Herve Cuviliez: Entrepreneur - business angel in the Middle East

I was just getting back home last night after a very nice diner with some friends.

While everybody was saying goodbye, my Iphone escaped from my hand and fell full face on the ground.

Here is the result

You know what, It still fully functional

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I spend a lot of time talking, thinking about the evolution of advertising. I even get pay for that.

for a lot of peoples, Nike or Apple are the champions. In a way, it’s true. They have great products, they are really strong in innovation and their communication is really best in class.

But Google is the real champion as a brand and as a media.

1) Google Brand reaches the Top 20 (source: Interbrand Best global brands 2007) in less than 10 years without buying any media. For that, they have created the first business case of every advertiser dream.
How did they do that ? one key word: Innovation
Strong buzz around products: Gmail, they offered 1Go storage capacity by invitation only when others offered only 25mb then 250mb in reaction. Bottom line
Open Culture: Google maps, every website can use them for free, a real service and Google gets its logo on every page
Entertainment: how hasn’t play hours with google earth. Bottom line for them, you have called all your friends about it and spent hours with a Google logo in front of your eyes.

2) Google is the center of the advertising world
Having a website google search compliant is now mandatory,
they have redefine the advertising model by introducing remuneration based on performance, first online but TV is next to come (read here).
With Adsense, Google have provide a lot of startups their first stream of incomes. In a way, Google is also the most active business angel

To me, Google will be the spark that divide she advertising market into two worlds.

The “performance model” one where you will pay only for results based on its ultra dominant system Adwords. I’m not talking only for advertising but for all kinds of media, especially TV because of TIVOs systems and Catch up TVs.

It will the largest share of the market in term of revenues, but not in term of profit for the industry except for google of course.
This world will be good for generating sales, driving traffic but not to create brand or create your reputation. This last point introduce the second world in the advertising industry : the advertising on demand world.

Born with the Internet, the on demand advertising (ODA) can be define by one rule: if you have to buy ad spaces to promote it it’s not ODA.
ODA is and will be more and more about creating Branded Entertainment, Application or online services that people want to see, use even pay for it.
Need examples other than Google Earth? M&M’s e-commerce, Burger King Video games, etc..
Isn’t one of the best form of advertising to have people downloading your product, playing with it or spread the world about it?

ODA market will be small in term of market share by definition (remember no media buying) but will be the most profitable segment for agencies

Everything between those 2 worlds will disappear especially the good old $1 millions 30s TV commercial, but it seems that the industry is stunk in the old good “pay per view” model even Yahoo, so Google will have for years a bright blue sky in front of them.

I hope I will be wrong about that (no competition in front of google) but I doubt.

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With a price ratio 1:20 comparing to PCs and a vaste majority of the population living with few dollars a day, it’s a no brainer to understand why mobile penetration is 10 times bigger in emerging countries.

For that reason, we will see mobile innovations coming from those countries in years to come.
Want signs of this?
South Africa is about to release a voting system through mobile for local, regional and even national election.
Bangladesh mobile operator Grameen Phone has gave information access (information is key for a farmer, for example. It’s helping him to know to where and when to sell his production instead of relying on local resellers) to poor people through 16 millions lines.
M-banking is the future of banking in Midle East & Africa (Etisalat has released last month a mobile wallet)

I see more and more mobile innovations coming from Africa (see dreamoval), middle east and of course India & china.

Kill cliches about tech innovation always coming from developed countries and remember

from the necessity come the creativity

If you know any others innovations there, please continue the discussion by leaving comments

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Ad:tech was taking place in paris the 7&8 april 2008 and I was a great event, lot of people, great speakers.
I was really blunt about the first edition in 2007 but this year was a real success.
I’ve animated a round table about Online identity and online reputation with Charles Nouyrit ( CEO and founder of MyID.is), Alain Bensoussan (Lawyer), Xavier Moisant (Blogger) and Stephane Billiet (CEO Hill and Knowlton).
I was a bit worried about the schedule: 10:30 am Monday morning but not on purpose because the Grand Auditorium was full.

I’ve also attended a really great conference around the internet of things (I’ve spoken previously about that here) with 2 great panelists : Bernard Benhamou (French Prime Ministers Office, Misson Forcast & Internet Governance) & Rafi Haladjan (CEO of Violet).

So once again, Congratulation Genevieve.

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1) Our culture: Coming from an engineer culture, France has always been strong at building infrastructures, don’t we have one best automotive highway or high speed train networks even airlines. It’s a no surprise that’s we have a fair good broadband network. As a consumer, you pay only 30 euros for a 20mb connection plus free calls plus 60 TV channels. Everything perfect but only 53% households have access to it.

But this time it’s not about infrastructure but about services and content
Didier Lombard (France telecom CEO) said

Contents are the oxygen for our networks

That’s my point because our culture, we don’t give enough value to intangible assets. We have very few online champions, really to few to catch the growth which goes to the US (around 80% of online media spending in france)

2) Our lake of investments: if you take a look at the The Global Information Technology Report 2008 ranking just released by the World Economic Forum, you won’t see big evolutions in the past 3 years, France (2006: #22, 2007: #23, 2008: #21), UK (2006: #10, 2007: #9, 2008: #12), US (2006: #1, 2007: #7, 2008: #4), Germany(2006: #17, 2007: #16, 2008: #16), India (2006: #40, 2007: #44, 2008: #50), China (2006: #50, 2007: #59, 2008: #57).

Knowing that a networked economy is directly linked to innovation and competitiveness, we will have to invest heavily to catch up with the 10 or even just for not been catch up.

Regarding point 1) and our 2,000 billions euros debt, It will need political courage and vision to make the necessary investments.

3) Talents migration: Due to point 1&2 and/or to our tax system, we face a huge talents migration and where we are still questioning ourself about it , others developed countries are already working on it (see Bill gates congress intervention here). In the past 6 months, every entrepreneur, I have met was considering incorporate outside of france. Fortunately, we have local initiatives (see my post on digiport) but it won’t be sufficient.

Conclusion: This is in this context that was appointed Mr Besson as Digital Economy Secretary of State. He will present his catch up plan for the french digital economy in a couple of months after a series of meetings with french digital economy leaders.
It will have to be ambitious, heavily founded and engaging if he wants to have the market makers behind him.
I wish him good luck, If this time nothing happens, I will also move east.

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Cashstore has released a version on cashstore in spanish : cashstore.es. The team has received a warn welcome from the market with dozen of press articles and more than 84 000 results inside google.com (to have the updated number click here).

I hope it will be in Spain the same success as it is in france.

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I just finished the latest book of Prof. Muhammad Yunus (founder of the Grameen bank and 2006 Peace Nobel Prize) called “Creating a world without poverty“.

I’d liked his analysis of capitalism and more precisely his vision on the far too simple way we are dividing the economic world: On one side companies with only on objective, maximizing profit and on the other side none profit organizations in charge of taking care of poor people & environment.

You, like I first done, will object that now big firms have sustainable development and CSR programs. that’s true but at the end of the day what is the one and only indicator the market will use to rate a company : PROFIT.
So if a CEO has to choose between profit and doing a good action, he will choose profit in 99% of the time because it’s what the market expects.

You know what it’s normal and Prof. Muhammad Yunus find that normal also.

That’s precisely what is liked in his approach, he is not an anti-everything kind of guy but a very practical and realistic one.

He proposes to create a new business concept: The social Business. A social business will be have the same mechanisms as a standard business but with two major differences it’s first goal is poverty reduction instead of making profits and propose products and services that’s enhance poor people life.
They will not distribute dividends, the investors will only get back their investment that’s all. So it will help to low products and services prices.

Social businesses and standard businesses will compete on the same market and at the end, consumers will decide.

I think it’s a brilliant idea it will give talented people another option than “profit companies” without sacrifing their revenues (remember a social business will be pay the same salary as a standard business) plus it will leverage the money given to non profit organizations by giving them the ability to get back their investment instead of just spending it.

My only concern about social business is how do we ensure social businesses keep their structural costs sharp without the profit pressure from the shareholders (really important to be able to keep the lowest prices). The board members will have to play hard on this otherwise it will turn into an inefficient administration and then back to beginning.

I strongly recommend this book and to think about this social business concept, if you have any input or comment, feel free.
On my side, I have a idea for a social business, I work on it and I keep you updated.

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I went visiting the Digiport in Lille (north of france).
they provides a full range of services for IT companies from a business park to host your business to personalized support for your incorporation.

I was really impress by the quality of the infrastructure and the skills of the team.

If you are a startup CEO looking for the perfect place for european headquarter, you should really consider this place.

Cherry on the cake: By the high speed train, London is at 1h20, Brussels at 30 mins, Paris at 1h and charles de gaulle airport 40 mins.

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Seen yesterday @ emerging art festival, a twitter device for your plants.

So you can be anywhere on the planet and receive status updates of your plants: Need water, urgently need water, etc..

So cool,

You will find everything on botanicalls.com to build your own device, don’t forget to them feedback.

As soon as I get back to Paris, I’ll try to make mine

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While the vaste majority of us just getting tired of facebook, the Web 2.0 is entering into phase 2. I will say a more mature phase.
With phase 1, we learnt how to connect to each other, sharing basic information, etc… I’m talking about facebook, dopplr, linkedin, Xing and hundred of others.

With phase 2, we will learn to share informations with others forms of intelligence. I’m talking about artificial intelligence, I’m talking about robots, sensors, any kind of devices. Scared ?
To make it simple, everyday there is millions of information gathered by sensors that could be valuable for us: temperature sensors, mobile for localization, wifi hotspots, RFID chips, etc…
In fact, we are already surrendered by sensors collecting information and “socializing” between them.
This phase 2 will be the connection of this 2 kinds of social networks: us and them.
Don’t Believe me ? Need some signs ? Here is some

Tim O’Reilly at the ETech08:

the future of Web 2.0 will be applications driven by sensors

But in fact, the first person, i ever heard talking about this, is Bernard Benhamou that’s was a year ago and he made a interview (in french) about this in may 06.

and then start to google this there tons of pages on this: A good article on the economist

So what’s new ?
It’s getting real. In 2008, we will move from prospective to concreate applications.

Need another sign ?

Yahoo just released Fire Eagle (a way to share your location with sites and services online) that collect localization informations and centralize them in an unique application then you can feed this into your applications. Sources could be wifi hotspots, mobile, gps, etc…

I will continued to investigate that and invest myself and my money into this type of application.

To be continued…

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