Posts from Instagram

The Gotham Gal and I went out with friends last night. As can happen, we got talking shop towards the end of the night. And specifically we were debating the significance of Snapchat. The debate was about whether the feature that makes Snapchat special (you know your photos won't end up on Facebook) is the basis for a standalone app and business. My view, having lived through this debate with Twitter and Foursquare, is that mobile apps are features in the mobile OS and that Snapchat can and likely will own this feature in the leading mobile operating systems even though institutionalized copycats (ie Facebook who copies everything) can and will copy it. The irony that Facebook has copied a feature that is specifically designed to avoid Facebook is precious in and of itself.

But I digress. The thing I want to talk about here is the emergence of privacy as the defining feature of the next breakaway app on the social internet. What does this mean for where we are and where we are going? Is open social out and closed private in?

At times like this, I like to talk to my kids and their friends. Here is a typical college aged woman I know. She uses Twitter, Instagram, Cinemagram, Foursquare, iMessage, and Snapchat. And Facebook too. She uses each of them for what they are good for. Each of them is on her home screen – one click and she is sharing something with someone. Each app offers a different graph – that she has curated specifically for that app – and each app offers a different type of engagement. If it is something silly that she wants to share with a friend but would be mortified if it ended up on Facebook, its Snapchat. If it is something she wants out there broadly, it is Twitter. If it is something she wants to share with a wide group of curated friends, it's Instagram. She has a private Instagram account so she controls who follows her there. She is a sophisticated user of social media. She was on Facebook in middle school and has grown up with this stuff. She knows how to use social media and she adopts whatever is useful to her. Snapchat is useful to her. Privacy is an important feature at times and she is happy to have an app with that as the central value proposition.

So that is my way of saying that I think privacy is an important feature and kudos to Snapchat for figuring that out. Further they invented a mode of engagement (the photos self destruct) that is new and novel. And the result is they are on the home screeen of millions of mobile phones and that number is growing by the day.

I expect we'll see a rash of copycats and other approaches to leveraging privacy as the central value proposition in the coming months. I am not sure that is the right thing to learn from this though. I think the right thing is to think about what other features are missing in the mobile OS and figure out the right mode of engagement to implement that feature. That is what Twitter did with status, Foursquare did with location, Instagram did with photo sharing, and Snapchat did with privacy. That got each of them on the home screen. Figure out what the next thing is.

I wrote the Mobile First Web Second blog post a few years ago. In that post, I talked about apps that were designed to be used on mobile primarily with the web as a companion.

There have been a number of startups that have taken that approach and done well with it. Most notably Instagram, and also our portfolio company Foursquare. It has become a bit of a orthodoxy among the consumer social startup crowd to do mobile first and web second.

But is it the right thing to do? Vibhu Norby, co-founder of Everyme and Origami, wrote one of the most thought provoking posts of the past month arguing that mobile first is a recipe for failure for most, if not all, startups.

Vibhu makes some excellent points:

All in all, mobile service apps turn out to be a horrible place to close viral loops and win at the retention game. Only a handful of apps have succeeded mobile-first: Instagram, Tango, Shazam, maybe 2 or 3 others.

and

You have an entirely different onboarding story on the web. You can test easily, cheaply, and fast enough to make a difference on the web. You can fix a critical bug that crashes your app on load 15 minutes after discovery (See Circa). You can show 10 different landing pages and decide in real-time which one is working the best for a particular user. You can also close a viral loop: A user can click an email and immediately be using your app with you. You can’t put parameters on a download link and people don’t download apps from their computer to their phone. Without the barrier of a download + opening the app to try your product, you can prove value to the user immediately upon their first impression, as is with Google. In addition, the experience of signing up for a service is superior in every way. Typing is easier. Sign-up with OAuth is faster. Tab to the next field. Provide marketing alongside sign-up as encouragement. Auto-fill information is a feature in every browser. The open eco-system of the web and 20 years of innovation has solved many of the most difficult parts of onboarding. With mobile, that kind of innovation is lagging significantly behind because we create apps at the leisure of two companies, neither of which have a great incentive to help free app makers succeed.

and

I use my phone more than anything else. I just don’t think that an entrepreneur who wants a real shot at success should start their business there. The Android and iOS platform set us up to fail by attracting us with the veneer of users, but in reality you are going to fight harder for them than is worthwhile to your business. You certainly need a mobile app to serve your customers and compete, but it should only be part of your strategy and not the whole thing.

Vibhu also takes a stance against the ad-supported, privacy challenged, free consumer app world. I respect that stance and every time I upgrade from a free ad supported app to a premium version (advertising free) via the in app upgrade on mobile, I express my solidarity with him on that one. But as a business person, I have and will continue to advocate for a free tier with a premium upgrade (or just entirely free) because as I have written many times on this blog, I think that is the value maximizing approach and it also allows the greatest number of users to access your product or service.

But I don't want to focus on business model in this post. We are at the start of what will be a long MBA Mondays series on business models and will be talking a lot about that.

What I want to focus on is the paradox that mobile is where the growth is right now and that mobile is very very hard to build a large user base on. Everything that Vibhu says in his post is right. Building an audience on mobile is a bitch. I talked about that in my what has changed post:

distribution is much harder on mobile than web and we see a lot of mobile first startups getting stuck in the transition from successful product to large user base. strong product market fit is no longer enough to get to a large user base. you need to master the "download app, use app, keep using app, put it on your home screen" flow and that is a hard one to master

But just because something is hard doesn't mean you shouldn't try to do it. I am convinced the next set of large and valuable consumer facing services will be built with mobile as the primary user interface. You can see it in the success of Uber and Etsy this holiday season. That's where you users are most of the time. And if you don't design your products and services for what is rapidly becoming the dominant UI, you will not maximize the success of your business in the long run.

So do I disagree with Vibhu? Not at all. I think he makes some great points on why you might not want to go mobile only unless you are in the games business. But I differ in two important areas. First, I think you can't abandon mobile. It is the future like it or not. And second, I think it is critical to design for mobile first and then build a web companion. If you design for the web and then port to mobile, you will find that it is really hard to fit your UI onto the small screen. Better to design for mobile first and then build a web companion. Mobile first, web second. But as Vibhu points out, the web can't and should not be ignored. It is valuable in many many ways.

Related articles

Beware the Mobile-First Strategy

Some things that make mobile user acquisition difficult

Why We're Pivoting from Mobile-first to Web-first

Why Mobile First Is Not The Right Strategy

The Biggest Problem in Mobile: Retention

Consumer Mobile Riches – Come back in 5 years?

I've thought this for a long time but never really articulated it publicly until the Q&A session at ad:tech last week.

There are a ton of social services that sit on top of the world of e-commerce and allow users to curate items they like and may want to buy in the future. These experiences can be highly social. And there are services that allow for transacting and payment inside of large social platforms like Facebook, Twitter, Instagram, and Pinterest. They bring commerce to social platforms. This entire category of services is called Social Commerce.

I have not been particularly bullish on these services because I think social commerce is most naturally e-commerce with a well implemented social layer built natively into the commerce platform. When you look at conversion rates in e-commerce broadly what you see again and again is that the more friction and overhead there is between discovery and transaction, the lower the conversion rate. Something as simple as logging into a commerce platform to complete a transaction can lower converstion rates by an order of magnitude.

Conversion rates are critical. They tell you what systems perform best for the end user. When a system converts north of 5% of users visits to a transaction, it is working extremely well for the end user. When a system converts 0.1% of user visits to a transaction, it doesn't work as well for the end user.

When a retailer or e-commerce service implements a highly social layer into their service with hooks into the major social platforms, the conversion rates can be significant. I have seen this first hand. This is an indication that users enjoy and benefit from social commerce when it is built into a native e-commerce service.

When users start in a social system that is divorced from the e-commerce platform, I believe the conversion rates are significantly lower, often by an order of magnitude or more. This, to me, suggests that the overhead of multiple systems reduces the effectiveness of the experience for users and is suboptimal.

So this is the thinking that led me to say what I said on stage at ad:tech this past week. I've felt this way for a long time and I am glad that I got the question and had an opportunity to address this issue publicly. I am eager to hear the discussion of this issue in the comments.

I have written so much about free here at AVC that it should be called AVFree. In fact, I've even written a post with this exact same title (almost exactly seven years ago, the summer we invested in twitter, zynga, and tumblr).

I haven't touched this subject much in the past few years but given that the topic has been in the air in the tech blogosphere, I thought I'd address it again.

First, let me say this is specifically not about Twitter. Folks should be encouraged to compete with Twitter. Competition is good for everyone as we talked about here a week or so ago.

This post is in reaction to the idea that services should be paid to ensure that they are appropriately focused on the consumer/user as opposed to the marketer/advertiser/sponsor.

Let's start with advertising. I do not believe it is evil. In fact, I believe it is a fantastic way to support services that want the broadest adoption and want to be free. Think about the Super Bowl, the World Cup, the Olympics, the Oscars, the Presidential Debates, the news coverage of important events. These things are ad supported and free for anyone to watch who has a TV and an antenna. It is good for society for these things to be available to the broadest audience.

There is a paid TV business and it is flourishing. The fact that at its base level TV is free does not mean that all TV has to be free. Free TV does not commoditize paid TV. They co-exist nicely. But we had free TV well before we had paid TV. Free is the foundation that creates a paid tier. That's what Freemium (a term that was coined here at AVC) is all about.

Now let's examine services that have a free and paid tier. Spotify is a good one to look at. Spotify's core business model is a subscription music service. All you can eat music for a fixed price every month. And yet this is what they show you when you land at Spotify.com for the first time.

Why do they show you that? Because most people prefer free to paid. I don't have the exact numbers but I would suspect less than 10% of Spotify's users pay for music. Why is Pandora so successful? Because it is free. Why is over the air radio still the most popular way to listen to music? Because it is free.

Now let's look at servces where the users provide all the value. Wikipedia, Craigslist, YouTube, Flickr, Instagram, Facebook, Twitter, Tumblr, WordPress, etc, etc. There is no value to any of these platforms if the users don't create the content. The users create the service, curate it, and make it what it is. I do not believe it makes sense to charge users to create the value. We've seen folks try this model. Typepad (where this blog is hosted) charges to host a blog. How well did they do? Phanfare charged to host photos. How well did they do? The list could go on and on but I don't want to focus on failed services.

When scale matters, when network effects matter, when your users are creating the content and the value, free is the business model of choice. And I don't think anything has changed to make that less true today. If anything, it is more true.

I understand the frustration of certain folks about the commercialization of Twitter, Facebook, Tumblr, and a host of other services. I understand the frustration over the increasing lock down of the APIs and the control these platforms are exercising on their ecosystems. I would encourage folks to compete with them to keep the web, the mobile web, and the Internet free and open. But I would not encourage those same folks to build paid services. I think their goals will be undermined by that choice.

We've been talking a lot about mobile here lately and in one of those discussions, someone suggested we share our home screens with each other. I figured that would make for a fun friday.

Here's my home screen:

In case you can't make them out, from top left to bottom right; Kik, Tumblr, SoundCloud, Instagram, Google Maps, Foursquare, Gmail, Twitter, Camera, Google Calendar, Android Browser, Settings, Phone, Google Contacts, SMS, and all my apps.

Oh, and that's the start of The Highline at Gansevoort and Washington in the background.

This is a T-Mobile Samsung Galaxy. I am actually in the process of switching to a Galaxy Nexus running Jelly Bean and will switch to a Chrome Browser and the home screen might move around a bit. But this is what I've got right now.

To play this fun friday game, take a photo of your home screen and attach it to your comment in the thread below. And add any color commentary you'd like to add. This should be fun.

Mobile is a less reliable environment than the fixed web. Things don't always work exactly right. And so failing in a friendly way is really important. I particularly like the way Instagram handles this.

I went on a bike ride this morning out to Lazy Point. I saw a sign that I thought was great. I took a photo of it and shared it to Instagram and Foursquare.

Except, of course, there isn't good cell service out at Lazy Point. Which is a feature not a bug.

So after sharing the photo into Instagram, geolocating it on Foursquare, sharing it out, the upload failed. In many cases, all the work I had put into getting to that point would have been wasted. The app would have just said something like "upload failed" and I'd be back to the starting point.

But in Instagram, you get something that looks like this:

The first time I got this fail message on Instagram and saw that reload icon, I thought "brilliant." That is friendly failing right there.

So I finished my bike ride this morning and when I got home, I took a photo of my phone, then using my home wifi, hit the reload icon, and the photo got posted, shared, and all was good.

There's a lot to learn from the way Instagram handles this experience. They save the action you wanted to do in its entirety, and they keep the app in that state until you choose to try it again, or choose to exit out on your own. All mobile apps should work this way. Many don't.