Tag Archives: mobile

The Mobile Equation

One under-represented area of growth optimization is the mobile web to app handoff and tradeoff. This area of growth is about the key decision of what to do when someone arrives at your website on a mobile device. Do you attempt to get them to sign up or transact on our mobile website? Do you prompt for a mobile app download? Do you make mobile web available at all? Different companies have made different decisions of what to do here. What I want to talk about is how to make that decision with data instead of just on a “strategic” whim.

To do this, you need to know your company’s mobile equation. The mobile equation is: when I optimize for an app install instead of mobile web usage when someone lands on my mobile website, do I receive more or less engaged users? The way to answer this question is to experiment. Optimize some people towards mobile web usage, and some people toward mobile app download. Cohort these users, and see which group has more engagement over the long term.

Keep in mind that engagement can also be optimized though, and where the baseline ends up is the result of multiple factors:

  • the quality of mobile app onboarding
  • the quality of mobile website onboarding
  • the quality of the mobile website itself
  • the quality of the mobile app itself
  • the quality of the mobile app prompt
  • where you prompt for app download
  • the country of the user
  • the landing page of the mobile website

At Pinterest, when we did this baseline, even though prompting for app download decreased signups significantly, we still received more users by optimizing for mobile app download because the activation rate was so much higher. That meant more people got more long term value from Pinterest by a little more friction upfront. So, we got to work in optimizing all of the steps of the mobile app funnel. We tested over 15 different app interstitial concepts. We redesigned the mobile app signup flow multiple times. We made the mobile app faster. We also started preserving the context from what you were looking at on mobile web to what we first showed you on the mobile app. We saw significant increases in engaged use from all of these experiments.

Learn your mobile equation. It will help drive your strategy as well as some key growth opportunities.

Currently listening to Rojus by Leon Vynehall.

What’s Your Mobile Loop?

One thing that is true about internet visitation habits and even more true about mobile visitation habits is the loop. The loop is the sequence of places you visit when you sit down at your computer or pick up your phone. What’s so interesting about the loop is how short it is for most people. With billions of web and millions of apps, most people’s loop only consist of a select few destinations. So, if you’re building an internet business, to be successful, you need to become part of quite a few users’ loops, or find a way to inject your content into the destinations that are in their loops. For example my mobile loop generally looks like this:

Gmail app (only if new content pushed there)
Feedly app
Twitter app
ESPN website
Amazon Kindle app (currently reading Sapiens)

My web loop looks like this:
some niche sites for music

If you’re capable of becoming a part of people’s loop, you have what I call destination appeal. You are where people want to go to when they are bored. There is another way to have destination appeal, and that is to be very successful at branding, or to have a frequency not at the level of “I’m bored”, but still pretty high e.g. searching. I set the barrier there at monthly. For the former, Airbnb might not be in any of my loops, but it is the first place I go when I need a place to stay. For the latter, I don’t check Google unless I’m searching for something, but I search for things very frequently. See here for more musings on mobile apps and frequency.

If you are not in many people’s mobile loops, even if you can build destination appeal, you probably need to focus a lot of attention on injecting your content into apps that are commonly in people’s loops (Facebook, Instagram, Twitter, Pinterest). For some of these apps, this can be done organically, but much of it comes in the form of arbitrage i.e. paying less to be in front of users on that site than you will make from getting in front of them.

So, examine your loops. Is your company in your loop? If not, are you injecting your company’s content into your loop effectively?

Failover Fails

One of my favorite quotes is from Mitch Hedberg:

An escalator can never break — it can only become stairs. You would never see an “Escalator Temporarily Out Of Order” sign, just “Escalator Temporarily Stairs. Sorry for the convenience”. We apologize for the fact that you can still get up there.

I’m reminded of this quote whenever I travel because so many apps on my phone don’t fail over this gracefully. My favorite historically have been foursquare’s. Whenever it couldn’t tell where I was, it would say “A surprising new error has occured.” or “must provide il or bounds”. Let’s forget for a second that these are the most unhelpful error messages ever and get to the bigger problem. foursquare (and most other apps) are designed only for a fully connected, localized experience. This is in a world where, even in cities, 4G connections can be intermittent, and GPS quality is sketchy at best, especially inside. Apps break all the time because of these issues, and it’s not excusable.

As we move towards always in the cloud, total internet and GPS reliant services, software makers need to think about these alternate states and design better experiences for them. It will be a long time before a wireless connection is reliable anywhere in the US, let alone internationally. It will be a while before GPS tracking works well in many places. Connections may be slow. Batteries may be low. Available storage my be low. I like to think of it like testing for different browsers and devices. If you aren’t testing for different connection states or with/without certain pieces of key information, you’re not testing right.

Distribution Real Estate, or an Untalked About Element of Facebook’s Acquisition and Unbundling Strategy

Many have opined about Facebook’s two major strategies over the last couple of years. The first is their aggressive stance on acquisitions, a 180 from their acquihire only approach pre-IPO. This includes Instagram, WhatsApp, Moves, and the real outlier Oculus. The second and more recent is their unbundling of core functionality from the main Facebook app, as with a standalone Messenger app, a standalone Camera app (now being replaced by Instagram), a standalone ephemeral messaing app (Poke and now soon Slingshot), and a standalone launcher app (the miserable failure Facebook Home). One might think I am against such a strategy due to my previous post criticizing unbundling. What Facebook is attempting is something different though.

It is rare that companies get to a point where they start to pursue a moat strategy. A moat strategy makes sense when a core business is so profitable that the most sensible course of action is to build things around it to protect it instead of trying to increase value of customers or try to attract more customers. Google is a famous example of this with Adwords. Its core business is so successful that it pursues projects like free mobile operating system Android solely focused on protecting distribution of Adwords as the world shifted to mobile, and free web browser Chrome to protect distribution of Adwords on web as Microsoft tried to bundle browser (Internet Explorer) and search (Bing) together.

While an entire company ascending so far to the top that its main course of action is building a moat is rare; it is more common on specific distribution channels. Take, for example, search engine marketing and search engine optimization. Once you ascend to the #1 result for an organic search, a normal marketer might stop there and try to optimize other channels. But savvy search engine marketers are just getting started then. A savvy search marketer knows that a #1 result organically does not guarantee that all clicks go to one’s own domain. There are still nine other organic spots and the paid ads, which may still appear above your result. So hardcore search marketers start working on their next trick, owning more than one spot on the search result.

I pursued this strategy at Homefinder. We would take the #1 ranking for certain keywords like “Fayetteville homes for sale”. Once we achieved this, we would bid highly on Adwords as well to take a second spot on the page. Then, we would work with affiliate marketers to bid below us in Adwords to take the second, third, fourth, etc. spots on the page. If someone clicked on those listings, they would go to a different website (as Google only allows one paid ad per domain). But when someone searched on those domains, they were redirected to Homefinder. By pursuing this strategy, we could own perhaps five or so spots on Google for one search, making the likelihood of someone landing on Homefinder much higher than if we just had the #1 spot and nothing else.

The travel companies like Expedia are the masters of this, with multiple brands ranking on the top of Google that are all owned by the same conglomerate not very differentiated. Almost all travel purchases start with Google, so the travel companies maximize this distribution channel more than any other category. For example, Expedia has Hotwire, Hotels.com, and Trivago. Priceline has Booking.com, Kayak, and Agoda.

You might ask what this has to do with what Facebook is doing. Well, on mobile, Google is actually not the only search engine of note. The App Store and Google Play are just as important to optimize for. App store rankings are largely determined by recent download counts, but Google Play is a bit more sophisticated with many engagement metrics. Facebook currently ranks #1 for free apps on Google Play. Did Facebook stop there? No, it unbundled it’s Messenger app completely, which is now the #5 free app. It purchased Instagram, which is the #4 free app. It tried to buy Snapchat, which is the #6 free app. And it purchased WhatsApp, which is the #14 free app. When you already own the top result, you tried to grab as much of the rest of the top real estate as you can.

If Facebooked buys Pandora in the future, don’t be so shocked. This is not just true on the app search engines though. The home screen of the mobile phone is another limited piece of real estate that is incredibly important. Facebook is likely on the home screen of more mobile users than any other app. But it is still only one app among many one can click on when they pick up their phone. So Facebook is focusing on other app that already have wide home screen distribution. I had Facebook, Instagram, and Moves on my home screen. That means, Facebook had a 3/16 chance every time I opened my phone that they would receive some sort of engagement from me.

When you’re optimizing channels, I encourage you to think about the real estate you own on each one, and how you can own more. It’s an incredibly effective strategy even if you’re not quite at the moat building stage.

The Contradictory Nature of Mobile Unbundling and the Emergence of Niche Marketplaces

Two specific, but highly related, points of view are gaining widespread acceptance among venture capitalists in the technology industry. The first is succinctly explained by venture capitalist Albert Wenger in a post called Facebook’s Real Mobile Problem: Unbundling. The gist of the post can be summed up by this comment: “Mobile devices are doing to web services what web services did to print media: they unbundle.” Fellow venture capitalist Andrew Weissman expanded on this idea in a post called The Great Fragmentation. In it, Andrew goes further, arguing that unbundling might be a core feature of the internet.

A second, but related point, is the emergence of the niche marketplace. Venture capitalist Andrew Parker has a post called The Spawn of Craigslist in which he shows how the behemoth marketplace Craigslist is getting slowly disrupted in a vertical-specific way. Venture capitalist Chris Dixon expands on this idea, saying that the only way to be successful as an online marketplace now is to take a vertical-specific approach.

Together, these venture capitalists describe a future in which there is a specific app or specific marketplace for every need a user might have. Instead of going to Craigslist to find an apartment, movers, a maid, a freelance web designer for your home business, a date, and last minute tickets, a mobile user would instead have an app for Padmapper, TaskRabbit, Homejoy, ODesk, HowAboutWe, and WillCall. The key to being a successful venture capitalist then shifts from finding businesses that tackle very large markets e.g. Craigslist to finding businesses that target markets that could be much bigger with unbundling e.g. Airbnb.

All of these VC’s are clearly smarter than me, but I take a somewhat contrarian view here. I hope the above example points out the main problem with this theory. In the above picture, in order for this mobile user to accomplish his/her goals, instead of needing to just know about and have an app for Craigslist, s/he now needs to know about and have apps for six separate businesses. One other thing venture capitalists agree on is that mobile app discovery is hard, and that the amount of apps mobile users will download and use is limited by both device memory as well as human memory. This same problem faces the sellers of services on marketplaces. With no aggregate marketplace, it may be harder for a seller of multiple services to know which ones exist for which product/service they are selling. Marketplaces thrive on a multitude of buyers and sellers. Unbundling of marketplaces makes building that two-sided network harder.

Something has to give here. You can’t have a future where everything is accomplished online via a mobile device, consumer’s preference on mobile is for apps, there will be hundreds of specific services for anything a user needs that are more powerful than aggregate services, app discovery is difficult, and people will only have 41 apps per phone. I think there is some sort of equilibrium here. Even if app discovery is solved (and that’s a hard problem), the rate of successful unbundling certainly seems like it has to be limited by 1) the amount of space on someone’s phone, and 2) user’s inability to be aware of hundreds of niche services they may need at any time. If you think a recommendation engine could solve this with big data, I recommend you read this article about how successful that’s been for other services.

If I had to guess, I would surmise that user unbundling will not be a trend in and of itself, even if it is a trend in technology startups building new businesses. Unbundling will continue when either 1) the frequency of the activity that is being unbundled is high (my standard would be weekly), or 2) the advantage of the unbundling is exponentially more valuable than the bundled version of the same activity. For criterion 2, that advantage will also be a moving target where the advantage has to become greater and greater to justify phone/brain space as more apps improve their utility. Number of apps per phone will continue to grow, but a decreasing rate, and with that growth, there will be a decreasing state of awareness for both apps that are on a user’s phone and ones that are not. If you doubt this, just think of how many websites you visit regularly. Think hard. It isn’t that high, is it? Now think about apps? Even less? Me too.

So, what does this all mean? Well, my take is that high frequency services like chat or picture taking continue to become unbundled from any aggregate services consumers use for them because of the ability of mobile to create superior user experiences for succinct actions. But, marketplaces that aggregate niche activities that users need only occasionally can continue to thrive e.g. eBay and Craigslist. One should expect only a handful of the dozens of services hoping to disrupt Craigslist or eBay or Amazon to survive, because of fantastic user experience or a high frequency of use. Finally, one should not be so quick to anoint the niche marketplace model as the emergence of mobile presents as many limitations to their success as it does opportunities for growth.

My Building Internet Startups Class Final Presentation: Cartogram

For Brad Keywell and Eric Lefkofsky’s Building Internet Startups class at the University of Chicago, each student was asked to build a 5-10 page presentation for a new startup idea. Out of the 100 students in the class, seven were selected to be presented in front of the class. Mine was one of the seven chosen. See it below.