Hardware products as an app download trigger

There has been a lot of discussion about the end of the "app boom" as new app downloads slowed down significantly over the past couple of years.

Note that any editorial claim today should be taken with a grain of salt. This article on Venture Beat provided a different angle which I believe is closer to truth and less misleading.

An alternative way to look at this is actually the new opportunities for hardware startups. The keyword here is "discovery process".

The discovery process of a pure software app is fairly established and well understood. There are basically a couple of ways:

  • Active discovery: Users need a solution and look for such solutions on iTunes App Store or Google Play. Depends on the described functions, price and reviews then the users might actively choose to download an app to solve his problem.
  • Word of mouth: Games or hot social network apps often go this route. Especially for social network apps, when the network effect kicks in the download numbers grow by themselves.
  • Advertisement: This is obvious as today we're bombarded by app advertisements over Facebook, Twitter and other news outlet almost non-stop.

If we look at the 3 main ways of app discovery, it's easy to understand why the growth has slowed. It's similar to the "share of time" issue that I talked about in another post.

Most problems that users have had have already good apps as solutions. Discovery of apps becomes a negative NPV process for most users when the marginal improvement of life is limited compared to the time and effort spend to try a new app.

For games and social network apps it's even more so, as users already spend tons of time on their existing games and social network apps, the new comers have to fight for those time taken by existing apps. This is harder than hardwares I would argue.

On the other hand, consumers have never stopped purchasing new electronic products. The CE (Consumer Electronics) market is less driven by needs but more driven by the capability and desire to spend money, as is evident in the annual craze of Black Friday and Cyber Monday sales.

This means that the discovery process of a hardware product is vastly different from the discovery process of a pure software app. It's not correlated to the app download slowdown we're observing now.

It is therefore entirely possible that a different scenario emerges: consumers buy a new connected hardware product, download the necessary app to run it and get hooked by the great UI/UX.

The app could then serve as a defensibility, i.e. constant UI/UX improvement to retain hardware users, as well as an exploratory tool for new growth opportunities in software apps.

I would be happy to hear a pitch if you're a hardware startup and you have a great plan on this possibility.

NRE for equity is a dead end for everyone

Share of attention