Resist the Urge Facebook

The rumor mill has churned out the possibility of Facebook building their own phone again. I have no idea if this has any truth behind it, but having seen stories like this in the past and having previously watched similar companies fail at this, it seemed useful to go through a few of the reasons why it should be avoided.

DNA

Facebook’s DNA is to solve problems with software and rapid iterations. There is a huge difference between this and distributing hardware. You can argue that corporate DNA evolves, particularly in response to an acute threat. However, to see how difficult this is, let’s look at the experience of some comparable companies:

  • Microsoft has spent roughly the last 10 years and untold amounts of money to get the integrated hardware/software experience and retailing of the Xbox just right. That took incredible commitment, patience and deep pockets from a software company.
  • Google, no doubt driven by some of the same fears Facebook has now,  has rocket ship growth of Android in smartphones. Yet, their attempts to directly retail Nexus devices was a flop. They have revived the program now, but there is no evidence to show it has been a success.
  • Nokia illustrates the reverse DNA mutation is also difficult. Their attempts to create a viable software OS and combine it with their superior hardware failed miserably. Their failure to accept that this was not in their DNA has destroyed a brand that was at one time synonymous with mobile phone excellence.

Distribution

Almost 1 Billion users is incredible, but it doesn’t guarantee successful distribution of a Facebook phone. Where is the Apple-like retail presence? Are Carriers really going to be excited to subsidize a Facebook phone that uses Facebook messaging to further erode their one-time SMS cash cow?

Brand

Facebook brand = Social connectivity. Facebook users are the product and they are conditioned to expect all of Facebook’s magic social goodness for free. This isn’t about whether users will pay $100 vs $300 for a Facebook phone, it is about whether that brand association will mean they want to pay anything at all. Need proof? Just go the Facebook login page to see it in their words – “It’s free and always will be.”

Role of Utilities

Facebook describes itself as a “Social Utility…”, and it is exactly that. While there are no doubt Facebook zealots who will use anything Facebook offers, these are the people who will be using Facebook from whatever phone they already have regardless. The more important segment is those between zealots and non-users who may be swayed to use Facebook rivals. Are there other ways to further engage this segment with Facebook mobile services and still hold true to their strengths as a company?

(There are a host of other issues – thin hardware margins, the importance of App Ecosystems, mobile patent wars, etc…but I’ve gone on too long already.)

If not a phone then what?

The presumed driver of this strategy and fear Facebook has is a valid one. The quote that best sums it up is:

“Mark is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms”

While a successful Facebook phone would alleviate this problem, there seem to be alternate strategies which better leverage Facebook’s strengths as a company.

Optimize and create Facebook products for mobile specifically. Their social product innovation is what got them their current dominant position on the web in the first place. Easier said than done of course, but software and product innovation is more up Facebook’s alley than building a phone is.
Other than Samsung and Apple, other OEMs have failed to differentiate their products and are languishing with a bunch of me-too products. If there is a unique need Facebook feels it needs from the hardware, these OEMs would happily provide it.

Onskreen Story

There haven’t been any good write ups of the story behind Onskreen – how and why we started it and the twists and turns along the way – so, it seemed like a fitting topic for the start of this blog.

Warning – this is going to be long. So if you can’t stand to be away from your inbox for the time it will take to read the entire post, here is the take-home message -> User Experience matters.

Pre-Onskreen – State of Things
It is hard to believe in today’s world of billions of app downloads, but in 2003, the problem of the day was how to get people to use their phones for more than just phone calls and sms. The magic elixir was supposed to be a killer application for mobile that everybody would have to use so badly they would ignore the small screen, lack of keyboard, etc…The only problem was nobody knew exactly what this app was supposed to be. So, much to the chagrin of the mobile pundits,  people continued buying phones based on how skinny they were (remember the Motorola RAZR?) or the camera. At the time, trying to accomplish any of the following with your super slim, shiny phone would cause you to either pull your hair out, or throw it against a wall:

  • Open the Browser – Yes, even figuring out how to open the browser on some popular models was a miracle
  • Download an app – Navigating the WAP deck was a nightmare (BTW – if you know what a WAP deck is you have been in the mobile industry too long!)
  • Change the Ringtone – I wish that I was exaggerating, but some phones had menus so long and convoluted on some phones this could be a serious challenge

At the same time, I was coming out of a one year stint working at Motorola after they had purchased 4thpass. At 4thpass, we became successful creating the concept of the Mobile App Store and deploying it with Telecom Operators around the world. We provided the back end infrastructure, wired it up to the network and the Operator had an app store for their users.
So, the industry plodded along making great advances in some areas (awesome camera phones, speedier networks, etc…) and failing miserably at crucial issues (UX specifically).

Launching Onskreen – UX is King
The killer app for mobile is not an app at all – it is an incredible User Experience. This was the key premise for starting Onskreen in 2005, which was a time where that idea was not a very well received world view. Today, it’s obvious of course, just look at Apple’s market cap. Seven years ago it took some convincing that what people wanted to do with their phones was everything, if they could only figure out how to use the damn thing.

The truth was that the Motorola’s and Nokia’s of the world in 2005 were never going to solve the problem of how people interacted with their phones. In addition to being relatively unchallenged to innovate, they were fundamentally not software companies. Their attempts at creating new mobile OS’s or improving their current ones were borderline comical. Their DNA was centered around optimizing radio and hardware and being efficient at global distribution of their products, not making great software.

So, I started Onskreen with the ambition of fixing the mobile UX problem and helping transform mobile phones into the incredibly useful little computers that they are today.

The Journey
Our first product, Fusion, attempted to solve UX problems that would improve user’s experience with their phones while solving business problems for Operators (at that time they were the only real source of distribution so we needed them on board). For users we wanted to help improve:

  • Discovery – No more searching around, information had to be obvious and consistently available.
  • Latency – Info had to be updated in a way that users felt like it was always fresh. No frustrating experience of click and wait.
  • Relevance – Put the power in the hands of the users so that the info they were getting was valuable to them.

Fusion transformed the front screen of the phone from the generic, static wallpaper into a richer experience capable of supporting widgets with info, news…anything the user wanted. I won’t go into detail here, but by doing this we also solved a slew of marketing and service problems for Operators. It was a win for everybody and it worked. We built the product and licensed it to Operators and Device Manufacturers. Things were going well and we were working towards a huge deal with Telefónica. Like much in startups, it was all good, until it wasn’t.

In parallel to Telefónica grinding their enormous gears to make the deployment happen, Nokia was leading the mobile industry with no real competitors. Motorola had faltered and Silicon Valley had not yet risen up to take over the mobile OS to displace them. When the time came for Nokia to include our software on the phones Telefónica purchased from them, they not so politely refused Telefónica’s request, although it was as simple as including an app on the phones. Nokia knew, as we did, that whoever owned the user experience owned the user. They understood that the loyalty of the user would become intertwined with that experience, and they were not about to let Telefónica own a piece of that. The industry as a whole wasn’t challenging Nokia to innovate at any pace but their own, so they felt no pressure to play nicely. [Note: The story of Nokia’s strategy and software failures in the last decade have been written about here and elsewhere. They are a great cautionary tale.]

It was late 2006 and Onskreen was at a crossroads. We had invested a lot to get a product through all the hoops so that a giant customer could deploy it and we could really scale, only to have another industry titan crush it. There was no point investing further on the path we were on. It was time to either cut and run or figure out another approach. Luckily for us and everybody else, Apple was on the verge of announcing the first iPhone. By solving the UX problem from outside the cozy and glacially slow pace of the mobile industry, they forced everybody in the industry to figure out how to improve immediately. What customers currently had to choose from paled in comparison to what Apple was tantalizingly promising. Our current customers and those that were interested but had not yet pulled the trigger started scrambling to figure out how they were going to respond to this threat and who could help them. We had been waving the mobile UX flag for the last 2 years, so our phones started ringing again.

Onskreen was reborn as a professional services organization helping Operators, OEMs and Silicon Vendors to improve the user experience of their products. We were fortunate to be involved with some of the first Android device releases and built a successful portion of our business on the explosion of Android phones and then tablets and TVs. Most recently, our work on transforming Android into a true multi-tasking platform, Cornerstone, was open sourced and is the basis of a number of upcoming Tablet and smart TV implementations.

Current State
Onskreen is a rarity among companies selling to the mobile customers as large as ours. We were bootstrapped and have been profitable for a number of years. It continues as a strong business, profitable and engaged with a number of the interesting shifts in strategy the mobile incumbents make to compete with their new competitors.

This doesn’t mean that all is rosy in the mobile world. There are a number of complex issues that we have had the chance witness first-hand, and that I hope to write more about as this blog goes on.