Entrepreneurial

App is crap

March 2, 2010

- 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.

Comments
12 comments so far | RSS Comments RSS

Disagree with the conclusions here and wrote a long reply here: http://www.appolicious.com/articles/1379 -apps-are-not-crap-and-apple-isn-t-evil .

Especially the point of “Should you build apps?” If you want to create value on smartphones today, you HAVE to build apps.

Alan Warms
Appolicious.com

Posted by awarms | Report as abusive
 

I believe that your article depends far too much on speculation and is, in fact, far from the truth. I am no fan of Apple’s policies. From limiting flash to potentially abusive secrecy, I think there is room for a lot of wrong. However, applications are the quickest and most convenient use of the internet on a mobile device today. The iPhone has taken a similar route to that of gmail in that it was questionable at its debut, but has gained steam. New phones (blackberry storm 2) and new operating systems (google android) have tried to topple apple on functionality, but fail to win with lack of user friendliness. The revision of websites to better suite mobile phones will not change the fact that accessing those very websites is a hassle. I have used blackberrys, the motorola q, and various htc smartphones. I got an iphone simply because I wanted a phone I didn’t despise. Ultimately, it proved to be vastly superior in function. The iPhone will remain as a huge competitor because of its ease of use. I agree that the mobile web is a cornerstone in the smartphone market, but current developments point to the iPhone having a strong future.

Posted by bossmeh19 | Report as abusive
 

What self-serving Andriod promoting dribble. I’m sorry about your poor investment choices, but please, we’re not all so stupid. The most successful consumer application delivery system in history is “a bad choice”? Eliminating smut from the venue of apps is a major barrier to market? What, are you suggesting Android is the preferred vehicle for delivering smutty applications?

You miss the point of Apps for the iPhone entirely. They are not predominately for redisplaying websites on mobile devices. They are dedicated applications that may or may not use web content. Your examples are all wrong and woefully inappropriate. A clothing boutique wouldn’t develop an App to display their webpage. They’d simply cater their webpage to both mobile or desktop endpoints. This is a simple webpage design option, not an App development. What they might do instead is create an App that let users shop securely and easily at their store in a manner that offered a much greater user experience than available on a web interface.

Your comparison of Gmail to Microsoft Outlook or Entourage is equally ridiculous. These Microsoft products are part of a business productivity suite that cost consumers several hundred dollars. Gmail is a “free” consumer-based email offering. People choose Gmail because it’s “FREE”, not because it performs better than Outlook or Entourage.

You’re not fooling anyone Android spammer. I’m sorry you invested in a platform that will have real trouble competing against the enormous success of the App Store. But please, don’t insult everyone’s intelligence by suggesting that this makes the App Store a “bad” way to go.

Posted by MeeerkatMac | Report as abusive
 

This article is dead on. As a web developer myself, the mobile market is a huge chunk of future revenue and expansion in the industry. Applications create silos which limit your marketability to one channel (be it Apple, Google, etc), silos are not cost effective nor are they good for users.

Focus on targeting as many platforms and access methods as possible for the cheapest cost and you’ve got a great start at a business plan. Letting someone like Apple have complete control over your application with no appeal methods and objective application approval is akin to playing with fire, eventually you’ll get burned.

Posted by Fmarvez | Report as abusive
 

Dude, I aint buying no 99c apps. That’s stupid. I’ll go to the web-page for free.

Posted by comment | Report as abusive
 

Once again I read an article written about the iPhone by someone who doesn’t understand what it is. He has tried to put in a box with one purpose and gone on to say that purpose is better served using a different method.

One has to take a look at the entire picture. One must ask – does this device do what I want? Does it go beyond a single solution? Who is using the device?

All this did was take a look a one market segment and give an opinion on it, not what the iPhone is as a whole.

Posted by Hillock | Report as abusive
 

What I hear Mark saying is that it’s needless and costly to establish a business that depends on establishing its reach on a platform application. The platform can change, the OS can change and to really put a spin on it, Apple can change its terms that invite developers into a new “app” regime. Take Macintosh system 6 for example. It had a huge following with plenty of “apps” for free. Then came system 7. The shakedown was immense. As developers had to join the developer$ club, many free and easy apps disappeared or simply wouldn’t work on the new system OS. I won’t go into the shakedown transition between system 9 to OSX. Each new Apple OS prior to OSX would promise better stability. Then OSX replaced the unstable “stable” OS altogether.
Unlike the Mac OS, iPhone users establish their usage through a contract with a wireless carrier. This landlord approach is an income dependent model that can have a crushing effect on users and apps if the US economy has a larger negative in the near future.
Apple is still the snotnose kid that only establishes standards for itself. The browser app is the way out of this infinite loop of serial numbered channel dependence as the browser is the standard that transcends the manufacturer of serial numbered boxes that are dedicated pieces of hardware and their OS’s.

Posted by nickjacket | Report as abusive
 

iPhones are cute. Apple’s business model isn’t all that. It costs money to develop for their insular platform. Then they assume it’s OK to take a large chunk of your otherwise liquid revenue for the privilege of you providing content on their superficially cute but increasingly parasitic channel.

Now, if you can really justify the costs of developing an app as well as a well-run website with cross-platform usability, then good on you. It means you have money to burn.

But if you have to choose, as most economically-minded people do these days, then nurture your own content on your own online venue first, always. Make it cross-platform, second. Apps would come in a distant third.

Apps will come and go, and some people will be gone with them when they inevitably go. Theirs not to reason why.

Posted by HBC | Report as abusive
 

Brave man – writing an article that has anything to do with Apple and isn’t effusive with praise.

I thought this was a sensible, rational and fair article. I don’t actually totally agree with it since i think fundamentally running a program provides a different end user-experience than loading a web-based application but I can’t imagine how anyone reasonable could disagree that having your entire business model depend on a partner that’s never even heard of your company is just asking for trouble.

Posted by binstar | Report as abusive
 

I find it amusing that people who disagree with my point of view feel that they have to resort to personal attacks. I have not invested in competing platforms as some of the commenters assert. My point is that we’ve had this debate before when the IT world moved from mainframes to client/server. We had it again with the advent of the World Wide Web. We had this debate with the proliferation of Java, “build once, run everywhere.” Over time having heterogeneous environments is a huge burden for software developers and a waste of time, money & effort for most companies.

If you disagree with this, fine. It’s my point of view – nothing more. But spare me your personal attacks. They don’t make your arguments sound any more valid. Open debate fuels innovation.

Posted by msuster | Report as abusive
 

I completely agree! Those who are furious with this post are Apple app developers! They can’t see the forest for the trees.

Posted by Astralis | Report as abusive
 

As a software developer this argument makes total sense to me. Over the last few years we have moved away from standalone operating system specific applications to multi-platform web based applications. Perhaps the insecurity here is – will the user pay the same money for a web based application? Presently, the user gets a (false) sense of ownership by paying, downloading and installing something. It’s theirs – on their phone. They get to show it off to their friends and the like. It’s harder to create this false sense of ownership using the web delivery method.

Posted by JustNeal | Report as abusive
 

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