All of us in the innovation eco-system have been aware of the wholesale shift towards mobile that kicked into high gear with the launch of the iPhone in 2007. In fact, we are all so aware of it, that it can be hard sometimes to step back and reassess what it all means. This, however, is exactly what Bill Gurley has done in a very thought-provoking blog post recently.
Let me highlight a few points Bill makes and add a few thoughts of my own:
- We are absolutely in the midst of a critical platform transformation as Bill describes. Mobile presence must be a part of any serious digital offering - and that means any digital company is going to need people that understand mobile design, development, and distribution. For a lot of small start-ups, that’s going to mean a window of acqui-hiring.
- Bill is spot-on in highlighting the difficulties of customer acquisition on mobile. A number of the companies I’ve been involved with have had a hell of a time doing this for two principal reasons. The first is that with all those VC dollars flowing into mobile start-ups, the cost per download (CPD) and cost per user (CPU) in the mobile eco-system are often too high and totally out of whack with the regular web. The second is that any customer acquisition flow that takes a user into an app store for an app download process is a conversion killer. Lots of companies are struggling with this, and some of the smart ones are rediscovering the beauty of web-oriented customer acquisition. I suspect that part of the answer here is that app download is actually the last step of the funnel not the first. That is, first get the customer to complete the action (buy the ticket, order the shoes, etc) and then get them to download the app.
- Web vs. Native? While Bill is pretty adamant that “HTML5 is a head fake,” I am increasingly of two minds about it. At first, I was convinced HTML5 (or any successor) was never going to be a serious competitor to native apps. But I think that was mostly because of the early versions of HTML5 apps I was using, clunky mobile browsers, and under-performing phones. More recently, I have found that web-based mobile experiences are getting so good that I sometimes prefer them to the app - precisely because I want the richness of features that the web offers - and because the screen, browser, and processor on my Nexus 4 are powerful enough to handle everything beautifully. Fundamentally, the arguments for native apps generally revolve around performance/responsiveness, offline usage, and presence on the home screen. Those realities are not going away. But I think there are powerful arguments in favor of web-based mobile experiences as well: they don’t require the user to wait while code gets pushed to the phone, they free the application from the tyranny of the app store (especially Apple’s), they enable quick iterations and A/B testing, and they can offer seamless experiences across devices. In addition, the support SEM and SEO in ways that apps simply don’t. Some apps (Instagram, Snapchat, etc.) will always be about “one button” simplicity, very frequent usage, and a deep trusted relationship with the user. But I am not sure that means HTML is a head fake.
- Good news for the big guys. One of Bill’s most interesting observations is how a lot of the dynamics of the mobile platform favor larger incumbents (think British Airways, AirBnB, Facebook, etc) and not the emerging players. The big guys have the resources to develop multiple apps for multiple platforms, and they have hard-won brand awareness in the desktop browser world that they can parlay onto mobile (where customer acquisition is more expensive).
- Search is still unsolved, but keep your eyes on Google/Android. Bill’s right that search on mobile is still a largely unsolved problem, one that creates opportunities. That said, I am continually amazed by how rapidly Google is improving the default search capabilities within Android and how powerful Google Now is becoming. This is particularly true as Chrome’s desktop and mobile experiences get further integrated into one unified experience.