[Recently, I read this roundup of perspectives on “App Constellations” on the new social/professional news app Quibb. This is an emerging product strategy in mobile embraced by Facebook, Linkedin, Foursquare, Twitter, and others, and found it fascinating. Thanks to the authors below for sharing their opinions on this new approach. -Andrew]

Fred Wilson recently coined the term ‘App Constellations‘ to describe what he was seeing in the mobile app ecosystem with respect to distribution. Over the past few months, mobile companies have continued with this strategy, the idea being that standalone apps are better for mobile, versus the all encompassing platforms that dominate desktop experiences – and it’s a better position to own and control several of these key apps on any person’s device.

It has been interesting to watch as Dropbox, Facebook, and Foursquare experiment with this approach – but it doesn’t seem to be working, at least not yet. CB Insights shared some discouraging data last month, and things have only gotten worse over the past few weeks for the most recent apps to be put out by these big players:

It’s important to note that none of the companies using this strategy have promoted their unbundled apps aggressively – beyond Facebook Messenger, which is seemingly the only app where this App Constellation approach is paying off:

Toufeeq Hussain (Senior Product Manager at Storm8)

The App Constellation strategy works when you have a core resource which can be shared across multiple apps. Slingshot and Poke are attempting to create a new resource (reply-to-view-images for Slingshot and disappearing images for Poke) and hence isn’t really leveraging whats core to Facebook (social graph and shared photos). In the case of Slingshot, even the social graph had to recreated from scratch. So even though these apps get huge media attention when they launch, they slowly slide down the charts as there is nothing holding them up.

One company that has done a great job of using core resources and creating a “basket of apps” is Evernote. It currently has Evernote Hello, Evernote Food, Skitch and Penultimate. Each of these are focused around helping users create more notes and thereby getting more usage of the core Evernote product. Of course, not all of Evernote’s apps are in the top-50 lists but they are targeted mainly at new users who are looking for more specific solutions to note taking. Carousel is on the same lines but my feeling is that Dropbox needs more apps that read data stored in Dropbox than contributing to it. If the goal is to contribute to the Dropbox then it needs to be something more than just syncing photo/videos as the default Dropbox app already performs that.

The Asian messenger apps use the contact list as the core resource across any apps integrated into LINE or WeChat. Invitations are sent through the core messaging app but specific functions are performed in the corresponding apps. Games, photo sharing, stickers all have specific apps but use the core LINE or Wechat identity and social graph to seamlessly work across multiple apps.

In conclusion, though its very valuable for a Facebook or Dropbox to shoot for “stars” and build constellations, what we have seen from companies like Evernote and the asian messenger apps (LINE, WeChat) is that a “basket of apps” approach that leverages a common core resource between other apps might actually be a more scalable strategy. Its very hard engineering “stars” – a lot of things need to fall in place to be a top-50 free app, a better strategy for Facebook might be to play to its strengths than alienating new apps from core FB resources.

Bubba Murarka (Managing Director at Draper Fisher Jurvetson)
App constellations are being deployed because the problem of distribution on mobile is “solved” in the sense that large incumbent app owner, and mobile marketers with sufficient resources, can predictably drive installs of their other apps via well known set of steps that includes cross promotion, cross linking, merchandising on mobile web & of course paid distribution. One of the best examples of this is how Facebook has managed to drive massive number of installs of the standalone Messenger app via the main Facebook integration. I would go so far as to say that if an unbundled app from a large incumbent does not to have a massive install base it is intentional to enable the app to mature before investing in driving distribution. FWIW, I am not saying distribution for younger companies without existing massive install bases, well known brand names or meaningful financial resources is “solved” yet…because, well it is not.

As for the value of this strategy it is easy to say it doesn’t work but that is not nuanced enough analysis of why companies pursue this approach. The multi app strategy allows more experimentation, different release cycles and tailored experiences to drive deeper engagement. This allows faster iterations for nascent product lines which is critical for finding product market fit (traditionally the key advantage startups have over large incumbents). Using Facebook Messenger, as an example again, FB only focused on driving installs 3 years after they had initially released the standalone app. I’d hypothesize that once Dropbox wants to drive installations of their app constellation they will have no problems – “Install Carousel and get 500 free MBs of storage” or “To sync your photos to Dropbox you need to install Carousel”. In summary, I’d suggest the best way to assess the value of this strategy is not to look at installs as the only measure of success.

Casey Winters (Growth Marketing Manager at Pinterest)
App unbundling or constellations are a nuanced strategy that I think needs a few, rare conditions to be effective. One is that your main app needs to be a top app already, with little room to improve. Then, it is advantageous to create a new app to see if you can take another top spot on the App Store/Google Play, and another icon on a user’s phone (see my blog post for more details on that strategy).

When you have this scenario, it’s little risk to create a new app, but it means that a very successful company needs to launch a new app and have it be an immediate success. You don’t have the advantage of iterating and starting small and working your way up to popularity like most apps do. It’s very tough to launch new apps this way and be successful because a ton of people try the app the moment it’s launched before you have any market feedback. Typically, people try it, discard it, and you don’t get another shot. So what ends up happening is that popular apps buy newly popular apps instead.

The only way I have seen the constellation strategy work is if the new app was already a core feature of the main app and is then unbundled. Facebook Messenger is an example of this. Since the feature is already popular inside Facebook, and the new app is now where that functionality lives (and that functionality hasn’t meaningfully changed), the new app is successful. Where foursquare erred is the the check-in was declining in popularity in their app, and when they unbundled it they changed the functionality meaningfully to upset those core users.

Alex Schiff (CEO and Co-Founder of Fetchnotes)
Unbundling into “app constellations” is understandably a compelling strategy. More real estate, more targeted products, and more mind share — hooray!

The thing is, outside the tech community most people just don’t download that many apps. Statista put out a report late last year that on average, US smartphone holders have installed 26 apps. To put that in perspective, that’s just over a page of apps on an iPhone 5 screen. Not only are most people not reading about or searching for apps, but when they do hear about one from a company they know, the default behavior is not, “Wowee! I already have Facebook – I should start using their new app!”

Putting the apathy of mainstream consumers aside, there’s a much deeper problem with the whole unbundling strategy. It only works if it’s a fundamentally distinct behavior being segmented into a stand-alone application. I think Facebook Messenger is a great example of unbundling that worked — messaging is very different from browsing stories and stalking people. Separating the two made both my messaging and social voyeurism (let’s be real, that’s what Facebook is for) experience better. Moreover, Facebook wanted to be your go-to messaging utility. That couldn’t happen, I believe, unless it was its own application.

Today, over 200M people use Messenger.

Now compare that with the launch of Paper. Paper, for all intents and purposes, has the same core features as Facebook proper – you browse stories, accept friend requests, view notifications, etc. More recently, they even added back in some of the features they left out, like birthdays and events. The major difference is UI (it’s beautiful) and a philosophical focus on stories over people.

In other words, it’s just a different approach to Facebook. Most users I’ve talked to use Paper instead of Facebook, not alongside it. Since Paper offers pretty much the same functionality as Facebook proper, most people just aren’t that motivated to try it out. As of June 11, Paper has only 119,000 MAUs. Frankly, I wouldn’t be surprised if Paper was just a test for a new approach they’ll be bringing to the core Facebook app. Unless Facebook strips Paper down to be stories and stories alone, I don’t see it surviving long-term as a stand-alone app.

There are certainly more granular product reasons Slingshot, Paper, Carousel, etc. haven’t taken off. However, across any app constellation effort, the products need to compliment — not cannibalize — each other.

Messenger does exactly that. Paper doesn’t.

Adam Sigel (Product Manager at Aereo)
App constellations, unbundling, whatever you want to call it, will ultimately yield a better experience for mobile users and better business practice for the companies making apps, but we’re going to have to work through some pain in the short-term. The trouble for now is that app constellations are ahead of the rest of the mobile experience.

It starts with app discovery. The App Store (for iOS especially) is largely leaderboard driven, and it’s hard to crack into the top ranks, especially for non-gaming apps. One “north star” app in a constellation makes it much easier to build satellites around, and we’re seeing that with Facebook, Dropbox, Google, LinkedIn, and Amazon. As Fred Wilson wrote, this creates a “rich get richer” scenario and creates enormous challenges for newcomers.

Having different apps optimized for different use cases is great, but managing all those apps is a pain. As I mentioned in a blog post about invisible apps, the mobile OSes need a way to have apps that exist outside the homescreen. “Winning the homescreen” just doesn’t make sense for lots of apps (finance and travel, to name a few). iOS is the worst offender here compared to Android and Windows Phone, but this could be addressed a number of ways including design changes, gesture controls, or anticipatory computing.

Even though more apps are building in deep linking capabilities—a very good thing for the mobile experience overall—app switching still stinks. It’s visually jarring to a lot of users, and app management is still a power user skill. To go with the typical early majority example, my parents don’t double-tap the home button to switch apps, nor do they put very much thought into which apps go on which screen or in which folders.

These are temporary imbalances, and recent announcements from Google and Apple suggest directional improvement. As app discovery improves, mobile OSes continue to evolve, and the market matures, we’ll get new, more sophisticated and seamless mobile experiences.

More:
There’s even more discussion in the comments, on Quibb.

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

Scaling growth is hard – there’s only a few ways to do it
When you study the most successful mobile/web products, you start to see a pattern on how they grow. Turns out, there’s not too many ways to reach 100s of millions of users or revenue. Instead, products mostly have one or two major growth channels, which they optimize into perfection. These methods are commonplace and predictable.

Here are the major channels that successful products use to drive traction – think of them as the moonshots.

1. Paid acquisition. If your users give you money, then you can buy users directly through ads. Usually companies try to maintain a 3:1 CLV:CAC ratio to keep their margins reasonable after other costs. (eBay, Match, Fab, etc.)
2. Virality. If your users love your product, then you can get major “word of mouth” virality driven by a high Net Promoter Score. If you can get your product to spread as a result of users engaging with the product, you can further optimize the viral loops using A/B tests to generate even more virality. People often measure “viral factor” to see how effectively existing users attract new users, and of course, you want your viral factor to exceed 1.0. (Facebook, Instagram, Twitter)
3. SEO. If your product creates a ton of unique content, in the form of Q&A, articles, long-form reviews, etc., you might end up with millions of unique pages that can in turn attract hundreds of millions of new users who are searching for content via search engines. (Yelp, Rap Genius, Stack Overflow, etc.)
4. Sales. For startups targeting SMBs or the enterprise, you’ll end up fielding a large sales org to handle both inbound and outbound. This is especially true for companies targeting local SMBs, where telesales becomes the only option. Of course, to make this work, you’ll need to generate a multiple in revenue of what you pay them.
5. Other. There’s the odd partnership, like Yahoo/Google, that can help make or break a startup – but these are rare and situational. But sometimes it happens!

These channels work and scale, because of two reasons:

• They’re feedback loops. Each of these channels creates exponential growth because when you make money from customers, you can use that money to buy more customers, which give you more money. Or in the virality scenario, a cohort of new users will invite even more users, who then invite even more on top of that.
• They have a high ceiling on saturation. Part of why paid acquisition will always be around is because people like free products, which cause these products to monetize using ads. As long as people will love free products (which they will, forever), there will be advertising to buy. The biggest ad networks reach a billion users or more. Similarly, SEO works because almost everyone uses Google, so as long as you’re dealing with a high-volume base of searches (like music lyrics, or products) then you’ll be able to reach hundreds of millions of users.

It might seem like it’s best to crack one of these channels right away, and then ride then into glory. But that almost never happens, and instead startups have to work towards them – but it takes time. To figure out if your CLV and CAC match up, you need to buy some users, then wait 6 months to see how well they monetize. If you want to see if your product is viral, you need to build your app, then wait to see if you have the retention and frequency to support a strong viral loop. SEO is hard because after the content is built, Google has to index it and you have to build PageRank. This can take months and years.

New products often only have months, or a year, to live, so these strategies are often not a real option.

High-risk, high-reward
Attacking one of these scalable channels is high risk but also high reward. Every startup has to make sure they are able to slot themselves into one of channels in order to scale their business, but in the meantime, how do you show enough traction to not run out of money?

This essay by Paul Graham gives us a clue, as he writes about Startups = Growth:

A good growth rate during YC is 5-7% a week. If you can hit 10% a week you’re doing exceptionally well. If you can only manage 1%, it’s a sign you haven’t yet figured out what you’re doing.

Another way to say this is, growth is measured through a percentage and so early on, small things can drive a high % growth when the base is small. When you’re starting, there’s a whole list of other tools you can use which don’t scale at all but are nevertheless low risk.

Here are some low-risk, unscalable ways to get users:

1. Getting your friends+family to use the product
2. Emailing/posting among your local community, whether that’s college or an alumni mailing list or whatever
3. Guest writing on niche blogs – you often see this with mommy blogs, etc.
4. Cold e-mailing potential users and influencers
5. Engaging with potential users over Twitter, Reddit, forums, and other communities
6. Contests and giveaways, partnering with a blogger/YouTuber or something
7. Getting covered in niche press outlets, like the tech press
8. … etc., etc.

All of the above require hustle, but are low-risk and fairly high-percentage. And when a contest can generate a few thousand signups, on a small base that’s not bad at all. The other added benefit is that these methods put you in direct/close contact with your users. So in the early phase, when you are still working on product/market fit, this can be an important way to learn if you have the right product.

However, none of these methods scale well, which is OK, if you know when you need to move on. Even getting covered in the mainstream press, like NYT level, maybe only garners a few hundred thousand signups max. Getting featured by Google or Apple is about the same thing. That’s better than nothing, of course, but it’s still far below what you need to get on a rocketship trajectory. For the rocketship, you’d need to perfect one of the 4 main channels I listed earlier.

So ultimately, how do you balance these? Let’s talk about the barbell strategy.

The barbell
To answer the question of how to balance these growth projects, let’s talk about the barbell strategy. The barbell strategy is a way that investors can split their holdings between some high-risk/high-return investments as well as low-risk/low-return conservative investments. Investopedia describes it:

Put your eggs in two baskets. One basket holds extremely safe investments, while the other holds nothing but leverage and speculation.

In the context of these growth channels, the key is to balance a series of progressively more scalable growth projects, while keeping track of the big growth channels that will help you shoot the moon.

Do the methods that don’t scale
During the early days, by all means, sign up friends and family. And get those blog mentions, and do all the content marketing you can handle. That’ll help create a base of engaged users, while you hit product/market fit. At each point, as what works caps out, go after the next marketing channel that can drive incrementally more users. In the early days, perhaps a contest partnership with a niche blog would do, but after a while, maybe you’d hire a small team to author long-term content marketing pieces to circulate.

Invest in moonshots
The other end of the barbell, the high-risk/high-reward projects, should be taken with deliberate projects and analysis. If you need your userbase to generate a lot more unique content for SEO, start fiddling around with features that reward long-form content. And start tracking what % of users write great content. And start making the small changes needed for Google to index your site. After a few months of this, you can start to understand what it would take to create enough pieces of unique content to make an SEO strategy work. You can usually work this kind of thing out on a spreadsheet.

Balancing between the two
It’s important to balance these short-term and long-term efforts. If all you do is work on nonscalable marketing methods, then inevitably the channels will tap out and your growth will slow. When you see the startups that are highly dependent on press hits for their traction, but seem anemic otherwise, this is exactly what’s happening.

The barbell strategy helps products make progress on long-term goals while still creating short-term momentum – you’ll need momentum to attract investor interest, but you’ll need the long-term scalable growth channels to really build your business.

Good luck. And if you have a product that’s working well, has a nice base of traction, and now the only things that can move the needle are scalable methods, don’t hesitate to email me for advice: voodoo at gmail.

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.

[Today we have a guest post from Alex Schiff, who’s a co-founder and CEO of Fetchnotes, which makes simple, smart tools that help people work together and get things done. Fetchnotes graduated from Techstars Boston in November 2012, and is currently a team of 5 in Cambridge, Massachusetts. -Andrew]

Alex Schiff, CEO of Fetchnotes:

There’s a big craze in messaging right now, and everyone seems to be trying to integrate some form of it into their product. Having learned that people who shared notes were way more likely to build a habit with Fetchnotes, we definitely caught the bug in our last iteration. It also coincided with a goal to evolve our value proposition beyond just personal organization — there’s just a lot of noise in that space.

A more detailed overview of that product, featured to the left, can be found here. To summarize, we wanted to create an organized feed for the things you’re keeping track of as well as the things other people want you to be keeping track of. Effectively, we built out messaging features (revolving around @-mentions) that allowed you to communicate in a hyper-organized way, on top of what was still at its core a personal notes/to do list app.

We learned a lot about the way people communicate and work together (which is informing a lot of future product plans), but we didn’t really budge the core metric we were trying to move: % of monthly active users sharing at least one note per month (below).

The % of users sharing actually went down before returning to pre-launch levels. We had a large influx of users from launch press, but the sharing value proposition still didn’t click. As a result, we had an even higher percentage using it as a personal notes app. Not the results we wanted, but we learned a lot in the process.

For anyone out there building social products, I wanted to share some of those lessons.

Be aware of invisible mental walls

Before we launched this iteration, a common complaint we heard was that the places people kept track of information personally tended to be isolated from where other people sent it to them (email, SMS, and other communication channels). This was pretty consistent across both people who used Fetchnotes and people who used other tools, and it was a major influence on the product we designed.

It turns out that while information silos are indeed a pain point, a major reason they exist is because people tend to think of “personal stuff” and “shared stuff” differently. They don’t want them co-mingled in one organizational area. When we started asking people the right questions, we also found “I need to send this to someone” is just not the same mental mode as “I need to remember this for myself.”

With good reason, too — here are some problems that you run into when you try to combine the two:

• People have different ways of organizing, prioritizing, categorizing, etc. that conflict with each other. And they are very particular about it — everybody’s a little OCD.
• Where you keep track of personal information is sacred. When other people’s stuff start showing up, you feel like it’s not yours anymore. That leads you to not want to put deeply private material there.
• Messaging/communication is inherently noisy and chaotic. Personal organization is about order.

Most often, people bucket Fetchnotes as either social-only or private-only, and generally it’s the latter. So if you’re building a product that has anything to do with shared and personal organization, make sure you give people walls to protect their “personal space.”

The concentration of communication channels

We were trying to get people to use Fetchnotes to communicate things that had an element of permanence or action. It was all about adding things to people’s lists — i.e., organizing your communication so it was where the recipient wanted it (featured to the left). What we didn’t want was the more conversational fluff, like this:

At that point, we might as well be having a conversation in Google Docs.

By talking to a lot of users and non-users about their habits, we learned that communication channels tend to concentrate around only a handful of categories:

1. People. “When I want to talk to Hans in Germany, I use WhatsApp. When I talk to my mom, I use SMS.”
2. Context. “When I want to talk about work stuff, I use Slack. When I want to talk to my friends about going out later, I use Facebook Messenger.”
3. Media type. “When I want to send my friends photos, I use Snapchat. When I want to communicate via text, I use SMS.”
4. Publicity. “When I want everyone to see my thoughts, I use Twitter. When I want to send messages privately, I use SMS.”

If someone can’t use a product for all of their communication within one of those buckets, you tend not to use it for any of your communication. There are certainly exceptions, but they’re exactly that — exceptions. People need an extremely clear mental model to answer the question, “When do I use this app?”

Regardless of what product you’re building (though it’s especially true in messaging), make sure that your users can answer that without having to think.

Make sure your “viral hook” is organic and frequent

Our users frequently asked for ways to share their notes with non-users, and that underpinned a big part of our growth strategy. That was the thinking behind our address book integration, which actually works quite well when people need it. In fact, about 25% of all notes shared are shared with non-users (via SMS or email).

The problem, as we realized, is that communication is about sending (one-way) information to another person. When I message someone about say, a link I think they should check out, I’ve already checked that link out. I don’t need to save that information for myself, so I have no reason to send that information to you via Fetchnotes (since it will just send you a text anyway). People do share with non-users in other ways (like sharing pre-existing notes after the fact), but that behavior isn’t frequent enough to make an impact on growth (less than 1%).

So as you’re thinking through your “viral hook,” make sure you’re building it around something that people organically need to do, and need to do often. “Non-user sharing” around inorganic behavior is just an invite system no one uses. Get granular, map it out from beginning to end, and talk to people about how they accomplish these steps currently. Don’t take shortcuts or make assumptions.

Your network-specific identity is probably confusing people

Way too many companies start off thinking, “We need our own identity!” Pretty much every major social network has one, and they’re enticing from a brand perspective (i.e., “Follow me @alexschiff on Twitter!”). However, most products don’t really need usernames to be front and center. People don’t want yet another identity to think about, and it usually ends up causing a lot of design complexity. Product managers tend to believe people will value their usernames, but unless you’re a product that is public in nature people stop caring after five minutes.

Ideally, identity should be something that fades into the background of a social product. Particularly for productivity-oriented tools, no one wants to share with “@alexschiff” — they want to share with “Alex Schiff”. Unless your product is public in nature, you might not even need a username at all. Either way, focus on real names, not aliases.

How groups adopt tools

Finally, we noticed a major trend in the way groups adopt tools — one that existed across families, businesses, friends, and pretty much anyone we talked to. We identified 3 major personas when a group chooses to use a new product, and one of them is much more important than the others.

The Leader

The leader isn’t necessarily the “alpha” of the group, but they’re the one who takes the lead in planning and organizing. More importantly, they’re the one who searches, evaluates and introduces a tool into the group — they want to use something to improve efficiency. They would generally set up Fetchnotes, load in a bunch of information (i.e., a list of prospective apartments you’re sharing with your roommates), and start using it completely. Frankly, they’re not that picky — they just want it outside of the noise of normal communication channels.

The Engaged Follower

The engaged follower is the person who contributes to the conversation, but defaults to using existing channels like email or text. For example, rather than adding a new apartment listing in Fetchnotes, they would send everyone an email, text, FB message, etc. They vary in reluctance to adopt new technology, but the unifying pattern is that they end up dragging the conversation back into email by not using the chosen tool.

The Passive Follower

These are the people that just go with the flow on how things are planned. They might contribute a little or not at all, but they’ll generally just go wherever the conversation is happening. This is because, for them, the conversation is more for reference than it is actively contributing their own ideas and effort.

Today, collaboration products are built for the leader. In other words, they’re built with the assumption that everyone in the group is planning on using it. But the secret truth is that they’re already plenty satisfied with the tools available — it’s the lack of adoption by other members that causes problems.

The key to getting group collaboration tools adopted, I believe, is by making it work for the “engaged followers.” The “passive followers” will go wherever the conversation goes, and the leaders are generally satisfied with the tools that already exist — besides the fact that no one will use them.

So, we’re working on exactly that — stay tuned ☺

I write a high-quality, weekly newsletter covering what's happening in Silicon Valley, focused on startups, marketing, and mobile.