Rui CarmoOne of the mainstays of the telco industry is what I call the “reality disconnection coefficient”. This is something that usually manifests in two ways, depending on whether you are “in” or “out” of the telco universe:
- Internally, I see it as the number of product concepts and service ideas that I’m deluged in during any given day and the (often infinitesimally small) chance of their actually turning into real, live products that you can hop into a store and buy (or subscribe to).
- Externally, it manifests to customers as niche products and services that cater to a very small subset of the overall market. You know, like those “cool” gadgets that pundits and other obsessed personalities hanker for, regardless of their practicality or maturity.
That is not to say that there aren’t some breakthrough concepts out there (both in the planning stages and as off-the-shelf stuff), but if I were to tally the number of things I’ve been involved in during the past few years and compare it to the number of shipping products and services, I’d say that the ratio is way above 20 to 1 – and I’m not even taking R&D stuff into account.
Still, there’s something to be said regarding product cycles. I’ve parodied them in the past in terms of insane scope and lack of focus, but my overall feeling is that there is another disconnect brewing – and this time it’s between “internet hype” and something I like to call “real life”.
Sure, there’s a lot of ink (or pixels) being tossed around regarding telcos’ supposed inability to deal with “internet time” (or quick product cycles) these days. And around twenty times more regarding things like Facebook’s apparent slowdown.
Both can be dismissed easily, though: the first is due to sheer ignorance, and the second is, well, just life, really.
Allow me to explain:
Anyone who thinks that telcos are slow and lumbering really ought to sit inside one for a couple of months and see how most of those fancy new ideas coming from the Web 2.0 hysterics committee crumble like a wet cookie when subject to some common sense and a bit more scrutiny than the average pundit is likely to give them.
I like to think of that as a sort of “natural selection”:Wikipedia:Darwinism process – paraphrasing “William Gibson”:Wikipedia:William_Gibson, what I go through internally to my company where it regards new product and service concepts is like “an experiment […] conducted by a bored researcher who [keeps] one thumb permanently glued to the fast forward button1“. It’s fast, brutal, and tends to breed tough, resilient survivors.
Very few (if any) crazy ideas make the cut, and there are many, many “cutting” sessions before something finally makes it to market.
That is not to say that there are no mistakes – but telcos are, in a way, unique in the sense that we’re the only “utility” (by whatever definition you may care to ascribe to that word2) that keeps innovating and learning from mistakes, even if that innovation and learning process isn’t visible to the outside3.
But I digress. Regarding most of those new product concepts, the point at which they usually start becoming mushy is when sustained growth rates are discussed (hence the connection to Facebook). Want to know why?
Because telcos (and especially mobile operators) are very adept at managing (and anticipating) a little something called “churn rate”:Wikipedia:Churn_rate. Facebook isn’t losing ground just because Scoble disses it. In fact, there are two aspects to it that ought to be plain as day to anyone who actually reads up on the matter:
First up, there is a seasonal aspect to consider – they had a similar lull between January and March 2006, and in the beginning of 2007 as well. Sure, they grow geometrically in some periods, but they aren’t immune to seasonal patterns.
Then there’s the long-term aspect: Facebook loses ground because it does not know how to manage churn. In their specific case, that means not just being able to retain its members (regardless of what voodoo they do with “inactive” accounts), but also staying relevant to them. The ruckus regarding privacy issues in the recent past was relevant, sure, but people turn away from it (like they turned away from Orkut and earlier things) due to an intrinsic characteristic of human nature:
No matter how many virtual connections you may have, the interaction becomes boring and pointless after a while. We’re social animals for sure, but we’re genetically hard-coded for direct physical interaction4, and no amount of silly games or flashy UIs will ever replace that5.
Which is why I never, ever intend to use my Facebook account for more than goofing around (responsibly, of course). Everyone who matters to me is, after all, merely a phone call away…
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1 “Neuromancer”:ISBN:0006480411, regarding Night City and Social Darwinism.
2 I’m using it for the pundits’ convenience. We prefer to be called “inter-personal communication providers” these days…
3 It should be obvious by now that we don’t advertise innovation by itself – we deliver it, which is a lot harder than most people think.
4 I alluded to that, briefly, on my 10 reasons why blogging doesn’t matter post, nearly two years ago.
5 Incidentally, I think of social networks in pretty much the same way as I thought of multiplayer internet gaming – they’re addictive and fun, but also the first thing people ditch when stuff like work and family duties gain a foothold in their lives.