While in Australia I spoke with Andrew Coates, Co-Founder and Chief Executive Officer of AgentArts, an Australian company which moved to the US to market recommendation technology. “The growth is working with American companies, we are focused on the mobile space because there’s a great deal that can be done to improve mobile storefronts,” said Andrew, claiming the market is about where the web was in 1995. “All the carriers that we’ve spoken to in the United states are really aggressive in improving their customer experience because they don’t want customers leaving their portal.” The interview covers challenges specific to mobile content as well as some lessons for any company seeking to enter the US market, or indeed any large foreign market.

According to Andrew, there is no conceptual difference between content on the web and content on mobile, but in terms of consumer usage and the way they interact with content there is a big difference. One of the big problems consumers face is the uncertainty of data transmission costs. For some carriers (the example given was Telstra) the data charges for getting the content onto the device are sometimes included in the price and sometimes not, and this consumer uncertainty is “a huge impediment for music and video services on mobile devices”.

“The expectations of consumers for a web storefront versus the expectations of consumers for a mobile storefront are vastly different,” said Andrew, which is lucky because mobile content is just beginning and there is still a long way to go. However, Andrew believes that in the very near future consumers are going to expect the same level of usability as online services such as Amazon.

This is going to be a problem since there are a number of challenges fundamental to mobile devices which has to be overcome. The most obvious is the small screen of mobile phones, which means there is very little “real estate” to present things. The storefronts haven’t helped things—they’re often divided by genre and have dozens of choices which users are simply unwilling to scroll through. Naturally, Andrew suggests recommendation services as an answer to this, but adds that the service has to be in the face of the consumer. If there is nothing more than a recommendations link at the bottom of the page no-one will click on it—the recommendations have to be the first thing people see when the screen comes up. This is different from an e-commerce page on the web, where there is a lot more space to present things and recommendations can be put in a sidebar or something.

The Carriers’ Problem

Carriers are beginning to outsource the content on their portals, bringing in specialists to run the games part or the sports part of their portals and either having their own brand on it or sharing the brand with the company running the actualy content, whichever seems most appropriate. The problem with this is that carriers want everything that is deeply imbedded in their portal to be of a high quality, and also to be uniform across the portal so that consumers will have the same buying experience across all the segments. However, this is easiery said than done… “If Telstra Mobile waits for everyone of their individual vendors to improve their user experience the big guys will get it right but the little guys won’t have the service,” said Andrew.

Doing Business Internationally

Agent Arts is an Australian company that moved to the United States and incorporated there, “because ultimately we are going to raise capital in the US or be acquired in the US…it’s a lot easier to do that if we’re an American entity,” said Andrew. Entering the US market is difficult for an Australian company, or any overseas company. In fact, entering any market other than that which you started in and succeeding is a real challenge, according to Andrew. Part of this is cultural—what works in one country often doesn’t transfer directly to another country—and part of it is the long lead-time involved when dealing with carriers.

“You have to be on the grounds in those markets, you can’t do it from here,” said Andrew, in reference to entering large overseas markets such as the US, Europe and Asia. “The lead time for selling to a carrier is measured in years, not weeks or months.” So you need to have people in the market you want to enter, preferably already with the contacts with the carriers since they can take years to develop.

Apparently Australia has suffered by the way its companies have tried to commercialize and sell the technology it develops overseas. The technology is good, but the attempts to sell it haven’t worked because companies often just try to dump the technology in another country and let it fend for itself. “You gotta have someone who knows and is connected to the guys you want to talk to,” said Andrew.

It also helps to have reference sites when dealing with carriers. “The work that we’ve done with telstra is quite wide and there’s a variety of things we’ve done with telstra, so that’s been a good reference site for us,” said Andew. The same applies with content—carriers want to know that you can produce good content consistently and on time, so if it has been deployed in your local country that’s a big plus.

Australia (and I assume a lot of small markets) also suffers from its small size. A company doing something innovative and new in Australia could quite possibly be the only company in its market, according to Andrew. In the US there is likely to be 10 or 20 companies doing the same thing, and their solution might be better or it might be worse, but there’s no way to know until you go and compete in the market—which is a very expensive proposition because it takes a few years to discover whether you’ll be effective. It’s important to have something unique and protected…Agent Arts has two patents.