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The race for Apple Watch’s killer app

Cover-Nov-2014-for-meng-700x902

The upcoming race
As the release of the Apple Watch draws near, we’re seeing press coverage hit a frenzied pace – covering both the product, the watch’s designers, sales forecasts, and the retail displays. That’ll be fun for us as consumers. But for those of us who are in the business of building new products, the bigger news is that we have a big new platform for play with!

The launch of the Apple Watch will create an opportunity to build the first “watch-first” killer app, and if successful, it could create a new generation of apps and startups.

Why new platforms matter – the Law of Shitty Clickthroughs
Regular readers will know that I’m endlessly fascinated by new platforms. The reason is because of The Law of Shitty Clickthroughs, which claims that the aggregate performance of any channel will always go down over time, driven by competition, spam, and customer fatigue.

When you have a big new platform, you avoid all of this. So it’s not surprising that every new platform often leads to a batch of multi-billion dollar companies being minted. With mobile, it was Uber, Whatsapp, Snapchat, etc. With the Facebook platform, we saw the rise of social gaming companies like Zynga. With the web, we had the dot com bubble. It’s very possible that wearables, led by the Apple Watch, could be that big too.

With the Apple Watch, we have fresh snow:

  • Right after the launch, there’s a period of experimentation and novelty, where people are excited to try out new apps, no matter how trivial
  • A barrage of excitement from the tech and mainstream press, which will publicize all the big apps adding integration
  • A device built around interacting with notifications and “glances” which, along with the novelty effects, will cause engagement rates to be ridiculously high
  • The app store which will promote apps that integrate with the Watch in clever ways
  • Unique APIs and scenarios in health, payments, news, etc., leading to creative new apps in these categories

At the same time, there will be less competition:

  • Many apps will take a “wait and see” approach to the platform
  • Some teams won’t try at all Apple Watch, since it won’t be easy to jam their app’s value into a wearables format – for example, you can’t just cram any game on there
  • The best practices around onboarding, growth, engagement still have to be discovered – so there’s a higher chance someone new will figure it out

The above dynamics mean that the Watch launch will lead to some exciting results. Apple has been thoughtful and extraordinarily picky about bringing out new products, so with the Watch, we know they’ll put real effort and marketing prowess behind it. Combine that with the rumored ramp up to millions of units per month, and you can imagine a critical mass of high-value users forming quickly.

What kinds of apps will succeed? It’s hard to answer this question without looking at what you can do with the platform.

The Human Interface Guidelines is worth a skim
Beyond the ubiquitous buzz stories that have been released, it’s hard to have a nuanced discussion about the Apple Watch until you really dig into the details. Here to save us are two documents:

Both documents offer some tantalizing clues for the main uses for the Watch, as well as the APIs offered by Apple for developers to take advantage of. The HIG document is particularly enlightening. Going through the screenshots, here are the apps that are shown via screenshot:

  • Visual messaging
  • Weather
  • Stock ticker
  • Step counter
  • Calendar
  • Photo gallery
  • Maps
  • Time, of course :)

personal_digitaltouch_2xlightweight_weatherglance_2x

For the most part, this is exactly what you’d expect. These are all apps that have existed on the phone, and the Watch serves as an extra screen. I’m sure this will only be the start.

The more interesting question is what the new Watch APIs will uniquely allow.

Apple Watch will supercharge notifications
One of the biggest takeaways in reading through the HIG is the prominence of the notifications UI. Although you might find yourself idly swiping through the Glances UI to see what’s going on, it seems most likely that one of the most common interactions is to get a notification, check it on your watch, and then take action from there. This will be the core of many engagement loops.

For that reason, Apple has designed two flavors of notifications – a “short look” that is a summary of the new notification, and a “long look” that’s actually interactive with up to 4 action buttons. Here’s a long look notification:

longlook_calendar_2x

Because it’s so easy to check your watch for notifications, and you’ll have your watch out all the time, I think we’ll see Apple Watch notifications perform much better than push notifications ever have. Combine this with the novelty period around the launch, and I think we’ll see reports of much higher retention, engagement, and usage for apps that have integrated Watch, and these case studies will drive more developers to adopt.

Waiting for the Watch-first killer app
Succeeding as a Watch-first app remains a compelling thought experiment. We saw that after a few years of smartphones, the question “Why does this app uniquely work for mobile?” is an important question.

Apps that were basically ports of a pre-existing website ended up duds – crammed with features and presenting a worse experience than just using the website. Contrast that to the breakthrough mobile apps that take advantage of the built-in camera, always-on internet, location, or other APIs available. Said another way, many flavors of “Uber for X” have failed because it’s unique to calling a taxi to constantly need to consume the service in new/unknown locations, and with high enough frequency for this consumption. Not every web app should be a mobile app. In the same analogy, the majority of apps in the initial release of the Watch may take it to simply be a fancier way to show annoying push notifications, and drive usage of the pre-existing iPhone app.

The more tantalizing question is what apps will cause high engagement on the Watch by itself, with minimal iPhone app interaction? That’s what a Watch-first killer app will will look like. I’m waiting with a lot of excitement for the industry to figure this out.

Good luck!
For everyone working on Watch-integrated apps, good luck, and I salute you for working to avoid the Law of Shitty Clickthroughs. If you’re working on something cool and want to show me, don’t hesitate to reach out at @andrewchen.

PS. Get new updates/analysis on tech and startups

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

My top essays in 2014 about mobile, growth, and tech

Hello readers,

Happy 2015 and hope everyone had a relaxing holiday. As always, more essays are coming soon for the next year. In the meantime, I wanted to share some of my essays published here over the last year. If you want to stay up to date, just make sure to subscribe for updates.

Also, thanks to the SumoMe team (specifically Noah Kagan!) for supporting my hosting costs. I’ve used SumoMe since the product was in alpha and find it immensely helpful in building an audience.

Thanks,
Andrew

The essays
Without further ado, here’s a selection of essays published in 2014:

Make content creation easy: Short-form, ephemeral, mobile, and now, anonymous

How to design successful social products with 3 habit-forming feedback loops

How to solve the cold-start problem for social products

Why consumer product metrics are all terrible

There’s only a few ways to scale user growth, and here’s the list

Why aren’t App Constellations working?

New data shows up to 60% of users opt-out of push notifications

Early Traction: How to go from zero to 150,000 email subscribers

Why Android desperately needs a billion dollar success story: The best new apps are all going iPhone-first

New data on push notifications show up to 40% CTRs, the best perform 4X better than the worst

Mobile retention benchmarks for 2014 vs 2013 show a 50% drop in D1 retention

Why messaging apps are so addictive

If you want more, here’s the link to subscribe to future updates: http://eepurl.com/xY3WD.

PS. Get new updates/analysis on tech and startups

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

Why messaging apps are so addictive (Guest Post)

[Andrew: This guest post is written by my friend and former Palo Alto running partner, Nir Eyal. Messaging apps have been a fascinating area within mobile, and the big reason for it is that the metrics – especially engagement – have been amazingly strong. I asked Nir to write a bit about why this might be the case, using the habit model. He’s in a unique position to comment on this: After spending time at Stanford and in the startup world, recently he’s been writing about psychology – particularly habit-building – and applying that to the realm of technology and products. Check out his new book Hooked: How to Build Habit-Forming Products and Nir blogs about the psychology of products at NirAndFar.com.]

Nir Eyal, Author of Hooked:

Today, there’s an app for just about everything. With all the amazing things our smartphones can do, there is one thing that hasn’t changed since the phone was first developed. No matter how advanced phones become, they are still communication devices — they connect people together.

Though I can’t remember the last time I actually talked to another person live on the phone, I text, email, Tweet, Skype and video message throughout my day. The “job-to-be-done” hasn’t changed — the phone still helps us communicate with people we care about — rather, the interface has evolved to provide options for sending the right message in the right format at the right time.

Clearly, we’re a social species and these tech solutions help us re-create the tribal connection we seek.  However, there are other more hidden reasons why messaging services keep us checking, pecking, and duckface posing.

The Hook

In my book, Hooked: How to Build Habit-Forming Products, I detail a pattern found in products we can’t seem to put down. Though the pattern is found in all sorts of products, successful messaging services are particularly good at deploying the four steps I call, “the Hook,” to keep users coming back.

The Hook is composed of a trigger, action, variable reward, and investment.  By understanding these four basic steps, businesses can build better products and services, and consumers can understand the hidden psychology behind our daily technology habits.

1

Nir Eyal’s Hook Model

Trigger

A trigger is what cues a habit. Whether in the form of an external trigger that tells users what to do next (such as a “click here” button) or an internal trigger (such as an emotion or routine), a trigger must be present for a habitual behavior to occur.

Over time, users form associations with internal triggers so that no external prompting is needed — they come back on their own out of habit. For example, when we’re lonely, we check Facebook. When we fear losing a moment, we capture it with Instagram. These situations and emotions don’t provide any explicit information for what solution solves our needs, rather we eventually form strong connections with products that scratch our emotional itch.

By passing through the four steps of the Hook, users form associations with internal triggers. However, before the habit is formed, companies use external prompts to get users to act. For messaging services, the external trigger is clear. Whenever a friend sends a message via WhatsApp, for example, you see a notification telling you to open the app to check the message.

2

WhatsApp’s External Trigger

Action

Notifications prompt users to act, in this case tapping the app. The action phase of the Hook is defined as the simplest behavior done in anticipation of a reward. Simply clicking on the app icon opens the messaging app and the message is read.

When the habit forms, users will take this simple action spontaneously to alleviate a feeling, such as the pang of boredom or missing someone special. Opening the app gives the user what they came for — a bit of relief obtained in the easiest way possible.

Variable Reward

The next step of the Hook is the variable rewards phase. This is when users get what they came for and yet are left wanting more.

This phase of the Hook utilizes the classic work of BF Skinner who published his research on intermittent reinforcement. Skinner found that when rewards were given variably, the action preceding the reward occurred more frequently. When forming a new habit, products that incorporate a bit of mystery have an easier time getting us hooked.

For example, Snapchat, the massively popular messaging app that 77% of American college students say they use every day, incorporates all sorts of variable rewards that spike curiosity and interest. The ease of sending selfies that the sender believes will self-destruct makes sending more, shall we say, “interesting,” pics possible. The payoff of opening the app is seeing what’s been sent. As is the case with many successful communication services, the variability is in the message itself — novelty keeps us tapping.

3

You never know what you’ll see when you open Snapchat

Investment

The final phase of the Hook prompts the user to put something into the service to increase the likelihood of using the service in the future. For example, when users add friends, set preferences, or create content they want to save, they are storing value in the platform. Storing value in a service increases its worth the more users engage with it, making it better with use.

Investments also increase the likelihood of users returning by getting them to load the next trigger. For example, sending a message prompts someone else to reply. Once you get the reply, a notification appears and you’ll likely click through the Hook again.

4

Growing a “buddylist” on Snapchat is an investment in the platform

Through frequent passes through the Hook, user preferences are shaped, tastes are formed, and habits take hold. Messaging services are here to stay and we’ll most likely see many more iterations on the theme as technological solutions find new ways to bring people together. By understanding the deeper psychology of what makes us click by knowing what makes us tick, we can build better products and ultimately live better lives.

PS. Get new updates/analysis on tech and startups

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

IAC’s HowAboutWe co-founder: How to Avoid Delusional Thinking in Start-up Growth Strategy (Guest Post)

Mobile retention benchmarks for 2014 vs 2013 show a 50% drop in D1 retention (Guest post)

New data on push notifications show up to 40% CTRs, the best perform 4X better than the worst (Guest post)

Why Android desperately needs a billion dollar success story: The best new apps are all going iPhone-first

Early Traction: How to go from zero to 150,000 email subscribers (Guest Post)

New data shows up to 60% of users opt-out of push notifications (Guest Post)

Why aren’t App Constellations working? (Guest Post)

There’s only a few ways to scale user growth, and here’s the list

Lessons learned adding messaging to a notes app (Guest Post)

Retention is King (Guest Post)

Why consumer product metrics are all terrible

How to solve the cold-start problem for social products

How to design successful social products with 3 habit-forming feedback loops

Congrats to my sis Ada Chen, who’s joining SurveyMonkey as VP Marketing

How to make content creation easy: Short-form, ephemeral, mobile, and now, anonymous

My 2013 essays on mobile, startups, and tech

When a great product hits the funding crunch

A clever way to buy Facebook ads based on what your users like (Guest post)

Use this spreadsheet for churn, MRR, and cohort analysis (Guest Post)

Zero to Product/Market Fit (Presentation)

The Rise of Fat Venture Capital

How Google and Zynga set & achieve meaningful OKRs (Guest Post)

Case studies from “Why you can’t find a technical co-founder”

Easter Egg Marketing: How Snapchat, Apple, and Google Hook You

How is Yahoo really doing? Here’s the Google Trends data (Guest Post)

Ignore PR and buzz, use Google Trends to assess traction instead

Books I’m reading (2013)

Constrained media: How disappearing photos, 6 second videos, and 140 characters are conquering the world

The highest ROI way to increase signups: Make a minimal homepage (Guest Post)

9 ways a billion dollar new mobile company might be created (Guest Post)

Mobile traction is getting harder, not easier. Here’s why.

Why you can’t find a technical co-founder (Guest Post)

How to grow your app revenue with DuPont analysis (Guest post)

New college grads: Don’t sell your time for a living

Does your product suck? Stop adding new features and “zoom in” instead

Linkedin, Facebook, Google, Twitter, eBay, YouTube, Wikipedia, Amazon, Hotmail, Blogger, Apple: How they used to look

The critical metrics for each stage of your SaaS business (Guest post by Lars Lofgren of KISSmetrics)