Howe: Congratulate Failure

Wed, 28 May 2008 16:01:22 -0400

By Thomas Howe

The recent demise of Jangl is an excellent sign for the overall health of the Telco 2.0 marketplace, and although difficult for their investors and employees, portends great things for this market. My sincere wish is that Telco 2.0 failures become more commonplace and numerous, and I firmly believe it will be so. As stakeholders in this market, we need to expect and encourage such failures. Congratulations to those involved, and I mean that sincerely and with no animosity whatsoever.

Not too long ago, new telecom services and applications were costly to develop and deploy, with only a chance of success in the end. Even for those that succeeded, competitors typically replicate the service in short order, gutting profits. The logical conclusion of many managers is to be cautious with new service deployments, and to concentrate on maximizing existing services, stifling innovation. They are afraid to fail, because failure costs money. However, something's changed.

What's changed is that costs of service deployments are falling at an increasing rate. The Internet provides a near frictionless marketplace for both service delivery and sales, and the challenge is no longer the design and development. The trick is now fundamental marketing: what do people want? How do I price this? What is the fundamental problem I can solve? Surely this is no small task, as these questions are notoriously difficult to answer and are as often discovered through dumb luck as solved through excellent analysis. There's no way the existing telecom infrastructure could support the development of a million applications, with the hope that ten thousand will be successful. However, a Telco 2.0 infrastructure can and will.

Telco 2.0 applications are built using web technologies to overlay functionality on the existing PSTN infrastructure. Since the PSTN infrastructure exists, there's no reason for the Telco 2.0 engineer to build the capacity for switching calls around the network. Since Telco 2.0 applications are delivered through the browser, there's no large workforce to manage and train. Since there's no natural geographic barriers, the entire world becomes your serviceable market. Since web technologies are naturally scalable, and are paid on a transaction transaction basis, large capital investments are unnecessary. As a result, it's radically simpler and cheaper to write and deploy them as compared to traditional services.

The result is that we'll see many more Telco 2.0 applications than we've ever seen from any other telecom market. Ever. Nearly all of them will fail, as most of the people developing them will not have the marketing skills to have any real chance of success. They tell authors that about one in a thousand books are actually published, and the number of authors that have published more than one book is smaller still. As you enter your local Barnes and Noble, start counting the books, and realize each represents a thousand others you'll never read. However, without mechanisms that allow people to write books simply and cheaply, how many of the books that fill the shelves would have been written in the first place? I say not many.

Congratulations to all those authors of software and prose who remain anonymous. Congratulations to my brothers and sisters at Jangl. Even though success was not personal for them, in very real and important ways, they guaranteed the success of their markets.

Thomas Howe is a long-time telecom consultant, writer, and speaker who is the CEO of the Thomas Howe Company, providing expertise in improving the business process with real-time communications. His website is at http://www.thomashowe.com

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Howe: Congratulate Failure