Why 3 mobile is so crap

My friends -- fed up with my tedious rantings about my hatred of my 3 (UK) mobile phone (a N95) -- convinced me to buy out my contract and move to O2. I've just started a 24-month contract with O2 using a blackberry bold.

For a year, I've not given out my mobile number because it probably won't work. Now, I have a service that makes calls when I dial numbers, rings when people call me, and what matters to me most, has the internet (that works).

So... I've been trying to work out why 3 is so shit, and I've got it. 3 does not have any GPRS failover. It's 3G (when you're lucky) or GSM. O2 has GPRS, so when out of 3G coverage, your internet session remains. And your phone call is not dropped when that happens.

Conclusion: 3's platform can never be any good. It's flawed by design, unless they get data roaming with continuous sessions. It's not their fault, it's just terrible.

(BTW: I get more minutes and texts with O2, and the price is the same).

My friends will now be relieved of my incessant hate rants about three. I now feel the need to evangalise to all 3 prospects about why it's so 3rd rate, out of my sense of public service. Perhaps my friends will hear my go on about it still.

Why the internet caused the recession

We will recover from this recession in amazing time because the causes of the recession were instantaneous global panic and the same reasons (near-instantaneous global coordinated sentiment changes) will bring us out.

The unprecedented speed of decline is what stopped a managable slowdown from occuring, and that was caused by the Internet's ability to spread panic on a globalized scale literally in the few hours (which happenned to be a Sunday) when Lehman went down.

But, this mechanism for recovery will be unprecedentedly speedy too. Never in the history of global economics do to have systems that allow coordinated global sentiment to occur.

Every recession starts with a build up of factors which are like a drought in the bush, making it a tinderbox. Noone was in any doubt that a recession was going to happen, but noone knew when. Every recession has it's own trigger -- an event which is unsustainable within the tinderbox.

1972 was Oil. 1979 was trade unions, 1989 for the UK was the sterlings fall from ERM. 2000 was the dot.com bubble (which was sufficiently gradual not to cause a proper recession). 2008 was the global panic surrounding Lehman brothers' demise.

Because of the speed of the propgation of panic last year, inventories were excessive and investment stopped.

What's going to happen in 2016? I don't know, but my bets are on an unexpected crash in consumers' desire to purchase, based not on financial reasons, but on some other "panic" story that spreads globally within hours. Something like a discovery of exceedingly toxic chemicals randomly and unpredictably found in a significant proportion of consumables. It might even be caused by something to do with global warming, but I don't think any single event will occur of such magnitude in 2016 to scare the majority of the world.

Whatever will trigger the 2016 recession, it needs the following stuff:

• a fragile ecosystem behind it
• a singular event which changes attitudes
• and this event needs to be hard to fix
  

Negotiated price of services

Negotiations of price, if rational, require a number of considerations:

• intrinsic price is the actual value of the product for the buyer and represents either the costs saved from doing it inhouse, or the costs available from other suppliers of the same product
• risk premium is a premium that the buyer is prepared to pay in addition to the intrinsic price to avoid risk that the alternative solutions are not as good or won't solve the problem
• convenience premium is a further premium that the buyer is prepared to pay because the 'ready made' solution is easier for him to buy than it would be for him to buy elsewhere or do inhouse
  
• speed premium is the benefits that the buyer gets from having the service working and in place quicker than other solutions
• transaction cost is the opportunity cost from having to run negotiations, plus the real cost of things like lawyers
• vendor relationship cost is the added cost of having to manage the relationship with a third party. This can range from the cost of dinners to the opportunity cost from managing the relationship once purchased
• vendor risk cost is the opposite of the risk premium, and represents the cost of the product not achieving the goals, either because the product is not as described or not fit-for-purpose, or because the vendor becomes unable to deliver in the future (e.g., bankruptsy)

The point of information in this equation is to quantify all of these items. A rational buyer makes an assessment of all of these items and needs information, which brings us into the value of information. A vendor, on the other hand, wants to create a perception that the greens are as big as possible, and the oranges as small as possible.

How is this achieved?

Most sales folk focus on the intrinsic cost, which for a well-defined market or a costly product may well be the bulk of the cost. A good sales person will also cover the other bases too.

What's the point of information?

1-in-30 dollars are spent on communications, yet as Chris Anderson points out in Free!, the value of informaton is completely subjective. Allow me to philosophise with amateur psychology.

What is the point of infromation? Why do we spend so much alone just on the ability to receive information; let alone on the information itself?

I'm reverting to my Maslow construction from an earlier blog:

Information allows us to:

• Get food, shelter and other low-level Maslow needs. Information tells us how to exchange skills/effort we have (work) for those that can make use of those skills/effort (customers). And it tells us how we can get work/skills done for us (sellers) in exchange for the money we received from selling work/skills (shopping).
• Get a sense of well-being. We can be entertained or informed and it makes us feel good. We can read a book or watch a film, and something human about us says that is good. Cats don't enjoy films, unless they are about food. Humans do.
• Get a sense of belonging, which includes sex. Information (or in this case social communication) is a key Maslow objective because humans are social creatures. The niche we evolved into was a social community niche, and our species has evolved to work on this basis. There are animals that don't need social interaction, except for sex; but humans are not that sort of animal. Information therefore, fulfils this.

Of course, companies exist to achieve the delivery of skills and work in a more efficient manner than a single person can do. The construct of company's need for information is different:

• Despite this basic raison d'etre of companies, coordination of all these people, and the ability to consume skills/work before skills/work can be returned back into the system drives the need for credit and credit markets and as such companies need information on how to aquire credit, which requires the business plan etc.
• Companies need to know how to get their skills/work recompensed, which means selling, marketing, advertising and customer identification.
• Companies need to know how to aquire skills/work that is not worth their effort doing in-house. They need to know where to buy from.

The ultimate objective of a company is, because of the credit market, to turn a profit. No company, whether a charity, government organization, sole trader, private or publically listed company, to ensure that the the skills/work they provide has at least the same skills/work that are required by the people within the company (plus the other stakeholders). Putting in terms of money, it means it must be profitable.

So, information has value to companies so long as it meets one or more of teh following objectives:

• it identifies customers (sales)
  
• it enables customers to understand the value of the skills/work they offer; it puts a price on skills/work (value proposition)
  
• it explains to potential (and current) credit providers that their credit is work investing in the company (capex control)
  
• it enables them to identify where to get services (purchasing)
  
• it allow them to create more product for their skills and work (operating efficiency)

What information would these people want in order to achieve these goals -- generically?

• sales advantage is only achieved if it is an advantage. Syndicated information, if ubiquitously used, is not valuable information. Only information that yields competitive advantage is valuable.
  
• understanding a products place in the market is important because it allows sellers and customers to identify a price. The buyer needs to have information that determines what value it will have within their organization. Ultimately, the price is determined by the amount of value that the organization, which includes the intrinstic value [how much would it cost me to do it myself], plus a risk premium, plus a convenience/speed of implementation premium; but less a transaction cost and vendor risk cost.
• since market fails when complicating factors such as 'brand', advertising, poor advertising, false hopes, excessive relationship risk); and in consumer markets this complication is positioned as "large risk premiums", or "high convenience premiums" which because of incomplete information force buyers (esp. consumers) to make irrational decisions, we have entire markets devoted to distorting market prices
  

What's the point of Industry Analysts?

Chris Anderson's Free! book is spot on. Put simply, anything that can be digitized will be free; and that includes industry analysis at least in it's current incarnation. So, what does that mean for Industry Analyst (IA) companies? The last recession has substantially reduced our industry and will cause some shakeout. What is happenning, though, is a change in the market needs from monolithic answers to generic questions (e.g., from Gartner, and Yankee in the form of reports) to systems that allow people to do their own calculations.

In other words, rather than IA companies saying "Read my report as a replacement for thinking", people want IA to say "Help me think".

The entire IA industry needs to realize that the majority of our clients can do most of the work themselves. What is it that IA can do better than companies themselves. There are three reasons why IA companies can do something better than the clients themselves:

1. Independence: because IA companies are not aligned to companies, they can be a filter of information which would not be otherwise put into the public domain
2. Coordinator: in the same vein as technological organizations such as the IEEE, independent coordination by someone to represent the telecom industry's general interests needs to be done by someone
3. Big thinking: analysts have more time to think than clients and can see emerging trends that are not big enough to justify executive thinking
   

What does that mean for the future of the industry?

• Syndicated data and analysis is fundamentally flawed as a business model. IA companies want it for the singular purpose of being scaleable. But it's fundamentally worthless and serves for marketing only
• There is no clear reason why anything scaleable has value. If it's scaleable, then it's not unique. The benefits of size are weaker than before -- Gartner and Forrester's former strengths (their size) -- will create less and economy of scale. Only sales channel, and brand awareness, benefit from size.

If only sales and brand benefit from scale, then the small players need to consolidate their sales and brand channels. It is in the small players' interest to promote the thinking that syndicated work is not valuable.

Coordination between the small players means that a loose -- single contract -- arrangement can provide highly customized advisory and promotion services. Why shouldn't a union of providers that includes Yankee Group, Telecom TV, a PR company, Ovum and Telegeography, with perhaps consulting from IDC analysts mixed with m:metrics data... you get the feel! This combination would be more potent than a Gartner or Forrester relationship... it would be a bigger force than them!