Bluenove Opening Innovation Conference

Septembre 2nd, 2008 ‘ Open Innovation’ & the Mobile Marketing Ecosystem Mobile Marketing 2008 Congress Warsaw

www.bluenove.com is a strategic consulting firm specialized in ‘Opening Innovation’ for major corporations and brands

www.bluenove.com/trackrecord.php has a strong track record in developing and launching innovative services with high-tech startups

www.bluenove.com/news.php is an active and credible evangelist in the area of Open Innovation in France and in Europe

www.bluenove.com/lipp.php provides its ‘Lab Innovation Partnership platform’ (LIPP) methodology to design and implement Open Innovation programmes

http://www.bluenove.com/customers.php is developing and supporting Open Innovation programmes for Orange, La Poste,..

Who is bluenove ?

Open Innovation ?

‘The smartest people always work for someone else’

( Bill Joy, co-founder of Sun Microsystems,1990)

What is ‘Open & Collaborative Innovation’ ?

‘… Open innovation means that valuable ideas can come from inside or outside the company and can go to market from inside or outside the company as well. This approach places external ideas and external paths to market on the same level of importance as that reserved for internal ideas and paths to market during the Closed Innovation era.’

( Book ‘Open Innovation’, 2003, Henry Chesbrough, Harvard Business School Press)

What is ‘Open & Collaborative Innovation’ ? Internal collaboration Innovative ecosystem customers startups Major Corporations Universities Players from other industries External collaboration Major Corporations and brands Outside-In (partnerships, M&A, JV,…) Inside-out (spin-offs,…)

Close the Gap with external innovation Research Development Current Market and Business Model Technology acquisition Technology in-licensing External research projects from Universities and Labs (Public or from other corporations) Technology from startups Venture investing Internal R&D Spin-Off Spin-Off New Markets and Disruptive Business Models +

Why Open Innovation ? External collaboration plays a key role in nearly 50 percent of P&G's products. We've collaborated with outside partners for generations but the importance of these alliances has never been greater. Our vision is simple. We want P&G to be known as the company that collaborates — inside and out — better than any other company in the world. Chairman of the Board and Chief Executive Officer

Results :

Outside Influenced Innovations : generating a dramatic growth in business

2000: +15% growth

2006: +35% growth i.e. 4 billion $ of new revenues every year as a result of innovation they generated from the outside : not a single Venture Capital fund can claim they have generated such an amount of revenues…from nothing. P&G has revolutionized their business

2008 : Target of 50% achieved

Why Open Innovation ?

Impact of ‘Open Innovation’ on revenues versus growth in R&D spent:

47.7% $76.4 billion $ 39.9 billion Net Sales 14.2% $2.1 billion $ 1.8 billion R&D spent % change 2007 2000

What Open & Collaborative Innovation is & is not

OI is not just about :

Core business

Outsourcing

Cost reduction

The R&D department

Partnerships with other industrial partners

Hiding what you don’t how to know

M&A

OI is about :

Innovation & collaboration

Blue Ocean

Growth

Change management

Relationships with startups, universities, customers

Openly communicate what you don’t know how to do

New Corporate Venturing & Partnership models

A very successful OI programme launched by Microsoft 3 years ago: Microsoft IDEES

Based on partnerships with startups and VCs

Support to Startups through marketing & PR, consulting & IT resources, meeting & working space in Microsoft facilities, introduction to VCs

An excellent Corporate Communication platform positioning Microsoft as the partner of choice for early-stage startup software companies in France

After almost 3 years and 50 partner companies out of a deal flow of about 400 companies, Microsoft is able to claim that in average these 50 partners :

raised 3 millions Euros

hired 16 people

Had a 400% growth rate

The Microsoft IDEES program is going to be deployed internationally starting 2008

http://www.microsoft.com/france/apropos/idees/

http://nextstreams.blogspot.com/2008/05/davos-annual-meeting-2008-power-of.html

http://nextstreams.blogspot.com/2008/07/open-innovation-by-nokia.html

http://nextstreams.blogspot.com/2008/06/open-innovation-trend.html

Our poll : http://www.polldaddy.com/poll.aspx?p=80103

‘ Open Innovation’ programmes currently supported by bluenove :

zoom on the ‘OPSUP’

Orange has started 2 years ago an Open Innovation programme to develop their Web 2.0 ecosystem

To launch new 2.0 services and enrich the existing ones such as : www.pikeo.com , www.bubbletop.com , www.soundtribes.com , www.whosegame.com , …

The ‘Orange Partner Start Up Programme’ in 2 years has

Identified more than 200 startups wordwide

Has contacted about 100

Has done more than 30 opportunity analysis and business cases

Has signed 10 partnership contracts

Is launching 5 new services/features

The ‘Orange Partner Start Up Programme’ is now part of the www.orangepartner.com organization: http://www.orangepartner.com/site/enuk/work/consumer/orangestartupprogramme/p_orange_startup_programme.jsp#1

Starting 2008, the OSUP scope will be extended also to the following areas beyong web & mobile 2.0:

Location Based Services and contact-less (RFID, NFC…)

Enterprise solutions

Digital Entertainment

Etc.

The OSUP has been designed by www.bluenove.com : bluenove will keep supporting the OSUP for the next 2 years

Deliver and implement a ‘Corporate Open Innovation’ programme :

By building a sustainable business and technological ecosystem around Orange and its platforms

Through the development of relationships and partnerships with Start-Up companies and Venture Capital funds (Worldwide)

Creating and launching innovative services/products/enablers and disruptive business models

Mostly in the area of Mobile/Web 2.0 (communities, social networking, user generated content), social media, audience, advertising & entertainment related services (video, TV, music, games),

Based on convergence (mobile, IPTV, web, content)

The ‘Orange Partner Start Up Programme’(OPSUP) mission

Objectives :

A ‘partnership platform’ based on the ’Corporate Open Innovation’ philosophy

aiming at developing a dynamic and sustainable ecosystem around NExT.com, OAD and the greater Orange Group

through the creation of a “ virtuous triangle ” to generate speed and value to Orange

How does it work ?

Provide new product /service or be part of

a new « mash-up » or enabler

Share development and experiment of first

launch & new business model

Provide funds to early-stage companies

Or support for partnership with FT-Orange

if already in their portfolio

Provide a first key pilot project /contract &

international development potential

Support early-stage fund raising

M&A opportunities

A unique ‘partnership platform’ delivering ’Open Innovation’ Customers FT-Orange VCs Start-Up

Close the Gap with external innovation Research Development Current Market and Business Model Technology acquisition Technology in-licensing External research projects from Universities and Labs (Public or from other corporations) Technology from startups Venture investing Internal R&D Spin-Off Spin-Off New Markets and Disruptive Business Models + Current OPSUP scope

inputs outputs Deliverables Internal sourcing from : R&D, Next.com, I labs External sourcing from : Web Sites, press releases, conferences… Bring value Challenging “ Make or buy” Develop a standalone project from scratch Contribute to the ecosystem development Build a label approach to improve internal processes (purchasing, legal…) OPSUP process et deliverables (pipeline 2007) “ On demand” sourcing of partners / enablers (> 200 identified) (> 80 contacted) (> 30) (> 10) (> 4) Pilot contract 3 Opportunity studies 1 MoU 2 Beta test project management BETA Collaboration Contribution Problems solving Final launch 4

Relying on the ‘Lab Innovation Partnership Platform’ (LIPP) methodology

6 layers of support, services and tools :

Programme ROI tracking system

Communication : internal and external (PR)

LIPPnet : collaborative intranet/extranet 2.0 and knowledge & best practices management

Processes (MoU, monthly report,…) and organization (steering committee, interfaces with Purchasing, Legal,…), pipeline management

Know how : to attract, select, deal with and support the startups and their management team for the projects take-off and management

People & training : a team of 3/4 people to run the programme + training modules to deploy Open Innovation change (1-Open innovation, 2-Venture Project Management)

Support layers as key succes factors

Best practises / lessons learnt

1) a specifically designed partnership contract/MoU which is co-signed with the purchasing department to create momentum and speed very early in the partnership process

2) no exclusivity nor IP issues dealt during a first 'opportunity phase' of collaboration, again to create extra pressure on the Corporate organization to deliver faster Time To Market and first mover advantage

3) no direct investment, but rather support the startups to help them raise funds with third party VCs thus contributing to the development of sustainable partners within the ecosystem as well as initiate extra opportunity flows from the VC community

‘ Orange Partner Start Up Programme’ case studies

After reviewing numerous start-ups, mob-it was considered as unique with many specificities :

The ability to deliver a very efficient web-to-mobile experience

A generation on-the-fly of a widget app from a website, fully personalized

No pre-installation process, no configuration

Not another Widget universe, complex to understand for the users

Easy to transfer

A very simple idea : the mobile device, with its small screen, its presence in our pocket, is the natural « to go » extension of the web .

We are focusing at leveraging our services such as Pikeo

As mob-it allows the mobilization of websites, through an installed application on the phone

Pikeo could benefit from the technology to provide micro-albums

Case Study: mob-it by NPTV

inputs outputs Opportunity studies 1 Beta test project management BETA launch Q4 - 2007 4 Deliverables Start-up screening from our 2.0 companies networks Processes and deliverables: in real life On your mobile 6 months public beta test 3,5 months 3,5 months = 7 months from meeting To beta Pilot contract 3 MoU 2

a simple button on any album

a click on the album, a phone number...

Case Study: mob-it

a SMS is then received on the mobile phone with a wap link (wap push)

a click and the installation begins

the application automatically launches...

no prior installation or configuration

virality through the click of a button

(web to mobile + mobile to mobile)

OSUP MoU has been highly valuable for mob-it

New prestigious clients : Universal Music, Marathon Group (TV production company), Canal+

Mob-it has been selected by Eureka for a 900 K€ public funding

As the pilot is being launched, OSUP is now providing support to mob-it team

Communication on the product : Press Releases, Newsletters, Conferences and shows to present the company. As an example of the OSUP contribution, we invited to this conference the CEO, Jerome Chouraqui. (Feel free to share and meet with him)

Financial : the company is currently looking for 1 million €. OSUP is organizing meetings with VCs thus bringing credibility to the project.This conference is also an opportunity to meet VCs.

Case Study: mob-it

Vringo have developed a community video ringtone service relying on Web servers, scripts as well as mobile phone clients. It allows friends to configure the video ringtone which will play on their friends’ phone when they call.

Among other service providers (usually based on IMS ), Vringo was considered unique :

Vringo’s architecture does not require any modification to operator telecom systems or mobile phones radio stack.

Vringo have developed an end-to-end synchronization solution between their servers and a wide range of mobile phones already (Symbian Series 60, Windows Mobile, Sony Ericsson (≥JP7), Nokia S40 (≥5th edition).

They have filed a number of patents which FT R&D have verified

Vringo can be seen as Personalisation 2.0 and its virality across mobile phones within a community of buddies could facilitate the roll-out of community services on mobile phones (MOC) as well as the uptake of the “Internet” options (“Internet Max” in France)

Case Study: Vringo

inputs outputs Opportunity studies 1 Trial with Lab’O BETA trial Q2 - 2008 4 Deliverables Start-up screening from our 2.0 companies networks Processes and deliverables Jan 2008 Mar 2008 Jun 2008 Jul/Aug 2008 1 months Pilot contract 3 MoU 2 Prepare launch with OFR 5

Orange & Vringo inputs & deliverables

Billing management

Data – flat fee

UGC upload (if necessary)

Premium content

Content (local & international partners)

Free SMS routing to Orange customers to enable SMS wake-up

Embedded clients signature (WM & J2ME) to enable SMS wake-up

Devices selection to match user installed base

Promotion of the service within MOC

And looking further into an advertising model…

Advertising network

Call Data Records (required to determine which video played on whose phone)

Service development

Mobile clients

Web site

Mobile site

Content (international outside of France Telecom / Orange partners)

Interop with other operators (e.g. Bouygues & SFR in France)

Promotion of MOC & mobile Internet bundle in Vringo invitations

Private alpha on : http://orange.vringo.com

V4x is a company selling authoring tools for Mobile Interactive TV

The solution is designed to repurpose content for mobiles, allowing to add the interactive metadata on existing video content

Among other service providers, V4x was considered as unique :

V4x’s platform is a technology enabler that makes Mobile TV a compelling experience. Working with original content, “mixing” it best for the small screen, and distributing it through a range of channels, V4x are the company delivering real, “made-for-mobile” programmes.

They have a complete software suite in ASP mode, from creation of interactive metadata to publishing

Result?

Lead to a proof of concept of an end-to-end mobile TV factory : from creation of interactive metadata, the end-to-end delivery on a unicast network and the browsing / rendering of this interactive info on a specific mobile

Case Study: V4x