Let the Madness Begin: Four New Questions About Mobile’s Future
San Francisco is a heavenly place to live and work, but there are two times a year when I would rather be in Boston. One is Xconomy’s annual XSITE conference in June, and the other is our Mobile Madness conference, which is coming up on March 14. It just so happens that there’s a cross-country Virgin America seat with my name on it this Sunday—so I’m looking forward to catching up with all my old Beantown friends at Microsoft’s New England Research & Development Center next week.
As I get in the mood for Mobile Madness, I’ve been looking back at a two-part column I wrote in the lead-up to last year’s event —Seven Questions That Will Decide Mobile’s Future—and thinking about which issues have been settled, which ones remain unresolved, and what new questions have emerged in the meantime.
Here were my seven questions in the spring of 2011:
1. Who will be the new gatekeepers, and how much friction will they impose?
2. Open or closed? Can the best parts of the Web-its openness and interoperability-persist in the world of mobile apps?
3. Can wireless infrastructure providers keep up with demand while keeping broadband affordable?
4. How will physical, bricks-and-mortar commerce evolve in response to mobile technology?
5. How much of business IT can be “consumerized” and replaced with cloud services and employee-owned mobile devices?
6. What matters most about context and location data? Is it a business or just a feature?
7. What comes next? What’s beyond mobile?
I think a few of my questions can be put to rest. It’s pretty clear now that Apple and Google have replaced the wireless carriers as the rulemakers in the new mobile marketplace. I worried last year that they’d become more restrictive about what apps they let into their respective app stores, but if anything they’ve gone the opposite direction, becoming more permissive (perhaps too permissive). And the 30 percent app store fee hasn’t budged, so business models look pretty stable for mobile app developers.
In wireless infrastructure, the rollout of 4G LTE service across the country has been remarkably swift, with more than 20 4G devices available on Verizon’s network (which covers almost 200 cities) and a dozen 4G devices available on AT&T’s network (which covers 24 cities). The good news is that the carriers don’t seem to be raising their data plan prices much as they move from 3G speeds to 4G speeds. The bad news is that they’re phasing out unlimited data plans, and drastically throttling connection speeds for grandfathered unlimited-plan customers once they go over a certain amount of data per billing cycle.
Commerce will clearly evolve dramatically in response to mobile technology. New mobile payment schemes are on the way, and startups like AisleBuyer and Shopkick are figuring out how to reach mobile users with product information and incentives while they’re inside retail stores. We’ve got a whole panel on this theme lined up for Mobile Madness next week.
But for every box we pry open, there seems to be another one inside. Here are some of the new questions on my mind these days. Most of these arise from conversations I’ve had with entrepreneurs here in San Francisco and Silicon Valley over the past year. They’re busy trying to solve these problems, of course—but they have a long way to go.
1. Mobile app discovery—Are we getting closer to a solution?
Apple’s iTunes App Store recently passed 600,000 apps and 25 billion downloads. The Android Marketplace also features hundreds of thousands of apps. But trying to find anything in these stores is like walking through a supermarket where the food has been stocked by monkeys, on shelves so high you can’t see the top. The primitive state of search and discovery in the app world could be the single biggest thing holding back innovation in mobile software and services.
There are companies working on fixes, some of them quite elegant. One that I profiled last November, Chomp, has created its own search index of apps, and uses it to come up with responses to your app search queries that actually make sense. If you simply go to the Android Market and use Google’s tools to search for “restaurant guide,” the first result is a game called Restaurant Story. At iTunes, the first result is an app I’ve never heard of, called Where To Eat. Chomp, by contrast, shows you Urbanspoon, Yelp, Zagat, OpenTable, and Foodspotting, which really are five of the leading apps in the area of restaurant-finding.
Apple must have realized how badly it was being outclassed at its own game, because it bought Chomp a couple of weeks ago for an undisclosed sum. I’m hoping they’ll use Chomp’s technology to completely rearchitect the App Store, which was thoughtlessly glommed onto the existing iTunes music store four years ago and hasn’t improved an iota since then. As for Google, well, it could always think about buying Tapjoy, which recently morphed from an “incentivized user acquisition platform” into an app recommendation service.
2. Cross-platform development—Will it get easier?
Pre-iPhone and pre-Android, the biggest problem for developers of mobile software was that they had to create a separate version of their application for every model of phone. Then of course, they had to negotiate with the carriers to get their apps onto the phone’s “decks” or top-level menus. Today’s world is vastly simpler. On the other hand, if app developers want to reach as many users as possible, they still have to build for both the iOS and Android operating systems, and, if they want to be really thorough, BlackBerry and Windows Phone too. It’s a pain and a waste. What app developers need is either 1) a way to write their apps for one mobile operating system and have them automatically adapted for the others, or 2) a universal app platform analogous to the Web. Like, maybe, the actual Web.
3. Location—Could it still be an organizing principle?
Lots of startups hoped to build big businesses around location-based search or location-based social networking, but that turns out to be pretty hard. Boston-based Where did a great job of building a location-driven search and advertising operation, but ultimately sold its business to the PayPal division of eBay, which will likely use it to enhance its mobile payment offerings. Foursquare, Gowalla, SCVNGR, Facebook, and others tried to give consumers reason to check in from their phones at local businesses and other locations, but only Foursquare has stuck to that vision. (Gowalla was acquired by Facebook, which plans to shut it down. SCVNGR pivoted to local deals and payments. Facebook demoted its own Places system so that checking in at a location is now just one aspect of posting a status update. And by the way, I admit that I was totally wrong in my August 2010 post Why Facebook Places Will Make Foursquare Into a Footnote.)
The answer to my sixth question from last year’s post is that location technology is just a feature, not a business unto itself, with the exception of location-infrastructure companies like Skyhook. But then along comes Pinwheel. I don’t want to make too much of this, as the service is still in a closed, invitation-only beta testing period. But when Caterina Fake, the co-founder of Flickr and Hunch, puts her mind to a location-based content sharing system, it’s surely a sign that the possibilities opened up by the GPS and mobile revolutions have not been exhausted.
The other day my friend Semil Shah tweeted a provocative question: “Q: If Facebook is where we keep ‘people,’ and Pinterest is where we keep ‘things,’ where will we keep ‘places’?” I tweeted back, “Pinwheel?” and I really think that Fake’s idea has that kind of potential. From Pinwheel’s mobile site (soon to be an iPhone app), you can create notes and attach them to specific locations. Then others can find the notes when they visit those locations, subject to the privacy settings you’ve selected—you can share notes with just yourself, just your friends, or everyone. “A note can be a story, advice, jokes, diatribes, information, memories, facts, advertisements, love letters, grocery lists and manifestoes,” Pinwheel says in its FAQ. The possibilities are “limited only by your imagination.” Other startups have tried using location as the fundamental dimension for organizing and exploring information, and the idea makes a ton of sense, given that we all live in a three-dimensional world. But no one has ever really nailed the magic combination of features that would make it compelling and viral. I think Fake has the savvy and experience to turn it into a real business.
4. Big data—How much value is waiting to be unlocked? At what cost?
Smart mobile app developers these days are instrumenting absolutely every aspect of their apps, and building a comprehensive picture of how, where, and when consumers tap each feature and function. Did you look at that snowboarding photo your friend posted on Path? Then Path knows it, and has told your friend. Did you walk into a Best Buy with Shopkick running on your smartphone? Then that fact has been recorded in a database somewhere, and is probably being used to craft a customized reward or offer.
It’s an article of faith right now that “big data,” especially the exabytes of intelligence being collected on the behavior of Web and mobile consumers, can be mined and analyzed in near-real time to form insights that will help companies acquire and retain customers. But it’s hard to come by specific evidence that big data is improving the bottom line. A few examples, such as TIBCO CEO Vivek Ranadivé’s anecdotes about Indian wireless carrier Reliance and how it reduces churn by offering free SMS messaging to customers who have experienced dropped calls, tend to be repeated over and over.
So one question is how many companies, especially small ones, are truly equipped to find the patterns in the data they’re logging, and whether they can translate those findings into offers that customers want. Another question is whether consumers and regulators will ultimately decide they’re not so comfortable about the rise of a de facto surveillance state (the difference being that it’s the big data geeks, not Big Brother, who are watching us).
There’s a lot of soul-searching going on right now in Silicon Valley as the result of revelations about data-gathering practices by mobile and Web companies. (A developer discovered that Path was uploading users’ entire address books to its servers as a way to facilitate friend-making, but it soon emerged that Twitter and other companies were doing the same thing.) Now the White House is stepping in with a proposal for a “privacy bill of rights” that would include provisions strengthening consumer’s ability to opt out of behavior-based Web and mobile marketing altogether. If mobile entrepreneurs hope to squeeze more benefits from big data, they’re probably going to get a lot more careful about how they collect it.
At Mobile Madness, we’ll bring you a whole session on big data in mobile with Chris Lynch of HP’s Vertica subsidiary and Antonio Rodriguez from Matrix Partners. And that’s just the beginning—you can check out our full Mobile Madness agenda here. My colleague Greg Huang has done an amazing job of corralling New England’s leading mobile innovators for this year’s forum, making it a true can’t-miss event. Luckily, I don’t plan to miss it.