@andrewchen

Get the newsletter · 2018 essays (PDF) · Featured · Recent

Open mobile platforms and Facebook developer refugees

New mobile blog from KP
This morning, my friends at KP launched the iFundVC blog to specifically cover the iPhone and the open mobile ecosystem that’s emerging. Their first blog post details a number of investments that they’ve made in the space, in particular Pelago, iControl, ng:moco, and GOGII. Anyway, I’d encourage you to read more about this legendary firm’s perspectives on the impending transformation of the mobile landscape.

One of the important comparisons for me is between the Facebook platform versus the iPhone platform. They are two of the biggest ideas of the past few years, one to open up the monster traffic enabled by social networks, and the other to crack open the walled gardens of mobile carriers. 

Is the mindshare of hobbyist developers going to the iPhone platform?
A key issue is where the developers are going to go – most of my technical friends have spent the last year and a half hacking away building apps on the Facebook platform. However, as time as passed, the platform has grown less attractive for a number of obvious reasons – to resummarize:

  • Lack of stability: Facebook may slap down your app and replace it with their own
  • Lack of monetization: Beyond remnant ad networks, there isn’t much you can do with the <$0.25 CPM inventory
  • Lack of investment: Many angel investors are no longer investing much into the space, as mature companies like Slide, Zynga, and others have established themselves
  • Lack of market excitement: Everyone wants to find the next new thing!

I want to also note that for the hobbyists, it’s not even the money that really concerns them. They just want to tinker around with stuff and build cool products, and there’s a set of sexy features like geo-location and SMS that allow them to experiment with the interactions.

As a result, I’d argue that a class of social network “refugees” are forming who are looking to build the next new thing, and the mobile platform (iPhone and otherwise) will start looking pretty attractive for them. I wonder how many of the lessons learned on the FB platform, like social gaming, viral distribution, etc. will port over to iPhone as well.

Comparing the Facebook platform and the iPhone platform
I also asked the audience to fill in a couple of the datapoints around comparing the two platforms, and what axes they would use. Here are some of the thoughts I got back:

  Facebook platform iPhone platform
Pricing Free Free or $0.99 to $999.99
Distribution Primarily viral
(invites, newsfeed, etc.)
Primarily app store
Audience 100M 8M
Coding language PHP/Ruby/etc Cocoa
Cost of service $0 >$150
Payment service? No Yes

I’m sure there is a much more comprehensive table out there. Noah also had a fantastic table here that was very funny. Anyway, in the comments there was a fun discussion of whether or not Facebook’s huge relative audience was more important, or if having more direct monetization was more important – quite a good exchange.

Ultimately, some of the >1M adoption rates of free iPhone apps like Tap Tap Revenge show that there may be enough audience there to generate some sizeable returns. So regardless of whether or not it’s a favorable or not platform, it’s attractive enough (especially with the stronger monetization channels) for developers to get excited about it. The after-effects of the open mobile platform, across all the carriers, is likely a strong enough trend to get VCs and entrepreneurs to decide that “it’s finally here.”

Are you doing cool stuff on the iPhone platform?
If you are, drop me a note at voodoo [at] gmail, I’d love to hear more about it.

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.

Views expressed in “content” (including posts, podcasts, videos) linked on this website or posted in social media and other platforms (collectively, “content distribution outlets”) are my own and are not the views of AH Capital Management, L.L.C. (“a16z”) or its respective affiliates. AH Capital Management is an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply any special skill or training. The posts are not directed to any investors or potential investors, and do not constitute an offer to sell -- or a solicitation of an offer to buy -- any securities, and may not be used or relied upon in evaluating the merits of any investment.

The content should not be construed as or relied upon in any manner as investment, legal, tax, or other advice. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Any charts provided here are for informational purposes only, and should not be relied upon when making any investment decision. Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, I have not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. The content speaks only as of the date indicated.

Under no circumstances should any posts or other information provided on this website -- or on associated content distribution outlets -- be construed as an offer soliciting the purchase or sale of any security or interest in any pooled investment vehicle sponsored, discussed, or mentioned by a16z personnel. Nor should it be construed as an offer to provide investment advisory services; an offer to invest in an a16z-managed pooled investment vehicle will be made separately and only by means of the confidential offering documents of the specific pooled investment vehicles -- which should be read in their entirety, and only to those who, among other requirements, meet certain qualifications under federal securities laws. Such investors, defined as accredited investors and qualified purchasers, are generally deemed capable of evaluating the merits and risks of prospective investments and financial matters. There can be no assurances that a16z’s investment objectives will be achieved or investment strategies will be successful. Any investment in a vehicle managed by a16z involves a high degree of risk including the risk that the entire amount invested is lost. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by a16z is available at https://a16z.com/investments/. Excluded from this list are investments (and certain publicly traded cryptocurrencies/ digital assets) for which the issuer has not provided permission for a16z to disclose publicly. Past results of Andreessen Horowitz’s investments, pooled investment vehicles, or investment strategies are not necessarily indicative of future results. Please see https://a16z.com/disclosures for additional important information.