A prominent venture capitalist and former entrepreneur Chris Dixon (@cdixon) published a blogpost lamenting the growing dominance of mobile usages by apps on Android or iOS. Apps, by their nature, are closed and blockers of innovation. Apple and Google (or Samsung or someone) will be a tax collector sitting on top of the app economy, collecting rent. App stores arbitrarily block whole classes of applications and choke innovation. (Dixon cited Apple’s refusal to publish Bitcoin related apps but you could just as well cite Apple’s refusal to publish apps that allow users to tether their phones to their tablets or PCs, which would hurt Apple’s partner AT&T but would help consumers immensely). For these reasons and more, Dixon claimed that we are at the end of the Mobile Revolution and innovation will cease in that sector. Dixon’s blog was widely shared. Other leading VCs, such as Fred Wilson, concurred with his assessment.
I happen not to agree with his logic. Here are a few reasons why.
1) Consider the Source of App Domination Meme. Dixon based his assumptions primarily on findings by Flurry. Flurry is in the business of selling analytics based on app consumption, primarily to app companies, and advertising in new app-based add exchanges. Basing an entire argument on one source is always dangerous - particularly one that is so vested in a specific outcome. I’d love to see more diverse data sources.
2) Consider the Costs. Talk to any developer or app company about what its like supporting Android and iOS apps and they will roll their eyes. Building responsive apps that run everywhere on the web and the mobile web is expensive enough. Building siloed apps in two completely different languages — both of which remains difficult development environments - is far more than 2x more expensive. Over time, the mere fact that its far cheaper and faster to build web native apps will allow innovative developers to build more of them and create more viable businesses on those apps.
3) Apps In Key Ways Degrade the Mobile Experience. Because apps cannot talk to each other, the app experience is disjointed and often illogical. Things you can do easily on a laptop take far longer on a Smart Phone. In particular, apps break the ability of the device to automatically access a single secured repository of stored passwords. Combine this with the far greater rate of errors typing on the smaller form factor and you get an utter User Experience disaster. The poor integration of apps with other apps obliterates the advances of context that have actually made using web sites much better. Services like Disqus, for example, don’t work well in the App Economy.
5) Second Wave Success, AOL and AltaVista. Once upon a time, America OnLine had a walled garden approach that was quite similar to the current version of the app economy. And a search engine named AltaVista ruled the Internet. We know how those stories ended. At the time, investors assumed those companies and others would keep a technology hammerlock. That technology advantage and lock-in was elusive and ephemeral. The lock-in is even more ephemeral today. A switch from a web app to an HTML5 app is seamless, painless and quick. Consumers won’t even know when it happens.
These are just some of the reasons that I think the Mobile Revolution remains in its nascent stages. I realize that much of Chris Dixon says has real merit and its a strong argument. I happen to think he’s wrong. And if I were a venture capitalist, I’d actually double down on the second wave of mobile companies that do things right. Second generation companies in a space tend to do much better than the pioneers. Mobile as a space is still maturing and becoming more of a cohesive market. Mobile usage on smart phones continues to soar. In their days, AltaVista and AOL had fine IPOs and returned loads of cash to VC backers. But then again, Google, Facebook, Twitter and other later stage Internet companies have fared far better over time. Mobile is playing out that same cycle, albeit a tiny bit faster.
(You can also follow me on Twitter @alexsalkever)