Mobile may create major new consumer properties: CTIA panelists

By Giselle Abramovich

April 3, 2008

John Simon is managing director of General Catalyst

LAS VEGAS – Will the mobile Internet see the creation of new billion-dollar startups?

Panelists at the CTIA Wireless 2008 conference discussed the fact that every new medium has created major new consumer properties. But there were mixed reviews on whether mobile will do the same.

“Consumers want very relevant content and quick access to information,” said John Zehr, senior vice president of digital at ESPN. “The mobile platform presents a unique capability to make the information very relevant for them. People tend to gravitate towards the brands that they know and, at the end of the day, they care about the best experience.”

In general, people are looking for speed and fun.

John Simon, managing director of venture capital firm General Catalyst Inc., believes that those companies that provide speed and a great user experience will ultimately be the leaders in the mobile space. He said that these may very well be startups.

Users are looking for a sense of community and things that are personal and made for mobile. Users are also looking for trusted information from a trusted brand, but that does not mean that only existing brands have a chance in the mobile space.

John Malloy, partner at early-stage venture capital fund BlueRun Ventures, agreed with Mr. Simon.

“If you present something relevant to a consumer, immediately you're playing on impulses and users will click on it,” Mr. Malloy said. “Yes, existing brands are definitely advantaged, but that does not mean that new brands won’t come about.”

Chi Hua Chien, partner at venture capital firm Kleiner Perkins Caufield & Byers, believes that for existing products and services, established brands have a clear advantage. However, for things purely mobile, there are no companies that are totally advantaged in this space because it hasn’t developed main players yet.

“This is where the startups will appear,” Mr. Chien said.

Gary A. Roshak, vice president of mobile advertisers and publishers at Yahoo, believes that companies such as Yahoo have a clear advantage in the mobile space. This is because they have already experienced becoming a trusted brand on the Internet and therefore it won’t be as hard to establish themselves in the mobile space.

Although Mr. Roshak believes that established companies do have a clear advantage, he does not doubt that startups that create good applications and services will do well. Established companies don’t need to market as much and don’t need to win a consumer's trust. Startups need to prove themselves first.

“There is a viral nature to the potential growth in mobile,” ESPN's Mr. Zehr said. “To date, people have been relying mostly on carrier placement, which is responsible for placement of some of the biggest mobile brands.”

Kleiner Perkins' Mr. Chi said that user expectations are evolving and therefore new brands have a chance to succeed.

“Users expectations are changing,” he said. “People used to expect their phones to be just phones. Now with data plans and Internet usage on the rise, there is a different mindset on the part of the consumer.”

Mr. Chi also believes that word-of-mouth is a phenomenon.

“Search is now here on mobile,” General Catalyst's Mr. Simon said. “You can buy keywords and get your content in front of users. There is now dramatic traffic on off-deck as opposed to just on carrier decks.

“You have to be thoughtful in regards to where and what you do," he said. "The key is to get your service in front of people before your competitors.”