Given the current state of the financial markets, I’ve found myself buying and reading books that help me understand either how we achieved these states or how we’ve muddled through similar crises. Two that are on my Amazon Kindle today are:

• A Conspiracy of Fools: A True Story, the story of creation, corruption, and destruction of Enron, and
• When Genius Failed: The Rise and Fall of Long Term Capital Management, the story of one of the first real hedge funds that nearly caused the collapse of world financial markets in 1998.

Both books are wonderfully educational and remind me that we’ve experienced and weathered significant market crises before. But more importantly, I think they illustrate another important idea:  in complex markets, business people — even those who caution us to read prospectuses before buying — often don’t understand the products they are buying and selling. And these books actually have some lessons for those of us working in the Anywhere Economy as well.

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Sling Media’s Slingbox has been on the market for a few years but despite the generally positive press coverage and expanding footprint, penetration remains low. Yankee Group’s survey data shows that less than 1% of survey respondents own a placeshifting device with little year over year growth.

The data is not surprising, most consumers see Slingbox as a device for road warriors hoping to catch up on content during their various jaunts around the globe. Sling is hoping to change this perception with the Sling Catcher - a device best used within the home.

I recently hooked up a Slingbox and experienced some difficulty with the original installation software. Set-up of course can be a major barrier to adoption for these types of devices. Sling seems to have addressed this with their new installation software which I downloaded. Before I knew it, my Slingbox was up and running.

After a few weeks of use, I have found my usage of Slingbox surprising. Instead of not using Slingbox because I am traveling I have been using it frequently in my home.  While working in my office I will occasionally turn on Sling Player to watch something off the DVR. When on the treadmill, I bring my laptop and watch VoD.  While I have yet to sit outside and watch content, that is due to the fall weather in New England. Taking a break at work I catch up on the latest episode of The Office (Mind you, such scenario has yet to be tried - I would never watch TV at work Emily, I promise).

The point is, Anywhere technology can be enjoyed while at home. While some of Sling’s appeal is the ability to watch content wherever you are the world over it really has more practical applications as well. At home uses could be compelling for the broader market, such as The Digital Shut-ins and The Technophytes who like technology but may not be road warriors per se. So while advanced technology like placeshifting may seem uninteresting to the mass market - this example proves that Anywhere can truly be for anyone. Now if service providers would only start embedding the technology into their STBs…

YG’s third Mobile Internet World event took place this past week. Despite increasing worry about the global economic outlook, attendance grew over last year and the conversations were energized and thoughtful. I asserted Wednesday that in the dam erected by the existing mobile power players, significant cracks are developing – ones that, as they grow, will cause either a catastrophic or planful unleashing of users into a more substantial mobile landscape.

Given the economic backdrop, it was all the more fitting that NEVCA (the New England Venture Capital Association) put together a track for Day 3 to examine the opportunities, funding resources, and liquidity prospects of mobile internet endeavors.  The final session brought together Chris Pasko of The Blackstone Group, Matt Rubins of M/C Venture Partners, and Joseph Sanborn of Rutberg & Co. to talk about the prospects for liquidity in the current market.

Chris wondered if tech-sector IPOs will ever recover to the levels we’ve seen in past times; certainly for now that avenue is closed. What of sales to strategic buyers? The threesome agreed that some key strategic buyers have both the appetite and the funds to take advantage of what might come onto the market. But with some public firms that would serve as comparables for the valuation range of a private transaction trading at unbelieveably low multiples, sellers not under pressure will likely prefer to wait. Will valuations begin to stabilize by the second quarter of next year, so that at least some deals can move forward? Matt suggested that VC firms will want to help their best portfolio firms hang tight for the time being.

Besides the well-circulated Sequoia Capital presentation (I’m not bothering with a link to it; it’s everywhere), what should mobile internet startup management teams do now? The panel’s advice:

• Focus. Now’s the time to pick the one thing that makes you special. Narrow is better than broad.
• Upgrade. Sadly, some good talent will hit the job market in 2009; now’s the time to make sure you have the best team.
• Align interests. Rounds of funding, M&A, and other events may have left your capital structure less effective for motivating the management team. To keep your team focused and to get the right new talent on board, make sure the options programs make sense.
• Keep talking. While it might seem like all your time should be spent on the path to profitability, you still need to build awareness of your venture.

Matt summed it up for us in exactly 10 succinct words:  “Cut the crap. Find a friend. Live for another day.”

I love Martin Geddes‘ posts over at Telepocalypse, especially when he talks about his own telco customer woes, like here or here.

Now I get to post one myself: a few weeks back I was told by my employer to get a Blackberry. As a remote employee (I’m based in France), I really welcomed the opportunity to become an Anywhere employee. Unfortunately, it’s looking like it’s not going to happen.

Oh, I have the device! It’s a nice and shiny new Blackberry Curve. Unfortunately, SFR, my operator, will not allow me to receive company emails on it. For those not in the know, there are two types of email access with a Blackberry. Either your company has a Blackberry Enterprise Service, in which case you need a BES subscription on your phone, or your company doesn’t and you need a BIS subscription. I asked the nice lady at the store for BES, she gave me BIS (I know this sounds like potayto-potahto, she probably didn’t know the difference either…)

Once I’d worked out that I couldn’t get the company email working, I called customer service who passed me on to tech support, and the truth was finally unveiled. I had the wrong subscription.

- “Switch me to a BES subscription, then”, I ask.

- “Sir, I’m sorry but I can’t”

- “Why’s that?”

- “Because you’re not an Enterprise, sir”

- “Ah. You are indeed right. My employer, however, is an Enterprise.”

- “Yes, but not in France.”

End of conversation.

In order for me to have Mobile Email, I need to be a declared French Enterprise (and purchase at least 3 subscriptions). Talk about not getting anywhere…

Think about the implications: presumably, I’m not the only guy in France who is contractually an independant worker but actually an employee of a non-French company. But even beyond that, there’s thousands of actual French company employees who expense their (private) mobile expenses to their employers. Are all of these guys condemned not to get corporate email?

That’s stunning.

Not that SFR would set up internal processes to ensure they don’t sell. Martin’s examples show that’s common practice among service providers. But the one that’s really losing out here is RIM. I have no choice now than to get my (expensive) mobile email device reimbursed, since it won’t do mobile email. SFR might be losing only a few bucks of monthly email sub, RIM is losing a few hundred bucks of device sale…

If I was RIM and I knew about this, I’d be mightily pissed off…

RIM, are you listening?

Today, Apple announced a refresh of new MacBooks and MacBook Pros. For pictures and hands-on of the products you can look at Gizmodo or Engadget.

Apple’s expected notebook revamp was, like the iPod event before it, ruined by leaks as pictures of the MacBook and the new manufacturing process had found their way onto the internet over the weekend.  But the sleek new products made up for the lack of surprise. Apple’s product refresh will certainly excite its users as the MacBook lines had needed a refresh.  This should bode well for Apple as it heads into the holiday season poised to steal more marketshare from the PC manufacturers.

The market share grab may not be as substantial as it would have been if Apple met the rumored $899 price point. This is especially true in an environment where many netbooks cost less than half of the entry level plastic MacBook and economic conditions are tumultuous. But Apple has never had to compete on price so even slight reductions will inevitably result in Apple growing its slice of the pie.

For those dead-set to purchase a MacBook the pricing of the aluminun clad Macbook “Pro Mini” could have many consumers reaching deeper into their wallets come this holiday season helping further propel Apple’s revenue and this upgrade decision could really light a fire for Apple.

Apple has clearly found the winning formula for avoiding a battle to the lowest price. Spectacular design, unique software, innovative input (such as the glass trackpad with gestures), and other niceties such as an LED screen. It is amazing that despite Apple’s success no other company has been able to use their formula to stand out from the increasingly crowded PC landscape.

Now if they would only release that Tablet PC with the embedded 3G connectivity everyone would be happy.

“Can competition kill innovation?”

Sounds like a silly question, right?

Common thinking suggests that competition forces you to innovate so the two are not opposed.

Economic theory is not quite so optimistic. The argument - in a nutshell - is that innovation investment is motivated by the guarantee of a return, and competition can diminish that return. Hence competition kills the investment incentive. This is hugely relevant to the emergence of the Anywhere Network because on the mobile, and especially on the fixed side, the technologies that form the Anywhere Network and enable Anywhere Services (and associated revenues) require very significant amounts of investment.

I was at an event on ultra-broadband (aka fixed Next Generation Access) organised by French regulator ARCEP yesterday (minutes and audio here), and this conundrum seemed to pervade every topic that was touched on. In a nutshell, the French regulator and others in Europe don’t believe that competition will kill innovation, but they can’t deny that the threat of competition deters incumbents from the investment. Their answer is to favor infrastructure competition by eliminating the bottleneck of access to ducts (which in turn lowers deployment costs) that confers an unfair advantage to incumbents (they own a lot of ducts).

This explains recent decisions in France and Spain to open the duct market and not regulate the network itself. In this way, the European model is moving closer to the US model of platform competition. European regulators acknowledge that these choices lead to an instituted oligopoly, but believe that any more competition will kill the incentive to invest.

What confuses me in this analysis is “which competition are we talking about?”

After all, the consumer doesn’t really care whose fiber strand delivers services. The consumer would like to have a choice of service providers, and a greater variety of services no matter who brings the fiber to his home. A lot has been written lately about mobile open access and Yankee Group has taken a stance that Open Access is a key enabler of Anywhere. That, of course, applies just as much to the fixed network (and we need to write more about this, which falls squarely on my shoulders, I’m afraid…)

But of course, we’re back to the argument I spelt out at the top. Most wireline operators are convinced that vertically integrated walled gardens are more profitable and therefore more likely to pay back for a new infrastructure they know they will have to roll out sooner or later. Forget that unbundling of their old (copper) network has largely proven to be extremely profitable to them. Forget that Open Access fiber networks in Sweden have higher penetration rates than closed ones. This is more dogma than economic analysis. The fact of the matter is they’ve been doing walled gardens for so long they no longer appreciate the virtues of an open field.

But it’s a paradoxical position. Because at the same time they’re complaining that they can’t get a share of from whatever revenues happen “over the top”. The Internet (barring any rash political decision on Net Neutrality) is open by definition and infrastructure owners see the Googles, Salesforces and Skypes of this world making money leveraging what they consider to be their infrastructure. They want a piece of that pie.

You can’t have it both ways, guys. An Open Access approach will allow you to develop the business models that leverage the infrastructure because you’ll be providing a key function to service providers as a distributor. But if you frame the debate in an “us vs. them” way, if you say the pipe business is dumb, if you decide that Google is your competitor, Google has no incentive to work with you. Hence no business model. You’re literally pushing these guys into disintermediating you.

We all agree that a key component of the Anywhere experience is the richness of services available, but it’s high time vertically integrated operators accepted that they’re not the best positioned to deliver most of these services. That doesn’t mean there isn’t money to be made there, on the contrary. It just requires an open mind.

So let’s focus less on getting several hugely expensive fibers to every home and instead on getting more than one service to every customer!

I’ve been getting grumpier each and every day. Perhaps it started when my neighbor purchased a Harley and started commuting to work on it. Let’s just say that I’ve had ample time early in the morning to ponder the question of how much more power comes from amplifying the thumping reverberation of V-twin internal combustion.

But the thing that’s been bothering me lately is the equally substance-less noisemaking of companies proclaiming that they now have an advertising network. This is something that’s easy to say and hard to do. Most companies are coming in with a handful of unique visitors, negligible impression volumes, and no idea what they’re selling and why any marketer would buy what they have to offer.

Most of these companies resort to a generic idea of a “brand” that would pay for access to their newly-anointed and innovative advertising network. This is often an over-simplification that misses the core value proposition at hand.  Recently, I found myself in a discussion that hit the nail on the head in the context of local advertisers.

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It’s that time of year again: I was at an industry event this week to talk about network transformation. Here’s the really short version of what I said: It has to happen, so buckle down and find a way to get it done.

Then a few network architects–guys who have to take a vision and turn it into a plan their CEOs will sign off on–talked about their approaches to that mandate. Ken Paker spoke for TDS Telecom. TDS is a U.S. aggregator of rural independent networks, which means it doesn’t operate one network, rather something like 86 networks with huge variation in architecture. After five years of study (uhh, that might have been their first problem), they’re ready to move to an IP-based architecture.

What finally pushed TDS to act? ”Our customers’ view on the role of broadband has changed, so ours has to. It’s now mission-critical for them, so we can’t be a best-efforts provider anymore,” said Paker. So what was the financial justification? Pause. “We say we have a faith-based approach to spending on this.”

I wonder how many network architects from the conference are now titling their transformation plans with the phrase? Today I was talking with Dan Dooley, president of Sprint Nextel’s wireline business, and related the remark; he laughed. “The math for us was pretty simple: we had a profitable wireline business, but would have been headed to cash-flow negative without the change. If faith is involved, it’s faith that our customers will need to grow their capacity with us once we get them moved to our all-IP network.”

As I always say, never bet against bandwidth demand. So far, Sprint clients are chewing up the opportunity, with the result that year-on-year growth in the wireline operation is up by 42%, well ahead of the U.S. market growth rate. Build it and they will come. 

PS: Wondering about the potential impact of the economic crisis on connectivity change? We’re on the case; let me know what you think of this first assessment: Will The Anywhere Economy Slow Down? 

Whether we all agree on what a fourth-generation wireless network will do, which technologies qualify to create one, or how to pay for the expense involved in getting there, the connectivity world is on an inexorable path to 4G.

Just one day after Sprint launched the first city for Xohm, its U.S. WiMAX network, I’m in Chicago at Yankee Group’s 4G World Executive Summit. I had a chance to chat with Mark Pecen, VP of Advanced Technology at Research in Motion. Some of his thoughtful observations:

• What’s driving us to 4G?  “When I first worked on wireless in the early ‘90s, there were big holes in U.S. coverage, but no one cared. We were just glad it worked every now and then. Fast-forward a few years, soon people expected it to work everywhere except when they left the country. Now, we want it to work all the time, anywhere. There’s no shortage of user expectations to try to meet.”
  
• What are some of the core technical issues?  “Take any standard communications cable, send a signal through it, and measure it a thousand times–your results will hardly vary. Do the same thing with radio, and it’s a different story: the standard deviation across a set of measurements like that will be quite large. Radio is a hard problem. Theoretical performance in the lab for any wireless technology is dramatically higher than actual results in the field, where signal interference is the dominant factor. The challenges have been the same since Marconi starting selling radios to shipping companies: spectrum, power, mobility. We just have to continue to evolve the solutions. We’ll still be working on good power-efficient and spectrally efficient radio techniques 10 years from now.”
  
• What’s challenging from a business perspective?  “Consumers don’t understand the true cost of the devices and experiences they seek. Mobile operators have the same problem as airlines: extremely high fixed costs to run a network, and very low marginal costs to add the next user. So they develop some bad habits to get that next user onto their networks–and those are hard to break.”

He’s right on that one: subsidizing device prices to users, and requiring long-term contracts and credit checks, actually damp progress to 4G as they tie consumers to current networks. YG’s Phil Marshall published new work this week on the technology road to 4G.  What do you think the big questions about 4G are? As we plan Yankee Group’s next 4G conference, we’d love to hear from you.