NIMBLE, PAY WATCHES AND TIMING

The other day I was showing my wife the great e-commerce platform we built at BBVA for small and medium size merchants in Spain called Nimble. She looked at it and simply said “I’ve done it 15 years ago”. In fact she was the founder CEO of an e-commerce platform company between 1999 and 2007. EST was the name (electronic secure transactions) and its purpose was to help banks and merchants to help sell to consumers in an easy and secure way. The company still exists, offers such services to the same clientele and now owned by a Polish company. Yet for EST to reach a critical mass it took years. Today more than 12% of the card transactions in Turkey carry ECI flag which identifies them as electronic commerce. (About USD 20 billion) Was it really necessary to wait almost 15 years to reach that threshold?

In 2006 we at Garanti Bank became the first bank in Europe and one of the very few in the world to introduce contactless payments. We introduced them not only with cards but also with key fobs, stickers that can be placed on phones and even on wagorsel1tches.

We spent money on contactless POS terminals which were expensive that time. We even shot a great TV ad that I am sure you will enjoy watching. (We wanted to introduce several Swatch watches manufactured only for this purpose. We got in talks that lasted a year and came so close. I even chose the models. Yet we could not convince an old and old fashioned chairman at that time.)

After 9 years contactless POS terminals make only 10 % of the POS base of 2 million in the country in spite of the fact that almost half of the 50 million credit cards carry contactless technology. Why in spite of all this push including marketing and PR contactless payments did not take off in Turkey?

Palm was a great device. It was one of the first personal digital assistance devices. Early adopters jumped on it and many businessmen tried it. Yet not only we do not have that particular brand now, it never gained mainstream adoption by the public.When first iPods were introduced, it quickly replaced the aging Walkman. Apple kept upgrading and introducing new models. Early adopters all uploaded their CDs into their PCs to use iPods but it was not before several years that it became mainstream.

gorsel2First PC was produced back in late 1970s, and was seen as an odd device by many in computer business. They could not see why a consumer, a normal person would want a computer at home. After all a computer was a sophisticated device controlled by a special series of coding only a handful people knew. And they were right…..for about 5 years. After 1985, sales of PCs soared.
Thus the question I want to ask is why? What is it that makes an innovation success if one defines success as the adoption by millions people.
I have two answers for it:

• Right communication and

• Right timing.

Right Communication: Only until 5 years ago (meaning before the social media), letting people know that you have a new product or service was very expensive. Even today if you want to run a TV ad during the Super Bowl, that will set you back by about 200 million dollars. Yet today it is easier than ever to run targeted communication for the right audience. Facebook alone has 1,5 billion users. Google has all sort of tricks to reach the target group.
Business case of building a new service or product should include its communication budget as well. Not only making it.

Most new ideas came not from marketing people but from engineers as they build things. We love and appreciate engineers but they are not the best people when it comes to communicate and let people know what they built. Therefore many innovations went and still go today unnoticed. Besides engineers even Private Equity people and Venture Capitalists are not good at this either.

Most of the time when there is a budget, the way it is communicated is also very ineffective. As it is an innovation, it is new to the people. A new product usually comes with several features not one. People who built it want to communicate and show the features. Most innovations are introduced like advertorials rather than simple ads. They are packed with all the new features. If a product doesn’t have one killer functionality but has several, then the best way is to communicate one by one rather all in one.

Yet in today’s world no one should assume that a wonderful product will sell itself.

Timing: The second and even more important reason why many innovations fail is the timing. When is the best time to introduce a brand new product or service?

The answer is very clear: when you can build eco systems around it. What is an ecosystem?

An ecosystem is the one that places your product at the core of an experience.

Lotus 123 was the first spreadsheet for the PCs which enabled a normal person without programming skills to utilize PCs abilities. That’s how PCs started to be really a“personal”computer and sales just went off the roof.

iTunes music store enabled masses to download the music hassle free when they want as they want bypassing the cumbersome process of uploading the music CDs. That’s how iPods became so popular and music downloading replaced CDs.

Contactless POS terminals only now are mandate by Visa Europe and MasterCard and will become the norms in couple of years. Consumers don’t want to go through the hassle at the point of sale and feel insecure to search for a contactless terminal. When we replaced all POS terminals at the biggest supermarket chain and changed all the process to start the transaction by tapping the card, 80% of all Migros Money Card transactions became contactless in Turkey. Apple Pay will struggle until 51% of all terminals in the US are contactless. (There are 12 million terminals in the US and one million of them are contactless as of June 2015).

E-commerce transactions in Turkey surged when the overnight delivery companies became dependable and Amazon type of companies whose business model was only based on internet sales emerged.

gorsel3Smart phones exploded when both Android and Apple opened up to app developers and the app stores started to offer all kinds of service. 90% of the smart phone users have only two operating systems but almost every phone is different as people are now able to “customize” their mobile devices through apps. And that is how the blackberry died which in itself was a great product.

Palm would have been a different story if there were 3G at that time. Without connectivity Palm was not a game changer.

Timing is very important to build or utilize ecosystems however smart those innovations may be.

Today more than ever humanity enables and motivates innovation. That is great. Just make sure that you have a chance to show your innovation to the public in a simple way and that your innovation is at the center of a great experience.

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