The MVNO roller coaster: Part 3 of 3 - The Reality Check & Exit considerations
In this this third article we will cover the following topics:
Most MVNOs that we meet experience four distinct stages in their first five years:
1. Launch frenzy
2. Growth & scaling
3. A reality check
4. Capital raising (or maybe an exit)
As a data and AI business specialising in telco and MVNOs, Sourse has observed these phases from every angle - and that’s what we are sharing in this blog series. While significant effort goes into planning the launch, proactive planning for subsequent stages is crucial. Deep understanding, confident assessment of future events, data, and data literacy are essential for navigating these transitions effectively and adapting to change.
If you’ve been following this blog series you’ll know that I’m an advocate for having dependable systems for:
At this point, you’ve scaled your MVNO which may mean you have outgrown your early capability choices – that’s worth critically evaluating so that you optimise operational costs.
The two major areas that may need maturing will be BI & Predictive Analytics.
Why? Well at some point you’ll reach a reality check – things are going in a different direction, and you need to scenario plan or even pivot. This moment needs confident, data-backed decision making. You need to adjust with certainty that the change you are considering to your product, pricing, positioning, MNO commercials, distribution etc will yield positive outcomes. Similarly, if you find yourself cap raising it’s time to go deep into your numbers – financials, commercials, operations and marketing numbersneed to be combed over or put to work using predictive analytics.
The truth is if you were diligent about reporting and data from the early days this won’t be agonising. But if you’ve held onto legacy systems for too long or avoided getting deep into the data unravelling this will take precious time – and it will come at the worst possible time.
Things to consider as you mature your management of data:
This will mean you need to bring in analytics experts. People that have numeric curiosity and healthy scepticism that can help with setting up data to explore and scenario plan.
Data may be the foundation, but predictive analytics is the super power you’ll want at this point. In the current climate there is a lot of focus on AI rather than Predictive Analytics. The big difference is this: Predictive analytics can tell you what WILL happen vs the common understanding of AI which is simulating human intelligence.
That’s why predictive analytics has such a powerful role to play as your MVNO matures. Instead of being a passenger to your data you will:
A special mention for Marketing Mix Modelling – this remains your secret weapon. There are affordable options for MVNOs to deeply analyse and understand their marketing spend. It is possible to do forensic investigation of your spend and its impact to stretch your marketing budget 25 – 40% further. Without an MMM your marketing team will be leveraging gut and MTA tools from Meta, X etc….which is a self-fulfilling prophecy and a sure way to spend more $$ without confidence that you’ll see more impact.
This is the kind of capability that the most well-known retail brands use our version is called Spend Impact and it is MVNO and telco specific. More information is here - https://www.sourse.ai/marketing-mix-modelling/)
The numbers will tell you. Predictive Analytics will allow you to be focused simultaneously on the full range of metrics that matter most in addition to the financial metrics on your P&L and balance sheet. Your financial metrics are immutable but these are the metrics that are your levers and the story arcs that will allow you to tell a compelling story about the business value that you have created:
When you ultimately exit your business, you will be evaluated on what you have created. In some cases, this might be a tech platform or a brand but for most MVNOs you will primarily be valued on your customer base. Therefore, the quality of your customer base is the most fundamental metric to be tracking.
So how do you know when you are doing good work? CLV is improving!
Predictive Analytics!!! What you should be looking for are the AI use cases that drive CLV
At this stage If you are driving your CLV upwards and measuring the contributing factors AI will give you a leg up as you plan, pivot or move toward your exit.
Whether you are raising money for growth, thinking about an exit or planning to stick it out you’ll want a crystal ball – Predictive Analytics gets you pretty close to this.
Predictive Analytics applied to CLV is the $M impact that you can count on. Customer Lifetime Value (CLV) allows for multiple drivers, dynamic customer relationships across entire probabilistic lifetimes. It allows for the measurement of future value rather than current volume.
This is the ultimate KPI for telcos to drive revenue growth because it delivers customer value which in turn delivers commercial value and therefore creates demonstrable business value. And business value that’s what you want to create and maximise in your entrepreneurial journey.
Whatever you are planning, thanks for reading and wishing you luck on your journey. You’re welcome to get in touch with me for more information or to chat about your launch – we would be delighted to help you!