Conflicts of Interest in the SMS Value Chain

December 29, 2003 | Comments

Here's a thought which has been bouncing around my head for the last month or so, and which I've mentioned to a few folks: there is a fundamental conflict of interest between companies providing the ability to send and receive text messages on mobile networks (i.e. SMS aggregators), and organisations who want to use text messaging as a communication tool.

The SMS aggregators typically maintain expensive direct links into mobile network operators - often into many of them. They'll sell connectivity (i.e. the ability to send or receive text messages) and employ a variety of pricing schemes which typically include one-off set-up charges, monthly rental charges (or enforcing minimum monthly spend on messages), and per-message charges for sending (or sometimes even receiving) text messages. This last scheme typically involves slightly marking up the charges that the mobile network operators apply.

In addition aggregators have pushed the idea of "keywords" onto the industry: they rent a single number, then redirect messages sent to that number to different destinations based on a keyword at the start of each message. So an appointment reminder service might own the keyword "REMIND" on a given phone number, at the same time that a ringtone seller owns the keyword "TONE" on the same number, and when a message comes in that starts with "REMIND" the aggregator can ensure it gets sent to the right destination.

Keywords are a great way of maximising the money aggregators can make out of individual phone numbers; there's no meaningful limit on how many keywords you can have on a single number, and aggregators can therefore make keyword-based products significantly cheaper to run than those that own all communication sent to a given telephone number. I've written before about my views on the disadvantages of keywords; companies like Trinity Mirror have had experiences which seem to back these up - and they're not alone.

Their commercial imperative for aggregators is therefore clear: get as many customers on-board as possible (using keywords to sell cheaper SMS receipt services and make better use of a limited resource of phone numbers), and generate as much message traffic as possible.

But now look at a customers perspective: they use text messaging in everyday life in a very conversational, informal manner. Traditional rules of grammar and spelling go straight out of the window when you're typing a quick note using a phone keypad. Plus every text they send is costing them money, whilst every one they receive is masquerading as a message from a friend and distracting them from whatever they're doing.

Clearly end-users have a different perspective: if they use SMS, they want to do so as quickly as possible - using as few messages as they can to get the job done. They should also expect SMS services to be forgiving: if their mate had to send in the words "FOOTBALL SUBSCRIBE" to get a football alerts service, then "SUBSCRIBE FOOTY" ought to work too. Were the provider of football alerts using a keyword-based service, they wouldn't ever receive the latter message.

So, here's the conflict: whilst it's in the vested interest of aggregators to make SMS services use more messages and to employ keywords, this is exactly the opposite of what makes a service attractive to end-users - and is therefore the opposite of how providers of successful services should behave.

What's the solution? Recognise that an SMS aggregator is not the best party to understand end-user needs and design a workable, appropriate service over text messaging, and talk to someone who is (plug: like us).

Being Dead Is Mint!

December 23, 2003 | Comments

Airenjuku 2003

December 23, 2003 | Comments

I received a tattered brown envelope this morning, stuffed full of photos and containing a scratched-out note. I couldn't work out what font it was written in, but the offensive content was obviously the handiwork of Mr Walsh. Also included was this lovely photo of us all taken when he was last in Sussex:

(Front, L-R: Maria, Mark, Tom; Back, L-R: Dave, Steve, John, Kevin, Me)

Christmas Party

December 19, 2003 | Comments

A few snaps from the office Christmas bash; as James has written, we wandered up to the excellent Seven Dials restaurant, were shown to the vault (the restaurant is situated in an old bank), and were served with fine wines and fantastic food - the mushroom risotto was particularly fantastic.

Life-changing announcements, intercontinental phone calls to absent friends, secret santa, and just getting everyone together in the same room: what a great way to round off a year!

Frank Nuovo of Nokia at the Design Museum

December 15, 2003 | Comments

I wandered up to London this evening to go and see Frank Nuovo of Nokia talk at the Design Museum. I hadn't seen him before, and found him a good speaker, if a little self-promotional (which is hardly surprising given his achievements - I'm sure in his position I'd be insufferable).

I didn't take any notes during the talk itself, but a few points I can remember now (sitting on my train back down to the seaside) include:

  • Details of how the design group at Nokia were first responsible for many of the aspects of phone UI which we take for granted today: the grouping of keys into control keys (softkeys etc) and alphanumeric keypad, the placement of the on/off button well away from these, and so on.

  • Comparisons between the phone market and wrist-watches: both are very personal and expressive products which nevertheless perform an important functional role.

  • How the cycle of design begins with technology and runs through design, style, fashion, and art, before returning to technology again - as we begin to understand more about the limitations and possibilities of this technology.

  • A lot on Vertu, the Nokia-owned (?) company which hand-crafts small numbers of handsets at vast cost to its customers - the core idea being to return to an Olde Worlde craftmanship feel in handset design.

  • How Nokia categorises its handsets into families (the Active, Premium, Fashion, etc. ranges) and how these have evolved over time. Particularly striking was a sequence showing handset faces morphing to represent the evolution of the devices over time. In every case bar that of the Premium family (precursor of Vertu), the screen and control keys have become more prominent over time.

  • A number of internal videos produced as pseudo-"mood boards", to demonstrate the feel of particular handsets, families, or customer segments.

Afterwards, I wandered to a local hostelry and hooked up with Jim, Martin, Ewan and Chris - for industry gossip and a chance to play with a couple of N-Gages: which alternately thrilled me with their multiplayer Bluetooth games and appalled me as I experienced first-hand the joy of disassembling the things in order to change games.