In terms of wealth and economic growth, China is the place to go. For a pair of young entrepreneurs in Dublin back in 2011, China was very far away indeed. Back then, Don Corbett and Brian Shannon were working on their own separate start-up ventures as part of the DIT Hothouse programme and decided to join forces.
“We decided to join Brian’s technical skills with my commercial abilities and our first product, an enterprise app for businesses, was such a slow burn in terms of sales that we decided to pivot in a different direction,” said Corbett, chief executive of Live Mobile.
That different direction has resulted in a major deal with one of the world’s biggest telecoms operators, China Telecom, and one that will result in 70 new jobs – 20 in Ireland and 50 in China – over the next three to four years.
The direction Corbett and Shannon chose to go in was one that would be of concern to parents everywhere: protecting kids in terms of the content on their smartphones but also using the capabilities of smartphones to keep their kids safe.
Live Mobile’s flagship product, an Android application called Mobile Minder, can be installed on a kid’s smartphone and allows parents to protect their child by viewing the child’s phone activity and location. Parents can also be given a visual display of who their child has relationships with in terms of the contacts in his or her phone book.
The application lets parents see where their children are, but also where they’ve been for the previous 24 hours.
It’s a deal
The deal will see Live Mobile’s cloud software distributed in China to protect millions of children by turning their mobile phones into a child safety device. There are about 160m children between the ages of five and 15 in China, Corbett said, so potentially it’s a very big deal indeed.
In explaining the technology, Corbett said the objective is to keep children safe and give parents peace of mind. The software has URL filtering to block access to porn and gambling sites and parents have the option to blacklist other sites, too, Corbett said. It can also block certain apps.
“Blocking apps is becoming a growing necessity in the market as parents are getting shocks from colossal credit card bills because kids are downloading apps via stores like Google Play which are connected to their parent’s credit card,” said Corbett.
“The software also comes with geo-fencing capabilities so that parents will know not only where their child is but the moment they leave a designated area on the map.”
As well as China where the software is sold by China Telecom and can be integrated with billing packages, Live Mobile has recently established a distribution deal in the US called MobiParent to syndicate the technology.
While China’s booming economy is an obvious reason for technology companies to go there, often many leave it to later in their development and concentrate on the US and Europe first.
Corbett said targeting China as a two-year-old start-up was more out of necessity than design. “Our product is a consumer play but you need partnerships with mobile operators to distribute it. At the time, to market it in the US effectively we felt we would have needed an enormous amount of money. We got the sense that China was ripe for opportunity and we decided to go about it in a very strategic way.”
Unknown to Corbett and Shannon at the time, the road to China became a journey of discovery that led to them refining their entire business plan: to concentrate on telecom operators to sell the software as a value-added service rather than trying to convince individual consumers.
Live Mobile overcame the privacy and security hurdles of hosting data on servers by establishing a relationship with a partner in China that would host the software on servers in China and Corbett had the company blog translated into Chinese.
There was initial interest at first but it wasn’t biting, Corbett said.
All about ‘guanxi’
“We learned that there is an emphasis on relationships and you have to build up ‘guanxi’ which shows you are trustworthy based on the relationships you have. So we spent more time working with our Chinese colleagues to increase our ‘guanxi’,” he said.
The duo then flew to China for the Shanghai Mobile Expo in 2012 and met with China Telecom.
“We told them that ultimately every child will want a smartphone that is likely to be Android-based and they agreed and saw our technology as a natural extension to what they are selling,” Corbett said. “People are more likely to trust a mobile phone operator for this kind of service than simply downloading it from the Google Play store.”
Corbett said that one of the most important things software companies targeting China need to consider is finding a trustworthy local partner and Live Mobile narrowly avoided a few horror stories before settling on an accredited partner that had an existing relationship with China Telecom.
“Now we’re looking at replicating the model we developed in China across the world. Mobile operators are looking to increase their revenues by selling new data services to users and this would be an example of the kind of value-added services they could sell to boost their bottom line,” Corbett said.
“We learned a few lessons in terms of adjusting our business model and instead of a costly scattergun approach we are focused on establishing relationships with telecoms operators.”
The best lesson, and one that he applied in cracking China, was to do your research and be very clear about how business works over there. Paraphrasing Seneca, he concluded: “Luck is what happens when preparation meets opportunity.”
A version of this article appeared in the Sunday Times on 14 July