A Spoon Full of Mobile
It seems like every technology investor is completely fixated on mobile these days. Why? Because they should be.
Do the math; there are roughly 2 billion people connected to the internet today. There are roughly 6 billion people that have a cell phone; pretty staggering in a world with 7 billion people. And there are roughly 1 billion smart phones in use. Five years ago, there were less than a 100 million.
And within 2 years, it is estimated that more people will access the internet through their mobile device than through their computer. In addition to the sheer number of devices in the market, the time people spend on their phones is staggering. On average, Americans spend 2.7 hours on their phone each day. That’s a little over twice as much time as they spend eating.
So mobile is clearly the right thing to be thinking about, but the way most investors are thinking about it is all wrong. Too often investors think of mobile as an app. They think of mobile as a separate ecosystem and product line. There are even funds dedicated solely to app investing.
I believe the app is a temporal construct. Over time, all websites will be designed for PCs, tablets, and mobile (and any other device that gains widespread adoption) and sites will work just as well when they are accessed from a large screen computer in your living room as they do when they are accessed through a tiny smartphone in your pocket as you board the train.
The propagation of HTML 5 and other ubiquitous technology software languages that work just as well on the web as they do on mobile is already changing how developers build websites. People are tired of having to build products in multiple languages (java, ruby, .net, etc.) for web and (iOS, Android, Windows Mobile, Blackberry, etc.) for mobile. There are too many platforms, too many versions, too many languages and too many standards.
Over time, this will all converge as newer software takes into account the multiple distribution platforms and devices that are available. When this happens, websites and mobile apps will more or less merge. You can already see this starting to happen. The game “Cut the Rope” was originally developed in iOS. The original source code was recently ported to bring “Cut the Rope” to life within a browser using HTML5.
But we still have a long way to go. Just as some companies are migrating to common languages like HTML5, others, like Facebook, are going in the opposite direction given their recent decision to abandon HTML5 for their mobile app and instead release a native version in iOS. Given their scale, they needed the additional speed and flexibility that a native language can offer today. But again, I believe this is a temporary state of inefficiency. Over time, Darwinism will kick in and only software that is cross-platform and agnostic to medium will survive.
But as mobile and web technologies merge, the best of mobile will dominate in my opinion. Anytime you marry an older, antiquated technology with a newer, modern technology, the new tends to dominate the old.
Mobile technology is inherently smarter than the PC. Here are just a few reasons why:
It’s real time: you use it to achieve something NOW.
It’s push and pull: you can ping and be pinged in ways that are transformational. You’re in a bar and lonely – you can ping others. You’re walking down an aisle and not buying anything – the store owner can ping you and offer you a discount.
It’s geo targeted: knowing where you are makes it technology smarter and more relevant.
It’s social: it’s designed to interact with those around you.
It’s local: localization makes it more personal by nature.
It’s opportunistic: technology is at its best when it’s relevant. Knowing who you are and where you are creates opportunities for relevancy that are exponentially superior to what a computer sitting on your desktop can deliver.
For those and lots of other reasons, when PCs and smartphones and tablets merge, the mobile technology stack will dominate and I believe we will achieve an end state where all websites are designed to engage people on the go, on the fly, in real time and in really fast ways. I’ll call this the “Era of Mobility.”
To understand my point, take Amazon and Groupon. One is a company I have spent some time trying to understand, the other I know intimately. Amazon was designed for the PC by virtue of the fact that it was conceived and built in the late 90’s. Its site is rich in content. It offers millions of products. It packs the page with lots of stuff (categories, images, descriptions, offers, ads, etc.). It was designed to be a site where you could spend time, research products you need, compare them against others, find exactly what you want and then order. When you type in children books, for example, and click on a book like “Nanny Piggins” you are presented with a plethora of information: item summary, price, picture, description, editorial reviews, product details, information about the author, customer reviews, similar product listings, forums, your recent history, and on and on. I stopped counting at a thousand words when I was still near the top of the page.
Groupon, by contrast, was designed from inception to accommodate mobile usage. It’s highly visual. It’s highly curated. Items are selected and presented in a manner in which it’s easy to buy when you’re on the go, which is why nearly one-third of Groupon’s North American business in July was through mobile – a staggeringly high percentage when compared to other e-commerce companies. It’s inherently social in that you often use Groupons with your friends. It’s clearly local. And over time, it should become increasingly more relevant, especially as more and more items are available on the site in a manner in which they can be pulled down by customers based on need or desire, instead of just pushed through daily emails on a regimented basis. It’s also broad, designed to cover a wide range of categories (local services, products, travel, live entertainment, etc.), which is critical when you are trying to spur purchasing on the fly as you never know where people are going to be or what they are going to want to buy. As a result, you can use Groupon when you’re out and about to order dinner, make a spa appointment, buy a TV, replace your mattress pad, browse handcrafted jewelry, order tickets to a concert you want to see, book a hotel and get a manicure.
Mobility is a state. It’s the process by which consumers will demand that the technologies they interact with are able to service them in the real world as they move about. The whole point here is that people are engaging on the move, hence the definition of mobile: “able to be moved easily and freely from one place to another”.
To compete, companies will have to examine how they offer their services and products. Are they visually appealing? Can they be purchased instantly and without effort? Is it easy to browse? Has the relevant information been presented in an efficient manner? Is the site smart – aware of who I am and where I am? Has the information I want been curated for me so I don’t have to waste time? And so on.
Every company is going to have to tackle these issues. As an investor, this is the one of the most important attributes we look for and something we believe we have found in the now 53 companies (unrelated to InnerWorkings, Echo, MediaOcean, and Groupon) that make up LightBank. Because in the end, a spoon full of mobile helps the… (I was about to quote Mary Poppins, but actually couldn’t bring myself to do it).