business models



Rovio, the Angry Birds owner, has 100% growth in 2012 and wants to become the next Disney

 

rovio_toys

Rovio just reported that revenues have doubled in 2012, due to strong game and consumer-product sales.  Rovio Entertainment is producing Angry Birds and several other mobile games.  Revenues reached around $195 million, up 101 percent from $97 million in 2011. Earnings before interest and taxes are up 50 percent from $60.2 million in 2011 to $98.5 million in 2012.  Headcount has doubled to 518 employees.

According to Rovio CFO, Herkko Soininen:  “We doubled our revenue with an EBIT margin of 50%, more than doubled our headcount, established new offices, and a new business ventures unit. Also, to protect our own, as well as our partners’ and our fans’ interests, we continue to invest heavily in brand protection globally.”

In 2012, Rovio successfully launched four major mobile games: Angry Birds Space, Amazing Alex, Bad Piggies, and Angry Birds Star Wars.  Sales of these games, along with in-app advertising, were two of Rovio’s major revenue streams.

The other major area of growth is Rovio’s consumer products line of toys, branded peripherals, and smartphone cases. The derivative products division more than tripled in revenues and now generates nearly 45 percent of its total revenue. A new important milestone is the active-monthly-user count that is now past the quarter billion mark.

Rovio CEO, Mikael Hed suggests: “Rovio has grown from a phenomenon to a very successful global business. In 2010 we set out to build an entertainment company and after last years performance we are on a strong path to achieve our goal.”

Rovio wants to become a worldwide content and merchandise powerhouse with a series of new titles, consumer products, and entertainment releases in the works. The company is inspired by Disney’s business model.  It is also working on an Angry Birds cartoon, and also a movie for 2016.

“We have had a stellar start for this year,” said Hed. “In addition to our successful games portfolio, we recently launched our first Angry Birds Toons series through third-party partners and our own in-game distribution channel. We will continue to strengthen our position in the entertainment business through continuing to innovate on our existing brands, exploring creating new IP as well as exploring opportunities with external parties.”

Louis Rhéaume

Infocom Analysis

Louis@infocomintelligence.com

Twitter : @InfocomAnalysis

 



Google business model analysis

GoogleLogo

Dr. Rod King offers an interesting analysis of the business model of Google, by using the Osterwalder & Pigneur Business Model Canvas (2010).

Google’s ecosystem is explained in 2 Powerpoint: http://fr.slideshare.net/RodKing/organizational-development-canvas-for-lean-startups-and-established-businesses

<div style=”margin-bottom:5px”> <strong> <a href=”http://fr.slideshare.net/RodKing/organizational-development-canvas-for-lean-startups-and-established-businesses” title=”ORGANIZATIONAL DEVELOPMENT CANVAS (ODC) FOR GOOGLE’S BUSINESS MODEL AND ECOSYSTEM” target=”_blank”>ORGANIZATIONAL DEVELOPMENT CANVAS (ODC) FOR GOOGLE’S BUSINESS MODEL AND ECOSYSTEM</a> </strong> from <strong><a href=”http://fr.slideshare.net/RodKing” target=”_blank”>Rod King</a></strong> </div>

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

It is the Best Time to Invest More in Tech Stocks

According to RBC, the Information Technology stocks are often very cyclical. The companies depend on capital spending and business or consumer demand, which can be quite finicky. The stocks may also have long-term growth potential as new technologies are developed. Technology stocks are usually popular during early to mid stages of an economic expansion.

We are at the end of a recession in the USA and Canada is in an early stage of a moderate economic expansion.  Mobile and social networks are driving the Internet economy.

RBC_40049-Fig-7-Econom-4D365C

I believe Tech stock funds might also lead the next bull market.  For instance , the Vanguard Information Technology ETF has a 8.58% return in the past 3 months. The tech companies that have survived the past decade are surprisingly strong, and their stocks are relatively cheap.

Investing in technology can be very lucrative, as Bill Gates or Larry Page could tell you. But for every Microsoft or Google, there are a dozen Wang Laboratories and Digital Equipment Corporations, all of which have disappeared. The companies that have survived, however, have emerged both saner and stronger and many firms changed their business models. One of these change is that: many companies now rely as much on revenue from maintaining their existing products as they do from selling new products.  Oracle is gaining greater revenue from its maintenance services. New software licenses are down, but it is still getting plenty of income from maintenance fees.  Constellation Software in Canada is also getting greater recurring revenues.  While some ITC firms are becoming more predictable and less risky in the long-term, many are still cyclical stocks depending on new product launches to keep the growth.

Another big change: many ITC firms have now a lot of cash and hold relatively little debt.  And many technology companies have experience with deflation — a period of falling prices. Even though deflation is a relatively rare economic problem, tech prices are almost always falling. The most successful companies have learned how to make money even when cutting prices.

Many tech stocks are still cheap, and those that have survived are far stronger than they were during the 1990s.

For more tech stocks advise, such as portfolio assessment and stock selection, you can contact me.

For more information on changes in technology business models and consulting advises, you can read my chapter of a book: “Advances in Communications and Media Research. Volume 8″,  with Dr. Yves Rabeau of UQÀM.

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

The 3 most promising start-ups from FounderFuel’s cohort of Fall 2012

Last week was the third Demo Day at FounderFuel in Montréal, this time for the cohort of fall 2012.  FounderFuel is in the major league of tech accelerator in North America.  So far, start-ups in the three cohorts have raised $6.5 million in financing.  The quality of each cohort is improving.  In this latest cohort, the three most promising start-ups are: Urbita, MyCustomizer and Openera.

Urbita has reached an important milestone with 3 million unique visitors last month on its web site.   The website is based on recommendation of marketplaces and destinations for travelers. The website is rich in images and comments from people who are passionate about the city. The web site aims to become a platform with direct competitors such as TripAdvisor.

In a previous article I discussed about the challenges for entrepreneurs who want to build platforms on the web.  With strong network effects and economies of scale, the success can be very fast, and unfortunately fierce competition can also produce fast failures.  Thus, Urbita will need to differentiate itself from TripAdvisor by focusing for instance on the weaknesses of the quality of many reviews on TripAdvisor.  Several travel agencies are not recommending TripAdvisor to their customers due to poor assessment of hotels, for instance.

Urbita has raised $500,000 so far and wants another $500,000 in the short-term.  Building successful web platforms necessitate a lot of capital but the payoff can be huge (Facebook and Yelp are public firms and Pinterest is growing fast). The founders are from Los Angeles and Buenos Aires.

Openera aims to simplify automated filing for everyone.  Openera automatically organizes email and cloud files to meet corporate compliance requirements and allow the right people to find files quickly.  The start-up is in a niche market that could be huge.  The CEO of Openera had over 15 years of experience at Open Text, one of the biggest IT firm in Canada, which experienced fast growth through internal projects and acquisitions.  The software of Openera makes the links in cloud computing with many other applications such as Box, Salesforce and Evernote. Some of their first customers are Box and CCA (Creative Artists Agency). Openera has an iPhone application enabling the management of document filing.  The start-up has raised $250,000 so far and wants $500,000 more in the short-term.   The firm is from Ottawa.

MyCustomizer enables retailers to sell customized products adapted to the special requests of their customers through cloud computing with a ready-to-use SaaS platform.   Mass customization was a buzzword with the growth of Web 1.0 around 1998.  Now, it is a reality in the retail world through Web 2.0. For instance, MyCustomizer has a partnership with Warrior Sports, a hockey goods firm, that lets the customer pick the colors of a hockey glove, and can change the material or even put its name or number.  In exchange, retailers can charge around 30% more to the customers for their special requests.  MyCustomizer is charging $99.99 per month and a commission around 5% on sales.  Thus, the company is already profitable and wants to expand in other vertical markets such as furniture.  The potential for customized products represents a large market for the start-up, which should help to attract Venture Capital money. The founders are from Quebec City and Montreal.  MyCustomizer is looking for a financing of $600,000.

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter:@InfocomAnalysis

OOHLALA Mobile aims to become the leading mobile platform for college and university students (interview with the CEO)

OOHLALA is the mobile app for university and college students. OOHLALA help students better connect with their campus and also help campus services better engage with students. Students use the app to enhance their campus life with features such as campus maps, courses, study groups, social scheduling (find where your friends are), campus wall (share conversations and photos), and games.

Problem: Right now if you as a student want to know what’s happening on campus your choices are several Facebook groups, different campus websites etc. Information is fragmented everywhere, and we are betting that mobile the best platform to both organize this information and keep students connected on the go. User discovery is another aspect that’s broken. For example if you are sitting in class and want to connect with other students in real-time (or that cute girl in the front row), current social networks such as Facebook can’t help you as you don’t know their names (but we can).

We did an interview with the CEO of OOHLALA Mobile: Danial Jameel.  OOHLALA was part of the Montreal technology accelerator FounderFuel in 2011.

 

Q1-OOHLALA mobile app is available in how many campus/ student organizations?

Since this semester, we are currently working with 50 campuses in Canada and United States, with another 150 to be launched during the next semester from US, Canada, UK, Singapore, France and potentially Mexico (currently in progress).

 

Q2-Does OOHLALA monetize with advertising? Any other source of revenue?

We put user experience and satisfaction as our top priority and generate revenues through sources that provide value to students. We currently monetize through premium features for campus services, and location based deals. We don’t do generic ads as its ruins the experience for our community.

 

Q3-How much money your firm has raised so far for its financing?

I can’t disclose this as yet as we are undergoing some financing, but we have raised our seed round.

 

Q4-OOHLALA has how many employees?

10-12 (we have some part time community managers)

 

Q5-What are your goals in one year? 

To be the leading mobile platform for college and university students in North America and UK.

 

Q6-Are you planning any new or complementary product(s) and service(s) in the short-term?

Right now our focus is looking into user feedback and user metrics to optimize UX and streamline performance.
Q7- As an entrepreneur, what is your most important challenge, since you graduated from FounderFuel?

Once Demo Day ends and the hype is over, its time to get back to reality and the grind. Demo Day puts you out there in the spotlight which is great, but it also means expectations for you are much higher. The reality of most startups is that after the initial hype they need to figure out the right product to market fit and build a business model before running out of cash. This doesn’t always happen overnight and hard/smart work is required.  I knew some founders who were not able to adjust the ‘you are on your own’ reality that sets in after.

On our end, we started our company at the basement library at our university where we iterated 24/7, and ate $4 pizzas to help solve student problems lol (good times). Post Demo day for us meant we could focus back on our users without distractions and on building the best product.

 

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter : @InfocomAnalysis

Digital visions from WCIT 2012 in Montréal

The  18th World Congress on Information Technology (WCIT 2012) was held in Montreal.  Larry King was the moderator of a panel composed of nine experts in the information and communication technologies industries (ICT).  They shared their visions on the impacts of the digital economy.

The digital economy is enabling governments to empower their citizens. For Ivo Ivanovski, Minister of Information, in the Republic of Macedonia, “Our citizens are our real resources.  We are becoming more transparent with the use of electronic services and mobile services.  Thus, we are becoming more productive and cutting the waiting time for services. In the future, all governments will be connected to their citizens through mobile services”.

With Moore’s law, microchips are doubling in capacity every 18 months.  Microchips are getting smaller and with increased processing, almost everything will become a computer. Human aspirations and imaginations are the only limits, said Brian David Johnston, a researcher from Intel.  Using the technology at the right time and at the right place to solve business and consumers problems is critical, suggests Vivek Ranadivé, CEO of TIBCO Software.  For him, the context, more than the information will be king in the future.  Content has to find its right place in the right context.  “We need to use actual information to resolve humankind problems such as health or water shortage.”

The World Wide Web is now at his fifth generation.  The Internet network and appliances are certainly going to change but not the information system of the WWW, proposes Robert Kahn, co-founder of the Internet and manager of the Corporation for National Research Initiatives (CNRI).  He pinpoints that in the digital economy some very important issues are private life and security.

Digital is as turbulent for media, as online music has been on the music industry.  IP technology is empowering consumers and enterprises and reduced their barriers of entry, according to Kevin Crull, Bell Media president.  Content creation is still very important, even though the user experience and availability of content has been improved by the suppliers of services. Mr. Crull is excited and is also afraid of the fast adoption of real-time content on mobiles devices. “The ICT sector is creating new business models, while some are also disappearing quickly.”

Mobile phone is a powerful education tool helping literacy around the world with mobile learning and practices.  It can also reduce crimes and protect journalists in some parts of the world, pinpoints Philippe Kridelka, director for UNESCO.  The digital economy is based on information management and collaboration suggests Mark Aboud, Senior Manager, SAP.  “We need to leverage the intellectual capital at diverse places and use it to create new things.”

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

 

The Secret to the Ryerson Entrepreneurship Program’s Success, is available on Techvibes

http://www.techvibes.com/blog/the-secret-to-the-ryerson-entrepreneurship-programs-success-2012-10-15

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

Comment faire sa marque dans un monde dominé par Apple et compagnie, est disponible sur LesNews

Entrevue avec Marcel Côté de SECOR (acquis par KPMG) sur la gestion de l’innovation dans les industries des technologies de l’information es des communications (TIC). Conseils pour les entrepreneurs et gestionnaires.

http://lesnews.ca/technologie/26674-comment-faire-sa-marque-dans-un-monde-domine-par-apple-et-compagnie/

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

 

Strategy Expert Marcel Côté on Platforms, Apps, and the Over-emphasis of Innovation is available on Techvibes

Second part of an interview with Marcel Côté of SECOR about innovation in the Information and Communications Technology industries (ICT).

http://www.techvibes.com/blog/strategy-expert-marcel-cote-on-platforms-apps-and-the-over-emphasis-of-innovation-2012-10-05

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

 

 

“How Can Facebook Be Successful Long-term When Its Predecessor Lasted Just Five Years?” is available on Techvibes

Interview with Marcel Côté of SECOR on innovation in the Information and Communications Technology (ICT) industries.

http://www.techvibes.com/blog/how-can-facebook-be-successful-long-term-when-its-predecessor-lasted-five-years-2012-10-03

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

@InfocomAnalysis

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