Jeff Amerine

Techpreneurship, with Jeff Amerine

(Jeff Amerine is an IA advisor and officer with the University of Arkansas Technology Licensing Office. Each Thursday, his Techpreneurship blog will appear in INOV8. Drop him a line in comments.)

At the end of your Techpreneur work day, if you don’t already have a pounding headache, just tune in to Jim Cramer’s “Mad Money” on CNBC…. His Jersey antics, rants, and decibel level will have your head pounding in no time.

In fact, I would probably pay good money to see a verbal throw-down between Jim Cramer and Dennis Miller.

In addition to ear plugs, we’d all need a research team at our side to look up the obscure references….but I digress….

There was a point to mentioning Cramer.  He has recently described the rapid movement of computing power and applications to smartphones as a “Mobility Tsunami.”  I agree with his assessment.

We’re seeing a convergence of unbelievable handheld computing power, very high speed yet affordable wireless networks, and a silly-huge number of applications enter the market.  The Apple iPhone, Blackberry, and Google Android-based smartphones have the buzz and appear to be carrying the day.

So what does that mean for Arkansas Techpreneurs?  This Mobility Tsunami is led by the Apple App Store  with a myriad of new applications created by third party developers.  Within the first year of operation, the App Store was a $1 billion business for Apple.

Check out some of the apps that have been developed and associated stats at http://appexplorer.com/stats/.  As you can see, the available iPhone apps cover everything from trivial time wasting games to apps with real business utlity.  Blackberry and Google are playing catch-up with their own APIs and portals for third party app sales.

Smells like opportunity to me!

So, what’s it take to play?  Software Techpreneurs will need great software development skills, and a keen sense for what people will buy… Notice I didn’t say “what people need,” but rather “what they will buy.”

Some of these apps cost 99 cents, so a purchase is not exactly a life-altering decision.  Multiply 99 cents by a few million, and thats a pretty good ROI for a Software Techpreneur…  Software Techpreneurs can create and distribute mobile apps with very low startup costs, and the potential of worldwide distribution and adoption – what a deal!

Did I mention you don’t have to be in Silicon Valley to play?  Did I mention you don’t  need VC money to get started or to get market traction?  In my view, the Mobility Tsunami represents real opportunity for places like Arkansas where we have a growing population of savvy, creative software developers, but not much early-stage capital.

The main barrier to entry appears to only be limited by the developer’s creativity and the appeal of the app.  This is a two-edge sword for Software Techpreneurs.  A low barrier to entry means lots and lots of competition.  This means differentiation and marketing will be key to success, but at least it represents a true level playing field for Arkansas Techpreneurs.

Here are a couple of Arkansas companies that are beginning to take advantage of the Mobility Tsunami to keep an eye on.  Revolution LLC, led by Tim Lee in Rogers, developed the cool iHog app.  If you are a Razorback fan with an iPhone – you “need” this app…  Versv, a Eureka Springs startup led by Philippe and Doug Hausler, has a bag of tricks in the works for the iPhone that could be a real game-changer…

So let me know what you all think about the Mobility Tsunami.  I’d really like to hear  about other Arkansas Techpreneurs that plan to catch this wave.

11 Responses to “Techpreneurship: How Can We Play in the Mobility Tsunami?”

1. Bob M says:

   December 3, 2009 at 5:04 pm

   Jeff, Is the date 1995ish where once again software developers are sitting around the dorm room turning off the wall idea’s for applications into products? Next we’ll see VC money being offered for a 3 line business plan written on a napkin! Hopefully the captialist (me being one) learned the lesson from the first .com.

   All kidding aside, I believe you and Krammer are correct to some extent. While I am sure there are some decent size companies out there developing enterprise applications, I believe there will be a explosive cottage industry that grows around this.
2. Philippe Hausler says:

   December 3, 2009 at 5:05 pm

   Very well put.

   The mobile app market is definitely a wave that I am sure everyone wants to key into. But there are a few responsibilities that need to be taken up in order to ensure a success without a dot-com bubble burst effect. Namely the development needs to keep in mind efficiency, and a user interface that is inherently smaller. Just because the line between desktop and mobile is blurred does not give us the license to create bloated applications, nor does it have to limit to neutered functionality. There is a happy medium (most of which I say is the responsibility of the programmer to create an application that is more than just well thought out).

   The other major hurdle to overcome is the underpricing of applications. 99 cent apps infer not only an impulse buyable app but also software that is somehow worth less than its desktop equivalent. Take for example Bento; the desktop version is $49 but the iPhone version is $4.99 even though they have very similar functionality (some of which is neutered only due to the limitations of the API). Is there truly a developer time investment swing of $45 per copy? Is the market really that much bigger for iPhone to compensate? Or is it just a mistake from the developer underpricing the mobile version? This trend can lead to undeveloped potential income, not only for the developer but also the distributer and all the way up the food chain to the investor.

   The top grossing applications on the AppStore are almost all over $5, and there a number in the top 5 that are in the $80+ range. Smells like even more opportunity to me!
3. Kelvin Stroud says:

   December 3, 2009 at 5:32 pm

   Could not agree more, the younger the person, the more they surf the net on their phones rather than at their lap top. Just like texting, older generations will soon follow, making web browsing and playing on the web more popular than at a computer. Collegetokens.com is making a mobile site as well. I will send you the preview link on email Jeff.
4. Jeff Amerine says:

   December 3, 2009 at 5:37 pm

   Philippe & Bob

   This is precisely the type of discussion we need. Clearly the business models and the pricing are all over the place and irrational at this point for some of these mobile applications. My next question for you all is when will the consolidation begin?

   At some point, as is always the case in these hotter-than-hot segments, somebody realizes fragmented offerings can be more efficient when they are rolled up. A few things happen in that scenario typically, 1) the early players get nice exits 2) the late players miss the boat and 3) the fun-meter for the surviving entities pegs out in the wrong direction as more commoditization takes place and more structure is added.

   What do you guys think? When will that happen in this space?

   I really appreciate the inputs and I do think flyover-state developers/entrepreneurs have a real shot at making a go of this one. I still think there is time to play.

   Jeff
5. Ryan Frazier says:

   December 3, 2009 at 5:49 pm

   Hey Jeff,
   First of all great topic to bring up, the opportunities in the mobile market are clear… but for me the question still remains how does the little guy monetize it.

   Last I heard Apple had broken the 100,000 app mark for the iphone… Great for Apple, they’ve developed a way for every user of the phone to completely customize their phone to their own personal needs…No 2 iPhones are alike… something no other phone company has been able to copy yet. And better yet for Apple, they don’t even have to develop the apps… AND they profit from them. hard to imagine a better situation.

   But for the little guy, how do you get visibility for your app. If a consumer spends 5 minutes looking over an app before making a purchase decision, a reasonable amount of time, it would take a year to look over every app. And in that amount of time the number of apps would likely double again. So how do you reach consumers??? Well one way is to hope consumers are looking for you, ie. Facebook, Ebay, ect.

   But for the Arkansas based techepreneur that’s not likely the case. And even worse for the techepreneur if it’s an innovative app that offers something customers aren’t aware of and won’t be searching for.

   To make my point, I don’t see the potential for a techepreneur to create a business around an app. So far the opportunity seems to be for existing businesses to offer an extension of their software to a mobile platform.

   That being said I haven’t seen significant innovation with mobile apps… beyond the fact that it’s mobile. For example: what is the difference between using the Facebook app or opening Facebook in my mobile browser?([ex]Why can’t the FB app sync with my contacts or provide an easier way to add friends in person)… what about ebay? ([ex]Why can’t I snap a picture of something I want and search for it or snap a picture of an item I want to sell and post it for sale?) And the answer is not much. Why?
   What about with mobile games, what’ the difference? Other than reduced quality and functionality?

   What the iPhone and followers have done is basically start to consolidate what I need to carry with me. Do I need to carry a laptop with me on the road now? iPod? Gameboy? notepad? voice recorder? camera?
   So what’s next? Well I still have to carry a wallet and keys and I certainly wouldn’t mind having an app for that.
6. Jeff Amerine says:

   December 4, 2009 at 9:05 am

   Ryan

   You bring up some great points. As the total number of available apps increase, raising market awareness and building a brand become much more difficult. One app won’t equal a successful business but one successful app can equal a good starting point. Raising awareness will still require traditional marketing and social media to get customer traction. This is where finding a specific niche, need, or novelty can make a real difference and that aspect is pretty independent of the developers geography. “Me-too” apps will likely be lost in the crowd as you point out. But then again how much adoption equals success for an application – especially if the cost of development is fairly low? In addition, the cost of customer acquisition via the App Store is probably as efficient as any means of distributing software that has ever been devised. Open source advocates might argue that point – but that’s another topic..

   In my view not all of the mobile winners will be a mere extension of a desktop applications. Specifically mobile solutions that use other unique mobile functions like GPS (location based services), imaging, bar code scanning, text-to-voice, voice-to-text, etc will have a life of their own.

   I really appreciate your inputs – you provided some very thoughtful and insightful views of the mobile arena from the generation that knows this space the best.

   Jeff
7. John R says:

   December 4, 2009 at 1:06 pm

   So, I just had to point this out on an aside, but Ryan Frazier and I are old buddies, so I was completely surprised when I saw his post and found out that we both independently read the IA blog.
8. mcarter says:

   December 4, 2009 at 5:41 pm

   That’s one of the things we try to do here at INOV8…..reunite old friends.

   Seriously, though, that is cool.
9. Tim Lee says:

   December 4, 2009 at 10:18 pm

   Jeff,

   Great article and I agree Cramer is crazy but he makes a valid points.

   I get asked often, what will the Internet have in store for us down the road or in say 5 years? At the rate in which technology and the overall understanding and deployment of technology is changing, it seems to be impossible to say. I do feel that programming for the hand-held computing devices and the around the corner Tablet computers will be a big part in how we address creating forms of advertising and the methods of accessing content & data.

   Just like the Internet, websites in the beginning were just bad, mid 90’s they got better and today the broadened features, development techniques and overall innovation has taken web development to a all new level. I feel we are currently moving form the 1st version or level of creativity and sophistication of Apps to the 2nd as we speak. The attention to the arena has been increased and more players are suiting up. This will create new competition and push the creative development process. In just the next two years we will seem amazing Apps that will truly become ‘can’t live without items’.

   I also feel that one of the big reasons why a lot of Apps are not more than they could be is that this became a new tech arena in one of the worst financial years in a long time. Most companies know they need to create an App for the business or service, but it’s just not in the budget. Those who did make it out and get the App in the App Store are seeing positive results and therefore will ad this new form of advertising in their 2010 budget. Which in result will cause their competition to join the game. Next year we will see an exponential growth in Apps and the significant innovation that once again will change the industry.

   BTW – My money would be on Dennis Miller in a head-to-head verbal smack-down…
10. Chandra Krish says:

    December 6, 2009 at 2:21 am

    IMO, what iPhone has really done is putting the power into the hands of a Techprenuer, a common man(obviously, software developer in this case). When i get to sell my app on iTunes, Apple takes away 30% of every sale and gives me the 70%. What Apple provides for that 30% sounds like a real good deal to me. Apple takes care of getting the audience to look at your shelf. Apple takes care of the marketing. Apple takes care of billing. Apple takes care of paying me enough, if i can make a sell-able app. This has taken away the overhead costs to build a company, marketing dollars etc. Still, i won’t be able to reach out to the size of audience currently attracted by iTunes. All i would need is a Mac and and couple of hundred dollars to get started. Well…, the toughest part is getting a sell-able idea

    The iTunes model has wrested the control away from the board rooms to the dorm developers. Something similar to what happened in the Music industry, when artists started releasing the albums themselves on MySpace and similar websites instead of waiting for the big labels to take notice. All these seem simply connected to the social web, when the power is in the hands of individuals rather than board rooms. Well…, i seem to be going off topic. It was great post Jeff! Will be back for more!
11. Ryan Frazier says:

    December 24, 2009 at 3:59 pm

    Noticed CNBC is doing a special called “Planet of the Apps” and it reminded me of this blog. The special airs on Jan 7th

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