One trick pony economy

Let’s face it, VC’s artificially sustain businesses before they are profitable, delaying the inevitable market confrontation giving founders more reasons to convince investors than users. In fact , and this is more prevalent in the phone app world, we see founders solely focused on seducing investors, hoping to figure out the business model later in the company’s cycle. And investors willingly playing the game, if only to beef up their portfolios.

They are, what we call them the One trick pony apps. Someone, somewhere figures out that a couple of features of a phone matched together can lead to a cool result and off they go, regardless if there is any usefulness behind it. More often than not, because of the weakness of their feature, they build a social platform around in the hopes that millions will gather just to use that one feature.

For example, today’s announcement of Flashgab, an app that publishes your photos 12 hours after you shot them.  While that might be a feature useful when you go out to party with your friends in Las Vegas ( how often does it happen?), it should be a menu item in Snapchat, Instagram, Facebook or even G+. It could even be one of the features of your phone, be it Apple or Samsung. Does it need a new social media platform round it. Don’t think so.

Flashgab is far from being the only one. Others will automatically group your photos based on where and where they were shot. Again, a feature, not a business. Another can automatically tag your friends. And so on.

Sure, examples like Snapchat prove that there is room for the explosion of new social media around one feature. But Snapchat is not the rule, it’s an exception.  A very lonely exception.  And yes, the idea behind some of them is to exit via an acqui-hire from a larger company who prefers to buy than build it in-house (another exception). But it’s getting debilitating and its using the marketplace as vast testing ground, treating customers as guinea pigs and clogging the app marketplace with completely useless and never updated junk apps.

Because failures in Silicon Valley are as honorable a special ops  scars, there are absolutely no reason for entrepreneurs to stop their try and dump process until maybe one will take off, at the expense of seemingly  supportive VC’s. It like a giant lottery game with no one cleaning up the losing tickets.

According to the Wall Street Journal, “While there are more than 800,000 mobile apps available in Apple Inc. ‘s App Store, only 80 of them generated more than $1 million in revenue during the fourth quarter (2013), according to research firm Distimo.” who continues : “Only 2% of the Top 250 publishers for iPhone apps in the U.S. App Store are newcomers”.Considering that the vast majority of the successful apps are games it just lowers even more the chance of a photo app to reach the top.

The number one criteria for a new app to be a successful business  should be the answer to this question: is this a feature that could easily be integrated into an already existing app or does it offer real stand alone value ? Granted, not always a clear cut answer ( ephemeral pictures could have been an Instagram feature) but an efficient filter to screen out useless waste of time.

We will certainly not see the end of the one trick app anytime soon as the cycle of failure to launch is accelerating fueled by consistent stories of multi million dollar exits. All we can hope is that VC’s become more savvy in where they decide to invest so that only the true to market solutions become funded. And part of this solution will be for us, here at Kaptur, to stop publicizing those apps we feel are just of waste of time for everyone.

 

Photo by The Nick Page