Expect large-scale industry disruptions as mobile apps re-write our lives.
The good thing about being in the mobile space right now is that everyone thinks mobile is important. No one though has a clear sense of how things will go. For example, Facebook has been criticised for not having a clear mobile play. People are increasingly accessing Facebook from their mobile phones yet Facebook doesn’t have a clear way to monetize or present advertising on its mobile site. Similarly, while sites like Paypal are showing a lot of mobile transactions, they are only doing so because people have registered their credit cards through the non-mobile site. One moral of the story here is that if you’re an established online player, you can piggy back on your online offering to gain quick mobile traction. The harder challenge of course is how do you truly leverage the full capabilities of the mobile experience which is far more powerful in some aspects and less so in others.
The mobile device inherently is a much more interesting machine than a PC or a laptop. It goes places with you. It is your primary camera, music player and text messaging service. You can customise it with apps. I download more apps than I ever did with my laptop or a Macbook.
What I’m describing is a pretty recent thing. The iPhone came out in 2007. App Store was available in July 2008. Android phones started appearing in late 2008. The iPad came out in 2010. Yet it feels like they’ve been around forever. Its hard for me to conceive my urban life without one or two of these devices by my side. What’s even more interesting is that we’re still in an early stage of the revolution. Smartphone penetration will hit 50% in the UK and US in 2012. There are more devices from more manufacturers in more form factors being unveiled every year. Even book-sellers like Waterstones are getting in to the game. Of the 30 or so billion dollar valuation startups, few who are truly mobile can claim to be part of it. Only Square, Instagram, and perhaps Rovio come to mind. Even some savvy venture capitalists are struggling to articulate as to which mobile business models are safe bets. Perhaps, we are looking at another decade of mobile growth and innovation if we take the global perspective.
The cost of innovation has also dropped and consequently the pace has picked up. It doesn’t take as much money to create a software product today than it did a decade ago. Equally, the evolution of software tools has made writing software easier and increased the pool of developers. With the dropping of the cost, comes the opportunity for a small-scale entrepreneur to come along and address profitable niche markets. We’ve seen this happen in Shenzen China at the very low end of the mobile phone market. In Shenzen, small 15-people companies created small batches of mobile phones for niche markets. Over time, thousands of such small companies each targeting their own niche, were giving large established manufacturers like Nokia and Samsung, a run for their money.
I think we’ll see something similar in the app software industry. This will mean an increasing threat of large scale disruption to whoever believes he or she is the incumbent. Software developers in very small teams, funded by an ever increasing number of accelerators, will create a succession of cool new apps which we, the consumer, will love. Our lives will subtly change every month and we’ll learn to accept and maybe even take it for granted.
What this means for the established industries I don’t know, but change is inevitable. The economic climate is unstable and a cause of high youth unemployment but this I believe will help entrepreneurship. The risk of a startup is considerably lower when the alternative is unemployment.
The world is a smaller place and more uniform thanks to the proliferation of mass-produced media. It’s easier today to produce a scalable product for the global market than it was two decades ago when I was growing up. Globally-aware young entrepreneurs will see an opportunity. Exciting times ahead and not all doom and gloom.