Yes mobile is important

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A press release by Zillow about their numbers was just released.. one thing that everyone knows but I think it is worth pointing out…

“The company says its traffic continues to be driven by mobile usage, with more people now searching for homes via Zillow on a mobile phone or tablet than on a traditional desktop computer. Zillow now has 13 separate apps for consumers and professionals in the real estate business. About 168 million homes were viewed on Zillow’s mobile site and apps in July.”

To everyone, especially consumer driven services, that is not taking into account the mobile experience please take note when you are updating your website.

Startup presentations are a good thing

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If you have a chance to do startup presentations for your idea/company in front of an audience that you don’t know it is a great thing.  It is great for your business because;

  • it forces you to look at your business from the eyes of your audience
  • it allows you to talk about the benefits of your business and get validation or not on your idea
  • it also will give you new ways to attack the problem you are trying to solve.

The last point is many times overlooked. When you have an idea and you work on it for months, tweaking this and that and making it better is what you do. But most of the time it is you and a few internal people doing the changes. When you get some new people who will bring a different prospective you get different solutions. Therefore when you have a chance to do a presentation to investors, other startup peers then get out and do it. You will not only get experience giving your pitch to people you might find a different  solution to the problem you are solving. Never be bashful and take every opportunity you can get.

Startup Grind Starts in Seattle Aug 29th

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I am the Seattle area director for Startup Grind. It is a community of founders, entrepreneurs, and wantrapreneurs looking to be inspired, educated, and networked with the smartest startup minds. We currently have 18 chapters around the world and we are launching our first event in the Seattle area.

Would you be excited about having the opportunity to work worth some of the smartest people in technology? Wouldn’t it be great to get access to API’s that no one else can get access to from Microsoft and their partners?

On August 29th, we are excited about having Rahul Sood, the GM of the brand new Bing Fund, an angel fund with an incubator program that is backed by Microsoft’s Online Services Division. He will be speaking about and answering questions on the goals of the Bing Fund. The Bing Fund makes angel investments and works closely with startups to take their businesses to critical mass.

During our fireside evening event you will be learning what the Bing Fund is looking for from entrepreneurs to get inducted into their portfolio.  Learn what Rahul looks for in founders and in a business plan in order to be part of their family of start ups.

Rahul Sood is a true entrepreneur who loves meeting founders and learning about the next big idea. He knows what it takes to be a success having started two companies in the last 16 years. He sold Voodoo PC to Hewlett Packard in 2006 and is a co-founder of BrightSquid Medical, a unique collaboration platform for medical professionals, which was subsequently acquired by NetworksMD.

The agenda will be from 6pm to 7pm there will be networking and snacks, followed by a fireside chat with featured guest, Rahul Sood  from 7 to 8pm. The event will conclude with open question-and-answer session and more networking from 8 to 8:30pm. This event is limited to 50 people, so don’t dilly dally around waiting as there will be no entry without a ticket.

IOS vs Android Apps

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this is a great blog post from Peter Farago

The iTunes App Store and Google Play now offer more than 600,000 apps each. And Apple’s most recent earnings call revealed that the company has paid out more than $5.5 billion to developers since the launch of the App Store. With unprecedented consumer adoption of iOS and Android devices, low barriers to entry for developers and throngs of paying customers, Apple and Google have created massive economic opportunities for developers.

In particular, iOS and Android have made it possible for independent developers and mobile app start-ups to thrive. As industries mature, however, we expect established players and brands to invade from other platforms, depressing opportunities for many early entrants. Along with this, we expect to see market revenue concentrate among fewer larger players. For this report, with these typical patterns in mind, Flurry modeled worldwide mobile app revenue, revenue sources and revenue concentration among top-ranked mobile apps on iOS and Android. For this report, we used data from over 200,000 mobile applications in the Flurry Analytics data set. Let’s start with market growth.












App Revenue Market Size, by Business Model

The chart above compares worldwide revenue generated by iOS and Android apps in 2011 vs. 2012. For 2012, we modeled the first half of the year based on actual data, and then applied growth rates to estimate the rest of the year based on the proportion of revenue observed in 2011 between the first and second half of that year. In 2011, Flurry calculates that iOS and Android applications generated a total of $5.4 billion across premium, in-app purchase and advertising revenue. Advertising made up 18% of the revenue. In 2012, Flurry forecasts that revenue will grow by 60% over the previous year, reaching $8.7 billion. Advertising is the fastest growing revenue category with growth forecasted at more than 100%, from $980 million in 2011 to $2 billion in 2012, delivering 23% of 2012 total revenue. Likewise, premium and in-app purchase revenue is also increasing at a rate of 50%, from $4.5 billion in 2011 to $6.7 billion in 2012.













Revenue Distribution by App Rank

Next, we look at the concentration of revenue among top ranked apps from 2010 to 2012. Please note that for this analysis, we focus on premium and in-app revenue only, excluding ad revenue. Comparing these two years shows how dramatically the distribution of revenue is shifting across the long tail. Starting on the left, in 2010, the green part of the column shows that 28% of revenue was generated by the Top 25 ranked titles on iOS and Android. In 2012, we estimate that the Top 25 will drop to commanding about half of total revenue, or 15%. Likewise, comparing the grey sections of each column, the rest of the Top 100 apps will drop from earning 27% of revenue in 2010 to 17% of revenue in 2012. Conversely, revenue generated by the long tail significantly grows from 2010 to 2012. Comparing the blue sections, any apps ranked beyond the top 100, we observe that long tail revenue explodes from earning under half of all premium and in-app purchase revenue in 2010 to over two-thirds in 2012.














iOS and Revenue, Top 100 Apps

Finally, we rank the revenue generated by each of the top 100 positions across the iTunes App Store and Google Play. For each year, we set the revenue generated by the top spot at 100%. Then, relative to the top spot, we take the percent each position generates from the 2nd rank all the way through the 100th. By normalizing each curve in this way, we can compare the relative revenue generated per ranked position in the top 100 per year. For example, we can see whether ranking number 50 generates more relative revenue in 2012 versus 2010. Most interestingly, this kind of analysis shows whether the developer “middle class” is better off today than its “parents’” generation.

Now that we have relative earning power mapped per ranked position, we can study the heights and shapes of the curves. Comparing 2010, the green curve, to 2012, the blue curve, we notice that two things are happening simultaneously. First, each position in the top 100 is more valuable now, which makes sense because the market has grown overall. Second, the blue 2012 curve is flatter. Unlike the green 2010 curve, which steeply drops during the top 10 ranked positions, indicating the wealth is more concentrated at the top, the blue 2012 curve stabilizes shortly after the top 5 positions and then maintains a high, gently sloping plateau all the way through the 80th position, where it then settles just above the green curve, ostensibly continuing to “fly” at an altitude higher than that of the green curve out across the long tail. In short, this means that the middle class has more earning power, taking a substantial share of total wealth in the economy.

With the app economy booming, companies like Facebook, Twitter and Zynga are under tremendous pressure from investors to seize the opportunity presented by this new platform. However, with software delivered in the form of downloadable applications, unguaranteed network connectivity, different consumer behavior and control exerted by platform providers such as Apple and Google, the mobile app landscape creates different, meaningful challenges for companies attempting to enter the app space from other platforms. Combined with a marketplace that reduces the power of brand recognition (e.g., apps are free for consumers to try risk free), market wealth unexpectedly continues to shift to the long tail, funding continued R&D, advertising budgets and other activities that increase their competitive strength. The age of middle-class app developer has arrived. In this economy not only are the rich getting richer, but so too are the poor, and gaining on the rich.

When do you raise money?

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I have been talking with several first time *treps (entrepreneurs, wantrapreneurs, etc) who are very early in the fund raising mode.  What I really mean is they are not ready to start raising money and they are very excited to start raising money.

Rarely is there a need to raise money until you have a product, customers or some validation of what you are trying to do. There is no reason to talk to investors until you have these in place.  Sure you can talk to some angel investors and see what they say but most will say come back when you have product, customers or validation.

Spend your time working on the acquisition of customers and refinement of your product before spending time on talking/meeting with investors.  Raising money takes a lot of time and energy. Oh yes it seems like so much fun if you have not done it before and it feels good when you tell your friends you are raising money of your new startup.

Don’t let your ego or someone telling you to go raise money get in your way of creating a kick ass product. If you have a great product then you will be able to raise money much easier and it will not be a pain in the butt. Raising money can be fun when you don’t need it or you have a product that many people want to invest.  Which by the way rarely happens.

Go out and create a product that can be used by real customers as soon as possible and then start iterating on it to make it better and better… the money will follow sooner enough.  Product first, raise money second.

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