Archive for the ‘Business Models’ Category

Secrets of Mobile App Success

With 1.6 million apps in two app stores alone, how can yours be discovered? Once discovered, how can yours get someone to use it? To download it? To keep coming back? What types of apps are out there? Where’s the future opportunity? How can you make money from an app when 80 percent are free?

The title of PluggedIn’s March 27th roundtable was App Engagement, but one question led to another and soon a virtual primer on the business of mobile apps took shape.

Discovery. A huge issue, but, truly, it’s fundamentally Marketing 101. People are not looking for apps. Apps have to go to users by understanding user DNA. (80% of apps are games.) Deliver real value for a specific user. Deliver sufficient value for users to want to talk about and share it – word of mouth is key. Facebook is good for this. Cross-promote your game through others with appeal to similar audiences. Most push notification is annoying, but intelligent push notification that respects boundaries can work.

Usage and Download. It’s all about delivering real value. What constitutes value depends on the purpose of the app. Is the purpose utility – to help someone achieve a task? Media – to help someone get information they want? Entertainment – a third of the time people spend on their phones is spent playing games? To get beyond one-time use to download requires meeting the No. 1 requirement: focus on doing one or two things superbly. Start by talking/messaging with your first users personally and get feedback. Turn them into passionate advocates. Without perceived value, you’re just adding to clutter. (40 apps is typical for most phones today.)

Repeat Usage. Here’s where engagement comes in with a vengeance. It’s about getting an app to become a habit. It happens when the app helps a customer accomplish a task – when the user finds what the app offers to be valuable enough to share. Gamification – i.e., rewards – is necessary on all apps to get people coming back. Marketing automation – such as that offered by Appboy – can make a big difference. In advertising, engagement is about loyalty to a brand. It’s a different use case for apps – satisfying a need. App engagement is also different from website engagement – and 98 percent of apps do not lead back to a website. The mobile app is in the context of the user’s life, and the user is multitasking, hard to engage, pops in and out of the app.

Types of Apps. Utility (Yelp). Media. Entertainment – video, Kindle, games (Candy Crush). Loss aversion (Whisper).

What’s the Future? Location – location – location. It’s unique to mobile app. It has huge potential and has yet to bloom

Revenue Models. In the beginning, 80 percent of apps were paid. Today, only 20 percent of Apple apps are paid, and all Android apps are free. The model is freemium – start free, then add paid features. Keepy, which helps families share memories, will generate revenue long-term through subscriptions. But the first step is user engagement, the second monetization through ads and partners. Then they can advertise payable features. Appboy sells “picks and shovels,” i.e., infrastructure, to app developers. Insticator, which lets viewers predict TV show events, will sell licenses to TV show producers.

Words from the Wise. Message your first users personally to get feedback and turn them into passionate advocates. Start small and gradually build the product to get more people on there. Go both small and international – two-thirds of the market is international. Focus on 1-2 things that work and do them well to get the data you need to learn. Keep functions atomic – no app is for everyone – take a focused approach to distribution and discovery. Measure things like time and frequency to assess and build engagement. Keep the app transparent so it allows user to do what they want but doesn’t get in the way.

Innovation from Within: Google

The very name Google denotes innovation.  Thousands of engineers are at play at Google Labs, with a steady outflow of amazing experiments.  But what if innovation is about more than engineering?  What if it is also about the human dynamic of technology?  That’s where Abigail Posner comes in – not an engineer but a social anthropology practitioner who’s changing how Google innovates – in subtle ways.

Her major at Harvard, where she took honors, was social anthropology, the study of human culture and society.  It turned out to be right on for account planning at global agencies like Publicis and DDB. She joined Google in 2011 after a 16-year career in advertising and management consulting.  Her title is Head of Strategic Planning, Agency Development.  What’s planning?  Insight and strategy, she explains.

Google knew they needed her but could not define exactly in what ways, she reported at a recent Women Innovate Mobile event.  She had to use whatever processes it took to get political and emotional sponsorship and to build her practice.  And so progressing in her role became not about moving up but about moving out, spreading her impact in many directions, probing for feedback.  “And then they all help each other as opposed to doing only one thing well,” she said.

Her first job is to help clients – marketing agencies – develop ideas.  Her role is not to make sense of data but to help creatives come up with creative ideas that inspire people.  To do this means understanding the symbolic value of brands and products.  Her second responsibility is to develop insights using Google tools and anthropological research; her third is training.  She developed a course on insight development for internal marketers; then clients asked for it..

According to Abigail:  “Because people spend so much time with digital media, we need to get value to them.  It’s not about screens but points of contact and communication.  We need to leverage those.  We’re all social strategists.  Everything we do is social.  The social platform space is unlimited.  What does it mean to be social?  Mobile?  Search?  Everything will be social and mobile.  How can technology amplify this?  Are we getting that fulfilled?

“Place making, a fundamental insight of social anthropology, is an innate desire to make sense of places, to constantly remind us of who we are.  Cell phones allow us to make places like crazy.  We find information on a restaurant as we pass by.  Then we find a dish we like and photograph and share it.  All this creates value.  Being connected is an opportunity to leverage place making.

“Mobile phones allow us to tap into deep-seated needs and desires.  What’s new is the interest in understanding the human dynamic of technology.  How can we use this to elevate our lives?”

How might understanding the human dynamic of technology relate to product development?  Product development used to be largely engineering, she responds, with some usage research.  She hopes in time to have more input into product development.  What a thought:  products designed with the human dynamic as important as the technology or usage!  That sounds to me like the true basis for a great user experience.

The Future is Internet Access. not Devices

Frugal innovation that’s just good enough to enable free mobile Internet access in order to supports a focus on education for billions of low-income people. That’s both the personal and business mission of Suneet Singh Tuli, CEO, Datawind. The outcome? The first $40 tablet computer – the Aakash – launched first by the president of India, then by the UN Secretary General and today in use by thousands of students in India.

Suneet’s business goal is to create a low-price product that impacts people’s lives and, yes, make money from it. “I am not a charity,” he declaims. The Datawind business model is to forgo most of the company’s hardware margins and to focus instead on recurring revenue from content and apps in order to go after and, in time, own the price-sensitive consumer.

He believes everyone should focus on education. Education corrects everything, he says. No, the low-cost computer is not intended to replace teachers but to supplement what they can do. His sons get answers to all the questions they have after school from YouTube! And Forbes International recently recognized Suneet in its annual impact 15 list of education innovators.

Lesson No. 1 for US entrepreneurs: “just good enough” should be part of innovation. It’s not disruptive technology that wins; it’s the one the gorilla ignores – as we learned from Clayton Christiansen. Large companies, such as Apple and Samsung, could own the low-cost tablet market but it would dilute their brands to say nothing of their margins. Their business model is based on creating and producing high-quality, highly profitable hardware. Suneet’s, on the other hand, is to use hardware as a customer acquisition tool.

Lesson No. 2: the future is Internet access, not devices, in Suneet’s view – with money coming not from devices but from content, apps and advertising. In fact, Suneet’s next goal, in addition to bringing the cost of the Aakash down to $25, is to spark a global ecosystem of socially positive apps that empower women.