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November 4, 2009
Posted by Ryan Graves

Monetizing the App Economy

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These days it seems like 25% of the ads on TV are for app this or app that. The iPhone app store just hit 100k in applications. Now the Verizon/Motorola/Google Droid comes out and says iCan do everything that the iPhone can’t. You know, Droid Does. One of the coolest things about this Droid phone is the fact that the app store will be just as open and the internets. If you know how to build an app for it, do it, no controlling application or approval process from Apple, Google, or anyone else…at least that’s what they say.

So, where is the money to be made in the App Economy? Well obviously the content creators, the folks who have the most data, whether that’s news, images, or a social graph. Those will always win. Then there are the builders, those who build the best apps will get the most attention, tons of shops have already popped up as the app developers, web developer just doesn’t market as well these days. Mobile is , so if you’re a developer and want to stay relevant, I’d be mastering the iPhone SDK and the Android 2.0 SDK (software development kit). Then come the aggregators, these folks make things easier on the users, and this is what I want to touch on today.

People always complain that the iPhone app store sucks to navigate and they’re right. It’s terrible. Nobody really knows what the Droid app ecosystem will look like because it’s going to be user generated and the users just aren’t there yet. One huge opportunity regardless of platform is application discovery. The proven model of discovery in almost any vertical these days is through the social graph. This means, what apps are my friends downloading, I want them too.

Enter, Appolicious. The social graph for apps. They’re creating compelling ways to discover new apps through a Facebook enabled social network and an easy tool to upload your entire (iPhone only for now) app collection…and if they’re smart, which I believe they are, there will eventually be no limit to which app ecosystem you’re interested in. Within Appolicious, when I search for foursquare I’ll eventually see both their iPhone app, their native Android 1.0 app, and their new Droid app, and also their Palm Pre and Blackberry apps (yet to be released). I want all apps, all platforms, and all my friends reviews.

How many app developers, content creators, and others will want to get a piece of that pie within Appolicious’s soon to be powerful network of people who own apps? Answer: All. This will likely become the most powerful site for application promoters and marketers because this will be the primary tool for application discovery. You might have said, “yea but Apple will just do it and wipe them out”, this application ecosystem diversification is exactly what will give Appolicious staying power.

Alan Warms, the Chicago based CEO of Appolicious, wrote an interesting post back in October about how free apps are the future (I agree) and this statement shows he clearly has a good grasp on where this application economy is going and how best to participate in it.

With yesterday’s announcement (10/15 Apple announces in app purchasing), every company out there can offer a free iPhone App, thereby reducing the friction of driving adoption, knowing that over time they can work with their consumers to find offers that make sense for both parties.

Alan is taking a big bet on Apps, and I think it’s a safe one. Applications, through the increase of mobile computing will become the quickest, easiest way for users to reach the web and the content they need. They’ll increasingly see their smart phones and mobile devices as their tool box to accomplish specific tasks and their apps will be their tools. We all know how much easier a job is with the right tools.

Here’s an interview Alan did with Robert Scoble about Appolicious.

image via flickr
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  • Hi. I'm Ryan Graves and this is my personal blog. I'm an entrepreneur living in San Francisco, but I'm from San Diego. My wife blogs too, and I love my family.

    I'm the CEO of UberCab the radest startup on earth. Here's more about me, and more about my work.





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