In the past couple of weeks I’ve had at least three people ask me if there is any point to Twitter. I suppose that some people above a certain age feel that there is something that maybe they don’t quite get.

I hate to add to the noise around Twitter, but I’ve given quite a lot of thought to just what Twitter actually is and why people find it interesting. I have to admit that I haven’t found it too interesting personally (I’ll apologise here to all of you who signed up to follow me on Twitter and have been disappointed at the lack of communication), mainly because on the receiving side, I don’t have time to sort the wheat from the chaff and on the sending side, I don’t feel the need to give the world a blow-by-blow rundown of my life.

Twitter is a pretty poor person-to-person communication tool. It is a pretty poor basis for something like team-based communication. It is totally irrelevant for communications that you want to keep private within a team or between two individuals. It’s maybe on a par with SMS on the real-time/asynchronous scale (quite a long way down the asynchronous end of the spectrum).

However, I think that Twitter is amazing for two things:

1. Person-to-World communication: If you have something to say, Twitter is a good way to get it out there. The news today is about a US basketball star who signed up to Twitter so he could tell fans directly and in pretty much real time, which team he was going to sign with. The guy creates a Twitter account, 300k people sign up to follow him. Instead of ESPN or some paper getting the scoop on the news, the player announces it directly to his fans. ESPN and the papers are left to provide details and analysis. I suspect that ultimately, Twitter probably has as big an impact on the news industry as blogs in general. Especially when you get people tweeting about specific blog posts in a way that lifts the important, deeper blog commentary up from the noise. Twitter is also a fantastic tool for corporate groups wishing to keep customers up-to-date for the same reason.

2. Aggregated, consolidated thoughts/views/insights on certain topics

I’ve also started to see substantial value created through consolidating Twitter comments from a broad range of users about a specific subject. Want to know whether or not a movie is any good? Just see what people are tweeting about it (although, of course you are then trusting the judgement of people who spend too much time on Twitter!). I’m certain that we will see a move towards filtering Twitter commentary on certain subjects and generating reasonable consolidated consumer views.

… so, for what it’s worth, that’s what I think. And, of course, it is a fantastic achievement for the founders to have revealed an entirely new dimension of communications, although I’m not sure it was entirely by design!

Ah, I had wondered when this would happen.

I’ve become used to not thinking about how much data I’m using on my mobile phone. I happily download whatever I think of downloading and often download stuff over the mobile network even if I’m in reach of a wifi spot because it is easier than doing the three or so clicks required to enable wifi and connect to the hotspot.

Of course I’m also very familiar with the screams of pain from mobile network operators that are suffering because people are actually using the data networks. Yes, after many years of pulling hair out trying to figure out how to get consumers to use mobile data services, suddenly consumers are using mobile data services. And it hurts.

Man, that Steve Jobs guy is so annoying!

So it is interesting to see the mobile operators getting the hang of this now and I can hear them thinking “next chance we get, we have to try to get out of this hole”. I guess that chance comes with the release of the next iPhone (June 24th… just around the corner!).

So, if you go for the new iPhone, buy out your remaining contract and upgrade, you get a new tariff scheme that offers 500 MB of data. That isn’t much data if you have got used to randomly doing data-oriented stuff without thinking about the usage. You can buy more data (in October).

I’m sure there will be plenty of groaning. I can find plenty of things to be sarcastic about here, but really, I think it probably is a sensible move. I’d love to have all-you-can-eat data, but if I’ve got a decent amount of data included, if I’ve got a way to clearly monitor my data usage, if they are fair about handling over-consumption, I think it makes sense and is just good business (some big “ifs” in there).

From my perspective, I could easily work within 500MB if I pay attention to when/how I use data, particularly as 3G is SO AWFUL that I tend to disable it and stick to GPRS or EDGE. I can easily do more via WiFi instead of loading the network and this sort of policy will have the effect of forcing me to just give a little more thought to what I do on/off the mobile network.

And, if it means that their data network will run a bit better, I’m all for it.

Now all I have to do is figure out what O2 30d Simplicity is.

I’m getting geared up to go back to Barcelona this year and preparing myself mentally for things to look basically the same as last year (and the year before, and the year before…) and prepared mentally for the various industry commentators to be talking about the same things they were talking about in years before. I guess the difference this year will be operators complaining about how iPhone usage is wreaking havoc with their networks (”argh! people are using our networks! We didn’t build the network with this in mind!”). And, of course, the most important player in the mobile industry will probably not be present (Apple).

Unlike previous years, this year I’m primarily focused on supporting one company, Palringo. We will be exhibiting in Hall 7 (through the main doors and up the stairs to your left). Palringo has been going for three years now and is a relatively young company, but I’m proud of where they have got to with relatively small investment and a small team. For anyone who does not know, Palringo provides a direct-to-consumer, mobile instant messaging platform differentiated by their ability to pull together popular third party IM services alongside the feature-rich Palringo service which includes walkie-talkie style voice messaging (push-to-talk for telco geeks), picture messaging and interesting location functionality.

Palringo’s direct-to-consumer service has been growing strongly and usage has been growing ahead of user growth which is interesting. Over the past few months, the company has also undertaken substantial work with partners and we have realised that working with partners really plays to the strengths of the company’s platform. We are letting the consumer service continue to grow organically and investing our development time into helping partners leverage our platform.

Over the past few months we have:

• worked with leading handset manufacturers to embed our application (several devices are starting to appear in the market),
• delivered a full white labelled solution for a partner targeting a specific region with a slightly modified proposition,
• worked with a partner to launch an entirely new service based on a modification of our application, adapted for a specific market niche
• developed an iPhone SDK that allows other iPhone app developers to incorporate Palringo’s chat capabilities into their apps

… and several other interesting projects.

The company’s focus at MWC is to make contact with a range of new partners. The proposition is interesting, the business model is interesting and the company is growing nicely. I’m not looking forward to hanging around MWC for four solid days, but I’m sure there will be plenty of interesting conversations. Do stop by if you happen to be there.

As an observer of technology trends, I’ve been aware of the growing eBook trend over the past couple of years. The venerable Gutenberg project has been producing eBooks for years and actually, back in the mid-1990’s while working at BT, I used to download and print out stuff from Project Gutenberg; whereas I couldn’t sit around work reading a book and it seemed anti-social to sit alone and read a book in the canteen, it seemed OK to sit and read some printed pages that look work related.

I’ve noted with interest the emergence of Amazon’s Kindle device. I’ve noted with less interest Sony’s attempt and several others that are starting to appear. I’m also waiting with interest to see what Plastic Logic comes out with (Jan 7 unveiling apparently). I haven’t been interested enough to run out and buy a device given that I have a laptop with a long battery life that I already have to carry around everywhere and I have an iPhone that is OK for reading some stuff. I thought about getting one a couple of weeks ago when Kindle launched in the UK, but talked myself out of it on the basis that Apple’s much rumoured Tablet may appear any day now.

I’ve also been following the demise of the newspaper industry: the slow, painful disintegration of almost an entire industry that was once a cornerstone of society. The process has been long and was easily predictable (and easily denied) back in the late 1990’s. There has been much discussion of late regarding the likelihood that Rupert Murdoch’s great content will have to be paid for and that some of these publishers are likely to launch their own eBook style readers to distribute their content.

Given this context, I was quite pleased to be given a Kindle 2 last week (thanks Asad!). It took me a few seconds to connect and buy a few books. It took me a few more seconds to realise that the device was registered to the person who had bought the gift and that I needed to register it to my own account. I was travelling last week, so I have now done quite a bit of reading. Here’s what I think:

- Technology: device is nice, easy to hold, mostly works. The e-Ink display does make for a readable page, although you need decent light and there can be issues with glare. The re-draw of the screen is a bit annoying at first, but I’ve become used to it (if you just blink when you turn the page, you don’t notice it!). In general, much better than back-lit and nice to not have the spooky blue glow usually associated with phones or laptops. Battery life is very good (it takes power to change the display, but takes almost nil power to maintain the display).

- Content: biggest disappointment thus far. Quite a few times now I’ve thought of a book, gone to the Kindle store on the device and discovered that the book isn’t available (a couple of absolutely classic books, a couple of recent books… nothing too obscure). Content from Project Gutenberg is available for Kindle (I download to PC and transfer across) and I suppose one must start thinking about browsing what *is* available for Kindle rather than expecting everything to be available, but it is pretty annoying. Without turning this into another overly-long blog post, I would like to point out that the various readers being launched onto the market are unlikely to fail without tight integration to content (advantage Amazon).

- Newspapers & Magazines: I found and downloaded a couple of newspapers and magazines. Another big disappointment, not in terms of availability, but experience. While I have found the device to be fine for reading books, it is annoying for reading magazines and newspapers. When I read a newspaper, I suppose I scan through the pages pretty quickly, have a good sense of orientation and quickly pick out the ones that are interesting enough for me to read. Same with a magazine. With the Kindle, one must scroll through articles sequentially, although there is an option to skip to specific sections. No way will eBook readers work for the ailing newspapers unless they can sort out the ability to scan through, get a sense of everything and waste time only on the really important bits.

- Books: no problem at all. The orientation issues do not bother me too much. I miss that intuitive feel for how much is left and how much has been read already, but there is a little progress bar at the bottom (”I’ll just keep reading until I get to 35%”).

- General things I don’t like: doesn’t smell like a book, I still keep reaching towards the top right corner to turn the page (when I’m tired), several times I’ve moved to look at the “back cover” to see the picture of the author…

Higher order effects could be interesting:

- Farewell to the art of headline writing: I suppose this is mostly a British thing given that headlines in America are laughably dull. In the USA, the objective of the headline is to obviate the need to read the article: just sum it all up in one line, make it boring if possible. In the UK, the objective is to tempt readers to dive into the article by eliciting a sort of “surely not?” or “what?” or “outrageous!” sort of response. At a higher level, this British art was best illustrated by London’s Evening Standard which is sold on the street by independent agents standing at little booths: they always hang signs with intriguing snips of information that tempt passers by to purchase a paper (”End of world is nigh”).

- Never judge a book by its cover: I’m always laughing at my wife who often chooses her book based on the cover. Covers don’t matter in the eBook world, but professional/consumer reviews do. Overall, I think the entire publishing industry will be disrupted and we will probably have a decade of bumbling incompetence from the existing players while the new order establishes itself.

- No free marketing: Gone will be the days of books getting promotion through people sitting and reading on the tube. Remember when it seemed that everyone on the tube was reading Captain Corelli’s Mandolin? Likewise, for newspapers (if newspapers on eBook catch on), there will be no free promotion from people sitting in public with their titles. Men in suits will no longer be obliged to read the FT on the way into the City and the plasterers heading to Notting Hill will not feel obliged to read The Sun.

- Read all those books you were too embarrassed to buy: I noted on a site for Project Gutenberg texts that one of the most popular eBook downloads was the Karma Sutra.

Overall, I like my Kindle. There is a long way to go, but I think that we are definitely at a turning point. I love books. I have a lot of books scattered around the house, but I also had a load of LPs, replaced with a bigger load of CDs, all of which are now up in my attic, replaced by iTunes.

There are two topics that I’ve been tracking closely for a while and have been meaning to post on, but which seem to move so fast that it has been hard to find a point in time where I’ve digested enough of the current newsflow to post something relevant. Those topics are the iPhone and Android devices.

Regarding Android, I posted some time ago that I was sceptical but taking a “wait and see” approach. More on that later.

For iPhone, there is so much to say. I’m a fan. It is fantastic. So many of the obvious issues that so many of us have complained about for so long have been addressed. Sure it isn’t a perfect device, but it is such a step forward and has driven massive change into the market. We are only at the start of a new mobile era that we will look back and recognise as having been initiated by the iPhone.

One thing I have been watching with interest is the relationship between Apple and the mobile operators. Here is clearly a case of a clued-up company that understands its users (Apple) throwing a lifeline to a collection of amazingly clueless companies (mobile operators). Granted, it has been a lifeline with plenty of conditions and consequences, but a lifeline nonetheless.

In phase 1 of the iPhone roll-out, individual operators in each country were given exclusivity, with the exception of France (typical!). In the UK, O2 has had exclusivity and, in the US, AT&T had the deal. The exclusivity was for 2 years.

On having it…

So, if you have exclusivity and you realise that the device is a massive hit, and you assume that your exclusivity will expire as predicted by the contract you signed, what do you do? The answer if you are O2 is… nothing (at least that is what I am able to gather from the visible evidence).

I have seen plenty of analyses of AT&T results pointing to how the company has benefited from iPhone exclusivity through subscriber growth and the conclusion is often that the iPhone is a substantial benefit to operators when they have exclusivity.

Sure, O2 and others have learned to optimise and operate their networks to cater of the quirks and demands of the iPhone. I have spoken to operator representatives who complain about the hassles involved in this and from what they say, it isn’t simple. Beyond this, however, there seems to have been very little effort to cultivate any kind of exclusive iPhone-oriented *capabilities* that would make *their* iPhone experience any better/different to that of a competitor.

Could O2 have built some of its own apps and services around the iPhone? Could they have built apps that made use of specific bits of network functionality? Even if you cannot launch your own apps, can you build up collections of specific sorts of content that can be accessed and managed through the iPhone apps you publish via the official channels? It could be that Apple prevented its exclusive distributors from engaging in this sort of exercise.

On losing it…

After a couple of years’ worth of exclusivity, time is up. No time is wasted and it turns out that Orange in the UK launched its iPhone proposition the day after the exclusivity expires. I guess the only thing to do if you are O2 is to wait and see what pricing Orange and Vodafone come up with, and then figure out how to respond (on price).

On taking it away…

After sitting around in the UK for two years and seeing more and more of your target market walking over to O2 and buying an iPhone, you can now sell it yourself. O2 is a sitting duck. Their pricing and positioning is clear for all to see. So here’s the really, really amazing thing: Orange appears to be preparing to draw attention to its cap on data usage (750Mb/month) and restrictions on services such as streaming, voice/video over the internet and instant messaging. All I can presume is that the Orange UK guys haven’t spoken to the guys in France and haven’t bothered looking at the apps available on the app store. They certainly don’t understand the market that is attracted to the iPhone.

In conclusion, I have to admit that it is easy to pick at these things from the outside, there have possibly been some restrictions placed on O2 to prevent them from innovating and the rumours relating to Orange could be … rumours. However, Apple has achieved something quite amazing by taking ownership of the customer over the heads of operators and, two years on, it is remarkable how little the operators seem to have learned.

Before I launch back into posting stuff I feel I should explain my extended silence. Unfortunately it isn’t to do with any kind of secret mission that required my radio silence. It has been simply a matter of not having (or not making) the time to do it. I have many half-finished posts lurking, but have had trouble carving out the time to sit down and finish them properly.

As some of my associates and friends know, I produced a regular newsletter of my views that was sponsored and was distributed to a diverse group, some of whom claimed to actually read it once in a while. When the sponsorship disappeared and I moved to blogging instead, I never really achieved critical mass and simply got distracted by the stuff that pays the bills.

I also found this year that I hit the point where I couldn’t keep up with incoming email. By that, I mean that I had email hanging around in my in-box that should be answered, but which I didn’t have time to answer.

During the lull in August I spent some time organising things. I implemented a task management system and mostly cleared my in-box. Of course, that means that I now have a task management problem instead of an email problem, but I think I’m getting better.

From the perspective of someone who invests in technology and who is actively involved in creating/growing companies in the tech space, I keep a keen eye on trends. I often find things that catch my interest and I’m aiming to comment here more regularly. Comments always welcome and can be sent to <tim at fivecross dot com>.

Further to my previous post on lasting 100 years, I’m reminded of another company I met last year. I will not get the story exactly right, but the gist of it:

The company was founded by a PhD student who, on completing his research, was keen to try and commercialise his work. He raised a small amount of money from a local investor (in Belgium) and set off to build his company. He hit break-even in 3 years (like we always project in our business plans!), I think it was about Year 5 when his investor had to pull out of early stage investing and forced the entrepreneur to find another buyer for the investor’s stake. 

The company developed and progressed each year and eventually did an IPO in about Year 10. From that point (we are now in Year 20!), the same entrepreneur has continued to take the company forward showing nice progression of revenue and earnings each year and now has substantially more than Euro 100m of revenue and is nicely profitable.

The company (www.irislink.com) has core technology in the area of Optical Character Recognition (OCR) and over the years has developed further capabilities in the area of document recognition and processing.

From a VC perspective, I was really impressed with the technology and the founder. We are used to thinking in terms of jumping in, getting things going quickly and trying to get out quickly and in so doing, we may often be out of synch with what you might call the natural rhythms and processes of company growth. 

In this morning’s post I received a company annual report. It brought back memories: a thick, bound, glossy company report. I haven’t seen one for … well, I guess I haven’t seen one since this same company sent me their report last year. Companies tend not to send these things out anymore, but this particularly company is a printing company that prints, amongst other things, company annual reports.

So, I was unwrapping it and heading to the recycling bin with it, but couldn’t resist having a look at the first page to see which way results were going. Surely an old fashioned business like this must be having a hard time? Actually, their 2008 figures are up and they seem to be doing OK. I set the report to one side so I can have a look later and see if I can figure out what they are doing right.

Of more interest was a statement by the CEO in the opening paragraph: the company has just completed its first century of operation and is looking forward to its second. I think that is remarkable. I know that there have been studies into how companies survive over long periods of time, but I haven’t got around to reading up on the subject.

In our new, digital age, things are so much more ephemeral. Fashions change quickly, companies rush to create (or follow) the latest consumer craze and at the end of the day, when stuff doesn’t work or ceases to be interesting, we delete and move on (except Palm which never seems to go away regardless of how poorly it performs). I’m not saying that the old days were better, I’m just finding it an interesting contrast.

So, anyway, congratulations to Patrick Holm and his team at Elanders in Sweden!

The world of mobile gaming is something that I’ve observed and had an interest in for quite some time. In my days at Softbank, a colleague made a very early investment in a mobile gaming company, but the year 2000 was probably a bit early to make a bet on the sector. There seemed to be a flurry of interest and investment in 2004/2005, but most of those companies seem to have fizzled out. Some would say that 2008 might still be a bit early to make a bet, but it feels to me as though things are changing.

About 9-12 months ago, it felt like the market hit a wall. The primary gaming platform, Java, has always been a joke in terms of performance and has suffered from the fact that the “write once, run anywhere” promise was a complete farce. In summary, the content was usually mediocre, performance was patchy, provisioning was a farce, billing was a complexity… it just didn’t make sense.

Now things are changing. The key change for my money is the iPhone. My friends are tired of my harping on about the iPhone, but it is a game changer. I have my gripes about the phone, but compared to what we have had in the past, it is phenomenal. Apple leveraged its focus on end-to-end control of the entire product and, critically, leveraged the massive installed base of iTunes software to deliver a coherent proposition. From a relatively small installed base (approaching maybe 10m compared to few hundred million shipped by Nokia each year), iPhone users represent a disproportionately large part of the market for mobile apps.

With iPhone shaking things up, we also have Nokia coming in with a revision of its NGage proposition. NGage launched (and flopped) in 2003, but the platform has re-emerged as a gaming platform that will run on high-end Nokia devices. The NGage game player will be downloadable and games can be purchased for $9-$14.

Then we have Google/Android entering the fray. I do not have high hopes for that, but they clearly have the iPhone model that they can try to replicate and I wish them luck.

The big question… what about the big chunk of the market not covered by NGage or iPhone? There is a big gap in the strategies of Samsung, Moto, SEMC and LG. More on this anon I hope.

In the meantime, here are some quotes and stats:

- Sega’s Super Super Monkeyball game sold more than 300,000 copies in 20 days on iPhone. The game costs $10 and illustrates the credibility of iPhone as a target gaming platform.

- Sony Ericsson launched its W760 Walkman phone with a 2.2-inch screen and dedicated gaming buttons and will sell games from Electronic Arts for $6.99 among other games in its content store. 

- On a monthly basis, roughly 40m mobile users in US and Europe download and play a game on a mobile device. Over the course of 2007, approximately 22% of people played a game on their mobile phone while approximately 9% played games that they had downloaded. (M:Metrics).

- Around 5-7% of mobile users in US/Europe buy mobile games regularly whereas in Japan and Korea, the rate is 10-15% (Gameloft CEO)

- Juniper predicts market size of GBP 5bn for mobile games by 2009.

- Mobile gaming is expected to be worth $6bn in 2011 (Understanding & Solutions).

- Informa expects revenues from mobile gaming to grow 23% in 2008 to reach $4bn.

- By 2012, mobile games will be a $5bn market (Gameloft CEO).

- Gartner believe that the market will be $10bn by 2011.

- Guitar Hero Mobile (from Hands-On) recently exceeded 1 million downloads across all wireless service providers (mostly in the US and mostly BREW). This game costs $11.99 for Verizon customers and also comes in a version that requires $4.49 monthly subscription.

- The vast majority of mobile gaming revenue (90%) comes from purchases on carrier-maintained portals, while the remaining 10% comes from independent gaming sites. That’s going to change–by 2012, 72% of gaming revenue will come from carrier portals, and 28% will come from independent sites. (Parks Associates).   

- Only 12% of the time mobile phone users spend on their devices goes for voice communication, compared with 37% messaging, 16% multimedia, 8% browsing and 4% games. (Data from  Nokia’s recent “Smartphone 360″ study)

- The cost of producing the average mobile-phone title ranges from $200,000 to $2 million, far less than the average $10 million spent developing a game for a format such as PlayStation 3 or Xbox 360.