Here come smartphones. And we’re going to ride that rising tide to a much better business.

According to a recently released Mobile Market View study, almost 19% of mobile consumers currently have a smartphone and another whopping 49% plan to get one in the next two years.

And there’s very rapid growth in what people are doing with their phones, shown here.

For FanMinder, the natural question is: How does greater smartphone adoption change our value proposition and business model? And it’s simple but powerful:

• Take advantage of mobile web to deliver 10X improvement in marketing programs for our customers
• Create downloadable applications to “catch” merchant messages without interruptive nature of SMS.
• Lower SMS gateway expenses
• Increase customer and merchant happiness

Moving from text to mobile web and rich applications is kind of like going from DOS to Windows (or, err, Mac)…a big improvement in what’s possible. We love texting because 70%+ of consumers have it and young folks are addicted to it – it’s really the only other feature of mobile phones thats used today by the mass market.

On the other hand, we need to be respectful of consumers’ desires not to get spammed. As you would expect, our research shows great interest from a consumer if you have love for a favorite store. But the concern is there around giving out their phone number to receive commercial messages. And again, the younger you are, the less you care.

Plus there’s a cost for each message. While the slope of SMS cost curve flattens over time, it’s still a big number.

Surf’s Up!

Just watched this great video on practical problem solving, but it’s really a video about how to innovate.

Paul Polak has lifted 17M people out of poverty with his treadle pump invention. His process started with asking two simple but powerful questions:

• What causes poverty?
• What can someone do about it?

We’ve been applying these two questions in our business:

• Why don’t small businesses grow their revenues faster?
• How can he/she create more revenues from his/her customers?

His process includes 12 steps, many of which are similar to Intuit’s Customer Driven Invention process. Here’s a few of my favorites:

• Get out of your office and go visit your customers - Obvious? not quite. So many tech products are designed in a bubble. We’ve visited 25 businesses since inception a few months ago.
• Understand the specific context – In Paul’s case, poor farmers had a tiny farm, poor soil, and no irrigation. Can you be as clear as that? We can: Smaller retailers spend on advertising but don’t get their money back, and don’t even know, so they turn to non-traditional methods like co-op advertising and hosting events in their store. They develop a mailing list but don’t use it because they’re not marketing experts.
• Listen to what customers say – Poor farmers in Bangladesh didn’t use fertilizer “like they should” so the agricultural experts created classes for them. What they didn’t know is that the farmers didn’t apply fertilizer not because they didn’t think it’s effective, but because they couldn’t afford to lose it in a 10 year flood. The “experts” thought they knew the issue but sitting in their offices it was clear they never asked anyone.
• Follow your customers – When farmers invested their treadle pump savings in their childrens’ education, he invented a solar lamp for the kids to read at night (they don’t have electricity.)