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The Mr Operator Series: Getting a deal with a mobile operator

Ah hah! A new series from SMS Text News!

Mr Operator

A mobile operator is a kingmaker, when it comes to mobile startups. If you can pitch your application or service successfully to a mobile operator, very quickly, you could find yourself with hundreds of thousands of customers — if not millions. They’re a lot more accessible nowadays too. Chances are, you can probably get a meeting with an operator to talk about your idea.

That’s where it all screws up for most people, though. Who exactly do you pitch to? CMO or one of the tech guys — or someone else? How do you get an operator’s attention? How should you craft your message to the operator? What kind of revenue share should you look at? When you’ve arrived in the mobile industry with $5m of funding from a top ranked valley VC and a business plan that depends on trying to sign up 3 international mobile networks to reach a 20m paid subscriber target by the end of the year, that’s when the challenges begin. Getting the money and knocking up the funky brand was the easy part.

And although 100,000+ people have downloaded the iPhone SDK, this does not, alas, signify a revolution as yet. The vaaaaast majority of handsets will remain contract, low-spec J2ME-if-you’re-lucky devices that customers will not be able to or cannot be arsed learning how to add apps to. Thus the MNO is still the on-device pre-installed kingmaker. Analogy time: Geeks like to think that as handsets become more open – Linux, Android, the iSDK – there will be a sweeping wave of mobile app democratisation, and soon every mum with a pram will be choosing her own IM client and ringtone editor.

Bollocks.

Look at the most open, customisable mass-market device today – the humble Windows PC. Hundreds of thousands of free apps out there, that will do everything from tell you the time in Peru to track the latest shuttle mission. Yet most PC’s remain bog standard, with users using the pre-installed Microsoft apps because the alternative requires just too much nouse, spare time, risk of the thing going tits-up etc. As a species, most of us like Vanilla. In one kind of cone. With only one price. It’s easy.

So. Pitching mobile operators?

There’s a chap I know. I’ve been calling him The Operator or Mr Operator in the recent SMS Text News podcasts. He’s a little known gem that almost every mobile startup needs to talk with. Or, ideally, hire. Indeed, if you’re not talking to him at the moment, or if you’ve never heard of this service, talk to me and I’ll see if I can introduce you. He consults to a maximum of five mobile startups at any one time. His job? To rip their services to pieces. To rubbish every slide, to bludgeon the startup’s business plan. To slap the VC sitting on the startup board. To bring reality. Yes! His job is to help you craft a winning strategy to pitch a mobile operator.

How do you know he’s any good? Simple. He is that man. He’s the guy you pitch at one of the world’s largest international operators. Hardly a week goes by where he doesn’t send me a text privately ridiculing yet another high profile startup that’s just been sent marching, tail between their legs, from his office. He does the best he can to help smooth rough diamonds but, geez, the stories he tells me. He doesn’t ridicule them for spite. It’s frustration. He’s hugely frustrated with the total lack of understanding displayed by most entrepreneurs trying to do business with operators.

For example, I sent him a text a few weeks ago about a new service I’d come across that I thought his company should take a look at it. “Download it,” I wrote, “Just met the founder and they’re looking for operator contacts?” I sent. Later that evening, he replied: “Installed it, looks nice, drained my N95 battery in 60 minutes. Piece of shit.”

Soooo I won’t be introducing them. This is the biggest frustration I have when I’m sat in the middle between an audience of mobile startups (and established developers) who naturally want to pitch their services to mobile operators. If you can’t deliver a product that meets a few basic criteria, there’s no way you can get in the door.

Just what are mobile operators looking for at the moment and how should you present your services to them?

Well, I have some answers — in the form of a new semi regular series for SMS Text News: Mr Operator.

If you’re a mobile startup and you’re hoping, or your business is relying on getting into an operator, this series is most definitely for you. I’ve sat down and managed to comission Mr Operator (or, Mr Gatekeeper) to write a regular commentary about pitching your business to a mobile operator. In the upcoming weeks, I’m going to ask him to shine his razor sharp wit and experience on a number of mobile startups that I know are hoping to get into operators. (If you’d like your product or service ripped to pieces by a mobile operator (hopefully, prior to doing it for real) and if you’d like to save yourself his £5k/month consultancy fee, drop me a note, otherwise I’ll be picking randomly, soon.)

To begin with, I asked Mr Operator to give us an overview of how the average mobile startup pitch goes with him. Here we go….

– – – – –

So you’ve got a cool app.

It does something Webby, something 2.0-y, but in a new, exciting way that people will love. You have sweated blood over it, sold the dog to pay the Symbian signing fees, and your partner now refers to you as ‘that guy with the bloody phone’.

You have a PowerPoint.

You have agonised over the fonts. Your designer friend knocked you up some business cards with a snazzy windswept and interesting* motif. You have a brand ending in one or two consonants, or possibly a Scandinavian vowel. If you are really lucky the whole name is Scandinavian. It actually means ‘wet shoes’ in Norwegian, but who cares?

Norway is not the prize.

You are Ready. Best suit on, checked the phone 5 times to make sure it’s on vibrate, got 5 copies of the office location printed, plus postcode loaded into GMaps on your new N95 8GB in case the cabbie has never heard of the destination.

You have your app on 3 different handsets, all reflashed to Nokia default, all with spare batteries.

You are going to Meet The Man From The Mobile Network Operator.

The meeting was set up following a 20 second passing blurt at a conference a few months back – you got The Man’s card, and have slept with it under your pillow ever since. You have him on speed-dial, even though you have never spoken since. You have sent increasingly nervous emails suggesting times / places / dimensions where it might be convenient to meet. Finally, there’s a 15 minute slot. You are IN my son. They will love you. Your MoMo mates are so jealous they can’t code straight.

You sign in at reception. He’s still on a call with the states, so you wait.

Read the FT.

And wait. Read Forbes. Check your phone’s on vibrate.

And He’s Here.

Big smile, firm handshake, business cards, etc etc. Up to the 5th floor, meeting room double booked so you camp out in a spare office. He’s only got 10 minutes now because of a call with Australia, so off you go. Out with demo handset one. Straight into it. Wait for S60 to boot up. Smile weakly. Realise battery is flat. Out with demo handset two. It’s a go-er.

Fire up The App.

Of course you’ll get rid of that Symbian pop-up message….and, er, that one too. Of course the UI will look much better when you hire that Flash developer, but, heh, you know start-ups, budgets, etc. Smile weakly again. Slides, did you say? oh, Christ yes, here, hold that, hang on, I’ll just boot up the laptop…………..Windows, eh?….weak smile…. Oh Jesus is that me sorry must have chosen Outdoor instead of Silent sorry….What’s that? Business model? er, well, A round is looking promising.

Oh, long term?

Well, we thought we could get three Euro per month per subscriber….

:: tumbleweed ::

:: crickets chirp ::

:: Fade to grey ::

* with apologies to Billy Connolly

– – – – –

Thank you, Mr Operator.

Standby for more, soon.

By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

22 replies on “The Mr Operator Series: Getting a deal with a mobile operator”

There is something so not right about that article. Talk about being up your own arse. Both of you actually if you want to know the truth.

I don't work in the industry but business is business and the principle is the same. Mr O might get his kicks out of ridiculing pitchers on a weekly basis but boasting about it – now, that's just rude. And disrespectful.

Furthermore, if Mr O was capable of adding real value, ie being the difference between success and failure as described, he would take a cut like everyone else instead of a crappy few thousand quid. Believe me. Actually the way this post is written, the payment comes across like a bribe.

Ah it's actually the opposite from ridiculing pitchers, AJ. I can see your
perspective though. I asked Mr Operator to do a tongue-in-cheek
illustration of what he faces weekly. I actually found it really
entertaining — and I got the serious point underpinning the piece: That
many startups just don't stop to think long enough about how to pitch their
app/service to an operator. They get one chance, screw it up (“3 euro per
month, per subscriber, please?”) and that's it.

There's absolutely no ridicule involved. I know the chap well and Mr
Operator doesn't take any pleasure whatsoever from turning down startups
who've clearly invested a lot of time, money and hope getting into the
office to pitch in the first place. If anything, the complete lack of
understanding for internal operator motivations and dynamics is extremely
frustrating for Mr Operator. He has to (for example) sit down witht he
startup and explain that the business plan a startup's been working on for
the last years is utter nonsense because no operator on the planet would
accept it. A hugely disheartening experience for all concerned, I suspect.

I'm hoping to change this with regular feedback from Mr Operator.

To answer the payment point: A bribe? Absolutely not! Let's be clear:
Mr Operator is an independent consultant. He works more or less full time
for one particular international mobile network.

If you're a startup, you can also hire Mr Operator to help you understand
precisely what your average operator will want and expect from a deal. I'd
liken it to hiring a financial listing specialist to help you prepare your
company to list on the Stock Exchange.

If your business plan depends on you getting your application or service
into a series of mobile operators across the planet, it's worth a chat with
Mr Operator — or another similar consultant. Meantime I'm confident the
continuing columns from Mr Operator will add a lot of value to a lot of SMS
Text News readers, many who would welcome an insight into the mind(s) of
your average mobile operator.

AJ some consultants do take equity as payment, but not many – why tie your income to the decisions of a start-up that may take years to make a return and/or ignore your advice?

I read this as similar to Dragon's Den… if you make it in front of the man who can make the decision about your app don't come with business cards but not a business plan. Never mind teasing start-ups… it's dumb to chase such a major opportunity only to fritter it away. If you do it's that kind of telling-off should be the push you need to get it right/better next time.

Having said that it would be nice for Mr Operator to offer some positive advice around those challenging areas in future…

We've had a lot of feedback from mobile developers this morning — I hope to
get Mr Operator to give his opinions and some constructive feedback to one
this week.

Ewan: Fair enough – but from my point of view this post seems to come across as a little sadistic, that's all. I have sat on both sides of the table and it doesn't seem very appropriate, texting your mates afterwards to take the piss out of someone, however unsuitable the pitch. Or maybe its the bragging about it afterwards that doesn't seem right.

Ben: Any consultant worth their salt in this type of scenario would charge a success fee or commission, at least in part. Particularly when he claims to be the difference between success and failure. Also, how many months is this likely to drag on for given that the guy has a full-time job and five simultaneous consulting assignments in any one month. Seriously, how much use is this person likely to be. If they can't agree to a cut of some form or another, I doubt they are anywhere near as good as they claim to be. In this sense, the post comes across a bit like a slightly desperate pitch of its own. Like I said, I don't work in the industry but I am basing this on my own experience.

Finally, the

I don't see how charging companies for the benefit of your wisdom is
underhand. I do it almost every day, AJ.

Mr Operator is a wholly independent consultant. Like a lawyer or any other
professional. Yes he works at a mobile operator too and in an influential
position. He can definitely introduce you to the network he works with, but
there's next to no guarantee that'll get anywhere. He's extremely careful
about his respective responsibilities — as he should be.

Generally, yes. I think that's an accurate viewpoint, Gabe. However there
are a number of applications and services that many operators will want to
resell as additional services to their customers. Zyb, for example.

AJ: I've been a consultant for ~10 years and my firm has never taken equity (and neither have any of the independents I know – although obviously I can't speak for all sectors). Purely from a cash-flow point of view it's just too slow… you give me a few % of your business today and then I have to wait for you to float or make a private sale… nah… I need to pay the mortgage now 🙂 Also, bare in mind it's advice being bought – not everyone follows it. The consultant's financial incentive to helping the start-up is the 2nd, 3rd etc engagements.

For someone at this level

I get the point about needing to pay the mortgage and believe me – I am not a socialist – consultants deserve to be paid very well if they can deliver. But when it is a start up involved, particularly where the consultant is supposedly offering to breathe life into a new project, I wouldn't take anyone that seriously if they weren't prepared to agree to some sort of success fee (at least in part). I have been involved in a couple of startups and it is always a really difficult time – in my experience most consultants aren't worth a dime and the only ones capable of any form of delivery are the ones who will discuss success fees rather than upfront payments. It was never my intention to imply that the only form of payment should be equity which would be useful but not very practical. By definition there is not usually that much repeat business where start ups are concerned – it is kind of a niche area. Although telecoms might be different.

Also, you are right about getting a week's work or less for

I get the point about needing to pay the mortgage and believe me – I am not a socialist – consultants deserve to be paid very well if they can deliver. But when it is a start up involved, particularly where the consultant is supposedly offering to breathe life into a new project, I wouldn't take anyone that seriously if they weren't prepared to agree to some sort of success fee (at least in part). I have been involved in a couple of startups and it is always a really difficult time – in my experience most consultants aren't worth a dime and the only ones capable of any form of delivery are the ones who will discuss success fees rather than upfront payments. It was never my intention to imply that the only form of payment should be equity which would be useful but not very practical. By definition there is not usually that much repeat business where start ups are concerned – it is kind of a niche area. Although telecoms might be different.

Also, you are right about getting a week's work or less for £5k but this guy is offering to work on 5 separate assignments concurrently as well as holding down a full-time job/contract at the same time. Actually none of this is any of my business and I kind of regret passing comment now. However it reminds me of a few consultants who worked for me in a start up I was involved in a while back so I might put it down to unresolved issues. You might be able to get rid of these people quite quickly when it is clear they are not delivering but it is shocking how much money can be wasted in even a relatively short space of time. My main point was that he doesn't come across that well from the post (no big deal – just a personal thing and that's obviously his shtick anyway) and I am more than a bit sceptical that he is capable of any form of delivery given the demands on his time.

Isn’t it perhaps better to work off-deck first?
Build-up some track-record (users, experience, statistics, and maybe revenue, etc) and then take it to an operator for a portal deal?
Portals are over-run with content that’s difficult to discover. I thought operators were cutting back on small third-party deals and just going with the mainstream, high volume stuff … ebay, yahoo, etc

Generally, yes. I think that's an accurate viewpoint, Gabe. However there
are a number of applications and services that many operators will want to
resell as additional services to their customers. Zyb, for example.

AJ: I've been a consultant for ~10 years and my firm has never taken equity (and neither have any of the independents I know – although obviously I can't speak for all sectors). Purely from a cash-flow point of view it's just too slow… you give me a few % of your business today and then I have to wait for you to float or make a private sale… nah… I need to pay the mortgage now 🙂 Also, bare in mind it's advice being bought – not everyone follows it. The consultant's financial incentive to helping the start-up is the 2nd, 3rd etc engagements.

For someone at this level £5k would get you less than a week of time.

I get the point about needing to pay the mortgage and believe me – I am not a socialist – consultants deserve to be paid very well if they can deliver. But when it is a start up involved, particularly where the consultant is supposedly offering to breathe life into a new project, I wouldn't take anyone that seriously if they weren't prepared to agree to some sort of success fee (at least in part). I have been involved in a couple of startups and it is always a really difficult time – in my experience most consultants aren't worth a dime and the only ones capable of any form of delivery are the ones who will discuss success fees rather than upfront payments. It was never my intention to imply that the only form of payment should be equity which would be useful but not very practical. By definition there is not usually that much repeat business where start ups are concerned – it is kind of a niche area. Although telecoms might be different.

Also, you are right about getting a week's work or less for £5k but this guy is offering to work on 5 separate assignments concurrently as well as holding down a full-time job/contract at the same time. Actually none of this is any of my business and I kind of regret passing comment now. However it reminds me of a few consultants who worked for me in a start up I was involved in a while back so I might put it down to unresolved issues. You might be able to get rid of these people quite quickly when it is clear they are not delivering but it is shocking how much money can be wasted in even a relatively short space of time. My main point was that he doesn't come across that well from the post (no big deal – just a personal thing and that's obviously his shtick anyway) and I am more than a bit sceptical that he is capable of any form of delivery given the demands on his time.

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