Mobile app startups are failing like it’s 1999

I'm a product manager that oversees several hundred apps over roughly 25 stores on 8 platforms (Android, iOS, BlackBerry/QNX Windows, Symbian, Bada, Brew, J2ME).<p>We are do a steady 2.5 million in sales per year, aiming for 4m next year.<p>The problem is that startups in the Valley are extremely narrow minded and aesthetically snobbish in their mobile approach.<p>1) There are 1 billion feature phone users around the world who have perfectly usable app stores.<p>2) You need to launch in more languages than just english, and on more app stores than just the US market -- Chinese, Hindi, Spanish and Portuguese at a minimum.<p>3) Apps that are not SAAS are throw away, impulse buys. They should be developed with that in mind.<p>4) Apps have a short lifespan and sell based on timeliness.<p>5) If you want guaranteed profit in mobile, build mobile extensions for established brands, don't try to build the next Angry Birds or Apple App clone.<p>6) Design matters, but not that much. Touch interface has made UI far more visceral, but the sale happens long before the user judges the design<p>7) IAP -- its icky but it works<p>8) Try lots of stuff rapidly and fail fast. 2-3 month cycles. You can get up to about 10 apps a month if you have a larger team and a good process.<p>Finally, this is nothing like 1999. Companies were failing with no product, spending 1 year + and not even launching. There were late round fundings for companies that literally had products that were figments of their imagination.<p>Now two guys in their garage can build a hit app with two macs and no funding what-so-ever. Don't confuse a highly active, easy to penetrate market with a bubble.

This has been brought up before [1].<p>I believe that currently, the biggest problem in mobile is discovery. I can't remember what problems were prevalent in 1999 but it could have been discovery on the web as well. If you're a startup, life is going to suck for you developing on mobile. You have a name recognition problem on top of developing on a platform where discovery is inherently broken. It will be tough to get those organic installs because on Apple, those are driven largely in part to your placement in the rankings, and there's less to do with SEO on the App Store as there is on Google. So I think success on mobile can be had in only a finite number of ways:<p>1) You buy your way to the top and hope your customer LTV &#62; acquisition costs (See all mobile games)<p>2) You spam the hell out of your users on other distribution platforms (SocialCam)<p>3) You're lucky and you develop a truly great product that thrives on mobile (WhatsApp, Camera+)<p>4) You can succeed with mobile being a utility, but not the essence of your business (Uber).<p>[1] <a href="http://news.ycombinator.com/item?id=4172261" rel="nofollow">http://news.ycombinator.com/item?id=4172261</a>

The answer has been simple for me: start on Android. The ability to push new fixes to live within a few minutes is a godsend. There is still the overhead of getting people to update the app after the download, but this can be easily remedied by in-app notification for a one-touch update experience.<p>I don't think it's too unreasonable to assume that if you hit product/market fit on Android, you probably hit it for iOS. Launch MVP on Android -&#62; get first 1k guinea pigs -&#62; pivot, iterate, pivot, iterate -&#62; achieve product / market fit -&#62; spend 3 months creating a beautiful iOS app.

Isn't it just a little ironic that this is coming from the same guy who said: "You should aim to hit 100 million active users, and get an off-the-shelf monetization solution later" Really? "Just get 100 million users and slap ads on it bro" is good business model advice?<p>Who's really 'acting like its 1999' in here?

I think what would really help if Apple had a Fast Track app approval system where developers could pay $300 to get an update approved within 2 days. Developers could use it as often as they wanted.<p>This would allow developers to iterate more quickly. Insanely more quickly. And would increase the odds of a startup finding product/market fit before running out of funds.<p>The current 10 days or so of waiting is really killing the iterative process.<p>Also, app ratings reset for each new update so developers tend not to want to update as often as to not upset their ratings... at least some developers. They need to fix that by not having ratings reset.

I was around during 1999 and the three key differences are:<p>1. The audience for the web was very small, in fact most homes were still using dial up in 1999 since cable modems hadn't even taken off yet<p>2. Launching a startup took quite a great deal of money in 1999, today it's a mere fraction of what it use to cost<p>3. The economy in 1999 was pretty damn amazing, but the negative side of this is that there was a great deal of dumb money floating around

Two points<p>1. Yes, most startups failed in 1999 and most startups are failing now. This isn't unexpected. Anytime, there is a boom in startups, most of them are going to fail.<p>If the first 10 startups succeed there will be 100 more. If the first million startups succeed, there will be 10 million more. Ultimately, most of them will fail.<p>2. imo Andrew is mistaken in assuming that the failures are due to startups having a <i>"super high bar for initial quality in their version 1"</i>.<p>If anything, I'd say that the quality of many apps is too low, Many of the big-name apps are often unstable and crash (not just in the V1 version, but in later versions as well)

It seems to me that there are two kinds of apps: the "top 100" apps and "the rest." If you have a killer smashing out-of-the-ballpark idea that will be "top 100", go ahead and be a startup.<p>For the rest, it seems to me that App Store economics just don't provide enough profit for overhead (personnel and investors needing return on investment) of the traditional startup. One or two-person self-employed shops survive. Great news if you want to be self-employeed and have a good idea; Terrible news if you were planning on winning the startup lottery.<p>EDIT: Need to point out the above is opinion unfettered from the constraints of fact. I welcome news of facts which refute my guesses.

Nice post by Andrew Chen. Unfortunately, apps are more like Windows app that require installing than web-based apps which can be iterated quickly and without users taking an action.<p>The other problem is that mobile apps have no "linking" to benefit from cross-linking. WWW spread like wildfire for a reason - it made it so easy to discover new websites and reduced the friction of installation to zero.

The article would make a stronger argument with examples of these failures.

Off-topic: Marketing Is Everything (that includes marketing to the right people who can support your project - investors, advisors, early customers)<p>When I read the article, I immediately noticed (in the picture) not the Socks.com puppet but the sculpture behind the puppet. The sculpture was called "Puppy" I believe. It was brought to you by Damien Hirst, the <i>brand</i> behind 'Beautiful Union Jack Celebratory Patriotic Olympic Explosion in an Electric Storm Painting’ (2012)'[1][2].<p>The world's richest artist ($300+M net worth). He is the Madonna, the Material Girl, of the Modern Art world. The person responsible for those inscrutable titles for artwork.<p>Why is he the world's richest artist? His personal brand. A Marketing Genius (overused, by appropriate here).<p>He is/was original[3][4].<p>To be fair, he is using his personal wealth to help create and endow an art museum.<p>[1] <a href="http://www.complex.com/art-design/2012/08/damien-hirsts-flag-for-the-olympics-closing-ceremony" rel="nofollow">http://www.complex.com/art-design/2012/08/damien-hirsts-flag...</a><p>[2] <a href="http://www.damienhirst.com/news/august/olympics" rel="nofollow">http://www.damienhirst.com/news/august/olympics</a><p>[3] <a href="http://www.forbes.com/sites/jonathonkeats/2012/07/20/is-damien-hirst-the-worlds-most-misunderstood-artist/" rel="nofollow">http://www.forbes.com/sites/jonathonkeats/2012/07/20/is-dami...</a><p>[4] <a href="http://www.villagevoice.com/2012-01-18/art/damien-hirst-died-gagosian-spot-paintings-dots/" rel="nofollow">http://www.villagevoice.com/2012-01-18/art/damien-hirst-died...</a>

For those startups that do iterate and deploy rapidly and often is that they forget that there is no instant update on mobile devices. You can't do QA by looking at statistics of your iOS users experiencing bugs.

This is why you should build for Android first, like I do. You can make changes and push the update as often as you want. It doesn't get you the 'cool' crowd (as here in SF nobody installs my app as they all have iPhones) but it does let you iterate... once the product works, then I'll build for iPhone.

Are they really failing? I can agree that many are spending too much time perfecting apps - but I haven't yet heard many stories of companies going belly up. Maybe others have?<p>I'm definitely expecting a pretty big fallout from all the funded startups of the past 3 years, but haven't yet seen evidence.

The answer of course is to start more Facebook-style social network startups, that leverage the cloud, and mobile connectivity, to enhance advertiser dollars and deliver maximum value to venture capital investors through distributed advertising channels.

I'm currently working in a small/mid sized company, on a iOS product for the iPads as of now, which isn't even submitted to the App Store yet, but already has its target user base and is developed in close relation with them and makes a LOT of money.<p>So, my point is that, its not mobile startups in general that fail, but bad business models. One thing, you can probably be sure of is that, if a startup wants to make the next angry birds, either it will immediately succeed in finding a niche in addictive gameplay or more likely fail a few times before succeeding.<p>The world is not binary. The market is just fine. Visibility is the only issue with the stores. But other means of marketing always exist.

I've played around with writing a couple of mobile apps (iOS and WP7) in my spare time. I think of this as a hobby since I have a day job. That said, I have this mental block -- for me, a mobile app does not make a viable startup. Sure there are apps that do quite well -- iTeleport comes to mind.<p>Other apps like Instagram, Groupme, and a few others have more of a platform feel rather than just a self contained app. Foursquare is another example of an app that is becoming more -- using the acquired data for recommendations, etc.<p>Do others thing similarly?<p>[edit] - NOTE - I make the above statement in the sense of trying to figure out how to justify angel/venture backing for what is strictly a mobile app.

I think you mean, 1983. <a href="http://en.wikipedia.org/wiki/North_American_video_game_crash_of_1983" rel="nofollow">http://en.wikipedia.org/wiki/North_American_video_game_crash...</a><p>A lot of people made outsized returns on the first generation of mobile apps because they were entering a vacuum. And that has encouraged a lot of people to chase the same "easy money". But the market has evolved and matured and the easy money has been taken. So a lot of gold rush mobile efforts will fail. Nobody should be surprised by this.

How about people who are not using the App Store as a monetization vector at all? Ie I'm talking about people who sell apps to big corporations and the like. I would imagine that that is a completely different ballgame?<p>Is anyone here in that situation?

An app is barely a strategy; having a sustainable and profitable business model is. App is a vehicle, and in some ways vastly superior to web in reaching out to people, use of context and focus.

I thought startups did pretty well in '99 and only started crumbling like dominoes in 2001…?

Took them long enough!