Telcos - how about adding intelligence to pipes?

Having worked in telcom domain for 12 years, I cant help noticing stark difference between the telco world and the internet world. Now that I am trying my hands on internet “stuff” for nearly 1 year, the difference is more apparent than before.

Much like the telcos, internet companies have gathered users, built a brand and store user data (think of Google, Facebook, Pinterest and likes as internet companies). Data is the core treasure and then in priority comes their brand; which can be obtained by e.g. through advertisements. Intuition should be telling them “hold on to data and don’t expose it anybody else”. On contrary… over time, they realized that opening up data to the world makes them an attractive proposition for a community of developers and their users. People will figure out innovative ways to profitably build applications in diverse domains. Think of Zynga and host of others who have built a business using social data exposed by Facebook (which Facebook by itself could not have done without defocusing from their main business). As a platform provider of data, Facebook only needs to create a business model to monetize exposed data. Data privacy regulations have to be respected and they have found ways to take permission from user. E.g. my private data is not compromised when Farmville uses my friends list since I authenticated Zynga using my Facebook credentials. Facebook and Zynga are examples of zillion others to illustrate power of open data architecture.

Imagine if telcos in India opened up their data. Privacy of data comes to the fore first… assume telcos have smartly handled it by taking permission from users E.g. via SMS for opt-in kind of services. India has nearly 600 million mobile subscribers and nearly 60 million facebook users. Who is more likely to have more data about your social graph? your telco or facebook. Remember telco knows who you call (close ones), who your friends call, how frequently, at what time of day, from which location, who do you SMS, how many times, with what text content and other way data about who called you etc. This is accurate way to understand who is important to you. In addition, by analysing data traffic moving in and out of network nodes, telcos already know which web pages you visited, what did you click, which e-commerce site you browsed, which product you intended to buy etc. If you think carefully, this is nearly as much data what facebook and Google put together have about you. Imagine if your telco were to start a mobile ad network. Since they knows which pages you browsed, which products you expressed interest to buy online and content of your SMS messages, what pages your friends browsed (wow), it could provide far more contextual advertisement than Google can provide. Although some of it appears to violating user privacy, a deeper thought can create value by staying within regulatory boundaries of user privacy. You could argue this is not core business of the telco. Well this is exactly where the telco will benefit by opening data to others who can create a business around it and make money. By unlocking the power of hidden data, telcos can create additional revenue streams. Apps will provide telcos a value differentiator from their competitors. E.g. you might stick to Vodafone and not switch to Airtel since you already use an app which inturn uses network data+your data. Telcos are currently collecting user’s government approved verification documents as proof of identity. Imagine if they exposed this data to third parties with a view to verify individuals, online hiring and online small credit agencies would use it as preliminary verification method. What’s currently done to satisfy regulation can be used to perhaps create new revenue stream. These are only examples to think in one direction. If telcos were to flex thinking muscles, they can uncover lot more useful cases. All this by providing secure APIs to developers and inviting them to hackathons to innovate. Instead telcos are happy protecting data assets (just like spectrum asset) in an oligarchy ending up providing a conduit pipe which provides commodity voice minutes and data bytes. Clearly, telcos have missed the bus. CIOs from internet domain can make this difference. Biggies have tried their hand but efforts are not enough. Airtel’s app store is not yet a runaway success. Vodafone had an initiative towards open data architecture but effort has weaned away without visible results.

2012 was helluva year. Excited about possibilities future can bring.

Looking back into one year could be daunting, more so if it threatens to expose own vulnerability. During my long walk with close friends, I have shared with them about my progress report… which has often triggered constructive discussions and ideas. Sharing with you could just stimulate further ideas...

When we started Shoutout, there were many assumptions. that people would complain… that India has enormous number of people who complain on regular basis… that we will evolve a business model after gathering a critical mass of consumer complaints… that we will magically weave an SEO band to attract consumers in hoards… that somebody will invest in us once consumers start pouring in… that we can draw living expenses to sustain and grow. When we launched, consumers came in good numbers to vent out complaints. Bloggers wrote about the exciting new story and companies started resolving complaints based on complaints. So far so good… till we started to define all foundational assumptions in numbers. We found from Flipkart’s yearly report that they received 1M active users during the year. This number was startling! much lower than any of own estimates. It does give a ballpark on number of active internet users in India. My folks at home use Gmail, Facebook and Youtube to consume information. However are they so active on the internet to transact (Flipkart, ICICI bank etc…) and contribute content (shoutout and the likes)? Probably not right away. They will, like millions of other internet users in India… take few more years to become really active. However we didn’t have financial muscle to sustain that long. A respected investor in town showed interest but perhaps found us wanting on techie skills. We had to move on… ShoutOut was exciting and will still be exciting. Opportunity still exists for somebody to grab this market, perhaps for those who can sustain for a longer timeframe.

Pushed to the corner drawing board, we had to find another opportunity to build a business. 2 of my well meaning advisors pointed to my past experience in B2B markets… they wondered why I wasn’t playing to our strengths. And that tipped us over to mold ShoutOut into an enterprise business. And then started a fresh set of assumptions… that businesses would like to hear feedback from their customers… that there are lot of such businesses in India (to start with) whom we can sell… that decision makers in service organizations would like to analyze consumer voice to make decisions on a ongoing basis. But now we were wiser than before. We realized it’s better to start small, make note of all assumptions and validate before drawing grand plans (these are established startup virtues made popular as lean startup principles). We also had learnt few other facts… that we had to learn coding to remain lean… that we had to build a product and prove market acceptance before seeking out for funding. After few weeks, we had learnt CSS, Javascript, SQL and RubyOnRails. Keen to follow lean principles, we had to now build a product with minimal features… which could still solve somebody’s pain point resulting in revenue. Our product is now ready… absolutely proud to have built it ourselves. Spencers retail and Café Coffee Day have agreed to pilot the product and we are on way to validate its viability in market. I like to believe we have setup ourselves to fail fast. If it has to succeed, it will by validating our assumptions. Else we will move on again… Market will finally have final say in validating my startup’s den of gambling assumptions. Although we know by facts that most startups fail… fight we will, hope we will.

My closest of friends have often challenged my wisdom of not having an easier life with a cushy corporate job. The journey to hang on and discover new inroad to what we believe makes it exciting lends a sense of purpose to every new day. The satisfaction of trying than wishing makes the effort worthwhile. As they say, startups are not for weak hearted… certainly not for those who are not prepared to fail. What do you think?