The staggering $19 billion Facebook acquisition of WhatsApp last week is not only an indication of the enormous value of social media, but also a reminder of the massive opportunity to play for in the growing app economy.
It's important to realise that this isn't just a technology story - it's about the services that apps enable. Facebook knows this, and Mark Zuckerberg's recent address at the Mobile World Conference in Barcelona where he stated Facebook wants to offer a "dial tone for the internet" hints at the potential market for apps and the services they offer.
Facebook is not alone in recognising the huge opportunity of the "app economy." In fact, the European Commission announced this month that the European app industry will be worth €63 billion by 2018.
But what is the secret to success, and how can individuals and businesses alike benefit from this massive opportunity?
Don't deliver apps - deliver an experience.
It may sound simple, but great apps deliver an experience. Facebook lets you experience your friends and families no matter where you are. Salesforce1 offers a mobile experience to employees, and Flipboard re-invents the experience of your morning news. Evan Williams, co-founder of Twitter, once said "we often think the internet enables you to do new things. But people want to do the same thing they've always done."
The way I see it, in order to succeed, an app must make the end-user's life better or easier in some fashion. To do that, each app needs to meet at least one of these core objectives:
-Reinvent an existing experience and make it better and simpler. An app often replaces and simplifies a pre-existing process, whether that is shopping, reading the news, or sending emails
-Provide information: Apps that deliver instant access to important information, from local weather and train times to push notifications when the user's favourite team is about to play or a customer has come online, are perceived as particularly valuable, especially if they can be tailored to the user's specific wants and needs
-Engage: Games have proven to be incredibly popular - Candy Crush was the most popular game last year with 93 million players on average per day - but there's no reason why we can't have fun at work too, so engaging work applications and gamification apps that make work more productive have huge potential
Make social part of your business model.
To succeed, apps also have to be shareable. YouTube videos often become an overnight sensation because of the sharing mechanisms already in place. It's not just YouTube, though; every single person who uses an app is connected to a network of potential new users so apps need to also incorporate easy-to-use sharing methods. Take WhatsApp; the more the user shares the app, the more people they have on their contact list, and the more rewarding the experience is for all. This mechanism was a key part of the organisation's success, and ultimately, its valuation.
In today's always-on, hyper-connected, socially-led world, consumers are known for having the power to make or break a business and its reputation online. But this can also be a great opportunity for the roll out of a successful app. Consumers (and businesses) are willing to test apps, try them out and feed into their success. So instead of spending long periods perfecting them, app developers can take the opportunity to test them in real life. Once released, they can then ask for feedback and continually iterate the app to improve the service being delivered.
Optimise for user productivity.
The World Wide Web turns 25-years this week, and the impact has been vast: our world moves at such a breakneck pace that many successful apps focus on making our lives more productive. Some of the most popular apps in 2013 focused on productivity, like Evernote and Dropbox. Even traditional industries such as banking are disrupted by apps. It wasn't long ago that you couldn't check your bank balance from your mobile device, let alone deposit a cheque. Yet a very real 'app gap' still exists. While individuals use apps every day in their personal lives, there is a lack of mobile apps designed to increase productivity in the workplace and drive better customer service. For businesses looking to design and build mobile apps, it's not about making every app mobile, it's about making the right apps the mobile way. Businesses can learn a lot from consumer apps in making employee productivity apps more engaging, because the days of green-screen apps is over.
In short, the recent acquisition has shown that in the new app economy, a good idea that provides a mobile experience, is built upon a social model, and makes users more productive is a recipe for success. Whatever the sector and the audience they address, successful apps can significantly improve our lives, drive new revenue streams, create new opportunities for shareholder value and even provide basic services for the community. There are massive - €63 billion worth - stakes at play for apps in both the consumer and business worlds, and anyone able to harness that opportunity might just end up worth $19 billion too.