Have you considered how to choose which mobile company to invest $10 million in?
| –Here is some sound advice from Strand Consult Through the years, Strand Consult has been involved in numerous start-ups in the mobile universe. Most of them grew to become successful companies simply by combining a good idea, a good team of people and a small investment. Having been in the mobile industry for the past 17 years, we know that a large investment is not in itself any guarantee of success. In fact if the investment is too big it can lull the company into a sense of false security that often dampens creativity and the desire to try new and healthy business models. The largest challenge when investing in start-ups in the mobile industry is often that the level of innovation is very low. Unfortunately there are very few unique and innovative companies in the mobile industry. Many new companies are often simply trying to launch a local copy of a concept and business model that is already in operation somewhere else in the world. The second largest challenge is that many people have very little insight in the mobile industry. Finding people that understand what to invest in, the underlying business models and which businesses have the best chances of expanding internationally is often almost impossible. Another challenge is that many start-up companies do not understand the necessity of thinking globally from the beginning. Instead their focus is either regional or national. We know of a company that had enormous international potential, but instead of launching on the global market where millions of customers could use their technology, they focused on their local market within a geographical area of just one hour’s drive from their head office! That strategy costs their shareholders great deal of money. In our line of business we naturally often meet people that dream of creating successful mobile companies, but that have limited experience in the mobile world. In our opinion there are a number of areas that newcomers should stay away from. These are areas where it is difficult to differentiate yourself from your competitors and therefore difficult to make money. 1. The Apps market. If you examine the number of available apps, who is offering apps and who is actually selling and making money on apps, it is very clear that very few people have achieved financial success on the apps market. The apps market is an area we would usually recommend avoiding. 2. The NFC area. Many people believe they can make a fortune in the NFC market on configuring mobile phones, NFC services etc. Most of these people do not realise that NFC is simply a communication technology that in many ways is comparable to Bluetooth. How many people have made a fortune on Bluetooth? 3. Solutions and tools that help make existing Internet concepts available on mobile phones. Many still dream of making existing Internet concepts mobile. In my opinion that corresponds to putting training wheels on a bicycle that somebody can already ride. I do not have much faith in this market. Companies that have successful Internet concepts can easily make them mobile themselves. If I wanted to invest $10 million, I would seek the help of a company like Strand Consult or a similar company that has a global network of contacts and extensive experience in the mobile industry. I would create a small team to evaluate where to place the money and use a third of the money on purchasing knowledge, a third of the money on investing in 4-5 companies and the rest of the money on building a relationship and cooperation between each of the invested companies and 10 potential regional/global partners. In the above scenario the amount of money being invested is of secondary importance. Most important is ensuring that you have access to the best possible knowledge, experience and contacts. If you have a good idea and a good team of people, and can combine that with a great deal of knowledge, it will be far less difficult to attract investors to a healthy company. Often that type of company can actually get very far solely by organic growth. Spending $10 million in the mobile industry is very easy. Finding the right people that have the right ideas, especially when some of those people might be currently be working for mobile operators or infrastructure providers, but are quietly looking for help to commercialise new ideas, is far more difficult. If you would like to receive more information about Strand Consult and the knowledge and experience we can offer in this area, please do not hesitate to contact us: Contact Us |
| More information: Strand Consults Strategic Workshops Successful Strategies for the Mobile Broadband Market OneAPI – Next Generation Value Added Services in the Mobile industry Show me the money – The future Business models for mobile Broadband Services How MVNO´s can get success in the Mobile Broadband market How media companies can get success on the mobile broadband market How to get success with Value added services on the Mobile Broadband market How can a Wimax operator survive in a world full of WCDMA |
