From JP Rangaswami:
…So let me see. Facebook has more customers than most original telcos put together, more customers than most new telcos put together. It offers more modalities of communication with lower transaction costs, higher end-user empowerment, personalisation and customisation. It does not have to invest in communications infrastructure, in customer premises equipment, in devices, in on-premise software.
600 million active users. A “subscriber base” larger than any country bar China or India. Revenues growing from $777m to $1.2bn between 2009 and 2010, with net income up from $200m to $355m.
The new new telco. Now think of the valuations of old telcos and new telcos, then look at the difference in costs, in scalability and globalness, in revenue and profit opportunity.
Let’s put this into context.
I have a lot of time for a Boston professor I’ve known since the nineties, N. Venkatraman, Venkat to his friends. Around a decade ago, across a number of conversations, Venkat convinced me of a critical change that was taking place in business as a whole:
He said that businesses used to be hierarchies of business units whose assets were called customers and products; that they are changing into networks of business units whose assets were called relationships and capabilities.
New new assets. Relationships and capabilities. Social capital. Human capital. Assets we have carefully avoided learning how to value. Assets we have refused to value, however much we speak of the importance of talent and knowledge and collaboration.
That’s where the new new value is.