Playing with fire

It's old news now, but I have been thinking about why Vodafone has been running its high risk campaign about it's 3G network that has led to Telecom launching its Commerce Commission action.

If you've missed it, here's the background...

Vodafone's Christmas campaign is all about coverage this year with a tag line of 'NZ's largest and fastest 3G network*' with the asterisk linking to a disclaimer that this is 3G based on W-CDMA coverage.

Technically this is all true - Vodafone have the only W-CDMA network in NZ.

Of course this would be fine if Telecom NZ didn't have 3G network (it does) nor if it's coverage was greater (it is) nor if the speed comparisons were unequivocal (they are equivocal as Vodafone does not have its top speed rolled out everywhere)

Which is why Telecom has taken its commerce commission action.  

One of the sideshows of this has been the pissing contest taking place on Geekzone, which is the wrong place for a PR guy to get cute about what Telecom has said about its current (larger) 3G network which it is about to replace with a newer, faster  3G network. Suggesting that there is a like with like comparison on  a network that hasn't been built and ignoring the current network as it is due to be replaced is just madness. Especially since the current network is still being offered to customers.

I've been in a position where I have provided expert evidence at the Advertising Standards Complaints Authority and the Environment Court. These are not places for bluff and bluster. The Commerce Commission is probably worse. A few well chosen questions and your evidence will be treated with contempt. Placing your corporate view on public sites like Geekzone is great when you are talking about your own company, but taking your competitor's statements and using them for your own justification is really unwise with this type of action looming. I hope for Paul's sake it doesn't get used against him as it would undo all the good work he has done to date being Vodafone's online presence - but I digress, that's not the point I am trying to make.

Here are my points

1. Vodafone *must* have known this action was coming - as I have said 3 things matter to customers on mobile. Coverage, Handsets and Price. Telecom will not give up its local coverage advantage easily as it is pretty much all it has to offer right now. The action was inevitable.

2. Vodafone can't possibly think it will win this - all Telecom has to do is prove to the commerce commission that 

a. EVDO is 3G; and

b. The majority of customers could be misled by this as they don't know what WCDMA is (especially non Vodafone customers who are clearly the target for this campaign). The only people who know are on Geekzone - that's a few thousand- the rest has no idea whether a 1.25 MHz channel or 5MHz channel matter in this debate.

They would have to seriously under-rate the technical evidence coming from Telecom to take this on. It's a pretty simple case and there are still experienced people at Telecom to take this on.

3. The outcomes for Vodafone aren't pretty

a. The maximum fine is $200 k - they would stand to get whacked with all of this

b. The greater cost is the campaign cost - in the best possible outcome, they would have to modify the campaign (maybe to fastest only, or if they were smart, emphasising global 3G coverage. Worst case they would have to pull the lot - that's millions.

c. Which leads to Brand costs - getting nailed on this would put Vodafone squarely into the camp of other large corporates who are just trying to use confusion to gain marketing advantage. Remember that?

d. Worst of all for Vodafone, Telecom would get some confidence, which it badly needs.

4. At best this was only going to be a short term campaign - Telecom's launch of its WCDMA network will give it a coverage advantage based on exactly this proposition. Until Vodafone launches its 900MHz WCDMA at which point it will all be the same.

5. Vodafone have a handset portfolio which is so large compared to Telecom's currently it is embarrassing. Vodafone have 49 on the books and have a bunch of parallel importers as well. Telecom list 22 - but it doesn't take a lot to realise that these are seriously outmoded. If they were playing football, Telecom would be completely within its rights to ask a few players to swap teams at half time just to make a game of it. 

So it seems to be high risk for limited reward. For Vodafone to success against the commerce commission, Telecom would have to end up crying on the stand that they never really had 3G, the ITU got its standards wrong, and it had mis-measured coverage and all it had to offer in mobile for now is legal action. Even then the Commerce Commission might take some pity on them.

So that leaves me with these questions.

Why run a campaign on coverage that is so tenuous and so clearly short-lived?

 Are Vodafone that keen to have a marketing advantage on coverage that they would take this sort of risk?

Why not play to your strengths which are handsets and global 3G? This would just ram Telecom as these will continue to be core advantages for sometime after Telecom launches its new network.

Who is giving these guys advice? This took me less than an hour to come up with - and the Geekzoners have been on the money as well. Maybe they are not taking any advice?

Have engineers taken over the marketing team at Vodafone? I thought the industry pretty much agreed years ago after the Qualcomm patent wars that it didn't matter if it was W-CDMA, CDMA2000 or 4G - customers just don't care so long as they are getting the service where they want it.

I think this is similar to the iPhone situation earlier this year - Vodafone are so looking to land a king hit on Telecom that they have lost sight of how to do this without misleading customers. Sticking with their core advantages may not be sexy but it would leave them with a very strong position and no risk.

The only other strategy they could possibly have is force Telecom to launch early with an underbaked network which will take them years to recover from. Given Telecom delayed launch until mid 2009 that isn't going to happen.

My call - Commerce Commission will rule against Vodafone - Vodafone will have to pay the fine and pull the campaign. I'll put a bottle of good quality scotch on that for any takers.

This leaves the door open for Telecom to innovate - ideally on data rates - with their new network. I think Vodafone will find that with all the changes at Telecom at the head of Mobile they are probably safe on that front for a while.

How to spend $1.5 Billion

Did a brief bit of commentary on TV3 yesterday on what the incoming National Government might do with the $1.5 B they want to invest to deliver super-fast broadband. Apparently I am too serious - I think this might the first time anyone has ever suggested this!

I wrote some notes while I was thinking about this, and am becoming to be more convinced that a quite different approach needs to be taken to work out what to do.

Before you read this you need to know that I have a bunch of interests that may or may not conflict me. But at least you know this now!

1. I am a Director of InternetNZ - a policy and advocacy group with a mission to advance the cause of the Internet in NZ.

2. I worked at Telecom for a while - like 14 years a while

3. I hold Telecom shares still - (ok I missed my window to sell...)

4. I have stakes in, and have worked on a proof of concept for, web based businesses.

5. I support Tottenham Hotspur which makes me something of an optimist.

From what has been said and written to date, the thrust of this investment has been around Fibre to the Home. While this is definitely a good idea, I am not sure if it is the right idea for now.

We have to take a step back and ask ourselves - what is the problem that we are trying to solve here?

In my view the main problem we are trying to solve is to improve the productivity and competitiveness of NZ. Sure there are a bunch of second-order issues (e.g. ameliorating the impact of the financial crisis, keep up with international and technology trends, allowing kids to social network) but the number 1 issue is that NZ's productivity needs to improve.

This is not my idea - Mark Weldon and David Skilling through the NZX blog, and Lloyd Morrison, through the Measureable Goal for New Zealand paper are doing a great job of leading this debate.

What's also clear from the NZX blog is that there are a heap of people who have good skills who are willing to contribute their time and energy to shape this debate. Free resource! Awesome!

It's a selection of people from this group (and others) who should get together real soon to shape this debate. The participation criteria for this is simple - you have to have had experience in lifting productivity in your domain and be a contributor to the debate for the greater good. Selecting it on the basis that every possible interest has to be represented will lead to failure. Furthermore devolving it into interest areas (eg Broadband only) will also mean it diverges from a meaningful goal. That will lead to the phenomenon of 'snouts in the trough' - the people who show are the ones who want to get their mitts on some of the $1.5B, as opposed to driving productivity in NZ. Keeping that off the table for now is a good thing.

Note at this point I still haven't talked about the broadband investment yet - that's because it can only start to be meaningful once the productivity goal is set and all the ways to improve it over the long-term are put forward. Despite my background I am open to the possibility that there are other ways to make this happen - including tax and regulatory structures - that could be more effective. However I would be very surprised if Broadband was not a part of it.

So this gets me to the current issue - should we be spending this $1.5B on Fibre to the Home or on something else?

My view on this is clear

- Fibre to the Home is a great end-game to aim for. 

- Good quality ubiquitous broadband access for homes and businesses is an important first step. While good progress is being made here, there are still inequities in the rural access network which impacts one of our most important industries - agriculture.

- The bottlenecks being experienced in our current broadband network are starting to point to transport issues - both domestic (from DSL cabinets to exchanges) and international.

- $1.5 Billion sounds like a lot but it gets gobbled up pretty easily when rolling our nationwide infrastructure - and it isn't enough for a nationwide Fibre to the Home network.

- DSL 2+ and its variants that run on existing copper lines are able to deliver plenty of access bandwidth for the next 5-10 years.

So if it was me, I would be using the money in this way

1. Improve the overall quality and reliability of the access network nationwide. This probably means

- some more cabinetisation of existing exchanges in fringe areas and development of some rural infrastructure (either fixed wireless or wired - not fussed)

2. Improve the regional transport network - provide enough capacity to allow for -say - on average 1Mb/s per line (note this was engineered for about 32 kb/s per line up until recently - maybe it still is)

3. Invest in a more effective international connection - we need better capacity  and peering charges to ensure we have the best connection possible to the rest of the world.

4. If there's anything less (I doubt there will be much) put that towards targetted Fibre to the Home.

This approach works because it

1. Delivers a tangible outcome - better transport and more ubiquitous access will lift the overall broadband performance for everyone

2. Does not preclude FTTH investment - in fact it probably makes it more effective. Cabinetisation helps the case for fibre. If you rolled out fibre now with the existing transport infrastructure, you would need to make this investment in addition to get the full benefits

3. It can probably get done in one government term if they got moving in 3-6 months.

What do you think?

Obama, the hype cycle and fish

Along with a few billion of my fellow earthlings I've been following the election in the US today.

A huge day.

You gotta like the acceptance speech of Obama - hardly referred to himself, but primarily to his call for change. Masterful. This quote is the one I liked most. 

This victory alone is not the change we seek. It is only the chance for us to make that change. And that cannot happen if we go back to the way things were.

He gets change - and the fact it's never done in one big moment but lots of little moments. Claiming victory at this point for his position just would lead to failure

I hope his advisors are telling him about the Gartner hype cycle.

My gut tells me that he gets it, but there are going to be *a lot* of people out there who will be going through the trough of disillusionment - probably within the next 6 months - as he tackles some big global issues. As long as he is upfront about what he is doing and why he'll make it. (Note to self - must be careful about the advice I give incoming US presidents as will most likely be fairly opinionated and, while based on good experience, may not scale up so well)

Arlene and I though were lamenting the lack of leadership in NZ. Both McCain and Obama have shown real personal courage and control in their speeches tonight.Best quote of the night from Arlene 'Where is our Obama ?'. Quickly followed by 'All we have to choose between is a wet fish and a fried fish.'

There are a lot of people bagging ACT for having Roger Douglas in the line-up for this election but at least he was an agent of real change - whether you liked it or not. I almost feel like voting no-confidence this time - it's just that isn't even an option.

Christmas comes a year early for Telecom

Unfortunately it's not good news.Christmas offers for 2008 arrived in 2007...

Handsets offered for this Christmas are pretty much the same as last Christmas.

It really seems as though bridges were burned with CDMA handset suppliers - nothing of note to be offered this year at all.

 This will be very easy for Vodafone to trump should they choose to.

Sadly I pick about about 4-5% market share loss between now and T-Day. That is going to take a couple of years to win back.

Only in San Francisco....

Do you see professional bloggers from NOTCOT on a lawn in the Presidio opening up their new MacBooks, so they can blog about it

Stunning machine - single block of aluminium, backlit LED, and laser cuts for indicator lights.

Filling the leadership vacuum

A while ago, I posted about the gap in leadership that resulted when Rod moved on from personal blogging.

Yesterday I was very disappointed about the lack of courage from National to respond to the crisis facing NZ and the world with the current financial meltdown. Basically both parties have put their head in the sand because it *seems* like this crisis hasn't had a practical effect yet on NZ'ers. This is simply just a matter of time until it bites.

My view is that in this time of crisis, there is no better mandate to be sought than to fundamentally restructure our economy to make us more competitive. Basically there is a clear requirement that we can't do the same stuff over again and expect to succeed.

National's economic policy stepped away from that challenge. Labour isn't any better.

I think Mark Weldon and David Skilling's effort to post a different way *and* be brave enough to say 'it's draft, how about you shape it with us' is, quite frankly, superb. They are leading a conversation that our politicians don't have the skill or the courage to engage in as they are too worried about their own personal position. Honestly, a vote of no-confidence is the best option at the moment.

I don't agree with all of the solutions but I strongly support the principles of 

1. Creating an environment where NZ businesses can initially survive and then be best placed to succeed.

2. Effectively advocating a raid on global talent by making it more attractive to the type of people who can drive productivity for NZ to generate a large proportion of that productivity here in NZ.

I will be adding my 2 cents worth of ideas of how to make these happen - if you care about the productivity and future of NZ Inc I'd encourage you to do the same. Even if you don't agree, be part of the conversation and make a difference.

One down, one to go

Over the last weekend, TelecomOne took place.

Ben and Mauricio's posts sum up really well the types of things that were covered over the weekend at TelecomOne. Big cultural shifts. Noticed by externals. All good.

I didn't go. Arlene and I have an understanding that we make enthusiastic mutual agreements for what we both do. We weren't both enthusiastic.

Despite that, or probably even because of my lack of attendance, TelecomOne was a roaring success.

There are a bunch of people within Telecom who have now had a great experience in terms of getting together their ideas to make Telecom work better. Awesome.

I have two requests for Telecom people.

1. If you attended TelecomOne

The most important thing they have the responsibility to do now is to do something very different in their day to day work even though the prevailing culture will not be that supportive.

2. If you didn't attend TelecomOne

Don't write this off via the Telecom clobbering machine - attendees gave of their own free time and energy to make this happen. Take the time to engage with them. Don't engage over a meeting - just get in a big open space and start sharing. TelecomOne isn't just about the content that was developed in terms of ideas and plans. It's about a more collaborative (and fun) style. 

TelecomOne was spawned as an idea out of the last KiwiFoo. Gripnostril (when can we tell people who you are?) has been the power behind this and is a great example of how 8 months of tenacity and perserverance will really pay off. Well done - take credit for it - it was your idea. Great leadership.  'If you do something with it, it *is* your idea'.

TelecomOne was one of two ideas that I really got excited about after I attended KiwiFoo earlier this year. The other one is about 3 weeks away from becoming real. 

Thanks Nat, Jenine and Mahurangi College for providing the environment where these ideas can flourish.

Pain is (apparently) good for you

I've been spending a bit more time on the bike these days. Riding up the hill to Bodysnatchers from Radiohead today. Rocking guitar is perfect for inducing hill climbing pain. Especially just before the 3min mark on this track.

This has to be contrasted with a couple of weeks ago where the last song I heard before going outside to shift a cubic metre of dirt was this classic from the Wiggles. 

I don't know what hurt more at the end of the day - my arms or my mind. I do believe there is an art to choosing the song you last listen to before you walk out the door.

The only thing we have to fear is fear itself

I've been closely following the developments in Atawhai and Titahi Bay relating to Telecom's difficulties with the local community following its proposals to install mobile phone sites adjacent / near to local schools.

Some background if you don't know me...

When I joined Telecom I was part of its mobile engineering group. Over my time at Telecom I was involved in probably the most contentious period that the local mobile industry faced. Networks were moving from being carphone based to needing to meet customer requirements for mobile handsets that were used indoors. Network sites were moving from relatively invisible locations to being required to be located in the community.

I personally fronted up to numerous community meetings, resource consent hearings and also gave evidence in the Environment Court. I also spent a lot of time visiting concerned residents in their homes to talk *with* them (as opposed *to* them) about their concerns and options we had to address them.

I was often asked whether I would consider installing a mobile phone site next to my own house. I was (and remain) so confident about their safety that my desk was located about 15 m away from a very busy urban site , on the same level.  I ate my own dogfood.

At that time, as of now, the most contentious element of mobile phone sites  was the issue of whether they were safe from a health perspective.

It's a totally understandable question - these installations are characterised as being physically out of proportion (15 - 20 m high) with the local environment (especially suburban areas), emitting something you could not see, hear, taste, smell or feel. It's the perfect unknown threat.

Furthermore there is a sense of lack of choice about these types of installations - no-one really wants them around yet they do want the utility that mobile phones provide.

In short I seriously empathise with people who have genuine concerns about mobile phone sites, and moreso if they are concerned about their children. They are feeling a real emotion.

What I take issue with is people who should know better, and who confuse this issue with many others. They stir up the local community and quite often, in my opinion, raise a spectre of concern that causes so much stress for the individuals that is much more damaging to the health than anything a mobile phone site could possible cause. These types of sites are the result. 

The two main arguments being used now are the same as 10 years ago

1. Mobile phones are new - not enough time to prove whether there are long term effects.

Some studies are showing health issues related to mobile phone sites - we should be cautious about their implementation.

2. Mobile phone sites are like power lines and there are cancerous effects from power lines so the same must be true.

I have to answer these points 

1. This technology is not new. Mobile phone technology has been around for 20 years. Furthermore it's based on radio technology that has been around for over 100 years. If long term safety issues were going to arise they would be found by now. 

Furthermore the World Health Organisation has spent $250m on this issue and continues to research it. 

2. Mobile phone sites are based on Electromagnetic frequency (EMF) transmission. High Voltage power lines are based on Extra Low Frequency (ELF)  electromagnetic frequency (EMF).

The World Health Organisation (WHO) rates ELF as a possibly carcinogenic to humans. This is on a three point scale of carcinogenic, probably carcinogenic and possible carcinogenic. Note that gasoline engine exhaust is in the same category of possibly carcinogenic.

So that's the ELF side (ie high voltage power lines)

WHO has this to say about EMFs specifically from mobile phone sites.

From all evidence accumulated so far, no adverse short- or long-term health effects have been shown to occur from the RF signals produced by base stations

Telecom has clearly made some errors on judgement in how the consultation was (or more importantly wasn't undertaken). This can be resolved by respecting that those who have fears are genuinely concerned, respecting that and trying to find a mutually agreeable solution.

But to see Nick Smith and Sue Kedgeley suggesting that radiations levels are high and that the Crown would be liable for compensation if there are health affects are purely grandstanding and not adding to the debate. Both of these people should know that the Environment Court in NZ has made it clear in its judgement related to the case of Shirley School that other communities should refer to this decision. 

What is key for Telecom now is to spend lots of one on one time with this community to rebuild trust and come to an understanding of how to best work together. It will only be through respecting the community's concern will any progress be made.

It doesn't really matter what I say I guess - it's what I do.

Ella has just started at a pre-school two days a week. There are two sites within 100 m of the pre-school. My position on this issue is clear.

Why your CEO needs to support innovation initiatives

I am on a roll at the moment on innovation in corporations.

There is a universal success factor that applies to all corporates I have talked with who have had some success with corporate innovation programmes.

The CEO has to support it.

The reason is simple.

Any innovation programme that is undertaken within a corporate is disruptive by nature. It usually arrives at products or services that cannibalise existing product and service revenues. By implication it threatens the certainty and security of the remuneration package that people currently enjoy. 

Naturally people respond - they try to remove what it is that is threatening their security. Consciously or unconsciously, innovation initiatives are constantly attacked from within. Call it organ rejection if you like.

This is where the CEO comes in. 

He or she does not have to 'get' innovation, but they have a role in ensuring it has enough oxygen to survive. That it doesn't get slowly suffocated by the inertia / momentum of the 'here and now' business.

This means setting up a structure where as few as possible senior decision makers are involved in the process of deciding which ideas that are spawned from the innovation programme are taken forward into development.

This is something I found personally very difficult in my role in running Telecom's innovation programme. My preferred approach is to enrol as many people as possible in assessing an idea to get buy-in. That doesn't work when you are asking the turkeys to vote for Christmas (no offence intended by use of the term 'turkey' - honest!). You can (and should) share the ideas around and solicit them from everywhere, but the actual decision making needs to be held very tightly.

The CEO has to support this type of very tight structure. Otherwise it's a worthless investment and just frustrates everyone.

So I was super pleased to see this tweet from @gnat yesterday. 

@gripnostril and I met w/ the CEO of Telecom today. He is bigtime clueful, grokked Foo Camp faster than anyone I've ever explained it to.about 12 hours ago from twhirl in reply to Gripnostril

He has been working with @gripnostril to get some time with Paul Reynolds, Telecom CEO, to pitch the idea of a foocamp style event for Telecom NZ.

Paul has supported the concept but they needed to get some facetime with him to see if he *really* supported it. 

He does. Bodes well for the long-term survival of the company IMHO.

5 easy questions from Sun

After writing my post on innovation a couple of days ago, I remembered a conversation I had with some guys at Sun around the same time.

These guys ran Sun's R&D centre in the USA and are tasked with developing new technologies and business ideas for Sun. Sun also had their view on Innovation with a little i or Innovation with a big I. They called it "faster,better, cheaper" or "brave new world".

As part of their role in creating an environment where innovation could flourish,  they gave each staff member a day a week to work on anything they liked. The only limits were 

1. The project had to be declared (ie you had to say what it was)

2. You couldn't spend more than $500 (i.e. creates scarcity which requires some kind of innovation to overcome it)

3. You have to answer 5 questions to start

They are simple to ask, searching and they work.

The questions are

1. What's the problem you are trying to solve ?

2. Who is it for ?

3. How will you know when you are done ?

4. What's the artefact you are creating ?

5.  How would shareholder value be increased through this idea ?

In a corporate world, question 3 can be the hardest to answer as you can often really never know when you are done. Having an honest answer to this upfront makes it easier to weed out the ideas later on when it is clear you'll never be done.

I use these all the time now when I am testing a new business idea for myself or others. They are also really useful when you get too far down the hole and need to remind yourself why you are doing what you are doing.

Paying back in spades

Since going on sabbatical in July this year, I've had the odd moment where I've been worried. Worried about cashflow (pretty much all out at the moment) and whether I am missing out on career and personal opportunities.

Those are real worries - but they are completely outweighed by the good stuff.

Today was a great example of the good stuff. Decided to get along to the Hutt Valley Gymnastics Centre for their GymPlay session. 

It's tucked away in Gracefield - the industrial area of Lower Hutt. You go inside a non-descript warehouse to find a real gym.

Sprung floors, trampolines, beams, crashpads, parallel bars, rings, pommel horses. You name it - they got it.

Kids can do what they want. Ella zoomed around trying everything- I had to show her how to use the equipment. Never used one of those springboards onto a pommel horse before - they are AWESOME!

All for 6 bucks for an hour - I easily got $30 of value myself :)

Eventually I will need to do some kind of full-time work - I am making the most of this time while I can.

Innovation with a big I or a little i?

I'm mad about the continuing mis-use of the term 'innovation'

By those apparently in the know it is held up as the solution to many business or national productivity woes (we just need an innovation programme), by a lot of people in corporate world there is a cry of 'if only we were more innovative' when getting beaten by the competition. It's a term used by a number of people with their snout in the trough - "if you removed this obstacle or gave me this resource, then I could be more innovative". I am mad because it's never well defined and used so loosely you can't really do anything with it. It's been captured as a 'buzzword' that now makes it less than useless. It's time to change that.

There are a few blogs that I have read recently that start to point to this and what to do about it. Gripnostril in his two blogs (I personally prefer 'Hammer' as the cynical view. Do the opposite of what it suggested here and you'll be on the way) has strong views on how you can make innovation work in a corporate.

SilkCharm also has some views of how it is being addressed by the Australian government. The dissection of the Australian government policy to drive Innovation being published in a document that is DRM locked does remind me that there are good reasons not to move to Australia.

This gets me back to the best conversation I ever had with anyone about Innovation was with a Microsoft SVP in a bar in Seattle about 3 years ago. I always go back to this view when I am being assaulted with 'innovation-speak'.

His view was simple.

There are two types of innovation - innovation with a big I and innovation with a little i. You need to know what it takes to play in each domain, and decide based on your capabilities which one you are going to go after.

Innovation with a little i - this is about doing things differently within the same market. This is about taking stuff that already exists and reconfiguring it in different ways to solve problems customers already know they have.

This fits well under an existing General Management structure and suits large corporates that are fast followers and generally market leaders. They can see what is or isn't working with those who get to market first and apply their organisation's skill and expertise to make it more efficient or tweak it as a result of their scale. He saw Microsoft operating well in this space.

Innovation with a big I - this is about creating new markets. It requires long-sightedness and thinking about the problems customers might have in the future.It requires things that exist and things that don't exist. It requires perserverance and patience and all those things that happen when you start a new venture. It needs investment but not necessarily bucketloads of cash (in fact this kills innovation with a big I). It needs the CEO to drive it. And it needs to recognise when it turns into innovation with a little i (ie get a General Manager to run it then). There are very few innovations with a big i. The iPod only makes it because it created an online music market.

Long story, short - by the time I was being told this MS knew they had been well beaten by Apple on digital music and their initiatives (Windows Media, Plays for Sure, Urge, Zune) were guaranteed losers as they were looking for one hit wonders based on innovation with a little i. They were following, but too late.

MS was in the process of launching Xbox 360 at this stage and realised they were being hammered by Apple in the digital music race it makes me think that perhaps they applied this wisdom to Xbox only.

I have thought about a couple of other conditions that are necessary since this conversation

1. In either case you do need an organisation that is accepting of risk. Risk is lower with innovation with a little i but it's still there. There are no guarantees that you will be a great fast follower (Zune vs iPod a great case study). It's just that the chances are better. If your organisation is risk intolerant it's quite likely that you won't have any innovation - and that's quite ok if that is not important to your business.

2. Innovation only occurs when your customer says it does - that can be when your external customer or external customer. I learned this lesson after spending years driving mobile product 'innovation' that was technology based (mobile video, mobile music etc etc). Customers rated $10 text - a billing plan - as the most innovative thing Telecom had ever done as it solved a problem in a way that worked for them.

3. It's my personal belief that Innovation really flourishes in an environment of scarcity. Really innovative stuff happens when there are resource constraints or desperate market share positions. that's because it requires strong belief and a need to 'lift' Human nature says you don't lift yourself when you're comfortable. Providing a bunch of incentives for innovation is counter-intuitive in my mind. Government and internal corporate programmes have to provide an environment where risks can be taken (and in fact rewarded) and that is much more important than having buckets of cash to throw at a problem.

Next time you are talking about innovation ask yourself this

1. Is this innovation with a little i or a Big I?
2. Have you got the pre-requisites to make it work - how much risk will you really take and what are you prepared to lose, even if it doesn't work?
3. When you are looking at Apple and saying you want to be like them are you thinking about the innovation with a Big I bit (i.e. making the ipod bet with  years in gestation and several years to payoff) or the innovation with a little i bit (MacBook) or the design aesthetic. All very different.
4. When you answer Yes to question 3, think about how Microsoft did the same and still couldn't do it and ask yourself why you'd have a better shot ?

5. The next time you want the government / corporation to fund your next innovation programme - are you making your lack of appetite for risk someone else's problem? The first innovation will be getting started when you have nothing apart from your own skills.

You know your blog has made it when...

You get comment spam ?

Or what about a comment that seems somehow relevant but is basically a poorly disguised link to an ipod battery site?

This comment at least said I have a nice blog...

Save yourself the trouble and don't bother with their site - pic below is all you need.

Feel free to advise on how to stop this type of rubbish...

Add your WiFi hotspot to the iphone / ipod Touch database

I have been looking around for a way to do this.

Apple don't run this database themselves - it's managed by a company called Skyhook. Given Apple's descent into evil that might provide some comfort to you non-Apple fanboys out there.

It's easy.

Go to this link.

Enter your address and fiddle with the marker to locate it correctly.

Enter the MAC address of your WiFi router - you'll probably need to google the model of your router to do this.

Wait 7 days - when you use the maps application on your iPhone / iPod Touch, hit the center button on the lower left and Boom - there you are.

Will probably help a bunch of other apps that use this data - would love to know what they might be!

Web + Wellington - FTW

I was lucky enough to catch up with Rick for half an hour or so today.

Great conversation which reminded me why I enjoy working on web stuff in Wellington

1. You get to do everything - Rick was saying how some lawyers specialise (Telco Law, Media Law, Privacy Law)  - with Internet Law he gets to do everything, all in the same day for the same client probably. It's the same for me - and I get to work with barely formed organisations (like my own!) all the way through to NZ's largest corporates across a whole range of areas. Brilliant.

2. Wellington is a great place to work - networks are open, people are visible on the street (even though today was a bit drizzly) and if you play your cards right you can bump into Rod as he wears a path between Prada and Xero HQ. Contrast that with Auckland where all the energy is inside the buildings or in cars and Wellington just feels like a good place to do business.

3. Well -informed debate  - with the InternetNZ members list you know exactly where a bunch of well-informed  people can really debate an issue to determine if its going to make a difference in NZ. Great example of the power of the 'net to facilitate quality people working together to make things happen.

We do miss Rod's blog - gaping hole in raising issues that can be debated in a more open environment. Although reading the blog and the Astoria post made me realise I forgot to pay for Rick's coffee when I left - whoops...

Two diametrically opposite Apple experiences

Two very different AAPL experiences today

1. The Bad

Graph says it all - stock price is seriously tanking. I am not so much of a fanboy that I will hold onto this forever. 

Managed to get out a 'local maximum' but it's still hurt.

According to Valuecruncher, it's still overvalued. I'd say that might be the case but getting in once things settle down  could mean some profit. 

2. The Good - here's the reason why I would still invest. The Remote app has been updated to allow Genius playlists to be set remotely. I am using Genius a lot since iTunes 8 came out and having to go to my Mac to set it was starting to annoy me. I've become somewhat reliant on the remote app.

Why I like apple stuff is that this stuff just happens - most other companies who deliver media products seem to leave these gaps going on forever. Somehow AAPL seems to work out what's important (to me at least) and makes sure it gets delivered.

Ben blogged about how can Apple get away with being evil. My view on this is clear - it has built a reputation over the last decade of delivering on its promise. It is having some mis-steps of late but it does this more often than not. That's why people cut them slack. In my mind it's a great way of building your brand.

MacBook Pro Hard Drive Upgrade

My MacBook Pro's 100 GB disk has been sitting around 85% capacity for a while now (mainly as I have a partition running WinXP via Parallels) and I decided it was time to upgrade. Combination of storage and a suspicion that the lack of space was impeding performance. I have been putting this off for a while as it is a tricky procedure.

I sourced a 250GB Seagate Barracuda drive (thanks Philip), took a clone using SuperDuper and performed open heart surgery. Took about an hour but given local prices to do this are about $150 NZD this seemed like the way to go. It is a little bit fiddly but the instructions by Extremetech are really good. If a Klutz like me can do, pretty much anyone can.

The only thing I would add to their notes is to test booting your MBP from the cloned drive (just hold down 'Option' while booting the MBP and select the cloned drive - just to be sure it works before going through the process) and don't slide out the tabs holding in the RAM. Very tricky to get back in.

Don't spend too much time looking at your disembowelled Mac per the pic above - kinda like looking down while walking a tightrope I reckon. I am breathing a lot easier now everything is back together.

Now I have space to burn and startup and responsive of apps is *heaps* better.

How your company's reputation improves speed to market

I caught up with a couple of ex-Telecom guys on Friday for a beer. They are both at Kiwibank now and we got talking about the differences in both companies.

The most interesting story that came out was about Kiwibank's mobile banking application which was released for iPhone after 4 weeks of development and recently won a TUANZ award. It's now available for most major mobile platforms.

Apart from a number of internal things that Kiwibank do differently (easy access to decision makers and lightweight funding and development processes) the biggest difference in their mind was the impact that having a very positive reputation meant. Effectively they could get 80% of the proposition right and people (market observers and customers) talked primarily about that as opposed to the 20% that they got wrong. In their Telecom experience there was no way that would occur - all you would heard about was the 20%  that was wrong.

Practically that meant that Kiwibank could

1. Take 3 weeks to develop a basic iPhone app

2. Take on board customer feedback, promise to change it and update it

3. Extend it to other platforms (Windows Mobile, Symbian and WAP)

instead of having to take a punt and do it all in one go.

Kiwibank's reputation means that they are permitted to get things out there that aren't spot-on *and* are trusted to put it right. My guess is that reputation would probably have saved them $100k on this development alone. Add that up across everything and you can see why they are making big in-roads.

Pretty simple lesson - strive to build a reputation that you can be proud of and the opportunities (and rewards) follow.

O for Oarsome

Got a heads up on this book a couple of weeks back from this guy.

I worked with Kevin at Telecom and was stunned at his story then - rowing across the Atlantic after living the corporate lifestyle. This book was actually stolen from his car (on his laptop) while at Telecom so I guess he wrote it all again. He left Telecom and went to the South Pole unaided and now does public speaking gigs - also impressive considering the speech impediment. Sometimes when he was sitting in the office in Auckland blocking out the world with blu-tack in his ears you could see how someone could be focussed enough to make it happen.

 I love this 150 word summary of the book

“I have a traumatic pizza ordering experience and stop being immortal. I quit my job, leave my girlfriend, sell my house and go live with Mum. I watch a lot of daytime TV. The ‘How's Life' show decides that I row the Atlantic. I team up with the original Naked Rower, we struggle to raise money and start building the boat, I start training insanely and nearly lose the plot. Find another rower, lose another rower, get another rower. Start the race (badly). Row into storm. Take the lead. Row. Lose the lead. Row. Row harder. Nothing happens. Row until we hallucinate. We start to close in! Seats break. Rudder breaks. Another storm. Neck and neck as we sprint to the finish. Capsize and thrown out of the boat. Get back in. Get to Barbados first! Yay! Get protested a gainst. Boo! Win at the protest hearing. Still living with Mum.”

There are quite a few extracts from the book on the site - the section about how he decides to row the TransAtlantic race as a result of his concerned Mum's question to How's Life is too funny. 

Make a great gift for someone going through a mid-life crisis.

Black & White - a customer-centred mobile operator in NZ?

It was good to see some broad coverage of Black and White's Mobile offering - currently under Beta launch in NZ in Computerworld, Stuff and Geekzone. I worked with Johnathan during his time at Telecom and hope he and the team at B&W do well.

Most of the basics have come out so far.

B&W are re-selling Vodafone's existing offerings (including plans according to Computerworld) and providing their own branded handsets. They are solid mid-range handsets including a decent enough Nokia 6225c.

Feature-wise this looks like it will be targetted at the SME professional - a good niche with basic voice, text and email capability. 

There are a few things that particularly interest me.

1. The launch approach - a slow trickle to get this right is a great contrast to Telstra Clear's launch last week which went above the line with no real behind the scenes leg-work.  I think this 'slow' approach will give them a heap of speed - just by being so in touch with customer wants.Assuming that B&W will actually make changes based on Beta feedback, this will mean that B&W have a chance of surviving - more so that TC's proposition. Add to that the fact they are planning to add 1000 customers after the Beta, if things go really well for them they have constrained supply to the point where there will be value in just being one of the first 1000 customers.

2. Customer approach - it appears that B&W are looking at a proposition where business customers are not locked in on contract. This is very new in the NZ market and is a hard one to follow for Telecom and Vodafone as their accountants really won't like the idea of revenue uncertainty. But it's a massive value proposition for customers that will probably engender strong loyalty to B&W until the others follow. It's the approach of 'We are honoured to have you as a customer' as opposed to 'We are so scared of losing your money we will lock it in'.

3. Despite the comments on geekzone, the margins for a mobile reseller are pretty slim. The costs to acquire and service a customer are significant so you can't just look at the retail price for a mobile minute vs. wholesale. The Retailer has to cover service costs, handset subsidies etc etc. If you can get 10% margin out of that you are doing extremely well. B&W will only survive if they are able to reduce the costs to service and acquire customers and still provide better than the current standards of service. That means on-line, customer collaborative channels.

4. Value exchange within the Beta - this is brilliant. Sign-up your first 100 customers via Geekzone. Give them free service. Get them to test your products. Take on board their comments. Boom - there's your first 100 sales people, and free testing. Pretty good for a company of 10 people. 

5. Break-even point - B&W are playing in the SME space, traditionally the highest ARPU mobile customers. That is not necessarily the highest margin but it's an area that cellco's fight for pretty agressively. My guess is that if B&W were able to gain 10% of this market (say 50,000 SME's) that would put them in a good place. That might be enough to make Telecom and Vodafone start to follow suit on no contracts.

I think based on this approach and without bundling this will stand up pretty well against the other Tier 2 providers. It will be interesting to see whether NZ Communications takes a similar approach, and just compete in the market, or whether they will continue to blame the big guys for their lack of progress.

My guess is that the bulk of the B&W customers will probably be Vodafone to start with - they are the customers who probably see less value in a bundled offer. This is not at all bad for Vodafone - they get the wholesale revenues and reduce the costs of servicing these customers.

Where it will get interesting is when B&W start offering their own plans, and maybe providing some more utility with customer call data to improve the service offering. In the meantime, don't expect this to change the market for mobile data plans.

Abel Tasman Coastal Classic: The Good, The Ugly and A Laugh

Sometime in January this year (I remember the night well - I announced my resignation from Telecom the next day) I was out with some of my colleagues and a couple of beers in, Dale and Kirsten said they were thinking of doing the Abel Tasman Coastal Classic in September.

Given it was

1. A few beers into the evening

2. 8 months out

3. I knew I'd have training time

it seemed like a perfectly reasonable thing to do.

The event is pitched as a 33km run along some of NZ's most beautiful scenery. Train for it like it's a marathon. Fast forward to last weekend, I thought I was in reasonable shape. I had managed a few 3 hour runs and was feeling pretty good.

The event kicks off with a boat ride to the start - worth the price of admission alone - it was stunning. Clear morning, dead calm - beautiful.

To make a long story short, I was trucking along well - got to the 21 k mark in a very comfortable 2 hours and thought that I should be able finish in 3 and a half hours. Genuinely enjoying the scenery and the track. I had been warned that you feel like you start going backwards around this point so I was keeping some in reserve. Around 2hr 40, I felt the first sign of cramp in my quads. No problem, I think, I'll take some water in and just throttle back a bit. No improvement. Still, no worries, I seem to be running ahead of the few people in front of me and they are not showing any inclination to pass. Km's seem to be clicking past more slowly now - I start wondering if I calibrated my footpod on my Polar correctly. Cramp definitely not improving. Couple of people pass me that I thought I passed 30 minutes ago - I am slowing up. Uphills I am catching people - can't keep up downhill or on the flat. Around the 30km mark, I think 'only 3km to go' but I can't see the end. Drinking like crazy, quads on fire. Remind myself not to stop and stretch - did this once before for sore quads in a half ironman which kicked off a cycle of paralysing quad and hamstring cramps. At least I can still move my legs. Scenery has turned into haze as I concentrate on running. I have to go under a fallen tree (translate: stoop slightly) - I stop to do it. 2 guys who had been running with me vanish instantly into the distance as I try to walk. Stop to shake my quads next to a guy who is carrying his kid on a daypack. I walk to get moving. He puts 20 meters on me while I am walking. I have to run to catch him. I say 'I am back on the wagon' - feeling like crap. 3hr 30 min pass - I am a long way from the end. At the 33km mark on my watch I know the end is still at least 2 km away - seems like forever. At this point I cannot run downhill - my quads can't control the descent. I am bitching out loud about the organisers inability to measure the course. Start to sense I am near the end - more walkers. I pick up the pace to run past a picnic site - I hear the picnicers talking about how crap I am looking as I *try* to run down the very slight incline with all the finesse of a man with two club feet. 2 guys roar past me yelling 'only 5 minutes to beat 4 hours!' I mumble something about them leaving the iron on at home, what's the rush. I see the end! Stumble across the boardwalks and cross the finish line in 3:58. I look like this...

I tell Arlene it's the worst thing I've ever done and have never been in so much pain - she is stoked, she ran her 12 km supporters run in an hour and 40 min. I think I acknowledge it. Longest run she has done by far. I eat pineapple and try and find a spot to sit while we wait for Dale and Kirsten. Kirst comes in first, looking fresh but worried "I think Dale died at Torrent Bay!". Apparently she prodded him all the way there and at that point he decided to take out a Muesli Bar and have a break from the prodding. She is worried that his flu has caught up with him and we need to send out a search party. While discussing this Dale crosses the line - he was sick of the prodding and told Kirst to p!$$ off or words to that effect.

Kirst says 'I thought you were dead'

Dale replies 'Sure didn't end up in heaven'

I question whether he deserved to be in heaven or not - this photo happens.

Probably do it all again next year. Officials have confirmed the race distance as 36 km - I feel a bit better. 

Today I see that I could have won the Women's 50-59 division with my time - there is hope for me yet.

Delay to Telecom NZ WCDMA launch is good for shareprice

Stuff reported today that ABN Amro analyst Geoff Zame suggested that if Telecom did not complete a marketing launch of its WCDMA network this year that it would be detrimental for the share price. The reported reason is that Telecom would be on the sidelines when the rush for Christmas connections comes through.

I disagree.

Everything that I have read suggests that the network is currently not fit for launch. That is not surprising. I know that there are a lot of people in Telecom who are working damned hard on getting this network up and running. I don't think this is an execution issue -its a reality issue.

Telecom announced that it was going WCDMA in June 2007, suggesting that build would not commence until late that year that it would be in market by Christmas this year. 

That's  12 months - gutsy stuff.

By comparison, the deployment of CDMA in 2001 / 02 took 15 months (that was an extremely aggressive and well managed deployment) and was voted telecommunications project of the year by TUANZ. That was on existing sites.

Vodafone's 3G deployment was of the order of  15 months after signing Nokia up - and they were hit pretty hard by customers reacting to coverage issues. 

In Telecom's case they are rolling out 2 networks

1. 2100 MHz WCDMA

2. 850 MHz (either GSM/EDGE or WDCMA)

The 2100 MHz network in particular requires new sites and resource consents. To go from 'hmm I think I'd like a new site in this area' to having property and resource consent in the bank takes about a year. A year was always going to be too short.

You would have to be doing well to do both of these in 15 months - not forgetting Telecom have operational separation, Next Gen broadband and all the rest happening.

If Telecom were beholden to a pre-Xmas date, this network would look more like MobileMe.

It will be much better for the long-term shareprice for Telecom to get coverage right for this new network as opposed to try and bank a short-term win, and then brand damage based on a sub-standard network. And to think that there would be significant uptake on the new network before it was bedded in pre-Xmas is optimistic to say the least. One can only hope Telecom has some CDMA offers to go out that are sharp enough to stay competitive this Xmas.

Reynolds has already announced in last week's result that there will be no EBITDA growth until 2010. Good to see him stick to the long-term plan - this approach will start to turn Telecom around from a dividend stock to a growth stock. That's the real issue for the analysts - the dividend payout made Telecom a very attractive part of their portfolios in the past. Now that Telecom are focussing on longer term bets this stock is no longer easy money. There is the possibility of still quite good dividend payouts and (if you are risk embracing) the possibility of longer term share price growth. 

Key issue now is when to get in.

Celebrating Che

Che in his kingdom

This time last week we had to put our cat Che down - only 3 and a half years old and he was debilitated with cancer of the colon and lower intestine. Couldn't hold down food and was slowly starving - we had little choice.

We were fortunate enough to have him around at home for a couple of days in front of the fire after the exploratory surgery confirmed the worst. Thanks to everyone for their sympathy and kind thoughts and deeds. It's meant a lot.

Ella knows her buddy has gone away but keeps asking when we can pick him up - breaks our hearts.

We chose the name Che as Arlene and I had recently seen Motorcycle Diaries when we were looking for a cat. We went to a crazy cat breeder who bred Abyssinians. This little guy caught our eye when only a few weeks old - playing with a scrap of paper and growling at his litter mates when they got too close. Sounded just like a little motorbike - hence the name Che. I guess he could have been called Ernesto.

That growl was always around - especially when he heard strange noises (he would growl like a dog), if you tried to take one of his victims from him (rats, birds, mice, lizards) or if Ella pulled his tail too hard.

He also met everyone in our neighbourhood well before we had - we were invited around for Christmas drinks and pretty much everyone in our street had visits from Che where he would just jump on the bench and take over and it still amazes me that he never caught a Tui or Wood Pigeon even though he spent the hours longingly staring at them.

He was a little cat with a big personality - Abysinnians are described as 'Attention Seeking Athletes' and I don't think I have seen a cat try to be the centre of *everything* as much as Che. To the point where he would jump in the parcel tray of Ella's buggy when we would go out for a walk. Or just follow me down the street like a little dog (except he was smarter!).

We miss him heaps - he leaves a big hole.

Che as a kitten - first week at home

Standard Saturday morning (I wish)

Cleaning up the local vermin

Che giving Ella some love

Che and Ella getting a bed-time story from Arlene

Standard position

Telecom, Kevin Roberts and Brand

I noticed with interest the appointment of Kevin Roberts to the Board of Telecom. Looks like I am not the only one as well.

I have had some limited contact with Kevin during my time at Telecom - the most interesting being a 2 day workshop where we tried to discover the key purpose of Telecom. Fascinating and inspirational. I've also worked with a lot of Saatchi's people, most recently Saatchi X who are (in my opinion) world-class Retail designers - they get the whole notion of designing Retail for customers. This is to the extent where they went around a bunch on NZ stores and just watched what customers did before leaping into any design work. Much better than what you would expect from a normal ad agency. So I have a lot of respect for the work that Saatchi can do to communicate a brand.

A few things I noted from yesterday

1. Governance - Kevin says that he is privileged to contribute to the governance of Telecom. I was very pleased to see this. Kevin has spent a lot of time through Saatchi and Saatchi advising Telecom directly on Brand Communications. Saatchi's has been Telecom's key agency as long as I was there (15 years). This Board role has to be separate from that - good to see he gets that. I do wonder how Telecom can get the full benefit of his brand expertise as both a director and its number 1 supplier , surely this starts to become a conflict of interest? Will be interesting to see how it is managed.

2. Comments about the lack of marketing and brand expertise on the Telecom Board. Wayne Boyd himself says that Kevin will bring Brand and Marketing expertise, as well as customer satisfaction skills. There is already significant brand and marketing expertise on the Telecom board with Rod McGeogh (anyone who can lead a successful bid for the Sydney Olympics knows how to execute a marketing strategy) and Ron Spithill (global marketing manager Alcatel). This may signal even more of a marketing focus for Telecom. However, given Kevin (through Saatchi and Saatchi) is already providing Telecom's brand execution, how much more can he offer than this? And is this really the problem?

3. The Telecom brand - the Radio NZ interview with Wayne Boyd yesterday included some commentary along the lines of 'if Telecom got its Brand and Marketing right then shareholder benefits will follow'. This is not a Wayne Boyd quote but a reporter's quote. This is mostly right but not completely.

In my opinion, Brand is the promise that you make explicitly and implicitly to your customers. Everything they see, touch, hear and feel when they interact with you defines the Brand. It's not that complex a concept (although it is difficult to tell a good story in a short period of time and keep your business in sync with it) and Telecom has been really good at making these promises and communicating them through its marketing and PR efforts supported by Saatchi. It invests a lot into this, wins global awards and therefore this is not where it falls over. 

Where it needs the most effort is in the delivery of the promise. In my mind this is where Telecom really needs to look in terms of its leadership. Telecom needs to make promises that it keeps - its recent brand damage has been caused by saying one thing and doing another. This is the long hard road to rebuilding brand equity.  Where is that leadership coming from?

I have been thinking about brand, marketing and customers for a while now and have a small series of posts that I think will help explain this further. Kevin talks about the whole notion of Lovemarks superceding brands - my view is that is a bit glib. Love is damned easy to talk about but really hard to build. 30 second ads and stories don't cut it in my mind - but more for a later post.

There - I've made a promise, time to deliver on it.

Disclaimer: I hold Telecom shares and have spent a lot of time trying to build a view and product set in Telecom that says if you do right by customers, then you'll get great results. I really want to see Telecom become a loved brand in NZ again.

Vodafone offers 'cheaper' iPhone data plans

After significantly reducing the trust of its customers, Vodafone has offered new data plans for the iPhone in NZ.

The Good

- Customers who bought iPhones under old plans can change 

- Vodafone appears to have listened to customers when shaping these plans

The Bad

- It's a small incremental change at the margin - monthly fee reductions with corresponding voice minutes and txt quota reductions.

- Customers remain disappointed from the early promise and there is no apology for that disappointment. Possible that Vodafone think they have got away with this. Especially since plan changes can incur a penalty.

- There is no high end plan that offers good value. In fact no high-end plan at all above 1GB.

My thoughts

- My pick is that Apple have forced this change - this is only incremental and comments on stuff and Geekzone seem to represent the tone.

- Vodafone NZ is in the dogbox with Apple - supply is being drip-fed to them (confirmed from two separate sources)

- It is going to require a lot more changes along these lines to regain customer trust for Vodafone. Expect to see more incremental changes.

- An opportunity still exists for Telecom to shake up the mobile data market and take some seriously high ground.