Business Models Archives - Creative Connectivity

Why Grabbing Greenland could kill 6G and burst the AI bubble

You’ve probably noticed that there’s a bit of a penchant for land grabbing at the moment. Russia wants Ukraine, Israel wants Palestine, China wants Taiwan, and now, America wants Greenland. The problem is that as more of it goes on, the behaviour becomes normalised and the international barrier to grabbing is lessened. America’s Christmas foray into Venezuela has further regularised the concept of interference, which means there’s probably a mandarin in Beijing who’s already cancelled their summer holiday and written “Taiwanese unification” on their wall calendar.

The problem with grabbing Taiwan is that it’s not just land-grab. It comes with some interesting unintended consequences, which may profoundly alter the technology balance between China and the US, bursting the AI bubble and upsetting telecoms evolution along the way.

How HP valued Humane

Last week HP announced that they were acquiring the patents and key staff from Humane for $116 million. A few years ago, I wrote an article questioning the value of patents for startups (of which more later), so it seemed a good opportunity to try to dissect the purchase price to see if it’s possible to put a value on Humane’s patent portfolio.

Humane’s not your average startup. From the start it was viewed as a potential unicorn. Its first product – the AI Pin, which turned out to be its downfall, had high ambitions. Although few reviewers appeared to notice it, if it had succeeded, it would have been the first nail in the coffin of the smartphone. The product failed to meet that promise, and the company appeared to be heading for a fire sale. Fortunately for the core team, HP saw their value and snapped them up for the bargain price of $116 million. Let’s look at how they might have worked out that purchase price.

The Superhero SIM

Almost everyone in the world knows what a SIM is. It’s the little piece of plastic with gold bits on it that makes your mobile phone work.

Almost nobody in the world knows how a SIM works.

That’s about to change, as over the next few years we’re going to see SIMs disappear. Or at least the bits of plastic with gold bits on will disappear, as the things that a SIM does get integrated inside your phone. It brings the prospect of changing the way phone contracts work, allowing your phone to do far more, and has the potential to disrupt the current business models of network operators.

The Silicon Black Swan Event

There’s a very good one act play by David Greig called “the Letter of Last Resort” (which you can listen to here). It’s based on the premise that one of the first tasks of any new Prime Minister in the UK is to write a set of letters that are sent to the Captains of our nuclear submarine fleet. In the event of their losing contact with the country, it instructs them what they should do. Options include retaliating, by firing their nuclear warheads at whoever they believe were the perpetrators, surrendering, or sailing to some other country and offering them our nuclear missiles.

It’s a gloriously far-fetched political black comedy, based on a modicum of truth. However, it’s likely that a very similar debate is taking place in a boardroom in Taiwan at the moment, as TSMC and other leading silicon chip companies debate what they do in the event of a Chinese invasion. I suspect there’s a parallel one being conducted within the Taiwanese Parliament. Should these plans ever need to be realised, it will have very serious consequences on everyone’s favourite technology and put a stake in the heart of the smartphone industry.

UK Tech needs a Fat Lady

The UK Government has just announced its latest initiative to make us into a technology heavyweight – the ARIA project. What we don’t know yet is whether the fat lady singing the aria is destined to be a consumptive Mimi or a brash Anna Nicole? If the scheme is set up and run by the same people responsible for previous UK tech development initiatives, it’s more likely to be a cut-price Florence Foster Jenkins. Which would be a great pity, as there’s a lot to be said for having a decent funding scheme.

Understanding IoT Business Models or “Who killed my Unicorn?”

One of the memes that has been going around the industry this year, particularly amongst platform suppliers, is that the slow growth of IoT deployments is due to the fact that “Consumers don’t yet understand the real value of IoT”. It’s an incredibly arrogant statement, which tells us a lot about the current start-up mentality, where too many have the perception that they’re entitled to become a billion-dollar company just because they’ve had the presence of mind to jump on the IoT bandwagon. However, the fundamental fact remains that if you are going to succeed, you need a business model. Unfortunately, profitable business models in the IoT are rather thin on the ground, largely because many of the self-styled IoT experts don’t really understand the market.

What most people do agree on is that the IoT isn’t taking off at the rate which everyone had expected, although that’s no great surprise – technology growth curves almost never match the hockey stick curve that analysts predict. Gartner’s famous Hype Curve constantly reminds us that the path to ubiquity is strewn with failed ideas, many of which never emerge from the trough of disillusionment. The IoT suffers from a further problem, which is that the catch-all name has become to mean all things to all men (or maybe all machines). Many forget that the popular IoT poster children which the press pick up and promote as IoT are generally more fluff than substance.

Which brings us back to business models. The IoT will take off when companies work out how to make money out of it. Sadly, that’s proving harder than it may seem, with the more cynical concluding that the only people to profit from the IoT so far are conference organisers. So, let’s take a look at why developing a profitable business model is proving to be so challenging.