By Francis Moran
Back in the early years of this decade, when my wife worked in marketing for a large optical components company and inmedia‘s client portfolio was well studded with fiberoptic and next-generation communications companies, it just wasn’t Q1 in our household unless one or both of us were headed to the big Optical Fiber Communications Conference and Exposition, usually held in March at the Anaheim Convention Center.
At one memorable session at OFC2002, Kevin Kalkhoven, who had recently stepped down as CEO of JDS Uniphase, asked how many of those in the room had access to a broadband internet connection at home. About 10% of the hands in the room went up. And this, mind you, in a room full of people whose very business was high-speed communications!
My own hand was not among those in the air, but it wasn’t for lack of desire or want of trying to get a broadband connection at home. At that time, we lived along the Rideau River about 30 kms south of Ottawa. We were more than eight kms away from the nearest telephone carrier central office, so beyond the reach of DSL. Our cable service provider had not yet installed the necessary infrastructure to support an internet service. A very promising high-speed fixed-wireless transmitter was in the neighbourhood and we did fall within its footprint, but, being on the river, we were down in a slight valley and so shadowed from that transmission tower where line-of-sight was necessary. I eventually invested a huge sum in a satellite service that delivered a blinding 640k down and about 128 up.
Kalkhoven went on to describe the market forces he thought were in play that would drive broadband uptake at home. This was in the immediate aftermath of the dot.com meltdown, when massive investments in fiber networks and the hardware to manage them were being seen as utter folly. Thousands of miles of optical cable were lying dark, and some were wondering if those networks would ever be lit.
Kalkhoven told the crowd not to lose faith. Key among the the drivers he identified was what he called “first-inch” devices, a phrase that has continued to make an impression on me both because it was so highly descriptive but also because it was so unusually customer centric. One of the problems with the communications industry, Kalkhoven said that day, is that it refers to that last final link to the end-user as the last mile. “Since when was the customer the last part of anything” he asked, insisting that the link to the customer should be called the first mile.
He then went on to describe first-inch devices, those things that customers hold in their hands that would drive broadband demand. He said that the most popular gift the previous Christmas had been digital cameras. And what do you do after you take a picture with your new digital camera, he asked? You send it to grandma.
Second-most popular gift was game consoles, many of which were internet-ready, meaning players could connect with other players across the net.
Both these new toys were first-inch devices that were going to drive massive demand for broadband in the consumer market, he predicted, and this was before VoIP telephony was much more than a gleam in an engineer’s eye and social networking was something you tried to avoid contracting if you were sexually active.
Fast forward to today, and a Scarborough Research study that has measured a 300% increase in U.S. household broadband penetration since Kalkhoven gave that chat at OFC. According to the study, just less than half (49%) of U.S. households currently subscribe to a broadband internet service, up from 12% in 2002.
Impressive though that growth may be, the U.S. still significantly lags the world. Using a somewhat different index, the Organization for Economic Co-operation and Development said in June last year the U.S. had 22.1 broadband subscribers per 100 inhabitants, good for only 15th place among OECD countries. Leading the pack were Denmark with 34.3, Netherlands with 33.5 and Switzerland with 30.7. Canada was in ninth place with 24.9, and the United Kingdom clocked in at 11th place with 23.7.
By Francis Moran
I had one of those conversations last week that frustrate the hell out of me and leave me wondering when, if ever, some technology executives are going to come to their senses.
I was at a session of the Ottawa Wireless Cluster on Thursday evening and I took advantage of the networking to renew an acquaintance with a seasoned CEO, someone who has helmed at least a couple of companies, bringing one of them public.
As usual, I asked him how things were going with his latest venture, now about four years old. He said things were alright, but that it had taken about twice as long as he expected to reach the level of business he currently has. Naturally, I asked him what he was doing to acquire that business. Such as, oh, I don’t know … marketing?
With no apparent awareness of the bitter and tragic irony at play, he proceeded to tell me his new company didn’t need — indeed, didn’t want! — marketing because it is the little upstart in the sector and he doesn’t want to tip off his competitors to what he’s doing. He said he gets customers through word of mouth, or by identifying prospects and going after them.
Now, I have nothing against a sales-driven customer-acquisition strategy and there’s no more powerful a channel than fabled word of mouth, but if it’s taking you twice as long as you expected to acquire those customers, maybe the direct route could use a little help. Such as, oh, I don’t know … marketing?
Naw, he said, don’t need it. In fact, don’t want it because, until very recently, his company was in “stealth.” God, I hate that word. Check out what I wrote about it in Mass High Tech Journal a while back. I have never been able to fathom why companies elect to be in so-called “stealth mode.” I have yet to come across one that was truly stealthy; that is, hiding itself from every prying eye. Most are talking to just about everyone — potential investors, candidate employees, suppliers, landlords, bankers, you name it — everyone except potential customers. In other words, they are simply failing to invest in marketing, and excusing it to themselves by pretending they’re doing something exotic and daring.
Fortunately, I also had the chance last week to at the same OWC event to conclude that conversation and go listen to a tech company CEO who really gets it. The featured speaker at the event was Nick Quain, founder of Cellwand, a gorgeous little company that has rolled out one of the wireless sector’s first premium directory assistance products, #TAXI, with others in the wings. I could write a lot about the product and the company’s strategy but for the purposes of making a stark contrast, suffice it to say that Cellwand executed effectively on the technology requirements and has racked up phenomenal success securing partnerships with wireless carriers to the point that the company now has blanket coverage in Canada, where it started, and is available on 150-million phones and counting in the U.S. It’s a textbook case study in building the right product and the right channel to market, and Nick did a great job of sharing the lessons he has learned along the way.
But, get this: He insisted that, phenomenal product, great carrier partners and blanket coverage notwithstanding, Cellwand is dead in the water without one more key ingredient. Such as, oh, I don’t know … marketing?
The CEO I spoke with before Nick’s presentation began was still there when it was over. I sure hope he was paying attention.
By Francis Moran
I wrote earlier this week about Sprint’s new all-you-can-eat rate plan, and the excellent black-and-white television commercial I saw announcing it. I wrote that I was particularly impressed that Sprint CEO Dan Hesse’s personal email address flashed on screen at the end of the commercial, a clear invitation, it would seem, to engage with Hesse.
Alas, it was not to be.
I took Hesse up on his implied invitation and dropped him a line. My colleague Danny Sullivan was closer to the truth when he said the email address might as well have been info@sprint.com, not dan@sprint.com, because sure enough, I did get a reply but it was bland pablum from some peon named Cindy.
An all-you-can-eat rate plan from a North American wireless carrier might indeed qualify as a “revolution,” as Hesse claims in his ad. But while I applaud Sprint’s move, it’s a sad commentary that what has been standard fare in most of the rest of the world when it comes to mobile phone rates passes as revolutionary here.
As a signal that Sprint was going to engage with its customers in a new, revolutionary way, though, it was strictly business as usual. Not revolutionary. Not awesome. Not even close.
By Francis Moran
With one foot of this agency firmly planted in Scotland but with a long and fond personal attachment to Cape Breton, the heavily Scottish-tinged northern part of the Canadian province of Nova Scotia, I am loath to choose sides in a trademark dispute that earlier this week saw the Federal Court of Canada order Cape Breton’s Glenora Distillers to stop marketing its locally-distilled single malt whisky with the word “Glen” in its name, something to which Scotland’s Scotch Whisky Association had taken grave exception.
Despite the fact that place names beginning with “Glen” are as liberally sprinkled across Cape Breton — indeed, across much of Canada — as sheep on a Scottish highlands hillside, it would seem the SWA believed that using the word in the name of a whisky unduly confused the market. The Scottish distillers trade association said it had found about 30 instances where Glenora’s Glen Breton Rare Whisky was mistakenly identified as Scotch whisky, although its news release failed to provide examples and there was no suggestion the Canadian distillery itself ever did so.
The professional marketer in me was intrigued by the trademark battle but the student of Scottish history in Nova Scotia was saddened that such a turf war would ever be necessary. Atlantic Insight, a long-defunct monthly news magazine in Atlantic Canada, once dubiously assigned this freelance journalist of undiluted Irish heritage to write about the cultural legacy built up by Scots throughout Nova Scotia and especially Cape Breton in the more than 200 years since the first major wave of Scottish settlers came ashore on the Hector in 1773. In many respects, the language, music, dance and literature of the old country was more alive and vital in the new world. For example, among the sidebars to the cover story that eventually ran was a piece on an elderly seanachie, or traditional Gaelic storyteller, whose skills were so outstanding that he often was called upon by groups in Scotland itself to teach his craft in a country where the language was at that time in some danger of being entirely forgotten.
Not that I think it very likely, but God forbid they ever forget how to make whisky in Scotland; after this ruling, they’ll get a frosty welcome should they ever have to turn to their natural heirs in Cape Breton for any guidance.
By Francis Moran
Regular readers of this blog will know that we have many a beef with the wireless carriers that operate here in Canada, and we don’t believe the options available south of the border are all that much better. (See here and here.) So I was delighted to see a television commercial Sunday night that scored big points with me on many fronts for Sprint, one of the major carriers in the U.S. I don’t watch much television so perhaps this ad has been playing for a while now, but it was new to me, and I liked it.
First, the commercial was well done. The approach was not startlingly novel; it uses Sprint president and CEO Dan Hesse as the spokesperson for the company and shoots him walking slowly towards the camera in an urban vista. Standard stuff, except that the ad is in black and white, which was the first thing that set it apart.
The second, and far more important, thing was that the commercial did not talk about all the things wireless and other telephone companies usually like to talk about, like network reliability, and service coverage, and call quality and so on. This one talked about what the customer really wants.
Hesse had me at his opening line. “If you could change the way wireless companies did things,” he asked, “What would you do?” Then he answered the question exactly as I would. “Use your phone for all the great things it can do without worrying about the meter running.”
He went on to call it a “wireless revolution,” and “pretty awesome.”
Well, not so much. More like a good idea copied from European carriers that have been selling all-you-can-eat plans for some time now and, like my British colleague Danny’s £35/month plan, at a lower cost than Sprint’s US$100/month Simply Everything plan.
Still, it was refreshing in so many ways.
Hesse was careful to introduce himself as the “new CEO,” telegraphing that the company was going to change on his watch. Further evidence of that change came at last week’s CTIA Wireless show in Las Vegas where he unveiled his WiMAX strategy that he believes gives his company a two-year headstart on its competitors.
The clincher, though, was the final image in the commercial — a lingering slide showing only one thing, Hesse’s email address, dan@sprint.com, presumably an open invitation to get in direct touch with the new CEO.
As your humble servant, I did just that yesterday. The auto-responder kicked back an immediate reply; the real-world response will take a little longer. “A representative from my office” will take “about a week” to get back to me, I was advised. I’ll keep you posted. In the meantime, you can see the ad for yourself.
