A Deep Dive Into The Latest Eye-Popping Mobile Trends

Heres a recent article I wrote on the Paypal network x.com titled A Deep Dive into Mary Meeker’s Latest Talk Yields Eye-Popping Mobile Trend.  Below are the mobile trends shaping the next phase of our world I cover in the article.

Smartphone Growth

The first major takeaway from Meeker’s latest talk is the astounding growth yet to be seen in smartphones worldwide. She illustrates the point on the following slide: approximately 953 million out of a total 6.1 billion devices are smartphones. Doing the math, one can see there is only a small portion, about 15% of the worldwide mobile devices, being considered smartphones. To put it bluntly: you are a minority in our world if you have anything more than a feature phone in your hand.

3G Wireless Penetration and Tablets

Another incredible observation involves 3G mobile wireless penetration. At last count, there were a little more than a billion people using 3G mobile wireless connections, again representing just a small fraction of all mobile users around the world.

Augmenting the rise in mobile usage is the adoption of mobile readers and tablets. A chart shows the rise in tablets dating back just a few short years. In Q2 of 2009, roughly 2% of adults owned tablets or eReaders. Comparing that to January 2012, where 29% of adults owned tablets, you start to see the tide rising—and fast.

Mobile Monitization Troubles

In addition to mobile growth, another data point Meeker brings forth is how the sea change of mobile drastically impacts monetization, both online and offline. Take, for instance, the difference between the time people spend using mobile devices versus ad spend on mobile. Time spent on mobile devices each week is estimated at 10% (and growing), yet only about 1% of ad spend is currently focused on mobile. Accordingly, Meeker says it represents a $20 billion+ opportunity in the U.S. alone.

Jon Evans (via TechCrunch) has a great quote:

In 10–20 years’ time, everyone on the planet has a smartphone, and/or some even smaller and more ubiquitous form of wireless access. Indeed, the whole notion of “online” disappears, as the Internet is woven into literally every facet of our waking life. As this happens, what company defines our identity, and becomes the gateway to every activity and every service?

The bigger business opportunity for leveraging the mobile device is to understand all the unique ways it fits into consumers’ daily life, and orient business models around and within those unique use cases. One of the most interesting monetization opportunities mobile presents is to augment the payment experience. From a previous article on mobile payments:

Virtual transactions—making payments without having to swipe, show, or display anything—will transform the payments landscape like never before. Since people carry their mobile devices with them everywhere, it makes the most sense to streamline transactions through the computer in their hands. True authentic mobile payments do not require any hardware outside of the mobile device. With cloud computing and offsite secure services holding payment credentials for every consumer, people can now make simple, quick, and easy mobile payments anywhere. As the consumer, the terminal is now in your hands.

Taking that a step further, the mobile platform is playing an ever-larger part in consumer shopping and buying processes. Even when consumers do not complete transactions via mobile, large numbers of shoppers use their phones to take pictures of potential purchases, access online reviews, compare prices, consult friends and family, locate nearby stores, add items to an online shopping list, or place an order. All of those actions can and will be augmented with business models outside of traditional display advertising.

Those were just a few snippets, go ahead and read the whole thing.

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Instagram’s Billion Dollar Idea Wasn’t Photos After All

I wasn’t alone in almost spilling my coffee mid-drink when I discovered Facebook purchased Instagram for $1 billion. Much has been covered on this, including talks of another bubble or irrational exuberance.   A billion?!  As a startup CEO, it’s sometimes hard to grasp how these types of platforms, which openly opine they are not concerned with making money can end up in such a successful outcome.

[So to all the investors out there, I guess we shouldn’t be focused on business models and making money, should we?  I digress…]

Yet the more I thought about the acquisition and the entire startup experience in general, a few lessons came to me that in hindsight are blindly obvious but bear repeating.  As founders, we tend to get lost in our vision.  We tend to over-think and over do our product to the point where our initial value proposition loses it’s inherent value to the market.

What do I mean?  Well, most likely you bloat your product with way too many features.  You also convolute your value proposition based on the latest moves of your competition.  You think if they jab right, you should jab right as well.  You then confuse your users as to why they should be using your product.  This is probably the main reason why your 15 month old startup is not fielding attractive acquisition offers.  It’s because there is no clear place in the market for your company so you just get lost in all the noise.

Instagram didn’t do that.  They kept it simple.  They kept is so simple that I had to write about it since I think most of us don’t realize how powerful a needle point actually is.  Needles cure disease, hoses don’t.

Here’s my view of how Instagram positioned their product for a massive acquisition from Facebook.  All startups, no matter what industry need to keep these principles top of mind if they want a positive business outcome.

Do One Thing World Class

Intagram has been referred to lately as a mobile social network, but in reality they are a much less than that since social networks just collect around specific things.  Instagram chose to focus on photos – and determined to do it world class.  They identified weakness in the current user experience of taking a picture with an iPhone and trying to share that with your friends.  They found the process was way too slow and cumbersome.  They realized the most important thing to people was how quick they could complete the process.  Optimizing how photos were uploaded sped up the process and greatly enhanced the user experience.  Instagram quickly became known as the fastest and easiest way to take and share mobile photos with your friends.

Interestingly, the precursor to Instagram was Burbn, which was what the founders built before changing to “Instagram.” Co-founder Kevin Systrom explains how they launched the service primarily as a checkin, social geo-location app full of hoards of features, on which users could quickly upload photos and share them with friends. (Heres a great interview on the background of Systrom and Instagram)

Burbn had attracted a core following of users, but was not exactly taking off. Upon further evaluation the founders noticed that photo uploading was the strongest and most used feature. Instantly, they cut all other features, kept with uploading photos and moved forward with the newly minted Instagram.

Systrom resisted being all things to all people and in the end sold his 15 month old company for $1 billion.  Think about that  for a second.  By removing most of his product and getting down to the essential, he drastically enhanced its value.

Do you have the stomach to gut your product down to the bare essentials in order to make it more attractive?   You need to find the needle.

Networks of Distribution

The success of any product or service greatly depends on people actually discovering it.  Instagram beautifully leveraged the major distribution networks of today – Twitter, Facebook and Foursquare – to quickly gain user traction.  Take a picture, instantly shoot it out to your friends and followers… People click on it, see Instagram and think “that’s cool, I need to use Instagram.”

You may be thinking this is obvious and being a technology blog most people should understand the concept of leveraging social channels.  Well, this is not about leveraging “social” channels, but rather about finding the appropriate networks of distribution for your specific product or service.  Too many businesses think they need a “viral strategy” when their user experience is far from viral.  Lost in the noise about Twitter and Facebook are all the other options your company may be missing.

Neil Patel does a great job of explaining how to co-brand with a leading brand, illustrating how Spotify jumped onto Facebook and instantly saw millions of new users.  He also says, “besides reaching a wider audience, co-branding your work will also propel your brand faster, double your strength, give you someone to lean on and adds credibility.”  Well said Neil.

What adjacent platforms or companies are sitting there waiting for a strategic partnership with your company?   Are there existing distribution networks already perfectly placed where your user experience will greatly benefit all parties involved?

Aimed Directly at Competition

Systrom and company did something amazing which seems to be overlooked by most startups: find a gaping hole in a major player’s armor and expose it right on their front lawn.  Facebook, being the largest social network and the primary place people connect and share photos with friends, was embarrassing lacking an adequate mobile solution.  They were pretty late to the mobile game and when they showed up, their mobile experience was flat out clunky.

Instagram was built from the ground up as a mobile platform, specifically around photo sharing.  They not only identified there was a hole in the market, but they filled it and shoved it right in the Face of Facebook showing them how much better Instagram was than Facebook at the mobile game.  Zuckerberg knew it the whole time and from what we can read about the situation the latest $50 million raise was the last straw.  He pulled the trigger and bought the company knowing Instagram was a growing problem for them.

Here’s the point:  Don’t go build “another similar product” copying the competition simply because you are lazy and they showed you the market wants what they are offering. The outcome is typically not very good.   Why not study the market, find the hole and then go do that specific thing?  Own that thing.  Be known for that thing.  And do that one thing world class.

Using Instagram as a perfect example, that’s the billion dollar idea.

@jnickhughes

I Just Asked My Friend About the Future of The Web, and Here is What They Said

Social Search Series: This summer I am embarking on a journey through on the emerging web of Social Search.  Traditionally known as the Questions & Answers industry, this category is currently being transformed by social and mobile technologies.  No more asking a site questions and finding old answers.  I believe the future of the web is ingrained in the dynamic interdependence of social and informational networks.  This is part I of the series.

Traditional Question & Answer sites are old and antiquated.  You know the drill – go to a specific website, type a question into a search bar and a variety of indexed answers come back to you.  The answers vary in context, quality and relevancy.  This was fine in 2002 when the web was less mature, but the reality is with advancements in web technologies it simply does not work today.  The problem is these sites typically:

  • Don’t know your location

  • Don’t know who are your friends

  • Don’t understand the context of your query

  • Are typically of low quality and relevance

Answers tend to be more relevant and helpful when they include this information.  When the system lacks these inputs, the quality of answers remains very low and you are left with an inadequate solution .  In fact, so low in quality you might as well just pick up your phone and call a friend.

Enter a new category of applications emerging on the web.  Social search applications implicitly take into consideration your social network, your location, your demographics, previous search history and other key data sets to help provide you with the best answer possible at that time.  I will not refer to the Questions and Answers space anymore, since I think asking a question and waiting for an answer is quite limiting and the entire concept is antiquated.  I believe we are on the cusp of a new internet category where users leverage their social/local sphere to quickly find relevant information.  I am calling this space the “Social Search” category.  Note that currently I am not including Facebook – the largest social networking site – in this category.  This is a study of startups who are strictly focused on social searching technologies.

This space is heating up and I am starting to read more about emerging companies working to build out the next social/local search platform.  Traditional Q&A sites are starting to see the writing on the wall, with Answers.com just recently massively laying off employees and replacing their CEO and CTO.  In fact, I wrote about a few local Q&A startups a while back noting this space is a game changer on the web.

When evaluating this new space, Four categories/quadrants emerge to separate the players in social search.  I have diagrammed them based on their relation to the four categories.  (If you don’t see an application that might fit on here, please reach out to me)

Location Relevance

Locating a user when a query is submitted is fundamental to providing the BEST answer possible.  According to Bing, over 50% mobile device originated search queries are about a specific place.  Think about how often you need an answer and how often you quickly use your mobile device to find it.  Exactly.  Mobile search will define the next wave of the web.

LOCQL

LOCQL is a Seattle startup some refer to as “Foursquare Meets Quora”.  These guys smartly put together two basic premises; 1) everybody knows a little bit about something and 2) location specific information always make something more valuable.  Marry those together, involve some game mechanics and you have a living, breathing repository of location relevant information based upon where you currently find yourself.  They are still in beta but anyone can use the LOCQL application.

Others include:

CrowdBeacon

Loqly

Gootip

Hipster

Travellr

LocalUncle

Local Mind

Location Agnostic

Some social search applications do not integrate location technologies into their functionality.  These applications more or less originate around specific topics and knowledge bases, not so much around a specific location.   Although these applications are location agnostic, they still can be relevant to certain users and possibly large search companies.

Aardvark

Aardvark is a way to get quick, quality answers to questions from your extended social network. You can ask questions via an instant message buddy or email. The questions are then farmed out to your contacts (and their contacts) based on what they say they have knowledge of. If you ask taste related questions about music, books, movies, restaurants, etc., they’ll ask people who tend to show similar tastes as you in their profile.

Others include:

Formspring

StackOverflow

Quora

Yahoo Answers

Long Term Value

It is important to create a  repository of information so users have something to search, and if done correctly this can be a great competitive advantage – the largest collection of information generally provides the best and most accurate information to a user.  Most questions have a narrow answer and this information generally does not change much over time.

Quora

Quora, founded by former Facebook employees, is a continually improving collection of questions and answers created, edited, and organized by everyone who uses it.   They aim to build THE go to application for wisdom and knowledge.  The cool thing about Quora is you can follow well known people as they continue to add their knowledge to the site. Quora seems to be the emerging leader of these newly minted social Q&A sites.  Thus far they have maintained their focus on the relatively smaller web tech community of Silicon Valley.

Others include:

CrowdBeacon

Loqly

Gootip

Hipster

Travellr

LOCQL

LocalUncle

StackOverflow

Yahoo Answers

Real – Time Answers

Instant interaction technology (real time) has transformed the web from a static information repository to a live, interactive medium.  This single change gave birth to what we know today as the social web, including Facebook, Twitter and many other social interactive platforms.  Search technology is catching up as well, and when infused with social interaction things could get very interesting.  Understandably, this category is nascent.

LocalMind

Localmind allows you to send a question to any place in the world, and get an answer from someone at that location in real-time.  They connect you, temporarily and anonymously, to someone at the location you are interested in, allowing you to ask any question you want, and get an answer in real-time. You can find out how crowded it is at a bar, how long the line is at a club, or how many tables are open at the restaurant.

Others include:

Ask Around (Ask.com)

Aardvark

Formspring

Look for my next post as I investigate: what’s the point of Q&A anyway?  Why am I now calling it Social Search?

This Get’s the Creative Juices Flowing

Trendwatching.com sends out a monthly briefing on emerging trends.  It’s awesome.  Here’s the latest mini-consumer trends they highlight in their latest edition, “Innovation Extravaganza” .  Read the briefing to get the details.

The both scary and celebratory part? Wherever you live, whatever it is you do, you have absolutely no excuse to be unaware of innovations originating in Australia, in the Netherlands, in the US, in Argentina, in Turkey, in Singapore, in South Africa … It’s all out there, reported 24/7 by numerous sources dedicated to trends and new business ideas.