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Entrepreneurship Hints from Overseas

Back to the future in Amsterdam and Japan

lapps_and_inuits.gifLast week I spent a couple of days in Amsterdam to attend a conference on business models and deliver a presentation entitled How Your Business Model is Culturally Imprinted — And Why You Should Care (about which more in a later post).

Amsterdam is wonderful: A city of living history with frank, funny, welcoming citizens, and skinny, happy policemen. Good design is evident everywhere, and businesspeople seem to surf on the leading edge of everything — especially in the mobile telephone sector.

Many of the conference participants were sporting Apple’s new iPhone, and more than a few were either involved in startups working on iPhone applications or serving as consultants to large multinational firms intrigued by the iPhone’s blistering adoption rate.

Watching the twiddling thumbs and the twirling tweets, I was overcome by a sense of deja vu. Where had I seen all this before?

More than ten years ago, it turns out, in Japan.

That’s when NTT docomo, Japan’s leading mobile phone operator, launched i-mode, the world’s first Internet-enabled cellular telephone service. I was a witness, and even experimented with docomo’s prototype 3G model in 2001 (see essay on 3G cat video).

The i-mode service was a smash hit, attracting millions of subscribers its first year. Thanks largely to i-mode, today NTT docomo boasts some 50 million subscribers, an astonishing number for a single carrier in a nation with a population of 127 million.cell_phone_beauty.gif

Here’s what strikes me: From a user experience standpoint, what Apple offers today is almost identical to what NTT docomo started offering more than a decade ago. Like the iPhone, i-mode enabled users to send and receive e-mail and perform a variety of other online tasks using a cellular handset. (Note to Japanophiles: Yes, i-mode was largely a “walled garden” insulated from the Internet at large, and naturally with far fewer services available at the time, but the business model and user experience are surprisingly similar).

Whether Apple took any hints from NTT docomo or not, iPhone architects could hardly have been ignorant of i-mode’s extraordinary, ground-breaking success.

Regardless, here’s the point: Other cultures can offer remarkable hints to inform our own entrepreneurial efforts. And today, a Japan struggling with new sorts of ground-breaking challenges — a declining population and the world’s oldest workforce among them — can offer to astute outsiders a glimpse of the future in sectors such as food products, health care, and, of course, always-stunning consumer electronics.

Next week: Design and entrepreneurship

Postscript: To be fair, with respect to the iPhone’s extraordinary design and user interface, i-mode developer Takeshi Natsuno commented in an interview that the i-phone “… cannot be produced by Japanese manufacturers. Never.”

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5 Comments to Entrepreneurship Hints from Overseas

On Jun 25, 2009, Greg commented:

I was living in Japan when Docomo introduce i-mode, and I will admit I was initially skeptical of its offering. It was slow, handsets were small, and offerings were initially limited. The sound quality of Japanese keitai sucked for a long, long time.

I haven’t followed the Japanese keitai market much lately, though I do know prices have come down, quality has gone up, and connectivity is pervasive. I also know iPhone is garnering a lot of attention there. Out of curiosity, why is iPhone so interesting in Japan if what it offers is so “old hat”? I mostly agree with your article, but I don’t understand that paradox. iPhone must be doing something different besides offering larger screen and an App Store.

On Jun 26, 2009, Traveler commented:

I too was in Japan for the birth of i-mode, and used DoCoMo until the iPhone came; I’m now an avid watcher and user of the latter in Japan. So I certainly agree with Tim’s comparison between the two, as I’d noticed the same parallel myself.

The important thing to recall about i-mode’s success is that it wasn’t based on any stunning new tech. It was a *business model* success, the first that really made it easy for businesses and users to connect with paid services, while DoCoMo (like Apple) acted as gatekeeper, and (like Apple) took an easily-understood flat cut of the revenue. That’s what paid services on mobile phone had been missing until i-mode.

But that’s why I can’t make heads or tails of Natsuno’s strange comment, “This kind of device cannot be produced by Japanese manufacturers”. The iPhone isn’t technologically earthshaking, and already manufacturers everywhere are creating similar hardware. Japanese manufacturers could certainly do so.

Again, the iPhone’s success is due to the business model – the great iPhone ecosystem – not just to the device. Natsuno may be saying that Japanese companies don’t have the creativity to create such a groundbreaking ecosystem – which is bizarre, as he himself was part of just such a creation!

So I have no idea why he makes that comment. (Which may not at all be his fault; one never knows how much the selected, out-of-context sound bites appearing in an interview reflect what the speaker actually said!)

On Jun 26, 2009, Tim commented:

Natsuno is referring to the extraordinarily advanced design and clever user interface that Apple achieved in the iPhone. So he’s referring to the hardware/interface design itself rather than to the service offer per se (in fact in the interview he goes on to acknowledge that Japanese carriers offer many services the iPhone lacks).

And Traveler is spot on in pointing out that i-mode is a business model rather than a technological advance. You need to read the entire interview to understand Natsuno’s comment; as a stand-alone sound byte, it does seem strange. And I think he is overly (and typically) deferential with respect to non-Japanese companies…

On Aug 17, 2009, Mr. Smith commented:

If you read Natusuno’s first book there are more insights. In the 90’s the Docomo mobile part of NTT was regarded as the red headed step child of the NTT group. No respect and a place for “renegade” or non conforming NTT clones. Pay phones and landlines were “the place to be” back then.

Pre imode. Too many people were making voice calls and overloading the network. The PDC 2G system was not designed and didnt have the network capacity.Tokyo has extreme mobile phone density.

Imode is a business model designed to get people to call less and use data more on a seperate(packet) network.And it worked. But they didnt know what the reaction would be. Sort of like 7-11 first in Japan. Would anyone come?

On Aug 27, 2009, by Tim commented:

Thanks for insightful comments. Natsuno has left Docomo,I believe, wonder what he’s doing?

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