Getting the mobile app business model right

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mobile business model

There is no mobile business model.

A few years ago it was “social networking” before that it was “dot coms” and before that, well… betamax. But jokes aside each new hot technology trend is subject to the same problems when it comes to business model, there are none, so let’s invent one. .

We’re still experiencing the lack of business model in the mobile marketplace – now we’re not referring to the sales of handsets, nor the fees covered by mobile operators, what we’re referring to is mobile application development, and it’s monetization.

We have to remember that the fundamental difference between a mobile phone and a laptop, desktop, netbook, or even the iPad is the way in which they are used. Mobile use is best described as coming in bursts.

You need info, you pull the phone out, look for whatever information you need and put it away. You don’t spend hours surfing the net, you don’t stream last night’s favorite shows, and you definitely don’t edit your excel spreadsheet or write the next chapter in the novel you’ve been working on.

The mobile is a device that is meant for burst use. Even such applications as iPhone games, are used typically in bursts. You’re on the metro, the bus, etc… you’re bored you play a game for ten minutes you put it away.

So what about the business model? Aside from application sales via i.e. the Apple App Store, you’re pretty much in the dark. And even there the majority of applications that people will use are limited to what is “top rated” or “recommended”, individuals simply will not spend hours searching for an app to install on their mobile device. So as you see we have a problem.

Non-Efficient Application Delivery

As previously stated – application delivery is not efficient, and even if you have an amazing application how will you get people to pick it up and try it.

One of the better ways is to have bloggers review your apps, if they like them, the next level of users who are 1st adopters will try those applications out, if they like them, they will use them, and they will publicize them. And when speaking of publicizing, it’s imperative that you implement a facebook API into this application.

Why? Well since everyone and their mother is now on Facebook, what better way to get free publicity than through status updates.

What is the application’s Value?

It’s one thing if the application in question augments the use of a current product, i.e. TripIt, LinkedIn, Imdb.com but it’s a whole other ballgame when you’re developing a new product from scratch. Meaning, the value to the user of the application has to be there.

The Bad: An example of a bad execution is VoiceFree, the application basically allows you to post audio messages to your friends on facebook. But why on earth would anyone want that. It’s quicker to go to facebook mobile, and post a quick message to a friend than to record something, and then have someone listen to it. After all, we read quicker than we speak, and mobile information delivery needs to be

  1. Quick
  2. Instant
  3. Provide what you’re looking for

Does this app do it? The short answer is no.  What is it’s value?  Not much albeit being a nifty idea. But nifty ideas don’t always make good business sense.

The Good: On the other hand you have another app, bump – that allows you to exchange contact information by simply bumping your phones together. This app’s value is clear from the onset, and it’s a great little app, that all truth be told should be included in the iPhone OS. Yet, how do they monetize? By offering 3rd parties access to their technology, PayPal for example uses bump technology in their application which allows users to send money to each other by bumping their phones together.

Great application, clear value proposition, great execution.

Think about it

When thinking about development of any product, be it mobile, internet, physical, you always have to consider what value it will offer the customer, simply devoting resources to a great idea is for the most part an exercise in futility if you don’t know how you’ll monetize it, be it today, or tomorrow. At the end of the day, what really differentiates the mobile platform is it’s delivery, and use, remember it’s busts, but aside from that, a product is a product and needs to have a business model behind it.

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