Partnering for growth

"Our partnership with Simetric is not just a testament to our team's dedication and innovation but also a clear signal that the future of connectivity is here. We will finally be able to provide enhanced connectivity, flexibility, and security for users that has been lacking with eSIM technology before." - Jim Hudgens, CTO, Simplex Wireless

One of the interesting trends in IOT and 5G communications is the rise of eSIM technology into actual devices and systems, which is introducing a whole new set of capabilities and functions to headless IOT devices, enabling carrier switching on the fly and greater granular service control for the operator.

Simetric partnered with Simplex Wireless as a way to begin embedding approaches to eSIM platforms into the overall "single pane of glass" model that Simetric brings. It's a key start to a next way of differentiated growth in the carrier management space and a partnership I'm excited about, both for the value that Simplex Wireless brings to the eSIM model, but also because I can see a wave of material, industry impacting partnerships coming for Simetric on the heels of this new partnership.

Simplex Wireless Partners with Simetric: Pioneering the Future of eSIM Technology | State | chinookobserver.com

What's wrong with MVNO's?

As a board member and advisor to Simetric, I get a chance to see the marketing and press coverage of the various IOT actors in the telco space and how they operate and I'm seeing a pattern of competition that indicates that there is a significant strategic shift occurring in Mobile Network Virtual Operators, who buy bandwidth in bulk and offer their own platforms for delivering this bandwidth to customers in smaller quantities. But first, you can't tell the players without the playbook and there are a lot of types of companies at work in this space, but to focus on three types:

• Very large Mobile Network Operators who own the bandwidth and antenna infrastructure, as well as their own OSS/BSS and network layer. These are typically former national carriers, like AT&T or Telefonica, and have opex and capital budgets that would make small countries blush, but as nationally critical infrastructure, they have often been slower to innovate and focused on extracting economic rents for the licenses they hold and invest in.

• Mobile Virtual Network Operators who are typically faster moving and focused on taking advantages of both the slowness of the MNOs, but also focused on building services layers to help customers manage their devices and projects more effectively. The genesis of these companies usually follows two routes:

  • The founders of these come from the MNOs themselves, leaving to create a company to take advantage of a gap in the marketplace that they found

  • The new MVNO is backed by an MNO as a market differentiation play from their core brand offering or services

• IOT managed services companies, who are typically focused on the data payload and not carrier operations. They see their role as making the IOT project successful across the application and data capture layer, but often get involved in the carrier layer to make things simpler for their customers as a service.

It's interesting to look into the history of MVNO's, especially in the B2B space, in the case where they were often started by former executives in the MNO and long-haul carrier space who saw the MVNO model as a way to focus in on a segment of the market with more services and capabilities. Here is where I see a strategic error in thinking affecting the MVNO market - they in essence bought bulk and broke into smaller consumption packages for customers, but they kept the DNA of the companies they were born from and focused on building custom intellectual property to make their platforms 'sticky' for customers and to reduce churn. The is strategically problematic, as they focused on the wrong axis of competition - trying to compete with the market incumbents by investing in capital infrastructure - systems and services - that would differentiate them as a tech company. In short, much like foolishly attempting a land war in Central Asia where there is a way more land than is reasonable to try and hold, the MVNO's decided to get into a spending war to build custom service platforms with the largest capitalized companies on the planet (the MNO's).

This, I respectfully submit, was a critical error that results into two limits to the thinking of many of the MVNO providers in the B2B space. The first of these limits was that investing in IP would give them a moat, or advantage for them in serving and retaining customers on their platform over the MNO platforms, which is predicated on the notion that both they could out-innovate the MNO's and outspend them.

The second error is more fatal - by focusing on trying to 'outplay' the MNO at the carrier systems game, most of them have not made the leap to realizing that ease of experience and high customer service are more critical to a complex IOT deployment - those customers don't want to spend less on their IOT service, they want to work less. The fatal impact of this point of view is that these MVNOs focus on the cost of the services they provide as a value add to the project as a percentage of the carrier network costs, rather than seeing the services they provide as being an area where, if they go deep and focused enough on the entire IOT project delivery process, the value of these services will be higher than the cost of the carrier services and their business will measure carrier cost as a fraction of their overall management services.

This is a second class of MVNOs who are in the market that are strategically different and are just starting to impact the market. Often, these competitors are backed by an MNO as an investment or a partnerships, but are differentiating on the overall IOT experience, not the carrier experience. These companies, like 1nce or Soracom, are focused on the overall lifecycle of the IOT project, focusing in on technologies on the device like eSIM and services they can offer around IOT layers - not just the device management layer with eSIM and other cross-carrier management services, but offering other services, like virtualizing the network services layer to operate across carriers as a cloud service, or providing services at the data acquisition and management side of the device. Will they succeed? It looks like they will get there because the value of what they can do spans across carriers and goes deeper into the total life cycle of the project, managing devices and networks across carriers and network technologies.

I don't think it's possible for an MVNO to credibly make the case to their investors that their capital investments in building competitive OSS/BSS service layers are ever going to outrun the MNOs' capital spend ability. I believe the MVNO's that have pivoted to branding themselves as complete lifecycle platforms that focus deeply on specific industries will continue to scale and take share. Which would you want - a partner that deeply understands the solution you need - Cradlepoint gateways and the downstream devices on a manufacturing floor and the RFID readers in the warehouse that are connected to wifi gateways and the SIM-based transportation management solution needed on the trucks as a single, curated solution that focuses on ease of deployment and management over a carrier that simply provides rate plan management and single-MVNO control panels that make global scale IOT impossible to manage.

Is it too late? Of course not - the ability to pivot to focus on an industry and provide a high value set of services requires simply to focus on the customer as the basis for your service offers and not focusing on the carrier cost as the basis for valuing your services and above all, stop trying to outspend capital budgets against the MNOs, for all investors sakes.

Finding treasure in Poland

So, I do a fair amount of work talking to and helping startup owners figure out their go to market and product launch challenges; I like the challenge of figuring out their business and how to help them out. I do this my lurking in the subreddit /r/startups and answering questions from the folks who work at startups.

Most of the time, it's a quick chat and things move on and I'll get a note a year later or such thanking me or, sometimes, much quicker on more questions. I hope it is usually helpful, as I enjoy the thought exercises.

I met one startup leader about 7 months ago who had hit some desperate straits; he had, like a lot of folks, poured way too much of his personal capital and his own energy into making his vision for automating a lot of the difficult work on running a consulting firm; he had a strong point of view on how to build and deliver a solution in this area, but like a lot of technical leaders, was struggling to communicate the value of the product and had created a platform where the UX, to put it politely, was hiding the power of what he had built.

This company had red flags galore - a founder who was technically brilliant, but a poor communicator who had built a great team, but struggled with balancing his personal life and his startup. Adding to this difficultly was a war occurring next door in Ukraine and the uncertainty of the region. Normally, a dozen reasons presented as to why this was a bad investment.

But his vision and persistence to connect and seek some advice got me to pay attention as I had worked with the customers he was targeting my entire career - his target is the IT services firms I've been partnering with my entire career. His use case resonated with me - I knew that fast growing services firms often had the "shoemaker's children" problem of many different application silos, between accounting, HR, task management and talent management there were all sorts of gaps to be automated and closed.

His vision for EmployPlan is broader than the current offering; we are first focusing in on being the "missing loop" between systems that track who knows what skills, systems that track who has done work putting those skills to work and systems that manage the projects that are being proposed and delivered.

By capturing every training and every delivery event, we build a skill and delivery experience profile for every resource and automate the process of building the right team slate for projects automatically. We build skill paths for users, directing them to training to close capacity and bench gaps before new projects close, and most exciting to me, it does it across connected suppliers and subcontractors.

Melody and I decided to take an equity position in the company to rebuild their go to market and customer success functions to help the market see this really valuable platform the team has built. Recently, I went to Łódź Poland to meet with the EmployPlan team and found a vibrant city of developers and engineers who have a deep technical capability, but are missing the critical go to market capabilities that are common to us in the west.

The team I met has a burning desire to help customers solve this problem and to build the AI-Automated consulting management platform; now to help them get a global stage to accomplish this goal.

Roch, Kuba and Dariusz