Enabling Technologies

The Devil’s Advocate

MEDICIManaging Partner

The issues related to scaling new technology, specifically in terms of stress testing its availability and redundancy, are very well known to entities that successfully operate such products and services at scale. While this is a tried and tested field, and hence, has proven tools and methodologies; the factors that typically trip up most providers can eventually be traced back to user behavior. What the inventor would classify as an outlier or erratic behavior in a lighthouse customer may turn out to be its Achilles heel.

Beyond the technological considerations are the relatively more challenging issues related to constructing and refining the business model.

Will this be a free service or paid subscription or something in-between? If this is free to the consumer, how will the provider recover their startup investments and sustain ongoing operations? If there is an ecosystem that is required to support the new product and service, what are the economics for the entire value-chain to ensure viability and sustainability over time? Which providers pay into the ecosystem and which providers are paid out by the ecosystem? If the consumer is required to pay for something, either at the onset or on an ongoing basis, what is the tipping point on the value-for-money scale? If the product or service is priced too aggressively on launch, is there any coming back from the dead? If the product or service is priced too complacently on introduction, is it possible to raise the price over time?

For every new idea that holds up on the technology front as it is systematically scaled, just a fraction successfully figure out the business model test, and an even smaller fraction survive the arduous journey of commercial sustainability. For the very select few that are still standing at the end of these three rounds, they now qualify to face a very different opponent.

In the blue corner, we have our shiny new gizmo; and in the red corner, are the regulators.

Regulators have the most unenviable task of ensuring that consumers are never in a state of jeopardy and that the entire ecosystem plays fairly with the consumer as well as with each other. The very nature of their responsibility forces them into the red corner. If they were to ease up on their conservative stance, it would be close to impossible to govern even the simplest of offerings for a niche industry, let alone a complex solution for the mass market.

Assuming we have figured out a new product or service that can deliver recurring and sustainable value to the consumer, and also to the entire enabling ecosystem, we now have our progression for successfully achieving scale. Start with overcoming the technological challenges, then iron out business model quirks, and finally satisfy regulatory demands.

The devil is always in the detail and someone has to be the devil’s advocate.

The industry progression for secure mobile transactions is to start with m-commerce, then scale or diversify to m-payments, and then finally evolve m-transactions. While some of the early m-commerce wins are now starting to scale, it is too soon to judge m-payments, let alone m-transactions. Clearly, the considerations for conducting two transactions a month versus 10 a day are going to be very different.

An early win for the former does not guarantee scale for the latter.


Check out Mehul Desai’s August of Money.

Mehul Desai

MEDICIManaging Partner

Mehul Desai has spent over 20 years in the areas of intellectual property, product development, business development, strategy and international operations, focusing on ICT and related applications worldwide. Mehul has done pioneering work in the field of secure transactions for mobile phone users, evolving the Digital Wallet, to a Mobile Wallet, to a Lifestyle Container. Mehul co-founded C-SAM, Inc. in 1998, which was acquired by MasterCard Worldwide in 2014.