In one of my recent speeches, I applied Malcolm Gladwell’s Tipping Point principles to conclude that we are at or approaching this point for the mobile internet, and are on the verge of explosive growth. He extracted his principles from looking at the conditions driving the spread of viruses, and applied them to new businesses and other social phenomena.

The three principles are:

1. Law of the Few: There is power in the individual on a stand-alone basis, rather than relying on a large group
2. Stickiness Factor: Once “infected”, the “virus” would stay locked in. Many web 2.0 services spend a great deal of energy creating stickiness in their strategies
3. Power of Context: Other external factors that will enhance or defeat the”virus”

Thanks to Esme Vos, I saw this thoughtful post-mortem on the demise of Meetro.com, and realized it was an interesting test of the tipping point principles. This was a site that displayed locations and profiles of “friends” on their mobile devices.

Of Malcolm Gladwell’s three principles to drive viral growth, I suspect Meetro scored very well on #2 and was about to score well on #3, but fell down on #1.

It was difficult to develop #1. Law of the Few because no individual could benefit from the service himself; it required large numbers of members to be effective. I suspect by the profile that Meetro did well with #2. Stickiness Factor, by providing a broad range of functions and services to members, once connected. And unfortunately Meetro died before it could benefit from the explosive growth of Web-enabled mobile devices (such as the iPhone, which would have enhanced #3. Power of Context. As Paul Bragiel points out in his post, there might still be a brilliant future for this service, perhaps provided by a company that can already deliver a large network of users, thus delivering on principle #1.

I wonder how many VCs are doing Tipping Point strategic analyses of startups, in addition to creating stacks of discounted cash flow projections? It would seem to be worthwhile.

Many real and wannabe macro-economists like to debate which economy will grow the most in the next 20-30 years: India or China? Singapore or Taiwan? Much of the arguments boil down to whether central control is more or less effective than entrepreneurial and organic growth (see Glenn Gow’s article “Gaining Competitive Advantage” on Crimson Consulting’s website for more insight on how a company can effectively compete against an established market leader.)

Now we can bring that debate to the mobile internet. Apple represents controlled and centralized growth with the iPhone, even keeping a lid on who gets access to the SDK and managing the distribution of new applications via iTunes. Google seems to be taking the opposite approach with the Android platform. They have just announced the 50 winners of development seed capital, which according to Eric Zeman at InformationWeek, cover a broad range of location-based services, security, safety, social networking, and media applications.

Over the next few years we will be able to watch to see which approach works better. There is room in the market for both to work, but for different audiences. My guess is:

• Apple, by controlling the technology environment, will be more expensive but able to assure a more reliable platform that will appeal to the affluent masses;
• Google, along with other Android players, will offer a broader range of applications, customization, and lower prices, but at a cost of platform hiccups and a greater need for do-it-yourself fixes, which will appeal to techies and new entrants.

Hmmm. Sounds like Mac versus PC?

Many of us were pleased to see the Sprint-ClearWire deal announced last week. This is an important next step for the mobile internet (see my earlier post “In Search of Mobile Broadband Tipping Point for more information on drivers for growth in the mobile market).

One key in the Sprint-ClearWire deal is that each of the major players brings something valuable to the party:

• Sprint has plenty of spectrum, a national operation, and a customer base. And with their base wireless business in decline, they have a motivation to take some risks and try a new game.
• ClearWire has an established operation and the visionary mind of Craig McCaw. Craig is usually ahead of the industry in thinking about ways to meet customer needs in new ways, and drives technology choices rather than letting them drive him. He also knows how to make money on the way toward the vision.
• Google is visionary, supports open systems, and appears to understand the importance of the mobile internet.
• Comcast has a customer base and needs a “quadruple play” (TV + internet + telephony + mobile) asset.

Some of my predictions are:

• While WiMAX will be the lead technology, this team will be technology-agile if something better comes along or WiMAX falters.
• While there is initially much discussion about PC cards to connect laptops to the network, we will see more focus on mobile handsets featuring communications (telephone and written), games, media, browsing, and navigation services.
• Other companies are likely to join this consortium — including content providers and key application providers. They will want the favored position and insight gained from being a charter member.

What do you think might be coming based on this announcement?

Many have heard the story about Eskimos having 32 words for snow, given how important it is in their lives. Similarly, technology companies have many different classification for technology workers — from CTO to CIO, and from lead web developer to database architects. Most technology companies have a very clear idea about what these jobs entail and who qualifies for them.

But many technology company executives are lost when they set out to build a marketing department. When I ask them what flavor of CMO (chief marketing officer) they need, they often freeze up. And when I start to discuss the various roles that might fall under the CMO, they get confused. In many cases they believe that the CMO handles just advertising and public relations, while the technology groups do the product development and management. These beliefs are a leading reason why many technology companies hire their marketing team just before they launch, instead of realizing that hiring the right marketers at the start of the development effort might have targeted their products more effectively at customer needs.

In the interest of clarifying the picture, here is my basic list of marketing roles. I list them roughly from the most conceptual and strategic to the most operational. One person can perform more than one role, but generally the adjacent roles on this list group best together. (For a complete selection of articles on many of these roles and their unique challenges, see Crimson Consulting’s Insight page.)

• Marketing strategy - where (customers & products) and how (distinctive competence) to compete
• Business development - key strategic alliances, and channel partners
• Product:
  • Product/service strategy - what products/services to sell to which target customers with what value proposition
  • Product design and development - what features and functionality, design, packaging, etc.
  • Product management -what prices, discounts, bundles, etc. through which channels
• Channel:
  • Channel strategy - what sales and distribution channels to use to get to market
  • Channel program design and management - how to attract and manage the desired channel partners
• Marcom (short for marketing communications):
  • Brand strategy - what the brand should mean to customers and how to build that
  • Advertising and Promotion - what messages in which media choices
  • Public Relations - how to convey the right messages through news sources, spreading the good and limiting the bad news
  • Promotions and Events - what other means to get the products and services in front of customers
• Demand generation:
  • Campaign design and management - what is the best mix of promotional and sales campaigns
  • Direct Mail/Direct Response - managing one-to-one interactions with prospects and customers
  • Web design - best design and layout of the web site(s) to attract customers; optimization of search engines
  • Operations -managing the processes and logistics of the campaigns
• Customer Service:
  • Customer service strategy and policies - determine the nature of the ongoing relationship with customers
  • Call Center - manage the (inhouse or outsourced) telephone sales reps, email responders, click-to-chat teams
• Sales
  • Direct - manage the customer-facing (inside or outside) sales reps
  • Indirect - manage the distribution channels
  • Telemarketing - manage the (inhouse or outsourced) telephone reps who make sales.
  • Administration - ensure proper processing of all the orders

Some companies put all these roles under the CMO. Others divide the CMO role into several different senior roles along the lines of strategy, business development, product, marcom, customer service, and sales. Some look for generalist CMOs to “cover the waterfront” across these roles, while others look for CMOs with particular strengths along this continuum and then support that person’s weaker areas with key hires.

Regardless of the approach and organization strategy, it helps to think broadly about the important roles within the marketing function and the best way to get the work done.

The New York Times ran an interesting story about how the Apple iPhone is going to take a bite out of RIM Blackberry sales. I have credited RIM for doing an excellent job targeting the corporate market for email and PIM synch functions, while making the CIO comfortable about security. They opened up the corporate smartphone market with a head start on Microsoft’s Exchange offering.

However, as I pointed out in my blog “Enterprise Customers are People Too“, RIM may have squandered their lead by failing to innovate quickly. This article describes how they are stepping up to the challenge on device development. Where it falls short is to look at the entire “system”.

Smartphones are more than stand-alone devices. They are increasingly part of a broader system or network of computers, applications, and networks. RIM scored early wins by seeing how to incorporate a smartphone into a corporate network. Apple plans to match this by announcing that in June they will support Microsoft Exchange as well as offer corporate VPN and security features. I am still looking for evidence that RIM understands that when they add media functions (music, etc.) they need to understand that Apple has a lock on the iTunes application and many propriety playback devices.

I am a sample of one, but may represent many “corporate” users. I held off buying an iPhone, needing Outlook Exchange functionality, but will buy iPhone over Blackberry because of the way iTunes pulls down my favorite podcasts and because I have iTunes connectors in my cars.

More and more the tech community is becoming a large system in which devices, content, networks, and applications must “play well with others”.

There has been a great deal of focus on broadcast Mobile TV over the past several years, on the DVB-H and MediaFLO standards. Many European and Asian mobile operators, as well as Verizon Vcast, Sprint TV, and AT&T in the U.S. have launched or are launching 8 or 9 real-time, broadcast, mobile TV channels with great fanfare. New products, services, and press announcements have dominated the news at the last two annual CTIA conventions.

I am a skeptic about the success of real-time mobile TV though. Even back in 1992, Bruce Springsteen sang about 57 Channels and Nothin’ On. And now in the age of declining TV viewership, increased (TiVo) time-shifting, explosive growth of YouTube, and other forms of media “snacking” and personalization, I have trouble seeing how real-time mobile TV will catch on.

Some analysts, such as in this Slash Mobile article, are still predicting explosive growth. Others are saying that the industry is solving the content, device, pricing, and network challenges — paving the way for growth (see my earlier post on 2007 Mobile Internet Scorecard for more info on the challenges the industry still faces.) Lately though, we are hearing some contrarian voices, such as BBC Worldwide mobile director Peter Mercier citing M:Metrics stats showing just a 1.2 percent UK take-up: “The hype you’ve seen at past 3GSMs about mobile TV is not warranted by the real growth. Mobile video itself is probably one of the least used applications on a device.” And Jeff Herrmann, Nielsen Mobile VP , said: “Not that many countries outside Asia are using it in a big way, but proportionally fewer Americans are watching mobile TV than anywhere else surveyed”.

It would seem a more efficient use of precious spectrum if users were to consume broadcast video, or even do some time-shifting with their mobile devices, using them as mini-TiVos. And there might be a small segment of users with real-time needs, such as watching sports events. But my bet is still on personal casting. I predict that if most people want to grab a quick video on their mobile device they are going to be more likely to watch some clips downloaded or stored on their device, such as from the Onion News Network or something more serious. I think the opportunity is to break the real-time broadcast TV paradigm and use this broadcast spectrum for mobile data.

The shift to the Mobile Internet will require the support of advertising funding to make it affordable for the masses. Advertisers will shift to mobile media as they:

1. See the number of users increase, and
2. Discover the impact of targeted and interactive advertising models (see Building A Successful Mobile Web Content Strategy).

One leading indicator is for advertisers to move away from the standard pay-for-impressions model, measured as CPM (cost per thousand), for interactive advertising.

A recent blog entry by Andy Plesser for AlwaysOn describes how VideoEgg is taking the first step to price their online ads by the number of viewers rather than the number of impressions. The interview with Troy Young nicely describes how this is a move along a continuum of pricing models.

This is a good early move. Once advertisers embrace this (which could take some time given the inertia in that industry) it will make online media more valuable, attract more funding, and lay the ground work for further extension to the mobile world. While the mobile extension will have to accommodate smaller screens, slower speeds, and shorter viewer attention spans, it offers the advantages of knowing the location and the activity (sometimes referred to as “presence awareness“) of the user. This, in and of itself, may be worth the price.

How do you see the mobile internet changing the way advertisers do business?

Marketing to enterprise customers can be a challenge because of the complicated chain of decision makers, long sales cycles, and the frequent need to customize processes or products to meet their needs. But, of course, it is a valuable target market for many products and services, despite these extra challenges.

What some companies miss, however, is the parallel need to market to the end users within an enterprise, and maybe even capture their imagination. Disappointed end users can degrade or defeat an enterprise sale by opting out or making counter choices. We saw this in the early days of personal computers, where many departments defied the will of the corporate IT group and made their own choices of brands, word processing software, and spreadsheet tools. Likewise, in the early days of the mobile telephone, the largest group of buyers were business users making phone and service choices as individuals, but using them for business.

A recent survey in the UK, reported on ZDNet, shows that among enterprise smartphone users, 59% are very satisfied with their iPhone, versus 47% feeling the same about their RIM Blackberry. What is interesting is that RIM practically created the enterprise smartphone category with their innovative way to make enterprise email, contact, calendar, and other information available to mobile users while making the CIO comfortable that the firewalls were still secure. Apple, on the other hand, has focused more on Phone + iPod features, and is frustrating business users with the lack of support for Microsoft Outlook Exchange, RIM, task lists, remote deletion tools, etc.

So why are enterprise users satisfied? What seems to have happened is that Apple has captured the imagination of the enterprise users, who are people too. By doing this, Apple will probably find it far easier to add enterprise applications to their offering and win the enterprise market (perhaps with the upcoming release of their SDK software development kit) than RIM will find the challenge of making their phone more appealing to users.

This is a shame for RIM, given all of the good work they have done. But it is also a good lesson - knowing how to win the hearts of people is a more challenging but more lasting business capability than knowing how to shape a product or service to meet the needs of an enterprise.

At the AlwaysOn media conference, Cyriac Roeding, a CBS VP made excellent points about what is needed to grow mobile advertising. I have long believed that growth in mobile advertising is going to be critical for the success of the mobile internet because it will help subsidize content and services to attract the early-majority users.

He laments that mobile advertising accounts for only 0.2% of all advertising spend, when the majority of adults in the developed world have these devices and advertisers have learned that users are 10X as likely to click through on mobile as online. He cries out for greater simplicity for users and for advertisers. “Don’t try to duplicate the online experience, mobile is different.” It took the iPhone to convince handset makers that the phones need to be simpler to use. Advertisers are perplexed by the different standards for mobile content and advertising, and cannot create effectively for this medium.

The industry is getting in its own way and must consider the needs of the users and the advertisers for us to realize the full potential of this technology.

One key dependency for the growth of the mobile internet is that we must have reliable web services. This need runs parallel to Google’s vision on “cloud computing“.

While web services and cloud computing are compelling new trends for the desktop and enterprise environments, they are essential for a mobile internet world:

• We need the storage space and processing power of server computers, rather than being limited by the capabilities of a mobile device;
• We will often want to do broader manipulation of our data on the desktop and then mini manipulation on the mobile device, much like people use Outlook today;
• We will want the security of having our data on a server in case we break or lose our mobile device.

Not only will it be important for all these services to exist on the web, but also users must be able to trust in their reliability and security. CIOs have their own concerns and needs about web services, however individual users will also need to have a high confidence level because they have limited negotiating power with the web service providers.

Some recent developments show that we have a long way to go to earn this consumer trust. Blackberry’s have had several widespread outages and Amazon’s S3 Web Services had a recent significant outage. Charter Communications deleted the emails for 14,000 users, and evidently did not keep backups. And a “computer glitch” gave the FBI access to all the email accounts on an unnamed network.

Clearly, like natural disasters, these incidents may be isolated and rare while generating lots of attention for the media. And it is likely that most all web services provide greater reliability and security than most home networks and maybe most enterprises. Nevertheless, perception is reality for the consumer, so service providers must try doubly hard to earn the trust of users before they will feel comfortable leaving all their data, communications, family photos, music, school notes, or whatever in “the cloud”.

And consumers must feel comfortable before companies can realize the growth potential of the mobile internet.