That’s the advice given by the founder of Tapulous, one of the most successful iPhone apps to date. If you don’t know the company, Tapulous is the ‘Guitar Hero’ of iPhone and has custom apps developed for Coldplay, Lady Gaga and Metallica. They have a rediculous amount of downloads. Something north of 25 million.
CEO Bart Decrem said straight out….”You don’t want to be in the app business. It’s not a fun way to do business.” The reasoning follows the same logic I’ve heard from many different sources. There are too many apps and its very difficult to get noticed. The life cycle of a typical app is a few months. If you succeed, you’ll make a few bucks but then what? Make another app? Then another? Each one is a gamble.
So what’s Tapulous doing? They are building a network. A community. The iPhone app is the interface that builds and nurtures that community. It was advice echoed by all the panelist at this event. It’s been obvious that investors are primarily looking at platforms, technologies and communities (foursquare, bump, gowalla, vark, etc) and not interested in just an app. There is a reason for this interest. I meet a lot of developers who are making a simple standalone one hit app and that’s pretty exciting but not WowWowWeeWow exciting. If your app is good, you can make enough money to put food on the table. If your goal might aspires for something more, and you recognize that the iPhone as a truly disruptive technology that’s ushering the decade of mobile computing (Android, WebOs, etc), then you’d better get your head out of your app.
Some other interesting tidbits for the evening:
- Angels are the new VCs
- BestBuy has an internal incubator. Cabulous is a spinoff of that incubator
- Tapulous has 40 different angel investors contributing about 3 million. Cabulous has 32 different angels
- Getting the first 25K is really hard. Getting the last 5 million is easy.
- You’re not hot until your hot
- Everyone knows how cheap it is to build and test ideas on the iPhone. Therefore you should test it before going to an angel. In other words, get traction
- 90% of your effort needs to be in marketing. This mostly includes telling your friends, twittering, wearing a sign-board while selling hotdogs in front of apple (John does this for Cabulous), etc.
- Because teams are generally small, the work never stops.
- Should you partner with a brand (Britney Spears, Vitamin Water, etc)? A: it depends on your goals. If you’re trying to acquire users to your network, then it may make sense. If you’re trying to build your own brand, watch out. Define your goals.
A short note on Cabulous: I haven’t looked closely at the company but what I understood so far was interesting. I thought it was lame but as I dug deeper, I wish I had thought of it. It’s simply about hailing a taxi and match making riders with drivers. Here’s the deal…. On one side (rider), if you want to find a cab, you hail the cab from your iPhone app (launch app, hit the big hail taxi button). On the other side (cab driver), if you want to find passengers, then you have the app running and it shows you points on a map where people are looking for a cab. Instead of running through some central dispatch, it makes the match making process peer-to-peer. The way things are done today is that a taxi driver basically hunts looking for potential passengers (assuming its not rush hour and its not raining). Using a mobile device running this app essentially gives the driver x-ray vision into the city. The marketing strategy Cabulous used initially was to let drivers promote the product. A passenger gets into his car and the cabby says: “Do you have an iPhone running the Cabulous app? If not, get it and make me your favorite driver”. Aside from location based match making, it also creates a social community of sorts around a particular vertical with ratings, comments, etc. There are competitors in the space but they’re focused in different directions. I’ll be downloading this app and taking it for a spin…perhaps I’ll comment more after I’ve given it a try.
Event held at Parisoma