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Mobile app startups are failing like it’s 1999 (2012)

andrewchen.co

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Re: Mobile app startups are failing like it’s 1999 (2012)

#31

Post by Zigurd »

I write about Android app development and consult to developers of mobile apps. It is still a tough business to make money selling mobile apps at app store retail prices. All of my clients have some other business model.

BUT this is changing. The number of app customers is growing very quickly. Eventually, perhaps soon-ish, volume will overwhelm the currently crappy economics of selling apps and collecting ad fees.

Ubiquity of smartphones is more than just more customers. Once penetration gets high enough you can actually buy advertising and PR and expect it to work. More users drive a virtuous cycle that cures most of what's wrong with trying to sell mobile apps.

Re: Mobile app startups are failing like it’s 1999 (2012)

#32

Post by kalleboo »

FallDead wrote: post #18

The author of this article is obviously someone who doesn't see the bigger picture of mobile apps. The problem is inexperienced developers who drop out (programmers) think they can 1. Write an Instagram clone or some one hit wonder app and expect it to help them build a business without any science behind what they do, obviously those will tank, its a not an app that supports a company, its shown time and time again…

> its shown time and time again that it is the web back end that supports a company and all those services

Saying "it's the web back end" sounds a bit code-centric. Twitter originally had an extremely broken back-end that didn't scale at all, they were down half the day. It still got extremely popular.

It's about the gestalt - the service, novelty, differentiation, virality, targeting, marketing, etc etc.

Re: Mobile app startups are failing like it’s 1999 (2012)

#33

Post by [deleted] »

callmeed wrote: post #21

How on earth is this post getting voted so high right now? How do you write a post and make a statement like this without one single example ? Seriously, give me a list of mobile app companies that failing in this manner and scale. I could rattle off plenty of mobile startups that went the raise-money -> no-traction -> acquihire route. But I don't know what he's talking about here and he offered no data to back it up…

[deleted]

Re: Mobile app startups are failing like it’s 1999 (2012)

#35

Post by zmitri »

pg wrote: post #23

This article would be more convincing with examples.

Here's my take on the situation as someone who bootstrapped a mobile app, got some traction, and did not end up raising a seed round (We even had a YC interview). I tried to use some real numbers/examples:

http://blog.zmitri.com/startups/2013/06/14/you-need-a-millio...

I can give you lots of specific examples if you send me an email, but I feel bad calling them out in public, because it's a grind and I don't think it's my place to do that.

You guys see so many companies that you probably have a fantastic, if not the best, take on this. I scoured around looking for data and statistics to figure out what was going on, but you can just ask your companies I imagine.

We're still going either way.

Re: Mobile app startups are failing like it’s 1999 (2012)

#37

Post by shuzchen »

redbluething wrote: post #17

It's a false premise that App Store approval = 6 month deployment cycle. Sure you can move faster on the web, but not that much faster.

Considering you have to go through the app store approval process every time you push an update out (so sitting in queue for a week even for bug fixes), building for web or android first gives you much more agility.

Re: Mobile app startups are failing like it’s 1999 (2012)

#38

Post by zissou »

callmeed wrote: post #21

How on earth is this post getting voted so high right now? How do you write a post and make a statement like this without one single example ? Seriously, give me a list of mobile app companies that failing in this manner and scale. I could rattle off plenty of mobile startups that went the raise-money -> no-traction -> acquihire route. But I don't know what he's talking about here and he offered no data to back it up…

Detailed examples of the model of failure described in the post are bound to be few and far between because of the massive selection problem. People who fail are way less likely than people who succeed to to tell the Internet about their experiences.

Re: Mobile app startups are failing like it’s 1999 (2012)

#40

Post by zmitri »

callmeed wrote: post #21

How on earth is this post getting voted so high right now? How do you write a post and make a statement like this without one single example ? Seriously, give me a list of mobile app companies that failing in this manner and scale. I could rattle off plenty of mobile startups that went the raise-money -> no-traction -> acquihire route. But I don't know what he's talking about here and he offered no data to back it up…

As someone who builds an app, he was essentially noting that:

Lots of investors made pre-traction mobile-consumer bets in early 2011. Some even built up teams of 5 or 6 people before having launched a product.

In late 2011 and early 2012, savvy investors quickly noticed that many consumer apps started to stagnate around 300-500K total users. Although their total user counts continued to grow, their active user count did not (often only reaching a few tens of thousands monthly active users) – some even had exponential decay.

Good examples would be something like Highlight (Sorry guys) or Mixel (Very well done app, but never grew that big, and got acquihired) or Cinemagram (Fellow Canadians, raised money, but with Vine and Instagram for Video are now getting trounced).

Another poignant statement is his closing statement on the closed garden App Store model, which seems to be having problem creating big hits now, or as Marco put it the other day, "the rich are getting richer." For example, Apple has been promoting video apps like crazy, stuff like Vyclone, or Directr get lots of love from Apple, but you just can't control the masses.

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