Business models now matter more than sales

When I was in my late twenties, I had a baptism of fire while trying to establish the Power PC chip as a new industry standard.

In early 1992, IBM, Apple and Motorola announced that they would be developing a new microprocessor – to be called the PowerPC – to power the Apple Macintosh and new PCs.

In my marketing role for Motorola, relatively early on in my career, I didn’t think it could get more exciting than being at the centre of an industry where a new standard was emerging.

But Intel crushed the technological advantage that we had with marketing messages that reinforced the benefits of its own chip, such as overall PC performance, software standardisation and compatibility. I learned that marketing trumps technology and always has.

Mobile World Congress took place in Barcelona last week, providing an arena to discuss how mobile phones are becoming the remote control to our lives, and what piece of the market they intend to carve up.

We are beginning the Smartphone Wars. Apple’s iPhone and Google’s Android mobile platform have opened up the market over the past couple of years, and Nokia and Intel have developed a new alliance for application development.

Palm, led by Jon Rubinstein – Steve Jobs’ former number two – is the one to watch as it pushes mobile application developers to write for the web.

While Apple lost out to Microsoft in the Desktop Wars of the 1990s, it has created the dominant marketplace – its iTunes App Store – for applications to be sold on the phone in 2010.

The winners in any business arena are those who are able to organise the economics of the ecosystem. Apple’s marketplace of applications on the iPhone works because Apple did the hard work of cutting deals with the mobile carriers, and on the iPod because it did the right content deals with the right media firms.

Many technology firms focus on sales, and yes, if people don’t buy what you sell, you have a problem.

However, business models trump sales because choosing and executing the right one leads to long-term market power.

New entrants and would-be rising stars need to find compelling ways to build business models for the future.

Julie Meyer is chief executive of Ariadne Capital. founder of Entrepreneur Country and a Dragon on the BBC’s Online Dragons’ Den.