By David Rowan
Do you seriously want to become rich? Here’s the secret — and it’s got nothing to do with building an online social network, or even getting the Government to bail out your bank. To paraphrase Mr McGuire from The Graduate, I want to say one word to you. Just one word.
Like, duh, yeah, you knew that mobile phones were the next big thing, what, a dozen years ago? And in between playing Angry Birds and tweeting from the Apple Store, you didn’t need reminding that apps were going to make us all millionaires. Except…there’s a far more fundamental business opportunity facing you right at this moment, and most people are unaware of the vast economic possibilities right in front of them. Quite simply, the mobile internet is undergoing such unprecedented growth today that anyone with a smart, relevant idea has a head start in building a profitable mobile business.
A few numbers will explain why mobile is today’s big growth opportunity. Remember how excited we got a decade ago about this new thing called the desktop internet, which AOL was persuading consumers to sign up to en masse using a blitz of CD-Roms? A little over three years after AOL had launched its service, it had some nine million customers, which is pretty good going. Yet in the same timescale after launch, Apple had sold some 120 million of its mobile online devices (iPads, iPhones and iPod Touches). As Morgan Stanley points out, that’s a growth curve for the mobile internet that’s around twelve times as steep as that for the desktop internet when rolled out — and we all remember how transformative that was. The speed of mobile-internet take-up, says Morgan Stanley, is a revolution “the likes of which we haven’t seen before”.
Here are a few other numbers. In Kenya, where a four-year-old business called M-Pesa lets you send and receive cash through your cellphone, it’s proved so popular — replacing the banks in ordinary citizens’ lives – that a quarter of the entire Kenyan GDP now passes through it. That’s behaviour change on a massive scale. A couple of months ago, Twitter co-founder Jack Dorsey launched a new business in America called Square that allows anyone with a smartphone to send and receive credit-card payments by plugging a small plastic card-reader into their phone. Already he’s forecasting some $1.1 billion in transactions by June. Then there is the amazingly fast-growing industry in virtual goods traded on mobile devices in games such as Farmville and Pet Society. Last year we spent $1.6 billion on virtual goods in iPhone apps alone – four times as much as was spent on advertising in App Store apps.
Mad numbers, right? So what does all this mean for you? This, says Finnish mobile-industry consultant Tomi Ahonen, is just the start — because mobile is going to get much, much bigger. “It is the fastest-growing giant industry of the economic history of mankind,” Ahonen says, “and it’s barely begun.” Because, though it’s worth $1.1 trillion now — ten times as big as radio — over the next two decades that value will rise to $5 trillion. And who wouldn’t want a piece?
Ahonen has just written an extraordinary 24,000-word blog post on where he sees the opportunities. The internet, he points out, did not change everything, as has often been claimed: sure, it reaches 1.7 billion people, but that’s nothing on the 5 billion with a mobile. Very few industries can serve us, and make money out of us, from early childhood to old age, he says — and even reach us in our sleep, thanks to our habit of keeping our phone close to the pillow with the ringer on. So this magical technology will inevitably transform “retail, banking, insurance, travel, entertainment, education, health, government, farming, fishing, forestry — everything!”
Where do you start, then? According to Ahonen, the money won’t be in smartphone apps. iPhones reach just 2 percent of the planet — and apps generate tiny revenue compared with more traditional text-messaging and multimedia-messaging services. Last year, we sent some 6,100,000,000,000 text messages — that’s 200,000 every second. With 4.2 billion active SMS users, think of a service that can persuade just a million or two of them to pay you a few pennies. You can deliver everything from horoscopes to airline tickets to cash via SMS. Old-school, but proven.
Nor is the money in location-based niche services such as Foursquare, Ahonen says, or in glitzy browser-based video. It’s in reaching the billions who simply want to be connected, whether by SMS or old-fashioned services such as WAP. And they’ll spend if you offer them a service.
After all, the world’s richest man is no longer Bill Gates. It’s Carlos Slim – who, remember, made his fortune in the mobile industry. And he won’t be the last.
David Rowan is editor of Wired magazine