Apps

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Towards Always On

There is a one-way vector in internet access.

At first, to do something like buy a book, we had to return to our desktop and boot it up.

Then, with smartphones, we, in almost real time, pull our phone out of our pockets and launch an app.

We are almost always on.  The smartphone behavior opened up many more behaviors — some we didn’t even realize were an issue to being disrupted by networks, by reducing the friction from perception of problem to network access.  Think taxi-hailing apps, which wouldn’t make sense in the desktop or laptop era.

The rule is that the less friction there is to internet access, more behaviors open to digital disruption.  The ease and the unobtrusiveness of getting on the network corresponds to getting on for the smallest of real-world behavior.

This is why, that despite reaching what seems like a minimal level of friction with the smartphone, there is a push toward wearable devices, most notably Google Glass.  Moving towards the era where humans were “always on” the network would open even more of the real world to digital disruption.

 

 

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The Opportunity in the Gap Between Mobile Hardware and Software

From my first computer, a TI99/4A to the PC clones we upgraded to every couple of years, the PC has tracked my life; getting more and more powerful, useful, and desired as I have gotten older.

This year, worldwide PC sales will dip significantly on a year over year basis.

In the last 3 decades, to the extent that this dip has happened before, it has been due to a weak economy.  This time, it’s more fundamental — people are ready and comfortable in giving up their personal computers due to smartphones and tablets.  And as happened with wired telephony, many poorer citizens of the world will simply leapfrog over the personal computer going straight from no computing power to a portable device.  The industry cannot count on growth, and it is a big reason why Dell, HP, and other big PC makers have hit a pothole.

This is a significant turning point, obviously.  The PC is losing its space on our desks and in our briefcases.

Often, opportunities lie in the gap between one part of the market and another complementary part.  One of these opportunities lies in the gorge that has opened between the hardware and some common software functions.  Specifically, despite the power and convenience of portable devices for email and the Internet, there is a big gap between changes in people’s preference and their ability to competently and confidently execute certain basic functions of the PC on portable devices, in particular, the typical office suite of word processing,  spreadsheets, and presentations.  To put some meat on it, I come up with my best ideas while waltzing around town on my phone, but if I have to turn it into a formal presentation, I still frustratingly need to sit and wait for my computer to boot up.

That is just one example of the gap between the preferred hardware and the lagging user experience, but it’s a big one.  As I have blogged before, I am still surprised that so little effort and progress is being made on this problem, when history (Microsoft, for example) illustrates how much durable market power is available to the companies that work and solve this problem even half-way competently.

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My, No I Mean Your 30%!

Inevitably, the various platforms and their monetization schemes were destined to clash, as the platforms intersect and overlap with each other.  This is happening now.

In the last two days, Facebook released its iPad app, linking two of the most powerful platforms out there, both charging rent to the apps for distribution on its platforms.  One platform is playing hardball with another.  Apple is not allowing Facebook to use Facebook Credits, so Apple can take the 30% cut of any commerce done through the iOS rather than Facebook taking its cut.

Relatedly, payers of the rent, are looking to own.  Today, Zynga announced Project Z, in an effort to go direct to consumers instead of through Facebook and consequently to avoid paying the 30% Facebook Credits cut.

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“Starting Up” in a Facebook World

I wanted to follow-up quickly on my post regarding my view that while social is inevitable and here to stay, Facebook’s continued success is not necessarily inevitable.  If investing or starting up companies under this thesis, the ideal situation would be a portfolio approach where you would bet both on apps riding the trend and bet on something disruptive aiming to create a new category or trend. Easier said than done from the entrepreneurial perspective where you need to be “all in,” but perhaps possible, and certainly possible from an investing perspective.  Not unlike “bubble” investing, where there can be a lot of money to be made riding the trend, even when your underlying view is that the thesis is ultimately not sustainable.
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Startup America Reboot Redux

A couple of links to a U Chicago professor article and the CTO of the US Aneesh Chopra since my post that talked about government data sets.  Still much more to be done on this front.  Way too early to pat ourselves on the back especially from the perspective of federal government data.  Hopefully this means more focus on this issue because it can be entreprenurial fuel as I have discussed.

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Photos: Social’s Backdoor

In my opinion, one of the stickiest features (and one that increases engagement) with Facebook is photo posting and tagging.  Being so compelling to users, improvements on the photo taking and photo tagging experience are explosive features for users.  And so they are potentially big fish for existing social networks (who want to maintain their engagement with users) and to others who want to increase their social capabilities and social cool. To follow the logic through, the sum of being compelling to users and potential acquirers means a compelling opportunity for entrepreneurs.  Consistent with this thesis is Instagram’s amazing reported growth and the rumored $100 million offer for Path by Google.
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Tube Ride

This post on techcrunch referencing the “app wall” had me thinking about the app business model and its challenges. One challenge is breaking through the noise of other apps in order to get initial attention. This is difficult but certainly doable. The second challenge is more daunting.  Even if the app achieves the initial flirt, is it compelling enough that people will enter into a long term relationship and use it regularly, instead of just moving onto the next interesting app.  This seems to be the greater challenge if one is aiming for the app to be the foundation of an independent business.  The addictive strategy of a game like Angry Birds is one answer. Another strategy is improving the functionality of another application like the various social networks in which people already return again and again and riding that wave instead of trying to create one’s own. Examples include the various photo-sharing apps such as Instagram which allow one to share photos on social networks, thus improving something that users already do regularly. By improving this functionality, both the app and the social network benefit.