Feb 19, 2011
1996 was a great year in the life of the web. Netscape had launched two years earlier, Excite@home was going to wire all of our homes with unthinkably fast megabit connections, Webvan was going to deliver farm fresh fruits and veggies to everyone’s house (without delivery charges) and Flooz was going to make wallets (as well as the cash they contained) obsolete. In terms of ground breaking innovative thinking, 1996 was a very good year.
For me, I was in primary school when all of this was happening, and I hoped that one day I could be part of something like this. I’ve always dreamed of changing the world with innovative technology and from my perspective 1996 was the time when an explosion of some of the most innovative thinking the world had ever seen became visible to the public in such a life-altering way.
When most people talk about the dot-com boom and bust they talk about the money that was made and lost in the process. What they don’t talk about so much is the innovation that created completely new and world changing technologies. From my perspective the money is interesting but the real conversation needs to be about the rate at which a new technology is adopted, the speed with which new companies are gaining market share and the disruptions that are happening as new technologies and companies supplant the prior generation’s most popular products.
As I see it, the big question people should be asking is, “Will mobile applications and the technologies that support them change the way people communicate, get information and do business to the degree that the web did starting in 1996?” Personally, I say yes. The dot-com boom was not a singular moment in history, just a notable one—but if there’s anything we can learn from the history of tech, it’s that there’s always something bigger on the horizon.
Today people are asking if we’re in another tech bubble. It’s a distinct possibility, but if we are in a bubble, it’s likely the expansion stage of that bubble and what we’re witnessing looks a lot like what we saw in the late 90’s, right down to the Super Bowl commercials. However, there’s one key difference: in the 90’s it was all about web sites; today, it’s all about apps and the mobile web.
Granted, I see the world through a very particular lens as the co-founder and CEO of Chomp, a technology company focused exclusively on solving the app discovery problem. As a result, I’m quite literally invested in my perspective being the right one. That said, take a look at the data; even if you don’t completely buy into my perspective, it’s hard to argue with the figures.It’s pretty clear that the growth of mobile usage and the rate at which mobile apps are being developed and downloaded continues at a rate that puts the 1996 numbers to shame.
When I look at the stats and compare them with what happened between 1996 and 2000 I feel very optimistic, and based upon what I see, I think we’re witnessing a phenomenon that I like to call the “appification of the web”. Here’s why:
The slide above comes from Mary Meeker’s presentation at last year’s Web 2.0 Summit. During the presentation she also commented that right now the mobile Internet is growing at 8x the speed of the fixed Internet when the Netscape browser was launched in 1994.
Stats related to mobile apps are even more astonishing. By the end of 2009 roughly 3 billion mobile apps had been downloaded from iTunes alone. That sounds like a lot, but even the most optimistic analyst projections were blown away in 2010 when (only one year later!) a remarkable 8.2 billion apps were downloaded.
Since Apple launched their app store in 2008, over 10 billion mobile apps have been downloaded from the store. In late 2010, Pew Internet released a report called “Rise of the Apps Culture”. Among the key numbers in the report, one in particular stood out for me: 35% of all US adults had apps on their cellular phones.
Another study, “Sizing up the Global Apps Market”, had equally impressive stats. The number of app stores, which in 2008 was less than 5, had skyrocketed to nearly 50 by February of 2010. With the recent announcement by AppBistro—that they are launching white label app stores that will make it possible for any publisher to create a custom app store—this number is certain to grow even more rapidly for the foreseeable future.
Looking further out, the numbers go from optimistic (the Yankee Group is predicting that nearly 7 billion U.S. smartphone app downloads will garner $4.2 billion in revenue by 2013), to wacky, (Gartner projects that as many as 17.7 billion mobile apps will be downloaded in 2011, a 117 percent increase from the 8.2 billion apps they say were downloaded last year). Also, according to the Gartner report, mobile app store revenue hit $5.2 billion last year, with an expected increase of about 190 percent to $15.1 billion in 2011. Perhaps even more impressive, Mary Meeker and Matt Murphy both of Kleiner Perkins just presented a slide deck on mobile trends that among other things projects that global mobile traffic will grow 26 times over the next 5 years.
The New Disrupters
Just like in the 90’s when new web technologies threatened—and frequently succeeded—to disrupt entire industries, what’s happening today with mobile applications is creating a laundry list of the next great companies.
- ● Instagram (which just hit their 2 millionth download), PicPlz and Path look like a next generation of flickr
● Foursquare and Gowalla have created entirely new kinds of social networks built from the ground up with a mobile user in mind
● Square has given everyone the ability to process credit card transactions once again changing the way people conduct personal commerce just as PayPal did in the late 90’s
● Shazam has fundamentally changed how people discover new music, making the process mobile and more spontaneous—further disintermediating record labels and physical stores
● Rovio is looking a lot like the next giant gaming company
● Thousands of novelty apps from androidify to doggy squeak toys (seriously) have replaced the dancing babies and flying toasters people were sending around over a decade ago
All of these companies and the applications they have developed threaten to topple the existing business paradigms in their respective niche. It was this same cycle of disruptive innovation that led to the explosion of web sites and web content during the dot-com boom, and it’s disruptive innovation—this time centered around mobile applications—that will power the growth of these technologies and the value they create today.
So how can you capitalize on this next great tech wave? The same way the winners did last time. Figure out what people want and then deliver it to them using the new version of the Internet—the one delivered via apps. If you’re able to give people a better, faster, more tailored mobile experience, you’ll be one of the disruptors. By precipitating change, you’ll create value. Those that do this best will win. After all, someone is going to create the next Facebook and someone out there is building the next Google. Disruption is in the air, and to me, it looks a lot like 1996 all over again.