Guest author Alex Salkever is head of product marketing and business development at Silk.co. This piece first appeared on his Tumblr.
- App use is crowding out use of the open Web on mobile devices
- App stores arbitrarily block whole classes of applications (i.e., Apple’s ban on Bitcoin-related apps)
- A “rich get richer” dynamic favors popular incumbent apps over innovative newcomers
- As a result, the open Web will eventually devolve into a niche product
Dixon’s post was widely shared. Other leading VCs, such as Fred Wilson, concurred with his assessment.
But it’s not that simple. Here’s why.
1. Consider The Source
Dixon based his assumptions primarily on findings by Flurry. Flurry is in the business of selling analytics based on app consumption, primarily to app companies, and advertising in new app-based add exchanges.
Basing an entire argument on one source is always dangerous—particularly one that is so vested in a specific outcome. Let’s have a look at more diverse data sources before jumping to sweeping conclusions.
2. Consider The Costs
Talk to any developer or app company about what it’s like to support Android and iOS apps and they’ll roll their eyes. Building responsive apps that run everywhere on the Web and the mobile Web is expensive enough. Building siloed apps in two completely different languages—both of which remains difficult development environments—is far more than twice as expensive.
Over time, the mere fact that it’s far cheaper and faster to build Web apps will let innovative developers build more of them and create more viable businesses on those apps.
3. Apps Degrade The Mobile Experience In Key Ways
Because apps can’t talk to each other, the app experience is disjointed and often illogical. Things you can do easily on a laptop take far longer on a smartphone.
For instance, apps break the ability of the device to automatically access a single secured repository of stored passwords, à la Keychain on the Mac or the “vaults” offered by other password managers. Combine this with difficulty of typing secure passwords accurately on small mobile keyboards and you have a user-experience disaster.
The poor integration of apps with other apps obliterates the advances of context that have actually made Web sites much more useful. Services like Disqus, for example, don’t work well in the app economy.
4. The Mobile Experience Remains Highly Inefficient
Closely related is a critical fact. Across the spectrum—advertising, ecommerce, media consumption—mobile wins more time but generates fewer dollars per capita. Why? Because buying on a mobile phone is still an awful experience.
Ads on apps are clunky and awful. Media consumption is fast and furious but remains very flakey. Those problems translate into opportunity to innovate and make more money.
5. The Browser is Becoming Far More Powerful
This isn’t the dumb browser of yesteryear. The latest generation of browsers offers developers far more control over how their Web apps behave on any device, mobile included. In particular, newer browsers can handle granular caching and storage requests at the device level.
6. Remember AOL And AltaVista
Not all that long ago, AOL ruled over a populous walled garden that closely resembled our current version of the app economy. At about the same time, a search engine called AltaVista ruled the Internet.
At the time, investors assumed those companies and others could maintain a technology hammerlock. Turned out, though, that their technology advantage and lock-in was ephemeral and elusive. Lock-in is even more ephemeral today. A switch from a native app to an HTML5 app is seamless, painless and quick. Consumers won’t even notice when it happens.
These are just a few reasons I suspect the mobile revolution remains in its nascent stages. Were I a venture capitalist, I’d actually double down on the second wave of mobile companies that do things right. Second generation companies in a space tend to do much better than the pioneers.
Mobile technology is still maturing, and mobile usage on smartphones continues to soar. In their days, AltaVista and AOL had fine IPOs and returned loads of cash to VC backers. Yet Google, Facebook, Twitter and other later stage Internet companies have fared far better over time. Mobile is playing out that same cycle—just faster.
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