FIRST TUESDAY
Applying first principles
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Olivier Lemaire, centre, with Jean-Claude Bintz, left, and
Jean Diederich, Photo: Julien Becker
First Tuesday Luxembourg celebrates its tenth birthday this year, and will mark this with an event on 2 February. The three main speakers give their views on ICT over the past decade.
“The iPhone. We didn’t have them ten years ago. We didn’t know they would be available, otherwise...” The question concerned what changes have occurred in the past decade, and the hanging answer provided by Jean-Claude Bintz, CEO of Lakehouse, is telling. First Tuesday arrived on scene the calling itself “The place where e-entrepreneurs meet real investors in Luxembourg”, and its initial get-together in this country came about after Steve Glangé, prompted by the lack of similar opportunities here, and a suggestion from First Tuesday founder Julie Meyer, “spammed around 200 suspects” and saw a crowd of around 80 people show up for the first event, on 1 February 2000 (source: Entrepreneur Country). In Luxembourg at least, the focus for First Tuesday has always been on innovation and entrepreneurship, and providing a place for players in the ICT industry to exchange ideas and contacts. Over that time, ideas and fads have come and gone, there has been a plethora of “next big things”, successes and failures, and a dotcom crash which changed prevailing attitudes towards entrepreneurship.Tough to call
As well as Bintz, Jean Diederich of Ineum Consulting and Olivier Lemaire of Ernst&Young considered the mistakes and progress made along the way, how attitudes have changed in Luxembourg, and what the future could feasibly hold for the ICT sector in this country, a sector that seems defined by its unpredictability. But back to the iPhone: “you can do everything on this,” says Diederich. “Ten years ago there were no touch screens, no applications. The appetite for mobile internet has grown incredibly from the time when you had a phone and address book,” says Lemaire, “even though you were happy with that,” adds Diederich. There have been revolutions in bandwidth and connectivity as well, but all three agree that mobility has been a huge development. In order to progress, however, motivation and stimulus are required.“Talking about the Luxembourg market, the first stepping stone in competition came with the arrival of Tango,” says Lemaire, “which was three years before First Tuesday,” interjects Bintz. In fact, he says, it started before that, with the competition for the license for the second mobile phone network, just as it happened in several other countries. “It had to be approached in a certain way,” says Bintz, “marketing needed to be aggressive but still fair and without necessarily sniping at or attacking the competition.”
This is how the telecommunications industry in Luxembourg has developed, as competitors seek to gain an advantage over one another. But foreseeing precisely where advantages lie is a problem in itself and as far as technology goes in this field, trends can be transitory and tastes fickle. Over the course of First Tuesday’s existence, plenty of factors have come and gone in the ICT sector. As Lemaire states, “ten years ago, the network itself was very important. Then a few years later we were saying Mobile Virtual Network Operators (MVNOs) are the future, no network, just the customer base itself, and today it has gone full-circle and we’re back to the network.”
While the idea of MVNOs was to have a lot of providers to create competition, the reality has not panned out that way in Luxembourg, just as it has not in other nations. As Lemaire points out, “even in bigger markets, having two or three operators is fairly standard.” It doesn’t end there, though. In a process that is already commonplace across Europe, incumbents will lose out as bigger groups either back or take over challengers to those incumbents. It can take a few years to really take effect, but LuxGSM will have its work cut out in the face of the Orange takeover of Vox, while Tango is in partnership with Vodafone, a company which has previous when it comes to challenging incumbents in those markets in which it is present. Furthermore, the anticipated 3G revolution has not really materialised. Why? “It is not because of people like us, who are dreaming of a wireless world,” says Diederich. “It’s actually the suppliers, the Nokias and Ericssons of this world who sold these ideas, and knocked on doors saying that 3G was coming and getting operators to sign up and build the networks. And then what happened? They had no devices!” But as all three have been at pains to emphasise, predictions in mobile communications can go wildly wrong, and this one has come back to earth with rather less of a bump than others: “I remember working in a company and we predicted MMS was the future,” says Diederich with a wry smile, “and SMS would be considered totally useless. Again, and then what happened? SMS is still huge business, while MMS never got out of the box. Now we’re moving on to applications. Either you use an SMS or you use an application like LinkedIn or Facebook. Nobody is interested in sending a photo peer-to-peer: you put the photo on a server and when you need to access it you have the application to do that.”
As Lemaire says, there is a difference between the examples of 3G and MMS as failures. “In the example of 3G, what may have been expected to take two years to develop, may have taken five or six, and remains a work in progress. And it isn’t that different to what was actually predicted. As for MMS, well that was just wrong!” “The most important thing is a comprehensive needs-analysis,” concludes Bintz.
“I remember outlining ten critical factors for success at a First Tuesday event in June 2000,” says Diederich, “I said the world was moving on, in communication but also e-commerce, e-banking and so on: more on the application side than the hardware, but they have to go together. There’s no point in having super-applications without proper bandwidth, just as there’s no point in having that bandwidth but nothing to use on it.” The frustration felt by people in the ICT industries was tangible. “At the time we had stress with people from the government, because for years we were always bottom of the class in terms of E-Europe.”
Think tank for crazy ideas?
The political class has changed however, and what we see today bears little resemblance to that of before. Where ten years ago the government for all intents and purposes ignored the industry, believing the financial sector to be enough, for the past five years there has been a concerted effort on their part to invest. But complacency is dangerous when you want to stay ahead. The competitive advantage has decreased somewhat, and as Lemaire points out, “we must watch what other countries are doing. Just because large clients do not complain about our infrastructure anymore, as they did prior to Jean-Louis Schiltz taking over as Minister for Communication, doesn’t mean we’re streets ahead. We aren’t. We are followers.” But did it take an unnecessarily long time for people to come around to the First Tuesday way of thinking? “We presented start-ups in paperJam at the beginning, but some thought of First Tuesday as a think tank of people who had crazy ideas, who wanted to change the world from a material one into a virtual one,” says Diederich. “But we really wanted to make the government aware of the possibilities. That was vital,” adds Bintz, “and it started one year before the dotcom bubble burst!” remarks Lemaire. Perhaps it is surprising that First Tuesday survived that time, but long-term they have managed to show that the ideas weren’t that crazy, and Bintz highlights “Jeannot Krecké supporting us more than any minister before him.” Sure, there were plenty of misses to go with the hits, and things are not perfect. With the number of “next big things” that ended up damp squibs or total washouts, is there any point in predicting what could happen over the next ten years?
People often make roughly correct predictions but “back the wrong technology,” according to Lemaire. Diederich believes that for such a finance-oriented country, e-banking lags behind in Luxembourg, an opinion that seems widespread, and that will develop here. And what else? It is difficult to know, but profits will surely come not from margins, but from critical mass in terms of users. Bintz points at the iPhone again: “In ten years’ time we could be remembering this and laughing at it...”
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