In Beijing at GMIC I am listening to a Russian Internet entrepreneur (iFree) tell us how his company, a Russian portal developer, is shifting strategy for the growth of mobile platforms.

He begins by saying that of the 142 million people in the former Soviet Union, only 43m are on the Internet. The use of the Internet is growing rapidly, and changing even as it grows. Portals, his firm’s core product, are destined for slow extinction (my observation, not his). In a market growing so quickly, social networks are already three of the five most visited Russian internet sites. More staggering, a whopping 50 % of incoming email in Russia is alerts from social networks.

Russian content and services are a $1.9 billion market that started with messaging in 2005, followed by portals in 2006, ring tones in 2007-8 and m-commerce in 2009. Those were the historical market drivers. This year, customization Is huge, especially ringback tones.

But since the percentage of mobile Internet is still only 19%, expected to grow to 30% this year, huge business model disruptions are inevitable.This turbulent and growing market has led portal developer iFree to a new strategy particularly for mobile, in which fourteen trends led them to ten assumptions, which led the company’s management to one decision
Some of the Trends:

Rise of smart phones
Mobile apps
Mobile Internet use
Social social networks
SNS
Tagging of objects in the real world
Tagging of people
New forms of Image delivery
Augmented realIty

Trends like these led the company to these assumptions:

App stores outside of operators control will give mobile users control over their experience E-money and e- payments will become most convenient way to pay
Social networks will give users most of the infrastructure they need
There is a place for new big brands coming from mobile and social apps market
There will be an enormous integration of real and digital worlds, with the mobile device as the mechanism

So iFree decided to form an entirely new venture hub to leverage resources for fast growth in these newly forming markets. From what I can gather, top management has stepped back from day to day operations to focus completely on innovations in mobile. I bet they end up cannibalizing their current business in order to move forward. Go I-free!
Francine Hardaway, Ph D
GV: 816.WRITTEN

Posted via email from Not Really Stealthmode

China is really frightening. Having spent the last three days meeting with Chinese startups and investors, I can see how their culture could easily eat our lunch. it is still difficult and expensive to get wi-fi here, so I will briefly summarize my thoughts and refer you to this presentation by Benjamin Joffee that tells it all. Benjamin is an Internet strategist who has been working here for five years. If what he’s seen is anything like what I’ve experienced on this return visit ( my fourth over a 30 year period, it is mind boggling. Just look at the chopsticks in the preso and you will be convinced. http://www.slideshare.net/mobile/plus8star/business-models-reengineering-in-c…
CENTRAL PLANNING
We read about it, but can’t easily visualize it. China builds the equivalent of two Boston-sized cities a year, and has done that for 30 years. People’s homes are torn down and they are relocated to modern high rises. Older generations used to squatting over a hole in the ground are now treated to hotels with modern bathrooms out of Architectural Digest (Kohler manufactures here, as does Toto, so programmable and heated toilet/bidets are everywhere in hotels and restaurants.

There are now twelve subway lines in Shanghai, where last time I was here i think there were two. In Beijing, the airport and the hotel we’re in were built for the 2008 Olympics.

INNOVATION

The Chinese have an unashamedly different view of innovation. They watch what we do on Tech Crunch and then they clone it in a matter of days for their enormous markets. They have several competing Twitter, Facebook, YouTube clones, and TaoTao and Alibaba are their EBay and Paypal. Baidu is their Google. They are PROUD of how quickly they can clone our IP, and since they don’t need our markets they can block our sites with no great suffering. The expats and geeks use VPNs anyway. They quickly build $500million local companies and exit by taking them public on our stock exchanges or their own.

China doesn’t have, as one VC who spoke to us put it, “those pesky privacy rules,” so they can keep all the billions of text messages generated on their ubiquitous mobile phones (they skipped land lines) and mine them to generate targeted advertising. Watch a startup here called Massive Impact.

TAKEAWAYS

Just the sheer size of the financial district we saw in Shanghai and the enormous expansion of Starbucks is enough to convince me that if we don’t partner with China she can eat our lunch in healthcare, internet, and IT — the fields I know well. Not to mention that this current five year plan, their twelfth, is entirely focussed on clean energy and lowering China’s carbon footprint. China is fighting a different war; the economic war. For this, it doesn’t need soldiers, just armies of young people with entrepreneurial aspirations and a historical desire to get back to ruling the world.

Francine Hardaway, Ph D
GV: 816.WRITTEN

Posted via email from Not Really Stealthmode

Geeks on a Plane is a trip that seeks to bridge cultural differences by focussing around the common interests of technology and entrepreneurship. There are about fifty of us, from all over the world, gathered in Shanghai to meet the local technologists and Investors and compare notes. We. Leave Shanghai tomorrow for Beijing, Seoul and Singapore. In each place there’s a conference, a dinner, and meetings. The contacts are invaluable: I’ve already connected/been connected to amazing global resources.
The logistics of this would be mind-boggling if it weren’t for Christine Lu, a powerful woman with the global reach of somebody with one foot in Los Angeles and the other foot in China. She and Dave McClure, outspoken Silicon Valley VC, can make anything happen.

So: with that background, let’s talk preliminary observations about tech in Shanghai:
1) it is everywhere. Programmable toilets in the airport lounge, automated parking that locks up your car if you don’t feed the meter ( no tickets, no metermaids), security everywhere (Rapiscan, video at immigration, metal detectors outside posh hotels) and quite a bit of Internet blocking.
2) undependable wi-fi and difficulty with varying interfaces
3) ubiquitous cell phones
4) equally ubiquitous, characterless new construction that looks like New York housing projects of the 1950s
5) young,ambitious creative classmates converging from everywhere to start businesses that capitalize on large local markets and American companies who want visibility in China.
6) Incredible Infrastructure investment (subways, Maglev trains)
7) energy

In general, if you haven’t been to China in the past five years, you haven’t been. The tradeoffs are the same as in any rapidly developing culture — the destruction of history in the name of progress, the carelessness about human rights, the rigors of central planning. China is a massive planned community designed by engineers, who can always solve problems and rarely give you a delightful user experience.

More detail coming, and photos at Http://www.Flickr.com/Hardaway. The set is called “geeksonaplane.”

Francine Hardaway, Ph D
GV: 816.WRITTEN

Posted via email from Not Really Stealthmode

Here's a copy of the media alert for Monday's press conference if you are interested:

Posted via email from Not Really Stealthmode