Questions, thoughts, complaints, rants, raves, ideas, discussions on the world of mobile content and how it affects consumers lives. Enjoy, contribute, learn and have fun folks!
Thursday, 27 October 2011
Amazon: Overcooked, just right or raw?
Amazon's stock price took a beating Wednesday with its stock tanking 13% in a single day of trading after announcing less than stellar earnings and also some Q4 projections that could see the retailer even post a loss for the first time since 2001.
So are the Wall St boys right or are they over-reacting? First, let's look at the flip side of the equation. Until recently, Amazon had actually, under some measures, been more richly valued even than Apple. If you compare PE ratios (price / earnings) you'll notice that up until Wednesday the stock traded at 119 times earnings. Compare that with Apple that trades around 14 times earnings and you have to question whether Wall St. was ever getting it right in terms of this stock. Second, I think you also have to think about what kind of company's Wall St. likes - nice smooth, predictable companies with smooth cash flows that reward investors. This is often times anathema to company's being able to make aggressive investments for future growth. Particularly in technology where product cycles and consumer preference often change quickly, companies have to be able to react quickly or face being left out of the market (Nokia, Microsoft, HP?). This isn't necessarily what investors like to hear. I mean would you prefer to get a higher dividend check or see a company increase capital expenditures? That really depends on your investment horizon for starters.
So the truth is that Amazon is placing a big bet on the future. They're betting that a big part of their business will be the distribution and retail of digital content. This includes books, music, movies and apps. This really shouldn't have been a surprise to Wall St particularly given the launch of their Android App store and their focus on distributing music over the Web. In addition, the company has a history of making significant investments for the future. For many years Amazon actually lost money as it was growing its brand, distribution footprint and acquiring new customers. The good news today is that Amazon is a household name in many parts of the world and has an enormous user base of consumers who buy everything from MP3's to video games and now apps. They've also established themselves as a very good manufacturer and retailer of hardware with their line of Kindle products. Wall St.'s view on the Kindle Fire to me seems short sighted. Although they say each device causes a $10 loss, it's unclear what their assumptions are behind Amazon's ability to make money off content sales on this device. We know Kindle users purchase content since they primarily use it to buy books. With the Kindle Fire it's save to make a couple of assumptions:
- They will acquire even more content since the device is even more powerful and also able to run more than simply books but also better suited to movies, music and apps
- They have an established form of payment already integrated given that they will likely need an Amazon account (credit card included) to use the device
So if you assume a consumer purchases at least one song or app per week at .99$ at a 30% revenue share to Amazon then that already earns Amazon an extra $14.25 a year which wipes out the loss on the device. Throw in Amazon's ability to cross sell other products, scale their buying power of components for the Kindle to bring down the cost and also the sale of higher value digital goods the picture becomes even better.
So what's the problem? Simply put Amazon was overvalued. A number of investors made the comparison to Apple. This really isn't fair. Apple is a device manufacturer selling premium products at premium prices. Amazon is a retailer. It's a bit like comparing Apple to Walmart. Walmart business is about scale and selling millions of items at low margins. Fundamentally, Amazon is in the same business although they have their cloud services business and Kindle business which have better economics. The question becomes whether they can leverage their consumer relationships into something that provides better margins. So over-reaction? yes. However, overvalued also yes. let's see what Jeff Bezos comes up with next.
Mad Mork
Friday, 12 August 2011
Does The App Ecosystem Needs Its Own Trade Body?
Another day another lawsuit. Another day another developer gets their app suspended by a store front. Another day and another change takes place to the T&C's app stores have for content owners or OS owners have in the way OEM's use their platform. While many of the changes are designed to improve the individual ecosystems they serve at times these changes can also be overwhelming and even confusing for the developers and partners they are meant to serve.
The mobile app ecosystem has indeed come a long way since it started to boom in 2008. Various estimates place the number of downloads in 2010 anywhere from 8 billion to 10 billion downloads. App stores have mushroomed to the point where there are now well over 100 different known stores that can be found on wipconnector.com. To serve this ecosystem a whole industry of "enablers" has also surfaced to help content owners / developers with anything from development (Appcelerator, Didmo, Ansca) to billing (Zong, Boku, Billing Revolution, Tanla, Mach) to analytics (Flurry, Distimo, Zokem, Comscore).
The reality is that as in any industry, rapid growth brings its own degree of chaos, uncertainty and fear. But is this really necessary? is there a better way to manage all this?
Content owners and developers are overwhelmed by the speed of change and the complexity of the different ecosystems. Each time they want to spread their content to another platform they need to ask themselves a million different questions such as:
- What is the submission process for this particular store / ecosystem?
- What's the policy in terms of the price of my app? who manages this?
- Do refunds exist?
- When do i get paid / how often?
- How long does it take for my app to get approved?
- Who should I speak with if it doesn't?
- What recourse do I have if my app is removed?
- Can I use third parties for billing?
- What marketing tools can I use to create awareness of my app?
- What are the rules when it comes to cross promotion of apps?
- Should I agree to exclusivities proposed by certain stores? what's my downside?
And so the list goes on. The risk today for most developers and enablers as well is that unless they have close, mostly personal relationships with ecosystem owners (OS owners) they either don't get clear answers to these questions or these "directives" are basically handed down via fiat. There is no debate. This is just the way it is. Take it or leave it.
So the necessary question has to be asked, is this really the best way for the industry to flourish? Can most developers even make some real money unless some standard best practices are in place or without having some sort of voice in the process? Maybe we're reaching a point in the evolution in our industry where we need a unified voice that can speak for the little guys and has some power to propose, debate and agree best practices with ecosystem owners. Maybe it's time to make our voices heard....
wouldn't we all benefit?
Patrick "Mad" Mork
The mobile app ecosystem has indeed come a long way since it started to boom in 2008. Various estimates place the number of downloads in 2010 anywhere from 8 billion to 10 billion downloads. App stores have mushroomed to the point where there are now well over 100 different known stores that can be found on wipconnector.com. To serve this ecosystem a whole industry of "enablers" has also surfaced to help content owners / developers with anything from development (Appcelerator, Didmo, Ansca) to billing (Zong, Boku, Billing Revolution, Tanla, Mach) to analytics (Flurry, Distimo, Zokem, Comscore).
The reality is that as in any industry, rapid growth brings its own degree of chaos, uncertainty and fear. But is this really necessary? is there a better way to manage all this?
Content owners and developers are overwhelmed by the speed of change and the complexity of the different ecosystems. Each time they want to spread their content to another platform they need to ask themselves a million different questions such as:
- What is the submission process for this particular store / ecosystem?
- What's the policy in terms of the price of my app? who manages this?
- Do refunds exist?
- When do i get paid / how often?
- How long does it take for my app to get approved?
- Who should I speak with if it doesn't?
- What recourse do I have if my app is removed?
- Can I use third parties for billing?
- What marketing tools can I use to create awareness of my app?
- What are the rules when it comes to cross promotion of apps?
- Should I agree to exclusivities proposed by certain stores? what's my downside?
And so the list goes on. The risk today for most developers and enablers as well is that unless they have close, mostly personal relationships with ecosystem owners (OS owners) they either don't get clear answers to these questions or these "directives" are basically handed down via fiat. There is no debate. This is just the way it is. Take it or leave it.
So the necessary question has to be asked, is this really the best way for the industry to flourish? Can most developers even make some real money unless some standard best practices are in place or without having some sort of voice in the process? Maybe we're reaching a point in the evolution in our industry where we need a unified voice that can speak for the little guys and has some power to propose, debate and agree best practices with ecosystem owners. Maybe it's time to make our voices heard....
wouldn't we all benefit?
Patrick "Mad" Mork
Friday, 5 August 2011
Moving on from GetJar
After more then 3 rollercoaster years at GetJar, I've decided that the time has come for me to move on in search of new challenges. These past three years have been the most rewarding of my career and GetJar has certainly come a long way from the small, 7-man company I was supporting from my kitchen desk in London in 2008!
Today, with more then 50 employees, the company has crossed the 2 billion download mark and recently been nominated one of the top European start-ups to watch by our friends at Gigaom. As a shareholder and early employee I have every confidence the company will continue to succeed and thrive in the ever-changing apps environment and amreally excited about some of the new products and improvements we’ll be introducing over the next few weeks and months.
I'd like to thank all the people who are part of GetJar's ecosystem for having made this experience possible. The reality is that our growth and success would not have been possible without the support of our investors at Accel, our content partners and developers and the enthusiasm and encouragement of our supporters in the press. Each one of you has played a special and unique role in helping GetJar become what it is to today and I've greatly enjoyed working with each of you.
So what's next? ;) Well, I'm an apps guy at heart and always looking for a good fight as you know! So I'll be joining Google as Marketing Director for Mobile Applications the first week of September. I'll be at GetJar until the 19th of August and reachable at patrick.mork@gmail.com after my departure.
The world is a small place so I hope to be able to continue working with many you in the future. Until then, “a bientôt” as they say in France since this is "see you soon" and not “goodbye”.
Appsolutely yours,
Patrick "Mad" Mork.
Today, with more then 50 employees, the company has crossed the 2 billion download mark and recently been nominated one of the top European start-ups to watch by our friends at Gigaom. As a shareholder and early employee I have every confidence the company will continue to succeed and thrive in the ever-changing apps environment and amreally excited about some of the new products and improvements we’ll be introducing over the next few weeks and months.
I'd like to thank all the people who are part of GetJar's ecosystem for having made this experience possible. The reality is that our growth and success would not have been possible without the support of our investors at Accel, our content partners and developers and the enthusiasm and encouragement of our supporters in the press. Each one of you has played a special and unique role in helping GetJar become what it is to today and I've greatly enjoyed working with each of you.
So what's next? ;) Well, I'm an apps guy at heart and always looking for a good fight as you know! So I'll be joining Google as Marketing Director for Mobile Applications the first week of September. I'll be at GetJar until the 19th of August and reachable at patrick.mork@gmail.com after my departure.
The world is a small place so I hope to be able to continue working with many you in the future. Until then, “a bientôt” as they say in France since this is "see you soon" and not “goodbye”.
Appsolutely yours,
Patrick "Mad" Mork.
Wednesday, 30 March 2011
Could Nintendo eventually be the next Nokia?
This past weekend, Reginald Fils-Aime (Head of Nintendo USA), was busily giving away the latest version of Nintendo’s Uber portable gaming machine, the 3DS, to throngs of fanatic shoppers at Times Squares’ local Best Buy Store. The much-hyped launch of the 3DS in the US, is Nintendo’s biggest console extravaganza since launching the Nintendo Wii back in 2006 and galvanized eager consumers to line up in the freezing cold to get their hands on the device for hours.
The console certainly has had a promising start. Over 200,000 units were sold in Japan the first week of launch and the company is seriously banking on this device to reverse its fortunes (which given its stock price it should – click here). The question is will it be enough?
Several weeks ago at GDC in San Francisco, Nintendo’s President, Satoru Iwata, spoke of the imminent launch of the 3DS and it’s ability to revolutionize gaming through its use of 3D, ability to run apps, take pictures in 3D, incorporation of Netflix and a host of other features. Bizarrely though, he completely minimized or ignored the threat of mobile gaming to the 3DS offering. Nintendo, he said, would never go down the route of mobile gaming as the experience would dilute and undermine the quality of the types of games Nintendo was trying to develop. Nintendo apparently has a difficult time recognizing mobile as a genuine gaming platform.
The strange thing about Nintendo’s denial of the rise of mobile gaming is that mobile gaming is doing to the handheld space exactly what Nintendo did to the console space with it’s Wii launch nearly 6 years ago. When Nintendo introduced the Wii it was lauded for its simplicity, design, fun factor and ability to do what no other console could really do: broaden the market beyond non gamers. Nintendo famously embraced what Insead professors Chan Kim and Renee Mauborgne dubbed “Blue Ocean Strategy” in a book by the same name. They choose to move away from the power, graphics and heavy-duty processor wars that had featured in the console industry and instead reinvent the industry by making a machine that was less powerful but more fun and more open to growing the gaming audience. The result was that the Wii became the best selling console of its time with over 34M installed units to date in the US alone.
With the 3DS Nintendo seems to be taking the opposite approach. The 3DS is its most powerful handheld gaming device yet with 2 266mhz Arm11 processors, dual stereoscopic cameras, 800x240 top pixel screen and full 3D graphics that don't even require 3D glasses to use. However, as a gamer and someone who’s worked in mobile games for the past 6 years I’ve got to question the logic of this direction.
First, consider the audience. As far as I understand, use of 3D is not recommended for people under the age of 6 and I would interpret that to mean it isn't ideal for 8-12 year olds much either. So the device will likely be targeted at 12-18 year olds or 18-24 olds. This is a similar demographic to those playing games on iPads, iPhones, iPods and increasingly on Android devices. Nintendo’s traditional gaming audience for their portable devices was much younger then this. Typically teens or young kids who might not even have access to mobile phones. The new strategy puts them much more squarely in competition against Apple and Google. In this respect they’re facing rivals who have both incredibly strong brands but also global reach and distribution as well as the marketing muscle of the carriers who push their devices. Granted these guys aren’t pushing solely gaming and their message can get diluted through multiple marketing campaigns by carriers all over the world but keep in mind that Verizon’s marketing launch of the initial Droid probably was on par with what Nintendo will spend to market the 3DS in the US.
Second, consider the value proposition. Yes the 3DS is cool and yes the games are awesome, but is the value proposition really enough for consumers? Is 3D really a good enough, sustainable point of difference to shell out an extra $250 plus $20+ per game when I can have pretty damn good experience on a mobile device – which I also happen to always carry with me and allows me to do 300,000+ other things as well (including voice calls for that matter) for $150-200 plus $1-$6 per game? As a gamer I just don’t see it and I’m not sure others will either.
Lastly, Nintendo doesn’t seem to realize that the entire paradigm for the console industry is changing. Console hardware has been typically updated every 5-7 years (the DS launched in 2004). In the meantime developers build games that try to eke out every drop of processing power from existing hardware until the next machine comes out. Mobile has changed all that. New, more powerful devices are coming out every 3-6 months and major improvements are happening yearly. This means developers are accessing a bigger and bigger market as smartphone penetration increases while also developing better and better games as devices improve. It also means that content is being developed at a rate that is far faster then it would be for a console ecosystem. One of the criteria gamers use when deciding on a device is the content available. How many games are there? How expensive are they and how easy are they to buy? Again, mobile gaming has dramatically changed the competitive picture for Nintendo here. Not only do I not have to leave my couch to get a new game, but also I don’t have to pay more the $5 (and that’s for an expensive game!) and I’ve got tons of new games literally at my fingertips every single week.
Is Nintendo sticking its head in the sand? Sounds a lot like a certain Finish handset manufacturer that as little as 5 years ago could do no harm and pretty much moved the handset market wherever it wanted to. We all know how that story has turned out so far…
The console certainly has had a promising start. Over 200,000 units were sold in Japan the first week of launch and the company is seriously banking on this device to reverse its fortunes (which given its stock price it should – click here). The question is will it be enough?
Several weeks ago at GDC in San Francisco, Nintendo’s President, Satoru Iwata, spoke of the imminent launch of the 3DS and it’s ability to revolutionize gaming through its use of 3D, ability to run apps, take pictures in 3D, incorporation of Netflix and a host of other features. Bizarrely though, he completely minimized or ignored the threat of mobile gaming to the 3DS offering. Nintendo, he said, would never go down the route of mobile gaming as the experience would dilute and undermine the quality of the types of games Nintendo was trying to develop. Nintendo apparently has a difficult time recognizing mobile as a genuine gaming platform.
The strange thing about Nintendo’s denial of the rise of mobile gaming is that mobile gaming is doing to the handheld space exactly what Nintendo did to the console space with it’s Wii launch nearly 6 years ago. When Nintendo introduced the Wii it was lauded for its simplicity, design, fun factor and ability to do what no other console could really do: broaden the market beyond non gamers. Nintendo famously embraced what Insead professors Chan Kim and Renee Mauborgne dubbed “Blue Ocean Strategy” in a book by the same name. They choose to move away from the power, graphics and heavy-duty processor wars that had featured in the console industry and instead reinvent the industry by making a machine that was less powerful but more fun and more open to growing the gaming audience. The result was that the Wii became the best selling console of its time with over 34M installed units to date in the US alone.
With the 3DS Nintendo seems to be taking the opposite approach. The 3DS is its most powerful handheld gaming device yet with 2 266mhz Arm11 processors, dual stereoscopic cameras, 800x240 top pixel screen and full 3D graphics that don't even require 3D glasses to use. However, as a gamer and someone who’s worked in mobile games for the past 6 years I’ve got to question the logic of this direction.
First, consider the audience. As far as I understand, use of 3D is not recommended for people under the age of 6 and I would interpret that to mean it isn't ideal for 8-12 year olds much either. So the device will likely be targeted at 12-18 year olds or 18-24 olds. This is a similar demographic to those playing games on iPads, iPhones, iPods and increasingly on Android devices. Nintendo’s traditional gaming audience for their portable devices was much younger then this. Typically teens or young kids who might not even have access to mobile phones. The new strategy puts them much more squarely in competition against Apple and Google. In this respect they’re facing rivals who have both incredibly strong brands but also global reach and distribution as well as the marketing muscle of the carriers who push their devices. Granted these guys aren’t pushing solely gaming and their message can get diluted through multiple marketing campaigns by carriers all over the world but keep in mind that Verizon’s marketing launch of the initial Droid probably was on par with what Nintendo will spend to market the 3DS in the US.
Second, consider the value proposition. Yes the 3DS is cool and yes the games are awesome, but is the value proposition really enough for consumers? Is 3D really a good enough, sustainable point of difference to shell out an extra $250 plus $20+ per game when I can have pretty damn good experience on a mobile device – which I also happen to always carry with me and allows me to do 300,000+ other things as well (including voice calls for that matter) for $150-200 plus $1-$6 per game? As a gamer I just don’t see it and I’m not sure others will either.
Lastly, Nintendo doesn’t seem to realize that the entire paradigm for the console industry is changing. Console hardware has been typically updated every 5-7 years (the DS launched in 2004). In the meantime developers build games that try to eke out every drop of processing power from existing hardware until the next machine comes out. Mobile has changed all that. New, more powerful devices are coming out every 3-6 months and major improvements are happening yearly. This means developers are accessing a bigger and bigger market as smartphone penetration increases while also developing better and better games as devices improve. It also means that content is being developed at a rate that is far faster then it would be for a console ecosystem. One of the criteria gamers use when deciding on a device is the content available. How many games are there? How expensive are they and how easy are they to buy? Again, mobile gaming has dramatically changed the competitive picture for Nintendo here. Not only do I not have to leave my couch to get a new game, but also I don’t have to pay more the $5 (and that’s for an expensive game!) and I’ve got tons of new games literally at my fingertips every single week.
Is Nintendo sticking its head in the sand? Sounds a lot like a certain Finish handset manufacturer that as little as 5 years ago could do no harm and pretty much moved the handset market wherever it wanted to. We all know how that story has turned out so far…
Tuesday, 22 March 2011
App meter q2 2011 - Android tipped to be next phone 2-1 over iPhone
All the latest consumer data from GetJar on the world apps. What kind of apps are people downloading, how many are they using, when are they using them, what types of genres are the most popular and much much more...
App meter q2 2011
View more documents from Patrick Mork.
Sunday, 13 March 2011
Sxsw app vs. web
My Apps vs. Web preso from SXSW 2011 on Slideshare
Sxsw app vs. web
View more presentations from Patrick Mork.
Tuesday, 8 March 2011
Android wins a battle, but the real war is just beginning
Not a week or two goes by without the folks at Google trumpeting some stat or other of Android’s unstoppable march towards complete and utter Mobile Domination.
This week we saw stats published from Comscore announcing that Android had taken the lead in smartphone market share in the US for the first time (click here). From October 2010 to March of this year Android’s share jumped over 7% to a whopping 31.2%. That’s gotta have a lot of engineers over in mountain view feeling pretty smug. Cue applause
Yet the truth is that for all for all the hype, Android is still a long way from winning the war. Although development on Android is at record heights as are submission of apps to Market, GetJar and others there are still some serious skeletons in the closet.
Of the last 20-30 developers I spoke with at GDC, MWC and other conferences over the past few weeks, only one was leading with Android for their development. This is by no means symptomatic of the overall ecosystem of developers but they all had one thing in common: they complained about the inability to properly monetize Android as a platform and many voiced concern over discovery of their apps as well.
Monetization of apps in general continues to be significantly higher on iOS then on Android. Take a look at the comparison published by HIS Screendigest last month:
As you’ll notice, Apple still commands over 80% of app revenues last year and although that’s down more then 10% vs. 2009, Android Market’s revenues are no better then Ovi’s (or is that Microsoft Marketplace or Microsoft Ovi or whatever….).
What’s more concerning is looking at revenues per handset / user. According to Digitimes, Android handset sales totalled 55 million units in 2010, which was jump of over 560% from 2009. The delta in revenues on apps was over 800% but revenues per handset were only $1.85 per user vs. $37.9 per user on iPhone (assuming 47 million iPhones sold last year). Now don’t forget that developers get only 70% of that revenue so on Android you can buy yourself a tall latté (no cream) while you can at least pay your water bill if you’re an iPhone developer. So if you’re a VC funding that next great app start-up well…
Show me the money
The fundamental problem on Android remains the payment system (Checkout) and the lack of in-app billing. Although Google has announced it will unveil IAB at Google IO in May they remain on mute about where it will be available, on which carriers and the economics of the deal. Naturally, developers remain in suspense. It’s been estimated that 47% of games revenue on IOS are now generated by IAB, which has come from next to nothing in the past year or so. However, the key difference remains that on IOS IAB is still a 70% revenue share. Most likely it won’t be this high on Android. Why? Because if Google offers IAB using carrier billing unless they are able to keep the same revenue shares they currently have with carriers (Google 10% / Carriers 20% estimated using Checkout) then the out payments (net payments after carriers take their share) could be significantly worse. Take a look at out-payments provided by 3rd party provider Fortumo for an idea:
So in this picture carriers take a whopping 60%+ before Google even sees a dime. The alternative is to use Google Check-out (ie Credit Cards) for IAB transactions. This may improve out payments to developers but it will cause a drop off in conversions to purchase. I spoke with a developer with apps on both the App Store and Android Market and he said that for the same app IOS had a 10x factor in revenues. Check-out will only be used by some people (18+ for starters in the US) and outside the US credit cards see much lower usage on average.
Why is this important? Early last year I published some research we did at GetJar showing that content was the number 3 most important factor in determining handset purchases among GetJar users. More important then form factor, battery life, or screen resolution. However, the key to great content is that at some point developers need to make money. You can do a million activations a day but unless those are in the right markets where consumers have disposable income and payments are frictionless and reasonable then developers can’t make money and the reality is they have to pay rent, eat and buy clothes as well.
To date Google has resisted developer attempts to use alternative solutions to it’s own in-house billing solution (Check-out) despite it’s obvious flaws. Although a number of solutions exist out there, many developers remain confused about whether they can or should use a non-Market billing solution for their apps. Amidst this confusion they remain, like a flock of faithful devotees, waiting at the foot of the mountain for Google to deliver the perfect solution. In truth, it will get better but there won’t be a deluge of money pouring out of the Android ecosystem anytime soon.
Discouraging developers from using alternative billing methods though is like offering Diners Club at Walmart as the only way to pay for your groceries. Vendors know consumers have other ways to pay but go hungry because Walmart won’t accept Visa or Mastercard. It’s not good for consumers and not go for suppliers.
Android was originally conceived as an Open ecosystem and that was part of the reason developers, OEM’s and carriers embraced it. Yet as its market share has increased it’s become more closed (let’s not even mention AT&T’s pre-historic stance on non Android Market app distribution). This isn’t a long-term approach to building a thriving ecosystem. Google still has time to fix this and make sure those vendors don’t go hungry. They should look to partner more with others who can help them improve distribution and monetization and move away from the “not invented here syndrome”. This race will be a long one and competitors like Microsoft have shown that with money, a good product and a strong ecosystem that rewards publishers (Xbox anyone?) the race is won by those who keep running and not those who sprint in the beginning.
Saturday, 26 February 2011
What's the role of marketing in start-ups?
Recently a question was posted in one of the Linkedin forums I joined entitled: "Why aren't marketers part of more start-up founding teams?"
This questions actually goes a lot farther then it would seem but part of the answer to the question is really: What's the role of marketing in tech start-ups? This is a pretty fundamental questions and the answer is pretty complex. I've been working in tech start-ups for about 7-8 years or so and my general consensus is pretty simple: engineers typically don't really understand what exactly marketing is and how it can help their companies and marketing guys typically struggle to find a way they can contribute to tech companies aside from advertising (which they usually don't have budget for), PR (which they might not be good at) and marcoms (which is key to selling but gets very dull very fast). What typically also compounds the problem is often that the marketing guys - present company included at times - don't know enough about the tech to build street credibility with the product guys.
All joking aside there's a lot of truth in what's been said here. I deal with this every day in my company. 2.5 years ago I was employee number 8 and today we're near 70 with over $40M raised to date in VC funding and I can truly say that marketing plays a big role in what GetJar does and how the company is seen on the outside.
But we're an anomaly. Sadly, I have to agree with many posts I've seen from frustrated marketers: The mentality in the valley is engineering driven: build it and they will come. It's also a real reflection of the ignorance of what marketing does or should do in a start-up. However, some clarification is required here:
Fred Wilson wrote a great post some time ago that was also partially re-printed in Techcrunch where he talks about the role of marketing in start-ups. Mistakenly, but somewhat unsurprisingly, Techcrunch sensationalized his post in a story saying "Marketing is for companies who have sucky products." In truth, this isn't at all what he's saying. He says that there is a time when tech companies need real marketing and that's later in their life cycle. Not in the beginning. Even then, this is only partially true in my opinion. He doesn't really do a good job of explaining what marketers can do in early stage start-ups.
Here's my experience on this at GetJar:
You have to define what your role is in the company very early on. What start-ups need is:
1. A killer product
2. A business model - and someone to sell it
3. Free, or next to free user acquisition (which Wilson does highlight well)
4. Cheap PR
5. Someone charismatic, smart and well connected to get out their and evangelize their product without over selling it
6. Lots of BD
I was with a partner at a leading VC the other day and he looked at me and said: "You're not really a CMO. You're a BD, Marketing, sales guy." He's right. But my role became that because it's my company needed - and to a degree still needs.
Part of the challenge for marketing guys is that they should know the tech cold. This helps credibility with the engineers and product guys and is key to getting a seat at the table. I'm still working on that part and I'm far from perfect but you need to build your street cred not just with the coders but with the organization as a whole. If you acknowledge what I said above and work along those lines you can really become a critical component of the C-team but if you think marketing is just advertising and PR you're going to be very frustrated very fast and not really add much value.
So if you don't believe you can change the engineer or "product guys'" view (as they sometimes like to market themselves - lol) here's a formula that could work for you:
- Spend time with the engineers. Ask them questions. Understand what they're working on. Take them to lunch. Play ping pong with them. Become their friends
- Spend time with customers. On average I do 4-5 meetings or calls a week with customers or potential customers. I also sell - literally - to clients and bring in cash. That earns you kudos with sales and in some cases these guys can influence product more then you do since they make sure the coders get paid ;)
- Do lots of research. Marketing 101 for start-ups at least for me is to spend a large chunk of time positioning your company as a thought leader. We're the only app store to share consumer and developer / platform data to the press, other developers and partners. We publish our numbers openly, discuss trends and are out often talking about where the industry is going. The benefit of doing this is threefold. 1. It generates free PR. The press loves this stuff particularly if they dont get answers from others. Apple and Google make our lives easy here since they don't openly share data. 2. It's a soft sell which helps you build credibility with your ecosystem but also helps your sales guys open doors. 3. If the above works you get a lot of credibility with the engineers because if they are smart they will see / hear others talking about your company and they will give you "respect".
- Think of "distribution" as bis dev. Again, this has the same benefits as doing research but also can widen your distribution and build leads.
The reality is Silicon Valley isn't going to change for marketers. Marketers need to adapt to the culture and do a better job of understanding the technology their company is doing and also carve out a space for themselves that brings value in the organization. By understanding what the organization needs and really add value they will build credibility not only with their organizations but also within their industries. In time hopefully they can then think of more traditional marketing if and when the opportunity presents itself.
P
This questions actually goes a lot farther then it would seem but part of the answer to the question is really: What's the role of marketing in tech start-ups? This is a pretty fundamental questions and the answer is pretty complex. I've been working in tech start-ups for about 7-8 years or so and my general consensus is pretty simple: engineers typically don't really understand what exactly marketing is and how it can help their companies and marketing guys typically struggle to find a way they can contribute to tech companies aside from advertising (which they usually don't have budget for), PR (which they might not be good at) and marcoms (which is key to selling but gets very dull very fast). What typically also compounds the problem is often that the marketing guys - present company included at times - don't know enough about the tech to build street credibility with the product guys.
All joking aside there's a lot of truth in what's been said here. I deal with this every day in my company. 2.5 years ago I was employee number 8 and today we're near 70 with over $40M raised to date in VC funding and I can truly say that marketing plays a big role in what GetJar does and how the company is seen on the outside.
But we're an anomaly. Sadly, I have to agree with many posts I've seen from frustrated marketers: The mentality in the valley is engineering driven: build it and they will come. It's also a real reflection of the ignorance of what marketing does or should do in a start-up. However, some clarification is required here:
Fred Wilson wrote a great post some time ago that was also partially re-printed in Techcrunch where he talks about the role of marketing in start-ups. Mistakenly, but somewhat unsurprisingly, Techcrunch sensationalized his post in a story saying "Marketing is for companies who have sucky products." In truth, this isn't at all what he's saying. He says that there is a time when tech companies need real marketing and that's later in their life cycle. Not in the beginning. Even then, this is only partially true in my opinion. He doesn't really do a good job of explaining what marketers can do in early stage start-ups.
Here's my experience on this at GetJar:
You have to define what your role is in the company very early on. What start-ups need is:
1. A killer product
2. A business model - and someone to sell it
3. Free, or next to free user acquisition (which Wilson does highlight well)
4. Cheap PR
5. Someone charismatic, smart and well connected to get out their and evangelize their product without over selling it
6. Lots of BD
I was with a partner at a leading VC the other day and he looked at me and said: "You're not really a CMO. You're a BD, Marketing, sales guy." He's right. But my role became that because it's my company needed - and to a degree still needs.
Part of the challenge for marketing guys is that they should know the tech cold. This helps credibility with the engineers and product guys and is key to getting a seat at the table. I'm still working on that part and I'm far from perfect but you need to build your street cred not just with the coders but with the organization as a whole. If you acknowledge what I said above and work along those lines you can really become a critical component of the C-team but if you think marketing is just advertising and PR you're going to be very frustrated very fast and not really add much value.
So if you don't believe you can change the engineer or "product guys'" view (as they sometimes like to market themselves - lol) here's a formula that could work for you:
- Spend time with the engineers. Ask them questions. Understand what they're working on. Take them to lunch. Play ping pong with them. Become their friends
- Spend time with customers. On average I do 4-5 meetings or calls a week with customers or potential customers. I also sell - literally - to clients and bring in cash. That earns you kudos with sales and in some cases these guys can influence product more then you do since they make sure the coders get paid ;)
- Do lots of research. Marketing 101 for start-ups at least for me is to spend a large chunk of time positioning your company as a thought leader. We're the only app store to share consumer and developer / platform data to the press, other developers and partners. We publish our numbers openly, discuss trends and are out often talking about where the industry is going. The benefit of doing this is threefold. 1. It generates free PR. The press loves this stuff particularly if they dont get answers from others. Apple and Google make our lives easy here since they don't openly share data. 2. It's a soft sell which helps you build credibility with your ecosystem but also helps your sales guys open doors. 3. If the above works you get a lot of credibility with the engineers because if they are smart they will see / hear others talking about your company and they will give you "respect".
- Think of "distribution" as bis dev. Again, this has the same benefits as doing research but also can widen your distribution and build leads.
The reality is Silicon Valley isn't going to change for marketers. Marketers need to adapt to the culture and do a better job of understanding the technology their company is doing and also carve out a space for themselves that brings value in the organization. By understanding what the organization needs and really add value they will build credibility not only with their organizations but also within their industries. In time hopefully they can then think of more traditional marketing if and when the opportunity presents itself.
P
Sizing up the global mobile apps market
Useful data on the size of the app market, trends, value of the industry
Sizing up the global mobile apps market
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