Mobile is Eating the World (Still)
NOVEMBER 14TH, 2016
I've recently focused a lot of time attention on this blog, and as an investor, on frontier technologies. I define frontier technologies broadly, as inclusive of a new wave of computing platforms, UIs, and applications that have recently gained significant traction in both tech communities, and society at large. Examples include: VR/AR, Machine Learning, Voice UI, Bots, Drones, and various IoT applications/hardware.
It's easy to get excited about frontier technologies and the potential they represent as a fundamental paradigm shift in the broader technology landscape. It's also easy to lose sight of the foundational technologies that came before, and provided the basis for the development of many frontier technologies.
One such foundational technology that has completely transformed the way humans interact with technology, and isn't done yet, is mobile computing. Mobile has become one of the most powerful technology platforms the consumer has ever experienced. Mobile has changed the way we live, work, communicate and play.
It’s only once every decade (or two) that we witness a technology platform shift. In this case, we've witnessed a massive shift from desktop PC to the mobile Internet. As a result, today for the first time, we have a global consumer computing platform as measured in billions of users, compared to the hundreds of millions users we saw with the desktop PC platform.
As a result of the scale achieved by mobile as a platform, we've witnessed the emergence of some truly innovative and massive tech companies. For example, with one tap, we can order a car (Uber, Lyft), constantly communicate with each other in real time (Snapchat, What's App, Slack), order anything we want on-demand (BiteSquad, Instacart, PrimeNow), easily access web based data resources on the fly (Google, Yelp, DropBox) and even find new friends and life partners (Tinder). The applications span the entirety of Maslow's hierarchy of needs, and new mobile applications are being developed every day that will continue to disrupt many aspects of our lives. In each of these cases, the application leverages the native capabilities of the mobile platform and inherent business model fundamentals.
As an investor, Brightstone employs a few strategies for finding the next big mobile application innovation. One metric we look at closely is frequency of use, as it’s important to understand how sticky a product is, and customer usage frequency is a good indicator of this. As for metrics, we also look at app store rankings, downloads, avg user session time, customer acquisition cost and customer lifetime value. Broadly speaking, we identify large markets that are likely to be disrupted by mobile platforms, then assess the landscape of mobile startups targeting the given market sector.
As mentioned in the opening paragraph, we're also interested in mobile because it has the potential, as a foundational technology, to unlock even more powerful applications. We're already seeing exciting examples of this when we look at VR (GearVR, Daydream), and digital assistants (Alexa, Google Home) that leverage VR, machine learning, and voice UI (respectively), but all rely on mobile as a computing platform to power the experience.
We’re only just beginning to realize the potential mobile will have on disrupting many large market verticals, and make no mistake, mobile will eventually disrupt the few remaining offline market sectors. This, combined with the ability to leverage frontier technologies will result in companies that have the potential to grow faster than ever before. It remains an exciting time to watch what the evolution of mobile computing.
