January 27, 2011

Making Money with Mobile

Wild West (TV series)Image via WikipediaThis is a call for you to join my experiment.

With all the activities going on in mobile, it would be easy to think it’s a piece of cake to take part in the get rich quick plan! See my previous post on this from web 2.0 but Analyst are predicting smartphone shipments to overtake pc shipments in 2012. The internet traffic that mobile is generating is taking off like nothing we’ve seen before. Needless to say the market is big, the opportunity is big (again from reporting I did at web 2.0), and the best news is, it is still the wild west out there. Making money is fun and it’s even more fun when you make loads of it.  I couldn’t tell you that from personal experience, but I have been told it is the case!

Apps, widgets, you name it are the way to go. A good, well designed app on a mobile is an app that does one to a few tasks, no more, and does them very, very well. As the creator, unless you’re creating a shoot them up game and even then, look to inject context of use in it. It’s the only way to go to be truly useful. In other words, putting context in your mobile app is a must.

let’s roll over naked in a pile of cash 

That was a famous quote to analysts from Rob Zambonini, former CEO of Cognos. Now you have a great idea for an app, how are you going to make money from it. The revenue models:
  • sell the app directly from the market – one popular way is via the app store;
  • advertising – the google way;
  • freemium model – the evernote way;
  • trial period – the old desktop way;
  • trial period with credit card info – the sales force way!
  • donation – the wikipedia way.
My point is there are many ways. Making money from mobile is definitely not a question of revenue model. The biggest challenge is rising above the noise level. The volume of apps coming out every day is enormous. The apps that are created are one of many and they face the greatest risk of going into the long tail part of the adoption curve more and more with every day that goes by.

I strongly suggest you read our critical path on Successful Mobile Apps. It gives some good pointers on the need for app developers to be smart about what matters. Providing value is key; focusing on finding a hook to rise about the noise level is critical.

Hooking people up: theory and experimentation

Mobile go-to-market strategy is more than putting the app in the store. It goes without saying that the usual marketing of your app is required; finding places to advertise and getting it reviewed by high profile people are still key.

A well known theory is highlighted in latest critical path : Using your app has to bring true value. Getting people to see and experience the value is an interesting problem. So hooking people up and raising your app awareness deals with a second aspect that at this point I only have theories for. Books and real life examples suggest using your app also means your app makes use of the social graph to make itself knownThere are three social biggies out there: the usual suspects Facebook, LinkedIn and Twitter. Depending on the app itself, how it uses the social graph to its advantage will differentiate an app.

It comes back to how smart is your app about the context of use and the user social graph. The intersection of these two is bound to bring visibility opportunities that are going to be very timely to others in the same situation as you are in just at that same time. The most well known use case so far is retail and flash sales, or mob sales, where people can at a given moment flood a retailer to get a special deal because they organize on the web, while they are in the store itself. I believe there are many more examples and verticals where this can apply.

We are running an experimental mobile project as I write this, with the goal of validating assumptions we have come up with at Macadamian. I will keep you abreast of what we learn and share material that we produce along the way to help you assess things for yourself.

I’m inviting you to be part of the experience; we will get something ready to play with shortly. Just like anything new, we’re in unknown territory and the only thing that is constant in these situations is that we’re going to be learning a ton. I hope you will follow along to see if truly being smart about how you hook context with social graph makes a difference for an app! Stay tuned …

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