Innovation Norway ICT Summit 2009 - Inge Andre Sandvik


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Keynote speak at Innovation Norway`s ICT Summit in Trondheim 12th of October 2009

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Innovation Norway ICT Summit 2009 - Inge Andre Sandvik

  1. 1. Innovation Norway ICT Summit 2009 – How to build a sustainable mobile application business. Inge Andre Sandvik. Co-founder, member of board of directors and strategy advisor @ Mobile Nordic AS and CEO, Founder of Mobile Gaps AS
  2. 2. Agenda • First little bit about my background and experience from mobile app start ups. • Then, tell you little bit about Mobile Nordic • Share interesting facts about the market • My view of key identificators and success factors that I think is important lesson learned. • The closing with a short story about “from R&D to commercialization. “ All this in 30 minutes !
  3. 3. Inge Andre Sandvik iasandvikk +47 90194949
  4. 4. Who would have thought this?
  5. 5. Mobile CTI – 1881 Mobilsøk – A disruptive innovation success story • Founded by Inge Andre Sandvik and Rudi Rørstad. Funded by Telenor Venture/Rune Rinnan trough Opplysningen 1881. • Timing: Search by SMS was not user friendly and have limited innovation possibilities, 3G and smartphones was emerging. • Disruptive innovation: Price model and ”See who is calling” • Assembling is innovating! • Awarded Norways best mobile service 2006 • Awarded Nordic and Baltic most innovative service 2007 by TeliaSonera. Year 1: EBITDA 4 mill NOK Year 2: EBITDA +10 mill NOK
  6. 6. Mobile Nordic
  7. 7. Next step - Mobile Nordic – going global. Vision : “the global interactive phonebook in your pocket” The company develops next generation mobile web 2.0 applications to simply the way users interact with their phonebook , call log and messaging services on the phone. Develop pro-active applications with high user retention and usability. The company philosophy is to have the technology stay in the background and the customer value in the front. We want to help the user being more productive and effective by adding smart tools that create instant value on top of the existing services on the phone.
  8. 8. View of the market landscape First generation phone book Social phone book Information. Communication Relations & location Storing, searching To answering the Who do you know question on how indexing and and where they are displaying static you want to and what they are communicate with infomation on the doing. device. your contacts. Social phone book is typical functionality that is well known in internet based applications like social network, IM, and VoIP. This is now more and more integrated into mobile phone applications. These feature and functions is often refered to as ”mobile web 2.0” Inge Andre
  9. 9. The evolution of the phone book Information Relations & location Personal info and personal The social graph/map of who knows content on the device who and where they are The social phone book Communication Exchanging or sharing messages, status, or voice/video.
  10. 10. Market landscape related to mobile social phonebook and how it is developing Information Relations & location Communication Future Inge
  11. 11. Global market perspective for mobile applications
  12. 12. Total market of shipped mobile phones world wide iPhone Souce: Strand Consulting
  13. 13. Smartphones Market 2008/2009  Nokia maintains global lead, although its performance varies by region  Touchscreens become the preferred interface, representing 40% of all shipments  Apple’s success continues, as the iPhone takes 23% of the North American market  RIM continues to gain share, succeeding with its push into the consumer market  Operating system choices are proliferating, primarily at Microsoft’s expense
  14. 14. Outlook - Smartphone market 2012 by OS Vendor /OS Units sold Market share (%) Trend Nokia 203 mill 39% Android 76 mill 14.5% Apple iPhone 71.5 mill 13,7% Windows Mobile 66.8 mill 12.8% BlackBerry 65.25 mil 12.5% Various Linux 28 mill 5.4% Palm (WebOS) 11 mill 2.1% Source: Gartner. Android will gain momentum from the growing OEM customer base and Mobile Operators that will initiate demand to ISVs to develop more applications on this platform.
  15. 15. Apple App Store`s incredible growth path
  16. 16. Mobile Apps spoils faster than fish 2 billion downloads does not mean 2 billion users are using applications frequently or are willing to pay.  Mobile market places need to focus on applications that are being used and where there is willingness to pay.  Top grosser in iPhone App store is apps that are utilities oriented and very popular and known games with global brands. (EA)  Top 20 grosser are local relevant applications.  Based on user returning and frequency is the advertisement model suited to be profitable for less than 5% of the applications in the market! The data in this report is computed from a sample size of over 2000 live applications and over 200 million user sessions tracked each month across Apple (iPhone and iPod Touch), Google Android, Blackberry, JavaME platforms .
  17. 17. Analysis of venture investments in the mobile space Analysis of venture investments in mobile space – Tracking worldwide mobile-related VC investments from June 07 to Feb 09 – In total 360 deals, thereof 159 in Mobile Apps and 31 in Mobile Advertising – Average investment per deal in Mobile Apps USD 8.5m, in Mobile Advertising USD 10m respectively. With regard to newly established funds of manufacturers an increased deal activity can be seen with significant average investments per deal, e.g. - iFund (in cooperation with KPCB): USD 6.85m (6 deals done to date) - Blackberry Partners Fund: USD 5.7m (3 deals done to date in mobile apps) -Android Developer Challenge: USD 187.5k (20 projects funded to date) (Source: BrainsToVentures AG) Prediction! We will see that new startups will need less money because development time will go down and distribution speed and ease will go up. We will see more device and mobile operator funded investments in the mobile app business area.
  18. 18. Most downloaded applications
  19. 19. Biggest movers and shakers in the mobile app market • Facebook: 65 million users (Aug 2009) • Opera Mini: 30+ million users (Aug 2009) • Skype: 3 million users on iPhone (10%) of all total iPhone users. (Oct 2009) • Spotify: No 1. free download i iTunes i UK, Spain, Sweden, Norway and Finland first week after launch. No 1. in Android Market. (Oct 09)
  20. 20. Key identificators and success factors (from my point of view)
  21. 21. Key identificators and success factors Unique market Great timing Plans & People & and technology Scalability skills & execution planning partners
  22. 22. Unique market and technology knowlegde skills • Major part of all great innovations is a bi-product of what it was meant to be used for. • Skype did not invent, but assembled existing technology – its allowed not to invent to make popular products. • Spotify founder Daniel Ek came from P2P – who would have thought than streaming would be his fortune. Unique combination of curiosity, dedication, smartness, understanding the need of coopetion and innovation surrogacy.
  23. 23. Key identificators and success factors Unique market Great timing Plans & People & and technology Scalability skills & execution planning partners
  24. 24. Timing & execution (and luck) • Have there been any new technology evolutions or innovations that suddenly open up new possibilites? • Have there been major changes in existing user behaviour or buyer patterns? • Have introduction of new technology made old ideas possible to be profitable? • Never give up easy, but know when you are in a dead end.
  25. 25. Key identificators and success factors Unique market Great timing Plans & People & and technology Scalability skills & execution planning partners
  26. 26. Plans and planning • “It's important for entrepreneurs to be able to both make business plans, and to be able to cut them up for something new” Marc Andreessen. • Plans must sell and be clear on what, when, who and how much. • It is not nice, but NEED to have effective web based collaborative tools to be effective. (Basecamp, Skype , Google Apps, etc) • Everything takes more than twice the time you think and cost more than you ever will imagine.
  27. 27. Key identificators and success factors Unique market Great timing Plans & People & and technology Scalability skills & execution planning partners
  28. 28. People and partners in the right place • Right people at the rigth time. • Not to many – the three muscateers. (37 Signals – Getting real) • People that is able to take full responsibilty over their area and have core competence that is needed at that stage. • People with the ability to deliver and make you better. • Enviroment can make all the difference . Make sure you are in a cluster where there is culture for innovation and sharing . “If I have seen farther it is only by standing on the shoulders of Giants.” (Isaac Newton)
  29. 29. Key identificators and success factors Unique market Great timing Plans & People & and technology Scalability skills & execution planning partners
  30. 30. Production scalability • Anyone can build a service that can get hundreds of thousands users. Very few can build services that scale for millions of users. • Architecture - Are we able to scale our production without escalating our cost? • Are we able to scale our product development without the need to go backwards before forward again. • Billing – Are we able to scale our business to new markets and bill our customers efficient? • Technology – Do we have the technology tools in place to scale? Code, DB, storage, HW, hosting partners, developers.
  31. 31. Closing From R&D to commercialization
  32. 32. From R&D to commercialization SMS Preview Instantly preview incoming SMS messages and see what is sent and who has sent it when the message arrives without a single click One simple idea, one developer and one product developer and millions of users.... • Idea came from a dinner I had with Nokia. • Development took 2-3 days. • One of the most popular app in OVI store. • SonyEricsson is preloading it on their new S60 top model – Satio. • Millions for users will use the application within less than a year after launch. • Freemium business model. • Platform for new product innovations and new revenue streams.
  33. 33. Thank you!