The bad taste of the Cell Phone Software Business

Alex Krupp have written some factual sense on why it is not just improbable but impossible to create a successful mobile-wireless software startup. I, personally, am up with his discussion and points; let me re-phrase here in a shorter ways. Please read his article for a full detailed reading - Cell Phone Software: The Billion-Dollar Sand Trap.

There has always been huge latency with new software implementations in the Mobile Software world - going from the developer to the carrier’s tech to the distribution. By the time, the software lands on the phone, it is already deprecated or badly in need of an update. It has been learnt that such usual cycle goes for over 36 months or 3 years and that’s one of the worst turn-around for any business. So, unless it is like a killer application (think SMS or some classic games) softwares on a mobile phone ain’t really the playing field for startups.

Alex gave an avid reason from 3 perspectives - technology, business and social;

• The underlying technology is broken
• The business case is a proven recipe for failure
• The social aspects are more awkward than a middle school dance

The underlying technology is broken

• Your software need to run on all different models of the humungous amount of Cell Phones in the market.
• Bluetooth is disabled by default.
• Nobody wants to buy or regularly use the external cable to connect their phones to the computer.
• Majority of people don’t know how to install softwares on a phone.
• Softwares that need to contact the signal towers drains battery very fast.

The business case is a proven recipe for failure

• Cell Phone carriers will never agree in a way that will make it profitable for you.
• If you partner with one carrier, others’ will boycott you.
• Upcoming wi-fi technology will make your software obsolete soon.

The social aspects are more awkward than a middle school danc

• People don’t know what your early adopters do on their phone, so very hard for an invisible software to go viral.
• Your software just remains a status symbol for yourself as can’t flaunt what you can’t see.

The canonical formula for business success is luck, pluck, and virtue. Success in mobile wireless is mostly luck. There are dozens of entrepreneurs who have gone into mobile wireless. All have failed. That’s not to say there will never be a day when it’s feasible for startups to venture into mobile. How will you know when the time is right? Ask yourself this question: Could I make money as a distributor of mobile software? If the answer is no (because there is no software to distribute) then find something else to do and check back again in a year. Mobile is still the future and it isn’t going anywhere. But in the meantime, better to let others get stuck in the billion-dollar sand trap.