Sunday, November 1, 2009

Mobile Commerce: Same Basic Idea, Different Approaches, Results

Let's look at a few businesses that thought, "Wow look at all these people with cellphones and smartphones. They could use them for so much more than calls. Maybe even as currency."

My analysis on the basic idea and how companies stemmed from them and their differing approaches and results.



Differentiating factor

Growth strategy

Status and Latest News

What they did right or wrong



integrate with paypal account

tie business in with, convert users, convert partners

releasing APIs; getting more merchants to accept it;

logical extension of their business; lack of innovating and solving a imminent need; lots of money and influence



order and pay for meals and have it ready for pick up

sign up restaurants, look for big partnerships

limited growth; testing new business models

dismissed P2P market and focused on restaurant ordering; relied on partnerships excessively; high learning curve for users; not enough focus on technology; limited dedication by small team



strong focus on sending money between people

grow network of users; social networks & gaming

Nokia & other investments; Social Network Market; Bank partnerships

great dedication, persistence, and belief in their idea; made key partnerships; continue to raise funding; growing network effect



make restaurant reservations

online; pull strategy


presented a straightforward value proposition; simply; online focus initially



pay parking

partner with local governments

growing contracts and clients

picked up on a very simple and sensible use; picked up great visibility and publicity through partnership with municipalities



social networks and gaming sites; purchases show on phone bill

less serious but just as safe

partnering with social networks; virtual goods; micropayments

international presence; digital goods




TV-voting using cellphones; relationship with carriers

delivered on a need; recognised an opportunity and a fit with their technology



Amazon support

get acquired?

Amazon is supporting it but the technology is old like MyTango and not intuitive

Very similar technology as MyTango; relied on partners; got acquired

I have not included any private information that I was privileged to and all information are public. My analysis is completely my own interpretation and prediction. In 2007, I interned at MyTango and they had some flashes of potential be successful. In 2007, they were on par with Obopay. However, since then these companies have gone very different paths.

With all respect and admiration for the MyTango team Terry and Randy, I will attempt to determine why one is looking hopeful and the other is seemingly floundering. All great entrepreneurs and engineers value honest criticism and honesty, so I hope my frank analysis is more constructive than offensive.

It isn't a far off idea that one day, we will be tied to our phones. It can pretty much do everything now. Wallets may be disappearing. Both of these companies recognised it. Both of them had the capacity to allow users to send money to other users.

Obopay thought that was a good enough function. MyTango thought it wasn't enough and decided to provide more value to customers by focusing on allowing users to bypass the line through ordering/paying with a phone. It did not market the P2P payment system much.

Logically, what MyTango did made sense. It provided value in a way Obopay couldn't. However, implementing it and getting user adoption would be a lot more challenging. The low volumes and commissions did not entice restaurants to sign up, and the high learning curve prevented users from adopting it. They would much rather stand in line for 10 minutes 3 times a week than spend 15 minutes learning a new technology that wouldn't be accepted everywhere else. And there was no big partner to support it.

While MyTango cornered its market (not the best, I felt in-seat ordering at stadiums would have been better and that's what Verrus pursued with minor success), Obopay kept it open and kept looking for new ways for their service to be relevant. They looked at banks. They looked at merchants. They looked at social networks. However confused and low traction Obopay was, they were dedicated to making it work. You could see that. The major difference is they were saying to everyone who would listen 'Hey we have a mobile payment solution for you, how can we work together?' Basically, they knew mobile commerce would take off one day, and they just want to be around when that actually happens.

Although still a bit far off, it's looking hopeful. With the popularity of the iPhone and rise of smartphones and internet ubiquity and potentially NFC (if the iPhone implements it), this is something to be excited about. Companies are not sure where the market is going and how the rules of the game will be changing, so they're trying to cover their bases by investing in everything. No one knows for sure if Twitter is just a fade or the future of how businesses and people communicate. No one know what Google Wave will do to email, mobiles, and social networks. It's a chaotic time. Maybe one day we'll just hold the iPhone up to each other to transfer money or exchange contacts.

That's why the future of Obopay is looking hopeful. Just looking at their website you can see how many people and partners they have working on the idea and ways for it to be profitable.

However, picking a niche market doesn't mean failure. It just means, you had better pick the right one. Verrus picked the right one. Who carries quarters in a jar anymore? Or coins for that matter. What if you had to extend your time on the meter? Verrus picked the right partners and got the right support, and now they are expanding. We even have the Canadian company here in the UK.

What does this mean for a mobile-related business in these exciting times?
1. Make sure you have a team that's dedicated to the idea and in the business 100%. I think this can make even a poor idea work.
2. Make sure it's simple. We are spoiled. We don't want to read the instructions. We think everything should be intuitive and easy. And that's the customer.
3. Get the market right. It's scary because you can't just go in there and copy your competitors because there aren't any, and if there are, they are just as confused.

TextPayMe got lucky and was acquired and got Amazon support. MyTango wasn't so lucky. However, it almost seems they have given up. The website hasn't changed in two years. It just doesn't seem they have the urgency and drive to keep trying and experimenting to make it work.

Here's what I think MyTango could do. Have an off-the-shelf iPhone app that you can customise and sell to businesses. Make the back-end payment system tight and charge for the app and monthly subscription/commission. Everyone wants to be on the iPhone. Everyone wants to have an iPhone app, even if it's just so you can have your logo in a glossy square with rounded corners. But seriously. Many businesses don't have the IT prowess or personnel to develop for the iPhone, so they can't get on it. What if you had a pizza restaurant and wanted to allow your customers to order a Pizza and pay using the iPhone? Have it ready for pick up or delivered? Or even send them a time-senstive coupon through the app? Or do a push notification when the person is close to you?

Make an off-the-shelf app for restaurants, allow them to customise the menu and logos. And there you go, MyTango 2.0. On the iPhone and Android. I realise that's fairly close to starting from scratch.

BTW you can do off the shelf apps for all sorts of businesses :) Check out AppBreeder,, and

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