Altibox: Busting Business Models

Last week I had the great pleasure of visiting Altibox´s offices. Wow, was I impressed!!

Why does a TV have to be a TV?
Why should the TV channel decide what I watch?
Why can´t I watch any program, on any device, at any time, at any place?

These are just a handful of the questions Altibox is asking – on its way to disrupt a range of industries, from television, movies, broadband services, gaming and communication. Simply put, Altibox is potentially reinventing your digital life.

We´ve longed argued that Norway, with it´s small population and high digital proficency is a great test market for next generation digital services. Telenor has been fairly fast, but outside of that, we´ve not seen an impressive range of groundbreaking digital services. That is, untill now.

Altibox and the mother company Lyse came on our radars some months ago. Recently their energetic and passionate Sales Director Stian Røisland held a guest lecture at BI Norwegian Business School. His presentation was more Sillicon Valley start-up than mature energy industry. My strategy students were wildly impressed. I was curious. Here was a company not only using the 30/30 rule in strategy (30 % of the participants in the strategy process should be under 30 years old). No. At Altibox closer to 80 % are under 30 years – and everyone´s taking part in the strategy process.
While some firms struggle to recruit at University level, Altibox is running a unique High School recruiting program. “We recruit for attitude, then train them for skills”, says Røisland, fielding through more than 100 applications for ten open positions. Taking a page from pro football, Altibox recruit them young, then develop them in-house, including paying for business school as they develop. If Kobe Bryant can join the NBA at 17, why can´t Altibox recruit next generation leaders at 18?

Making your digital home a reality

While recruiting for the future is one thing, developing digital services for the future is truly another – and Altibox is hard at work. Today I witnessed the smart house of the future. Combining existing software and hardware, Altibox´s team of innovative technologists have made the digital home a reality. Currently field testing 19 houses for the elderly in Stavanger, the company combines light, doors, temperatures, video calling, TV, security, health check-ups and more, all into one device, all running on one plattform. Now, your grandmother can watch her grandchildren play on your floor from the comforts of her couch, while opening her front door without having to get up. And home nursing services can check in on her using video conferencing. While none of these are new technologies in themselves, Altibox´s team has put these together into one user-friendly app running on the iPad (android coming shortly).
With field testing well under way, deployment can´t be far off.


Gunnar Crawford, innovative Senior Business Developer at Altibox


Changing the game…and reinventing your television

Having dug Norway´s fastest fiber broadband to customers, the company is now developing digital services to make use of the capacity. This, of course, opens for innovative possibilities.

How would you like to watch six football games at once, on six split windows on your TV, all in HD. And if you have to get up and leave the couch, you can continue watching on your iPad as you move into your office..

Or how about choose any TV program you want, then watch it when you want, at what pace you want and fast forward whenever you get bored. No need to follow the TV schedule, because there is none. No need to tune into Grey´s anatomy at 21:45, beacuse you can get it whenever you want, on any device you want. And hey, perhaps you can choose whether to pay .99 cents for it, or watch a bit of advertising and get it for free.

TV, of course, is only part of the services being rolled out. High Defintion Video Calling using Cisco Ümi is another service. Social gaming over Altibox´s platform is another. Integrative e-learning, combining video lectures, twitter feeds and slideshows in multiple windows is yet another.

Radical business model innovator

The Norwegian book industry has chosen to stand by and watch the digital revolution. Altibox is leading a massive push to reinvent the TV-industry and the many layers of services potentially following your future TV usage. While the company still is small in scale, the ideas are big.

For most radical innovators, getting the business model right is the big challenge. Finding the right streams of cash flow for the right level of services at a time the market is ready to buy requires finess, insight and more than a little bit of luck.

Altibox had many open questions. But the company also had some emerging answers. Integrated vs. stand-alone, purchase vs. subscription-based, slow growth or massive scale-up. Yes, questions only begets more questions. But finding the right mix of business models will happen through trial, experiments and innovation close to the customers. It will be interesting to watch as Altibox puts their various business models to the test.

Putting the Innovation Pyramid to work

Analyzing Altibox using the Innovation Pyramid reveals a telling picture. The company is hard at work on radical business model and radical industry innovation.

Altibox Innovation Pyramid

View more presentations from Engage // Innovate

While most firms we look at struggle just to develop innovation at the product and process level, Altibox is racing ahead. While a lot of firms are satisifed with 3, 5 or 10 % of revenue from services less than three years old, Altibox is working at a whole different level.

While most firms are pleased with a balanced level of incremental innovation, Altibox is really pushing the envelope in terms of bringing innovations to the market. Not small, safe, incremental innovation, but big, bold, potentially massively disruptive innovations. Innovations that can change how people use technology both at home and at work. And this is not something that can happen some years from now. It is happening. Today. At Altibox.

Watch this company. I believe this could be a growth case to follow. And first step is finding the right mix of business models.


Stian Røisland, highly engaged and relentlessly positive Sales Director at Lyse

It’s people like Gunnar and Stian that’s making innovation happen. Thanks.

——-Update———
This blog is driving a new record of hits on our blog. Thanks for reading. Thanks for sharing.

Altibox: Busting Business Models

Google has X-Lab; What have you got?

A recent NY Times article revealed some of the inner workings of Google’s X-lab. It is a fascinating read. For those of us who’s been keeping track of Google for years, it comes as no surprise. Rather it is a delightful example of how one of the World’s Most Innovative Companies stays innovative.

X-Lab is where Google’s team of dreamer s and doers develop the future. Today you’ll find work on self-driven cars, space elevators or self-ordering refrigerators. This is where Google’s top 100 moonshots happen. While some critics view this as being outside the core business, “investing in speculative projects is an important part of Google’s DNA”, states one spokeswoman. Google Co-Founder Sergey Brin is even clearer, stating“…we hope (this) will graduate to important key businesses in the future”.

Now reading about Google and X-Lab is fascinating. But the bigger question is; What have you got? When you look at the average firms’ innovation capability. When you look at the average firms’ innovation processes; how wildly creative and innovative are these? How wildly creative and innovative is your firm?

OF course, most simply aren’t. Sadly so. Most firms focus too much on what scholars Govindarajan and Trimble call “Manage the present”. While they should evenly balance what the authors call “Selectively abandon the past” and “Create the future”.

The two repeatedly state “Business organizations are not designed for innovation, they are designed for ongoing operations. And there are deep and fundamental conflicts between the two”.

Yet, Google’s X-lab shows one glimpse of how one company is organizing itself for more innovation. Google’s innovation philosophies are more complex than this, but the X-lab is one highly visible effort – and it is one most firms could – and should – copy with urgency and pride.

Google has X-Lab; What have you got?

What Banks Should Understand

This week we’ve been reading up on innovation in banking and financial services. It is an industry ripe for innovation.

One of our favourites is “Your Next Credit Card is Your Last“. Imagine going back to, say, 1985, and say ‘cheques cease to exist’. Most probably the average consumer would look at you funny and shake their heads. But that’s excactly what’s happning to credit cards and debit cards. We do not need them any more. The phone is taking over. We’ve been blogging about this for a while. But Fast Company’s recent article is bringing this closer to reality. And it probably won’t be banks doing it……

Following the theory of disruptive innovation, it will be the current industry òutsiders`who are small, quick and nimble, who will reinvent banking as we know it. Did you know that Google is the big driver of mobile phone banking payments in the US? And now rolling out across Canada too….

or that Square has one of the highest growth rates in financial services anywhere?Are you familiar with the web-driven, social banking concept of Bank Simple yet? Or perhaps you have yet to read about Stripe: payment for developers yet either?

While these examples are all from North America; looking across the globe, to Norway and Pakistan (!) a similar pattern emerges. The Norway-based telecommunication (now going on software) company is now the biggest bank in Pakistan. Yes. Under the name of Easypaisa, Telenor has grown its customer base to ten million, while other banks have eight million customers – combined. All in less than 18 months. With 100 million mobile users – and growing – Telenor looks set to become of the biggest banks in Asia. All thanks to banking meeting technology and innovation. Yet, as Telenor is quoted saying, “We talked to 36 banks in Pakistan, but none wanted to join us”.

This, of course, is the typical pattern of companies getting disrupted. They fail to embrace new opportunities, new technologies and new business models. At their own risk.

Facts that should absolutely scare banks throughout the western world are these:
Cost of opening a traditional bank account in Pakistan: $85
Cost of opening a Easypaisa bank account: 60 cents

Time to open a traditional bank account: one week
Time to open a Easypaisa bank account: a few minutes

“We got 500.000 new customers in the first month”, says Telenor. That’s not a bank in the world who can claim such figures.  This is what we call “Think Different”.

So while non-banks are pushing the boundaries for innovation in, well, banking, traditional banks are watching from the sidelines, slowed down by their own size, mental models and organizational structures.

Starting tomorrow, today’s banks should embrace change, embrace innovation and embrace technology. And the should see their role changing in the customer relationship. Banking services should be more of just that; services. As businesses globalize, so will banking services. “Small businesses will expect their financial services provider to be their local portal to
the global marketplace, delivering the products, services and information required for successful international transactions” (Intuit). Intuit’s excellent Financial Services 2020 report paints a compelling picture of technology, customer service and personalization blending seemlessly.

“Technology will drive innovation and create new efficiencies and ways to interact with customers and business models”(Intuit). One such example is using Twitter for a digital townhall meeting.

 (all photos from Banking2020.com)

(The complete transcript can be found using #IFSsurvey on Twitter)

P.s.
If you are having trouble understanding this blog, that’s the big challenge for bankers. Even banking regulators are struggling with the emergence of social banking. Yet,these are all things banks should understand.

What Banks Should Understand

Eventyret Apple: Foredrag i Stavanger Næringsforening 8. desember

Apple er et innovasjonssenter. Apple har blant verdens mest engasjerte kunder. Apple fullstendig overgår konkurrentene i omsetning pr. kvadratmeter butikkgulv. Og Apples butikker har blitt inspirasjonsskilder for designere, etnografer og bank arkitekter. I juli 2011 hadde selskapet til og med en større kontantbeholdning enn USA.

Vi inviterer deg til et spennende foredrag hvor vi ser på Apple som en stor eventyrhistorie. Et eventyr som kan analyseres, tolkes og forstås. Et eventyr andre kan både lære av og bli inspirert av. Foredraget vil være faglig forankret i strategi, men vil være av interesse for alle som jobber med salg, marked, ledelse, strategi, innovasjon og rett og slett alle som er nysgjerrige på å forstå eventyret Apple.

Foredragsholder:
Christian Rangen
Høyskolelektor, Handelshøyskolen BI
Partner Engage // Innovate.
Christian underviser i strategi, innovasjon og ledelsesfag. På BI jobber han mye med utvikling og gjennomføring av bedriftsinterne program.

Møteinformasjon
Dato: Torsdag08.12.2011 Kl. 11:00 – Kl 13:00
Sted: Rosenkildehuset

Påmeldingsfrist: 07.12.2011
Påmelding her.

Eventyret Apple: Foredrag i Stavanger Næringsforening 8. desember