founder relationship as I discuss at length here, and it seems to be a particularly acute problem in Europe.

But the important part of this story is that after explaining my experience with the previous potential investors and then M8 Capital doing their due diligence, they agreed in principle to invest £750,000 ($1.1m) for ~22% of the company.

This was fantastic news. Finally something seemed to be going Rummbles way.

This was precisely the size of investment which a consumer orientated company of Rummble’s stage needed. Critically, with this deal the Rummble team and I would have retained control of the business but also had the runway to truly deliver on an improvement to our User Experience (which was indeed needed) building on the top of a platform which was, without question in my view, more advanced than any of its peers.

So the deal moved forward – although not without difficulty. But again, anyone who has done a venture investment will tell you that those which sail smoothly into a new day, without hitting some choppy waters along the way, are few and far between.

The Life and Death of Colonel Blimp

Within weeks I then lost majority control of my start-up, because I was honest.

That probably sounds ridiculous so needs some explanation. A minority shareholder, John Rand (who had been doing part time work in return for later post-funding pay) had also been doing Rummbles book keeping to save Rummble costs. Just before I signed the personal warranties (which had me vouch for the accuracy of our accounts/books as part of the investment) I did a final and thorough re-checking of all the accounts and in the process identified circa £20,000 ($30k) of additional creditors (debt) which was not on the balance sheet which had two weeks earlier been sent to M8 Capital.

Having confirmed the mistake I sent M8 Capital a new balance sheet, to replace the previous one of two weeks earlier, but included notes detailing very precisely the reason for the changes.

Their response was decisive. In a meeting a few days later they said they could not do the original deal. My understanding was they felt the financial management of the company was so poor that they would only be able to do an equity investment (rather than the convertible loan we’d agreed) and that it would require them taking 75%, instead of 22%.

Note to Founders: don’t cut corners on accountants, it could cost you an investment deal, or your company.

Now at this point, with hindsight I should have either:

  1. Wound the company up and raised money to buy it out. This I did not do as I felt  an obligation to suppliers and shareholders. Mr Muir also still lurked at the sidelines and would I believe have done his best to disrupt that process. The risks seemed too high.
  2. Stuck to my guns, offering M8 Capital 49% and financial oversight, but no absolute control. This would have been worth pursuing, but could simply have resulted in a the investor walking away.

Had I not sent the new balance sheet, the original deal would have likely been signed. But having dug up the mistake, it would have been dishonest to sign the warranties, knowing the balance sheet included a mistake.

But then viewed in the shadow of investment banks frudulent trading, Enron and the flakey reversal into shell companies on the AIM, one can’t help wonder who is being the fool? In reality £20,000 ($30k) of extra creditors on a £750,000 ($1.1m) investment would not have been material to the future of the business post deal, and it would still have left Rummble (after paying all creditors) around £500,000 (~$800k) of working capital. In all likelihood the difference would have been lost in the greater scheme of things.

So, a white lie would have meant the 22% deal would then have been done. That’s unless it was a ruse all along up to this point, as a negotiation strategy. Before you say I’m crazy, it’s not entirely implausible. In psychological parlance it’s known as “the low ball”. If this was the case (and I’d like to think it was not) it would be from my point of view a pretty dirty trick. But from an investors POV, perhaps it is simply a justifiable negotiating tactic. It’s far from illegal and the point of a negotiation is presumably, to come out with the best deal you can for your side?

At the meeting when I was told it was 75% or nothing, Joe Kim indicated that he did not want any longer to do the deal but that his colleague Shiraz Jiwa, did.

Shiraz Jiwa’s background is in distress capital and all the shenanigans of that world. Later, he said words to the effect that he couldn’t believe I had previously negotiated so hard when the company was in such a bad condition. That would suggest to me the change of heart was not a ruse, but simply the last straw for them as investors, struggling to comprehend a struggling start-up, and the balance sheet change could have genuinely triggered some innate reaction to either control everything (utilising this fortunate opportunity to justify taking control of the business) or to walk away from what may have seemed, particularly in their corporate eyes, a can of worms.

Draw your own conclusions.

I negotiated the deal down to 52% from 75% and signed, handing control of Rummble to M8 Capital as the new majority shareholder.

The negotiations during this period were fraught with problems and bad feeling grew on both sides.

At one point M8 Capital even suggested I should pay a $15,000 legal bill which came in from our lawyers during the DD saying that it wasn’t there before. Well, obviously not as it had only just been sent to the company by our laywers. The idea I should pay a company invoice personally seemed rash at best, even if M8 were fed-up with the poor financial condition of the company. What happened to working together to solve problems?

Both sides probably should have walked away.

Post Investment

From a business perspective it was a shrewd move by M8 Capital to gain a controlling stake in a company with great technology. Unfortunately the deal left such bad feelings on both sides, making working together difficult from day one; the relationship since has only ever worsened

M8 Capital took 3 board seats on a 5 person board, with John Paterson (my previous Chairman) and myself. This seemed excessive for a small business, but even practically,  other than votes (when M8 had majority control anyway via ownership) it meant there was little sector experience as none of the 3 M8 Capital directors had any in my space nor with early stage start-ups. Joe Kim would have provided all the business experience required (and made all the decisions for M8 Capital anyway). In short the board was dysfunctional and did not add real value to the business.

The Kernel’s article prints in much detail about what happened next, but I recognise Rummble’s consumer product had a UI which needed serious improvement … and the initial M8 investment allowed us to begin that process.

Iterating on the number of platforms we had already deployed across, even today takes time (that’s why the likes of Instagram stuck with just one: the iPhone). And sadly  subsequent events ensured Rummble version 2 never quite saw the light of day.

It would have been ready for a January 2011 launch and with the aid of Ribot.co.uk (with whom by November 2010 we’d developed an exciting, unique and incredibly simple 3-touch user interface) the whole team was confident of great things to come.

In parallel to this, we had also executed on all the suggestions M8 had made, including a viral Facebook app (which Zuck awarded first prize to on his visit to London in 2010) and a local business platform for retailers and venues, amongst many other things.

Our user engagement levels progressively improved during the 10 months post M8’s original investment, on track with my predictions and adhering closely to our agreed cash flow and burn.

The rest is much as The Kernel reports. In December 2010 Rummble was renamed Rummble Labs. Quite a good name as it happens (it just would have been nice to have been asked about it, as technically I was still CEO when it was chosen). And on January 6th 2011 I was officially no longer CEO of Rummble, after five very tough but mostly enjoyable years.

Rummble Today

With a superb accountancy firm at the helm of Rummble’s accounting since I appointed them in April 2010, balance sheet gremlins are long gone.

Rummble Labs continues to be a business with exceptional IP and today has a B2B product which is a leader in its market.

At the time of writing (3rd July 2012) I remain on the Board and have contributed where I can with business development. Alex Housley and I speak for business reasons, but we are not friends.

The trust network technology is in use by a number of large clients on a commercial basis, increasing the quality of their user’s experience and – most importantly – the revenue from their on-line assets. In the pipeline testing Rummble Labs’ technology are some of the biggest names of the modern Internet.

Rummble Labs then, continues to grow and I expect it to eventually exit thanks largely to the technology which I co-invented (which has continued to be improved upon since I left at the end of 2010) and the hard working development team which has got it this far.

Also the very concept itself (of highly personalised content) even as a business to business API, is finally no longer grossly early to market (you can read more about my views on timing in a marketplace here).

If you have a website which needs to deliver the right data to the right person at the right time, or a  silo of data which needs clever personalisation, Rummble Labs is certainly the place to go.

In Summary

This level of detail about a company’s fund raising is seldom widely discussed until the company has died (at which point few people care) or unless it is re-imagined by third parties (journalists, writers and bloggers), or when looking back at the events from a distance (Microsoft and Apple are the extreme examples of this, with hundreds of books and films published).

The truth is that many start-ups which on the outside look healthy or stable, are often either desperate for cash or have serious problems of another nature, if not with their investors then perhaps their product or service.

Board squabbles are more the norm than the exception and arguably so is the Founder being removed as CEO of their own company, either because:

  1. the company is growing so fast that he is no longer the right person to do the job and is better being “Founder/CPO/something else” or
  2. because the company is failing and shareholders/board/team (or all three) loose confidence.

Lessons Learned

One of the mistakes with Rummble was trying to do so much, especially with a mobile app and a comprehensive web presence. Keeping it simple on mobile today is very important, but in actual fact, keeping it simple as a start-up en general is important, full stop.

Rummbles strategy may have been fine if we’d had a longer commitment (the user growth and engagement curve was after-all going up and to the right) but I also feel M8 Capital didn’t truly understand the challenges and resources associated with building a cross-platform mass-consumer play. Any significant investor must understand the challenges of doing what your start-up does.

As CEO I of course made mistakes also; probably not being ruthless enough in culling projects, nor taking a far more radical approach to try and re-position Rummble’s relationship with M8 Capital, for the benefit of all parties when it was immediately clear things weren’t working. But without control, that is extremely difficult.

My humble advice to Founders of early stage start-ups

is that which you’ll probably read many places else and which some I’m sure will say is obvious:

  1. really make sure you get to know your investors to make sure there is alignment of vision and critically, also of culture. Do whatever it takes but try and understand what makes your potential VC partner tick: go kite-surfing together, go to CASUAL dinners, go drinking. Whatever works. They need to understand and trust you too.
  2. don’t let go control of your company (easy to say, sometimes hard to avoid). In a Series B or C you can expect not to have majority control, but early on you risk everything in the hands of someone else, both your business and your position. In my first few start-ups I didn’t break this rule. For Rummble I did and the results were less than ideal. Before you do it, assume a worse case scenario and then work backward and ask yourself how that compares to alternate choices which don’t involve you ceding control. If you do give up control, haggle hard for serious safeguards and if the investors won’t compromise, you have to ask yourself why? Are they investing in you and the company or just the company? With an early stage start-up that’s an important question to know the answer to. They won’t agree to anything on trust, they’ll want it on paper signed. So should you.

My humble advice to VC’s and investors

  1. is the same as (1) for Founders above. Know your Founders well (of course) but more importantly if it’s an early stage investment, don’t invest in anyone you don’t want over to your house for dinner. If you do, IMHO in the long run it won’t help your fund and certainly doesn’t help the entrepreneur.
  2. a determined Founder is probably the single most valuable part of an early stage business and they could still disproportionately contribute to its success even if he or she ends up not running it. If things become difficult, give a Founder some credit for their ability to be pragmatic and work toward a compromise, because they are also business people even if their outlook and approach is fundamentally different to your own. Finally, if you have never started something from scratch, given birth to the idea and built it up to a point where it could just possibly become the next big thing, consider how you would feel if someone came in and took away one of your children (if you have any) and never returned them. Because ridiculous or otherwise, that’s probably how emotionally attached entrepreneurs can be to their company (especially if it’s their first) because it’s the only way they can be irrational enough to choose tech entrepreneurship as a career to start with.

Here endeth the lesson. And that’s officially the longest blog post I’ve ever written.

Footnotes

Disclosure: The author has contributed x3 articles to The Kernel as an Entrepreneurship columnist at the time of writing this post, on an unpaid basis. The author has no control over other copy or editorial, the author is not consulted on what or when anything is published, there is no commercial relationship and nor was the article about M8 Capital and Rummble at the behest of the author of this blog post.
1 The tribunal case was thrown out after the Respondent (Rummble) claimed that the author was not an employee of Rummble for more than 11 months (despite having founded the company). The key legal take away is twofold: that Employment in UK law is currently defined by a need for their to be a Master Servant relationship between the company and the employee. The employee must serve the company. If you are in control of the company, how can you also serve it? There are exceptions to this and it is an area of grey. The second key legal point is that if the employment contract is signed less than 12 months before the employee leaves, it is the responsibility of the claimant to prove he is an employee. If it is over 12 months service, it is the responsibility of the Respondent (employer) to prove the individual is NOT an employee. As I arbitrarily signed an employment contract before the Series A, the date by chance was February 6th. I was forced out formally on January 6th. I was one month short, despite having continued in the same role for over 5 years; the paper trail did not demonstrate this fact thus the Judge had to conclude the tribunal did not have jurisdiction over the case.
2 Steve Kennedys loan to Rummble was converted into low ranking shares at the behest of the new owners in order to close the 2010 investment, although in addition today I still guarantee the loan on behalf of the company at 15% apr
3  as I recall, any imbalance in dilution in any potential deal with LikeCube was only to appropriately incentivise the management team of both companies. In addition M8 Capital would have no longer had a controlling interest, releasing the management and Founding team to pursue a strategy they felt best for the new entity
The title of this post derives from the 1943 film comedy-drama of the same name, whose title is taken from the satirical Colonel Blimp comic strip by David Low, but the story of the film itself is original. The film today is regarded as a masterpiece of British cinema. It tracks the antagonist who struggles with the new dynamics of modern warfare which do not respect any previous code of honour or behaviour amongst fighting men, whether real or imagined. In other words, in warfare there are no rules.
published Without Prejudice.

The Next Generation Tech Conferences

I think we’ve all been there. Sat in a conference room, probably with no wifi, wondering how long the jabbering idiot on stage will take to finish what amounts to a sales pitch for his company.

Credit to JohnLund.com photography http://www.johnlund.com

Of course not all events are like this, but many are. At risk of never being invited to speak at one again I find the worst offenders are those who should be the best at creating conferences – the conferencing companies who have created conferences for years and specialise in doing so.

Marcus Evans and Informa should be experts in this field, leading innovation and producing the most engaging events. Sadly that is not the case.

The dinosaurs of the corporate conferencing business suffer the same stagnation of ideas and lack of evolution as the lumbering incumbents of so many industries. Unable or unwilling to escape the confines of their tried and trusted product, have been doing the same thing with increasingly diminishing returns to the attendees for far too long.

In 2008 I was invited to an old Munich hotel on a mountain side. Stuck in this rather shabby excuse for accommodation with 14 others (it had not been open for business in 15 years) we were gathered there at the invitation of Harald Neidhardt.

Harold chose 15 people he found inspiring, who respected and liked, from the burgeoning mobile industry and persuaded them to stay in a remote building in the German countryside for a weekend with no pre-conceived agenda, other than to create what he called “MLOVE”.

An abbreviation of “Mobile Love” Harald wanted to harness the energy and innovation he repeatedly stumbled across in the tech industry (he’s currently CMO at Smaato) to create a group whose collective ability and enthusiasm would be greater than it’s whole, toward a goal he had yet to define.

Over the next 18 months, with contribution from that 15 (including Peter Giblin, Jonathan McDonald, Stefanie Hoffman, René Bellack, the Roeder brothers Philip and Michael, Mark “nobody calls him Mark” Schmöger) and some other key people, the MLOVE collective decided that a next generation conference was the best vehicle to execute the chosen mission of: inspiring people to inspire others in the mobile industry through telling stories and sharing experience.

With help from a core team and Director of the first conference, Pete Giblin (a veteran conference Director, Curator and consultant) MLOVE appeared for the first time in June of 2010. Pete’s contribution to the vibe and feel of the event should not be underestimated; he reached into his wide network to find truly inspirational presenters and created a program which represented something truly different – from a budist monk as opening keynote to one of the worlds biggest ever augmented building projection shows (impossible to experience properly on a computer screen) by Projektil.

Jonathan McDonald added his exuberant MCing alongside Pete and Harald and even I pitched in (OK so yes I’m bias) and the schloss became a hive of digital mobile activity. Features.

Since then, the first MLOVE Confestival (a word which everyone felt better represented the highly interactive nature of the event than simple a ‘conference’) has continued to be held in an old East German Schloss (castle) each early Summer.

I then summed up that perhaps MLOVE aspires to take the inspiration, education and high fidelity of the TED conference series and combine it with the trusted community, freedom of expression and environmental consciousness of the Burning Man festival.  With a modest 150 attendees reporting back unanimously with “wow” and “best event I’ve been to this year” in 2010 I think we succeeded in doing that.

Mobile IS the Internet, it’s the future of us all. In 10 years, we’ll scarcely remember the days of tapping at our desktop PC … and MLOVE’s re-imagining of the conference concept seems timely.

As celebrated in the collective conscious theory of French sociologist Émile Durkheim, unique ideas are seldom entirely unique – springing up at a similar time in disparate parts of the globe and in isolation.  In the same way as internet or mobile start-ups, or indeed any business idea, the secret sauce is actually in execution, in other words, talk is cheap.

Thus across in the United States an industry friend introduced me in 2010 to The Future of Storytelling which was a new invite-only conference being held in June in New York. She describes FST as being “..inspired by conferences such as TED, Pop!Tech, and PICNIC, it will gather presenters, performers and educators. The speakers will be a mix of artists, authors, educators, designers, performers, programmers, and inventors, who will share best practices, inspiring creations, and powerful, moving stories.”

Then there was Summit Series – a new invite only conference held on a cruise ship, in a ski resort, the partying (thus building of bonds and connections) being as important as the speakers on the stage.

Seeing the arrival and evolution of Summit Series and other new events reassures me that both those and MLOVE are on the right track; there is an audience and business community readier than ever to engage on a more human level than the dry corporate format of traditional events.

Convergence is not just rife within mobile, online and other technologies but amongst business verticals themselves. An overlap of interests, cultures and profits is being fuelled by rabid globalisation and the ubiquitous information age.

With everything from computing power, to social networks and supermarkets getting bigger and better, more people strive for a personal connection – the irony of the connected, IM, SMS, newsfeed ridden “social” enabled revolution. People are yearning for more meaningful relationships in the real world.

MLOVE is not a big event at around 200 people, but the likes of TED and Summit Series (both of which have a few more years under their belt) have grown steadily as the clammer for access to these unique experiences and the people who attend them, increases.

I believe it’s not so much a matter of conscious elitism by organisers to take the “invite only” route, moreover a profound need to not break the event – not to smother the personal trusted environment they strive to create. It helps create an atmosphere of a temporary “community” where relationships can be forged and ultimately deals done either to stir the capitalist cauldron or the philanthropist’s pot.

Sea Summit, started 6 years ago with a gathering of just 20 people, in 2011 took around 1000 invited people onto a massive cruise ship – dubiously called the Celebrity X – for a 4 days cruise out of Miami, stopping at a Bahamas island for the day in the progress.

I’ve been struggling to describe Sea Summit since attending – it was a hedonistic mix of inspirational speakers, partying, shark tagging (for conservation tracking) partying to Swedish House Mafia DJ Axwel, free booze and a lot of talking. Perhaps then “extreme networking” might be the best description.

At $4000 and up such an event doesn’t come cheap, but it does give you unfettered access to a wealth of knowledge, new relationships and have fun in the process. Shai Agani spoke of his revolutionising the electric car, rolling out a unique but ubiquitous charging network in Denmark and Israel. I met an Astronaut called Scott (no relation) who has flown up and literally fixed the international space station, climbed mount Everest and is now curing cancer with nano technology.

Rob Stewart and I talked about the horror of shark fin soup and his next documentary which is about saving the human race from itself.

Summit Series made me feel on the one hand like a complete under achiever but on the other that I could perhaps contribute value to many of the projects and people from industries outside my realm who need my experience and expertise.

My biggest criticism was Summit Series it would likely benefit from a better geography of attendees (many were from San Francisco or New York) if only as when trying to change the world, it would be good to hear from more of the world.

No event is perfect though and the eager team at Sea Summit have created something from which the momentum is tangible and if the comments on twitter post conference are to be believed, blew many of the attendees expectations out of the water. I’ll certainly be back for more in 2012.

At the more intimate extreme you have the http://www.dolectures.com/ , which have been quietly breaking the mould since 1996. They have a cult following and demand is extremely high. Alan Moore <alanm@smlxtralarge.com> introduced me to DO, saying “Just go”.

Inevitably, the world is full of events the many of which I’m likely not aware of. The few I’ve mentioned represent the future of “conference” events as I would like to see them and I hope they will help banish the un-interactive one-to-many talk-at-me sessions of old.

Rather than lengthen the red carpet, TED have recently widened it introducing TED-X 24 months ago, democratising it’s brand. It’s a model which I suspect others are likely to follow (MLOVE has similar future plans).

In April TED proper also ran a campaign asking potential new speakers to submit a 1 minute YouTube video to be considered for a full audition in New York to potentially speak at the main event. It’s great to see them thinking differently to maintain the flow of disruptive content. If you haven’t already, check out www.TED.com where there is a library of free videos which will lose you for hours.

Back here in the Old World, LIFT in Geneva has a proven heritage of throwing disparate disciplines into a giant melting fondue of a conference. I attended in 2011 after a 2 year hiatus and it didn’t disappoint. LIFT also have a TED-style outreach program – last year I found myself with 25 others squeezed into a LIFT Living Room session in North London – bloody good it was too. (The pic below is from LIFT’s giant

Whether you’re working in tech, social enterprise, non-profit, film or elsewhere, all these conferences will provide value, connections and inspiration. The best test is to ask those who have been.

I write this while I’m at MLOVE Europe 2012. As ever it’s a disparate group of wonderful people in a castle in the middle of nowhere. The rustic adhoc vibe creates an environment ripe for building relationships which last – and the free bar fuelled by the eccentric owner Armin doesn’t hurt either. The next MLOVE Confestival is in Japan Q4 2012. Sign up now and hope to see you there!

..oh and if you want a conference curated, you could do yourself a favour if you give Pete a shout. He’s a bit of an expert 😉

STOPPRESS: And if you’re in to PRODUCT? There’s not question you should track down ProductTank / Mind The Product event 🙂

NB: Lastly, apologies if I missed anyone off this blog post – the MLOVE team over the years has had the support and assistance from so many great people it was not possible to list everyone here!

Will Facebook Ever Hit 2 Billion Users?

I just read Jason Hesse’s recent article on the falling stock price of Facebook. It makes some good points and generally I agree with it’s conclusions around the execution of the IPO and possibly today’s valuation. The multiples on revenue were after all, many times that of Google at IPO, for example.

Some of the other conclusions around future growth, I feel hold less water. Jason states:

“More than 900 million people is enormous, but could the company realistically double its monthly users? Anecdotal evidence would suggest not. ” …. “Naturally, the company’s growth could come from new sign ups. Facebook’s largest market is Europe, with more than 230 million users. This means more than one in four people in Europe are signed up to and use the social network. So realistically, there is little scope for this to grow significantly – if you’re not on Facebook already, the chances are you just don’t care and won’t join anytime soon.”

I don’t think I agree with this statement. Why won’t people care any time soon? I consider Facebook and social networking as a part of our lives, to be similar to the take up of email and other new technology, like the web itself. Even my Dad has a profile now, although admittedly for a 75 year old he is pretty well connected with PC’s, tablets and Android phones!

I also can’t help feel the sentiment of this statement is similar to the naysayers of the web 10 yrs ago; I would conclude social networking is following a very similar growth path.

With 1.5+ billion people on the regular internet but with 5 billion mobile subscribers, who are all fast moving to Smartphones with internet, the numbers also don’t support this statement.

And why would more than 1 in 4 people in Europe not want to join Facebook?

It’s taken just two years for Facebook to nearly double it’s user base.

The real issue IMHO is not that Facebook will stop growing because people don’t want to be on a social network and embrace the sweeping social change which those services is causing, but whether Facebook can maintain and evolve a service which captures that growth.

Given that a lot of the growth will be users who access the service by mobile, this is the second issue which faces Facebook (no pun intended). Can a service routed online historically successfully transform it self to become the stalwart of the mobile world?

In summary then the -in my view inevitable- growth of users numbers in Facebook is theirs to screw. They must:

1) Continue to innovate their product and maintain existing users attention
2) Navigate the cultural preferences of the untapped developing markets
3) Become a truly mobile orientated company, with the same level of UI/Ux on mobile as they demonstrate online.

Arguably they are currently failing at no.3

Finally, there is the spectre of “Privacy”. Jason says:

“If anything, as privacy concerns continue to grow, more people will leave the social network.”

I think this is also unlikely UNLESS Facebook makes a very serious faux pas. Radical transparency is not for everyone but there is good evidence to suggest the trend is in that direction. I can’t help feel this argument, that social networking has a limited growth due to privacy fears, is akin to the talk about e-commerce never taking off online for the mass market because of fears of credit cards not being secure online. In other words, it’s a red herring.

Compuserve was my first ever email address back in the mid to late 1990’s. It then slowly died over a period of years, as destination closed wall portals were trumped by the world wide web. Facebook, if it doesn’t continue to aggressively become more open, may risk it’s position as the ultimate social graph and silo of social data. (BTW, that little button in the top bar,  a globe with two striped lines, took you out onto the ‘scary’ WWW)

Facebook must get it’s future strategy right and that strategy must be around becoming more a platform and less a destination site, if it wants to maintain it’s position as the biggest silo of social data on the web. If it doesn’t do this fast enough, it will likely go the way of AOL and Compuserve before it, or be out manoeuvred by a future more open and yet to exist mobile competitor.

Apple and iOS will not become a smartphone monopoly

I just read this article on Techcrunch about why -allegedly- iOS will dominate the burgeoning smartphone O/S market.

It won’t.

As I said in the comments, I can’t agree with this analysis of the market.

Even from an instinctive point of view, without referring to the market numbers, it is highly unlikely that a high end desirable brand like Apple will become the dominant player in the mobile space. I’m unconvinced they even want to.

Apple will continue to have a disproportionate impact on the direction of the market and likely remain the fanboy and girl object of desire and admiration for the foreseeable future, but do not mix this up with the realities of the wider market.

In addition, Apple remains a more desirable piece of kit for laptops and desktop use with PC’s, but has never been dominant – the arguably inferior Windows O/S has.

Once you do look at the numbers, the likelihood of Apple and it’s iPhone O/S taking an equivalent position to Windows monopoly on desktop, seems even less realistic. Firstly most of the growth in mobile subscribers over the next 3 years will be in developing countries. Second, the bulk of the upgrades from feature to smartphone of western users, will now come from the un-tech savvy. They will believe what the shop sales person says, or just pick the brand of phone they are used to and had before. iPhones will even be out of the reach cost-wise of many Western users, on lower incomes.

Apple is vastly profitable, it does not need to own the entire market and were it to try to it would likely not be the most profitable of operations that it is.

In addition, open ecosystems are more likely to dominate and the Android O/S is free to install. This is without even discussing RIM’s new O/S, or Samsungs Bada (Samsung is the worlds biggest manufacturer of phones).

With only 30-40% of the US and UK population having a smartphone, there is a huge amount of growth to come – but with 3-4 times the number of phone subscribers due to have smartphones, than there are current internet users globally, it is extremely improbable that the phone O/S war will even be just a two horse race, in the next 3 years, or even 5, IMHO.

More reading? I wrote about Android versus Apple some time ago here:

My Prediction for the Future of Nokia

Maybe I’m missing something (I’ll admit I’m not as well versed as I sometimes have been on the machinations of mobile industry juggernauts) but I can’t help feel this cartoon (which I spotted yesterday and felt obliged to graffiti) is the most likely destiny for Nokia:

..and yes in spite of the pretty excellent Lumia.

Will Nokia’s enormous existing user base and continued growth in developing regions be enough to prevent eventual sublimation into Bill Gates Jurassic beast?

I’d argue that the natural conclusion of the Microsoft pact makes the future purchase vital for Microsoft. Some Nokia loyalists may be hearing echo’s from Star Wars popular culture: in the words of Lando Calrissian “This deal is getting worse all the time”.

Discuss.

What RIM Must Do With Blackberry To Survive & Prosper

Anyone with even a passing interest in the mobile industry is aware that RIM has been struggling. From accusations of being an irresponsible conduit for enabling the London riots to flourish* to it’s CEO losing the plot while being interviewed, to it’s ever diminishing market share and reports of delayed handsets, RIM is in trouble.

A phone store smashed in London during the riots. Taken from the Guardian's article - click to read.

(* a ridiculous idea btw, if it wasn’t BBM it would be something else)

Unlike many though, my view of RIM and moreover Blackberry, is not as negative.

If RIM had the right leadership (and perhaps embraced just x1 CEO rather than x2 ?!), it could take this opportunity in turbulent times to change, evolve and grow.

The problem is that, in the same way Microsoft missed the boat with the web and lost the search market (through Bill Gates uninformed leadership at the time) the same way Nokia has (still in my view) not changed radically enough as a business to yet flourish, RIM is not making the gut-wrenchingly tough and transformational decisions it needs to, to fight in this new game, on a new playing field, which has some new rules.

Blackberry/RIM could still recover. They just need a radical strategy and of course one which works.

In short they need to focus on their strengths and get someone capable to sort out their product roadmap and new O/S.

Blackberry's heritage is in efficient, keyboard driven long battery life devices many of which are often used abroad

Three things have kept me using a Blackberry and it is these top three things which RIM should focus on in the short term:

3) Battery life. Traditionally I am used to still having a working phone long after my friends batteries have died a death. They must focus and innovate on maintaining this lead in the battery-life stakes – as there is a big contingent of people out there who dont want to have to charge their phone twice in one day a la Apple iPhone.

Battery technology will eventually improve, but meanwhile, this is a key differentiator.

2) The keyboard. I hate touch screens for typing. The keyboard on the new Blackberry 9000 Bold is possibly their best ever.

They must find ever more innovative ways to integrate this keyboard into devices which will tempt users from switching to touch screen only.

1)  Bundled foreign data ..and this is the most disruptive. This is something no one is fixing soon because its a Golden Goose for the MNO’s.
I do have unlimited bundled international data on my Blackberry. It’s a tarriff I got with the UK’s O2 3 years ago. Sadly, they no longer seem to do this tarriff (which means I have to ignore my VIP upgrade rights and buy my own new handsets).

Why did O2 do this? Why did they stop?

I don’t have answers to the second question, only the first.

My understanding is that the RIM network (which was originally built for international email and push messaging, long before most mobile users even knew what a “data plan” was) is used with data routing (after hitting the cell tower) via Blackberry’s own international network of servers and APN’s (those more technical than me, can probably confirm this as right or wrong).

Assuming this analysis is not entirely wrong, RIM could force a deal with carriers to provide bundled international data on ALL their handsets. This would steal a march against all the other phone providers who don’t benefit from RIMs existing data infrastructure.

Bonus number 4) Run Android Apps. I understood the new version of the O/S should be able to run Android Apps. If it can, this should without question be included as standard, especially giving Blackberrys existing rather woeful collection of applications.

Other than finding a leadership team who can implement these things, at least to recover RIM in the next 12 months, to me these seem awfully simple things to be focusing on.

So many people travel these days, the data plan is the scourge of the traveller. What clearer message to market than “Buy a Blackberry: Get international bundled data. No more data charges”. Add in a fair-use policy and watch your sales rise.