App is crap
– Mark Suster is a partner at Los Angeles-based venture capital firm GRP Partners and the author of the blog “Both Sides of the Table”. The opinions expressed are his own. –
I recently wrote a blog post entitled App is Crap: Why Apple is bad for your health, in which the thrust of the argument is that the technology ecosystem will be better served by applications on mobile devices that work inside your browser, rather than applications you download onto your device.
The downloaded world is a hugely costly proposition for software developers and also makes it harder for new phone manufacturers to produce products. Neither is good for innovation in the long run.
One of the topics I want to expand on is “the iPhone is a channel, not a business model” for your company. I see too many startups building iPhone-app companies. They are setting up businesses whose sole purpose is to get users on the iPhone to download their app and they plan to make money from charging the 99-cent fees for their application. The iPhone is not a business model, unless you’re Apple. It’s a channel. It’s a way to reach your customers. And single-channel businesses are vulnerable to the vagrancies of the marketplace. You need to think in terms of broader distribution.
Let’s start with an example. Apple recently decided to ban all applications that have what it considers “indecent” content. That includes apps with swimsuit models, who may not be exposing more than you would find on the latest cover of Sports Illustrated. It’s their right to do so. But if you’re a developer who’s based your whole business model around an iPhone app, you may just find yourself flushing your investments down the drain.
This is true of any channel partnership. If you’re beholden to any one channel for too much of your business, then you’re financially vulnerable at all times. What should you do about it? If you’re developing mobile applications, you should also build for Android. It now has an open-development platform and is putting serious money behind expanding its reach in the mobile market. I would watch closely the movements of Windows7 Mobile, Blackberry and Symbian, but for now I would be reluctant to overly invest in those channels unless you’re building an app for older phones, e.g not the newer generations of smart phones.
I believe you should make sure you look at developing a browser-based version for the mobile web. The market and technologies may not be fully ready and robust, but you will be able to evolve with what I believe the long-term trends will be. Having a solid web-browser version of your product might just give you an edge over competitors in the long run, who bet on the iPhone-only strategy. It was this way on the pre-mobile Internet. When you look at Gmail in the early days people criticized it for not being a functionally rich enough product versus the client apps. In the start these commentators were right, but with the acceptance of Ajax and more powerful browser capabilities, Gmail has evolved into a killer product that many people prefer to Outlook or Entourage.
I believe the mobile Web (versus building downloadable applications) is especially relevant for you if you’re not a software developer. Let’s say you run a clothing boutique or a restaurant chain. Should you build apps? No. In the long run you’ll sink tons of costs into it and I don’t believe users will want every single business’s “app” on their phones. Should I do nothing and just have my normal website viewable on a mobile device? I also don’t think this is the right strategy. Mobile devices are different. The screens are smaller, they’re location aware (it’s possible to know exactly where the person holding their phone is if they allow you), they’re almost always with the user and they have neat features like cameras and accelerometers.
So you’re better off creating a version of your website that is optimized to work on these devices, taking advantage of the way mobile-Internet surfers operate. Think about how the user is changing their behavior in this new mobile era and how your website will be used as a result.