Tioga Venture Blog

Windows Phone 7: the targeting issue

Windows Phone 7 has now been on the market for several months and we thought it was time for us to share some thoughts on the product. We will not do a detailed review of all functionalities, as this has been covered in great many details by many blogs.

Key question: "Is WP7 a failure?". Difficult to say at this point. The silence of Microsoft and its OEM partners lead us to think that the results are significantly below their expectations. WP7 does not show anywhere in the market data released by the analysts. All signs point toward a disappointing start, although it is too early to call it a failure. Back in 2008, Android also had a very slow start before taking over the world in late 2010.

As far as the handsets and operating systems are concerned, I would say that it is as good as IPhone or Android. One can argue forever on the respective merits of the different systems but they are mostly equivalent. It took 3 years for Microsoft to wake up and deliver a good mobile operating system but WP7 is pretty good. The tile navigation is very smooth (disclaimer: I use a Samsung Omnia WP7) and very differentiating. The couple of features missing are not a big issue and more a check box issue for geeks. The clear weak point is the appstore. The content is much narrower and weaker than either IPhone or Android market place. I expect Microsoft to catch up in the future but as of now the gap is wide.

The reason WP7 is failing is actually much deeper and more serious than a couple of technical functionalities: it is the targeting. WP7 is clearly positioned as a pure consumer phone, integrating with Xbox, SkyDrive and other Microsoft consumer services. For professional usage, WP7 is significantly behind what windows mobile 6.5 could do. To give just one example: you cannot sort contacts per company! You cannot even search the company for a contact. These are extremely basic usage for a professional smartphone. On the other hand, you can connect to Xbox services and share your highest scores with your friends. By positioning WP7 as a pure consumer phone, Microsoft has cut itself from its core customer base and constituency: the enterprise and professional users. Microsoft is an enterprise company; more than 90% of its revenue (and 100% of its income) comes from enterprise and professionals. Another blatant example of lack of integration is the fact that you cannot connect WP7 to SharePoint 2007 that is still the version delivered in BPOS (the Saas productivity suite of Microsoft). Had WP7 being more focused on professionals, it would have had a chance of being unique on the market and leveraging the core strengths and channels of the core enterprise business. As a consumer solution, it has a very limited chance of out staging either IPhone or Android. IPhone is the cool high-end brand with the best appstore and the best music offering. Android offers a real ability to Mobile Operators to customize the user experience to their brand and services. It also allows producing the cheapest smartphones. WP7 is not the coolest product, not the best appstore, not the cheapest smartphone and not the most flexible for mobile operators: it will be tough to win the consumer war.

We'll see what the futures versions of WP7 bring. The alliance with Nokia could also change the game as Nokia will allow WP7 to, potentially, be running on cheap smartphones and leverage Nokia scale and scope. To be continued…

Frederic HALLEY

Social Media Week : War for talent

Last week, as part of Social Media Week, one of our partner, Frederic Halley, participated to the 'War for Talent' panel. The participants of the panel were:

• David Bizer (Hackfwd), moderator
• Patrick Attalah (90:10)
• Chris Phillips (Taleo)
• Olivier Fecherolle (viadeo)

For those who could not make it to the panel, here are some resources to catch up The livestream can be found here (starting at 41:00) :

http://www.livestream.com/smw_paris1/video?clipId=pla_677a7cdb-706c-41e7-83bc-bd252bc72b2c

You can also find a feedback on the viadeo blog here (in French) :

http://blog.viadeo.com/fr/rh-2-0-medias-sociaux-strategies-recruteurs-recrutement-emploi/2011/02/16/?utm_source=twitterfeed&utm_medium=twitter

 

 

 

 

AFDEL : Croitre à l’international par acquisition

Dans le cadre de l'AFDEL, la prochaine réunion de la commission internationale aura lieu le mercredi 16 mars de 17H à 19H dans les locaux de l'AFDEL. Lors de cette réunion, nous aborderons le sujet de la croissance à l'international par acquisition. Si le sujet du développement à l'international est une évidence pour de nombreux éditeurs français, la manière de le faire est souvent moins claire. La croissance organique est plus sure mais plus lente et peu de dirigeants ont une véritable expérience de fusion-acquisition, encore moins à l'international. Les intervenants qui partageront avec nous leur expérience sont :

• Jerome Malavoy, CEO de Trace One
• Bruno Tourme, Managing Director de Bryan Garnier

La participation est réservée aux membres de l'AFDEL. Inscription directement auprès de l'AFDEL.

Frédéric HALLEY

Tioga at Social Media Week

For the first time this year, Social Media Week will also take place in Paris. Many events related to social media will take place In Paris between February 7 and February 11. You can check the details on techcrunch France (in French).

We could not miss that and are very happy to participate. One our partners, Frederic Halley, will participate to the HR panel "war for talent" on Wednesday February 9^th from 15H to 17H. You can sign up directly Social Media Week website.

We are looking forward to seeing you there.

Paris bars ranking by foursquare users

With this first post of 2011, we'd like to wish our readers all the best for the New Year. Hopefully, you've recovered from the holiday seasons and it is time to look at what is going on the Paris bar scene. The third monthly ranking of bars in Paris viewed by Foursquare users is now available. You can discover what happened in Paris during the Christmas Holidays. Even if popular places seem to be undefeatable other places are still competing for the fame. Congratulations to the three mayors that defended well their mayorships.

 

Below is the usual interactive map of Paris allowing you to locate the places you are interested in.

To know more on the 'Bars in Paris' index, you can contact us at [email protected]

 

Paris Restaurants : Foursquare guide update

Last month we published our first guide of Parisian restaurants viewed through Foursquare crowd. After a busy month, you can now discover the new rankings. The trendy places have been reshuffled. Check out if you were there.

 

 

Also, below is a new interactive map of Paris allowing you to locate the top restaurants of the month. You can check directly from here the tips left by the foursquare users who have been there. If you want to see the map with the full 2600 restaurants, you can check this map :

  

To know more on the 'Restaurants in Paris' index, you can contact us at [email protected]

L’innovation au profit de l’industrie française : l’acquisition de Vizelia par Schneider Electric

L'acquisition de Vizelia par Schneider Electric est un exemple à méditer pour plusieurs raisons.

Rappelons d'abord le contexte : Vizelia est un éditeur SaaS, qui a construit au cours des dernières années « Vizelia  Green », dont l'objectif est de gérer dynamiquement l'énergie des bâtiments. D'un point de vue technologique, la solution est entièrement développée en technologie Microsoft .net ; le mode Saas apporte une grande simplicité et flexibilité, la gestion d'une multiplicité de capteurs dans une multiplicité de bâtiments, et permet ainsi un benchmarking instantané des performances énergétiques.

Dans cette acquisition, la  première source de méditation est le mariage de l'innovation et de l'industrie « classique » ; Schneider, en tant que spécialiste mondial de la gestion de l'énergie, trouve à travers Vizelia une solution différentiante par rapport à ses concurrents. Vizelia peut maintenant déployer sa solution dans le monde entier grâce à la présence internationale de Schneider Electric.

La deuxième source de méditation est la nationalité de l'acquéreur,  à une époque où l'on a tendance à penser qu'un acquéreur de solutions technologiques ne peut être que de l'autre côté de l'Atlantique. Nous avons ici l'illustration d'une forte création de valeur, grâce à la forte présence internationale de Schneider. Cet exemple est une source de réflexion pour d'autres acteurs mondiaux du CAC40, qui pourraient renforcer leur position dans le monde à travers des acquisitions de technologies innovantes.

Tioga, qui a conseillé Vizelia depuis plus de 5 ans, souhaite un grand succès à Vizelia et à Schneider Electric dans la création d'une position de leader mondial sur la gestion de l'énergie dans les bâtiments.

Julien MAZEROLLE

Paris bars : updating the movers and shakers

A month ago, we introduced our first ranking of the bars in Paris, based on Foursquare users feedback and check-ins. As this was very popular (some other topics we cover are not as popular!), we decided to post an update. The idea is simple: same methodology and tools and we have also highlighted the changes vs last month. Note that the scope has increased dramatically the scope of the analysis as the number of bars covered jumped from 1500 to 2300. Interestingly, the number of check-ins jumped from a cumulative 76k to 122k illustrating from the dramatic rise in foursquare usage. For the record, foursquare should use 4M users worldwide very soon. Interestingly, the fad is not rescinding.

 
As we did for the restaurant guide, we have also included a google mashup, allowing you to locate the bars and obtain directly the related tips from foursquare

Enjoy the read and let us know what you think : [email protected]

 

Cool restaurants in Paris – foursquare guide

A couple of weeks ago, we published the first foursquare guide of bars in Paris. Based on a crawling technology we developed we tracked the activity of foursquare users across Paris to know where they were hanging out. The results were very interesting and generated a lot of interests from our readers. A natural next step was to extent our work to restaurants. And here are the results:

 

 
 

This week, we decided to go further by mapping all the Paris restaurants mentionned in foursquare. Although the tips of foursquare are still not as rich as the ones from sites such as yelp or dismoiou, they provide some interesting users feedback on the places. The following maps include all restaurants and will also tell you who is the mayor.

 

 

If you relate to the foursquare users and value their feedback, you now have all the information you need to find a restaurant.

To know more on the 'Bars in Paris' or the 'Restaurants in Paris' index, you can contact us at [email protected]

Julien Mazerolle.

 

AFDEL : A la conquete de l’Amerique

Dans le cadre de la commission internationale de l'AFDEL, la prochaine réunion animée par Tioga Venture aura lieu le lundi 6 décembre à 14H sur le thème : « Les Etats Unis, rêve ou passage obligé de l'expansion ». Pour les éditeurs français, l'expansion en Europe est souvent une étape naturelle du développement. Les Etats Unis représentent en revanche une étape majeure tant par son potentiel (le plus grand marché du monde) que par sa difficulté. Sans compter le mythe de la Silicon Valley, très présent dans notre industrie.

Pour débattre et partager les expériences sur ce sujet, le panel d'intervenants comprendra :

• Philippe Collombel, associé de Partech International, fonds franco-américain bien connu pour avoir accompagné de nombreux éditeurs dans leur développement aux Etats Unis
• Alain Baritault, Journaliste Economie et Technologie et Directeur du Founder Institute à Paris, qui habite dans la Silicon Valley depuis plus de 20 ans et connait parfaitement le milieu de la tehcnologie aux US.

Comme d'habitude, la commission est réservée aux adhérents de l'AFDEL. Inscription directement auprès de Fabrice Larrue de l'AFDEL.

Frédéric HALLEY

Paris bars: the foursquare guide

You have always wondered where the latest up and coming bars in the city of Light ? We'll tell you all you need to know based on Foursquare crowdsourcing.

Foursquare is today the social network with the highest relative growth, moving from 3 Million to 4 Million users in the last 2 months. Tioga developed a crawling technology to understand the check-in activity in bars in Paris. More than 76000 checkins in 1500 bars having 810 mayors combined with hundreds of tips will definitely impact future bar activity and attractiveness. Everything is summarized in a one page dashboard, outlining the most popular bars (highest total checkins), the trendy bars (highest recent checkins), the wanted bars (those with the toughest competition to become a mayor), the easy mayorships (a few check-ins will make you a mayor) and the tough mayorships (very well defended by the existing mayor). Tioga will publish the "Bars in Paris" dashboard on a monthly basis.

 
 
 

If you want to know more on the 'Bars in Paris' index, you can contact us at [email protected]

Julien Mazerolle.

Mobile Operators hypnotized by Apple

 

I love Mobile Operators: they are some of the richest companies in the corporate world. In a little more than a decade they became behemoth weighting heavily on all economies across continents. Their services, mostly unknown 15 years ago, are used by billions of people. These companies are packed with many smart people who changed the way we work, interact and communicate.

What is very interesting is how these supposedly smart companies got hypnotized by Apple. If you remember the Jungle Book, you'll get the picture the same picture that I have of Kaa with his rolling eyes hypnotizing Mowgli. The whole story of Apple with mobile operators over the last 4 years is really how Apple managed to hypnotize the operators. Before getting to today's news which prompted this post, let's get back a few years ago at the launch of the IPhone. Back in 2007, Apple was a much smaller company producing Mac and IPod. The first version of the IPhone was a good product, different from existing solutions but with many limitations (weak camera, no multi-tasking, short battery life …). The genius of Steve Jobs was to convince Operators across the world to subsidize the handset at an unprecedented level and share part of their revenue. Operators were fine: cool products, very small volume for very high end customers. Not great for the bottom line but good for the branding. Interestingly, they made sure there was no direct competition on the market. In 2007 and most of 2008, Orange France would sell unlimited data plan only if you had an IPhone. When I asked the service agent why I couldn't buy unlimited data plan with Nokia, HTC or any other phone, the answer was approximately: "buy an IPhone". Not surprisingly, mobile browsing statistics were showing back then that IPhone users were using mobile internet much more ; well, having an unlimited data plan vs. paying 1€/Go does play a role too! Clearly, beyond product quality, operators were major players in the success of IPhone.

The IPhone was a success and the shipment went way beyond what the operators had in mind. Momentum set in, consumers got hooked on the products and its apps, as well as to deep subsidy Volume started picking up. What became apparent very quickly to all players in the industry is that the mobile operators were getting disintermediated from the payment value chain. They had created the most successful micro payment scheme with Premium SMS and later with other billing technology (IP Billing, Direct billing…). Of course, all that went away for IPhone users: you put your credit card in ITunes and you're done: no more billing through operators. Operators had kept their haircut on very high on operator billing: between 20% and 40% depending on country and many other factors. Of course, that significant tax limited, and still does, the growth and potential of operators billing. I remember interviewing an executive at a major European operator in 2008 on that topic. He was clear and disillusioned on the matter: yes they understood they were getting disintermediated but no they were not going to do anything as IPhone sales were helping the presentation of quarterly results. That is when I realized the hypnotization factor: the operators understood Apple's strategic objective was to transform them in dumb pipes subsidizing their handset but they wouldn't react and let Apple take the ball and run. I actually think most operators underestimated Apple and thought they were the ones in control. Actually, they were already under the spell and hadn't realized they had lost the customer relationship, the payment, the brand,… In one word, they had lost control.

The collision of news and announcement of the last 2 weeks is fascinating. Orange communicated how happy they were to be the number 2 sellers of IPhone in the world and that they'll want to continue pushing it. I would really challenge that this is good news for Orange. Considering how deeply subsidized the IPhone is, I wonder how long it will take them to break even with a modest increase in monthly ARPU. If you factor in, the added burden on the infrastructure due to mobile data traffic explosion, I really doubt this is good news for Orange's shareholder. Today, the French newspaper Les Echos published a great story on how Apple is ready to launch the sales of simcard and subscription directly via ITunes in partnership Gemalto. The bundled sales of handset with subscription would transform Apple in a MVNO pushing the disintermediation idea to its limit. Mobile Operators can focus on the maintenance of their antennas! The journalist ponders how and if the operators are going to resist. I think it is too late now: the momentum of Apple in mobile phones is amazing. The consumer awareness and demand is great. I am ready to bet that at least one operator per country will go with the new Apple model, forcing all the markets to go in this direction. It is a little late to wake up and realize what has been going on for the last 4 years. By the way, they have one great idea to counter Apple : push Google and Android. I am not sure Google is going to be soft and fuzzy and bow to their traditional ways… The mobile operators were the key winners of the 1995-2005 era, they won't be the winner or the decade to come.

Frederic Halley

Pricing as a science

Pricing is probably one of the most important decisions taken by management. However, pricing decisions are often made in a surprising way. As a very quantitative factor, you would expect management to rely heavily on numbers and data analysis. This is much less the case as would be expected. I learned recently from this major consumer company selling its products through retail chains where the discussions was mostly based on 'gut feeling' between two disagreeing managers. The discussion going along these lines: "I believe a 20% price cut would increase sales", "no 10% should be enough"... Price elasticity and data analysis didn't really appear in the conversation. And this was a Fortune 500 company!

Starting with today's post, we'll explore some framework and examples on pricing and how to improve decision on this most critical point.

The following table highlights, at a high level, some ways of thinking or analyzing pricing.

	B2B	B2C
Small Company	Ad-Hoc pricing	Data analysis Market Research
Big Company	Data Analysis Benchmarking	Industrialized Data analysis

 

Underlying this table and the variations of approaches is data quantity factor. Very simply put, if your company does 5 or 10 deals a year, or in fact anything below ~100, data analysis will not help you much. Deals will vary too much from one another; specific aspects will hide a potential pattern. Big companies in B2B overcome this difficulty with scale and size. Global analysis or country benchmarking allows identifying patterns and validating hypothesis on topic such as discount or cost of sales. In B2C, data are usually available, both in ecommerce channel and in traditional retail and allows diving into more 'traditional' analysis : price elasticity, sales analysis,…

Small companies in B2B rely mostly on empirical elements, combined with competitors' analysis. The 'cost based pricing' method is prevalent in many traditional industries. Defense contractors typically work on 'cost plus' basis where they add a negotiated markup to their cost. This historical way of pricing is now being challenged by the budget crisis and the willingness of many governments to reduce defense spending. 'Cost based pricing' methods with its many shades of grey tend to be somewhat inefficient for a simple reason: they focus on the vendor's problem (the costs) and not the customers' side (the value). Over the last 10 years, we have worked with many B2B startups on pricing. Pricing a new and innovative product or service will always be difficult and include some judgment calls. However a 'scientific', fact based approach, allows finding a good equilibrium: this is what we call 'Value Based Pricing'. The objective of the process is to discover the value that the new product or service will create for the enterprise customer. Of course, this fact finding is a significant effort as buyers will not necessarily disclose to the seller its own ROI analysis. Understanding the value chain from the buyer's perspective is a full project that will typically include two or more of the following activities:

• In-depth interviews with prospective buyers, but clearly not with purchasing departments but with the beneficiaries of the solution. In several instances, we have also find finance people to be useful as they are the ones running or validating the numbers that are prepared by the buying team.

• Competitor analysis is critical. Even if you think that your solution is unique, this is not the way the buyer will see it. They will look at your solution as incremental: incremental vs. what they are currently using or incremental vs. competition. It is never a black or white choice.
• Industry and vertical analysis. The web provides a wealth of information and market data. Understanding in details value chain, cost and margin structure will provide valuable insight into the pricing of your solution.

So, no magic formula but a clear and structured approach to get to the solution. The result of this work is often a range of price that seems acceptable. The final choice will depend very much of what type of industry you are in. If prices are public or easily accessible, it is often a good idea to err on the low side of the range to be safe. In enterprise market and especially in technology, such as enterprise software, we tend to go for the high end of the range:

• It is easier to lower than increase price. In technology, prices go down with time. That is just the way it is (mostly driven by Moore's law and network effect)
• If the price is not public, a direct sales force can adjust the price down with discounts. It needs to be managed carefully at the execution level but it will give more flexibility and less risk of leaving too much money on the table.

This illustrated typically the way we work with technology startups to get to a good price positioning in a simple and practical way.

Next time, we'll look at New Product Pricing and how to set up the price of a new product at its introduction.

Frederic Halley

AFDEL : Comment démarrer à l'international

Dans le cadre de la commission internationale de l'AFDEL, la première réunion de la commission aura lieu le 22 octobre 2010 à 16H30 dans les locaux de l'AFDEL. Le thème de cette première rencontre sera double :

1. "Comment démarrer à l'international" avec le témoignage de Jean Noël Grandval, cofondateur de Instranet (éditeur franco-américain racheté par salesforce.com en 2008). Jean Noël reviendra sur son expérience d'entrepreneur face au développement international en Europe, aux US et dans le reste du monde.
2. Zoom sur le Vietnam avec une présentation de Sylvain Biard, conseiller export filière NTIC Ubifrance Vietnam.

   

Comme toutes les commissions de l'AFDEL, cette réunion est réservée aux membres de l'association ; mais il n'est pas trop tard pour adhérer.

Frédéric HALLEY

Tioga renforce son soutien à l'AFDEL

A titre individuel, les associés de Tioga Venture ont supporté l'AFDEL (Association Française des Editeurs de Logiciel) depuis sa création. Ce support s'est renforcé l'année dernière quand nous sommes devenus officiellement partenaires (communiqué de presse de septembre 2009). Ce partenariat s'est encore renforcé cette année puisque Tioga Venture prends la présidence de la commission internationale. Nous sommes très heureux de pouvoir contribuer au développement de l'industrie du logiciel en France de cette manière. Le développement à l'international est traditionnellement une étape difficile à franchir pour de nombreux éditeurs. Néanmoins, la taille limité du marché domestique rends le plus souvent ce développement nécessaire.

Dans les différentes réunions de cette commission nous nous concentrerons sur le partage de bonnes pratiques et l'échanges d'expériences avec en complément des zooms sur certains pays. La première réunion de la commission aura lieu le 22 octobre (ouverte uniquement aux membres de l'AFDEL).

Frédéric HALLEY