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The Idea Phase

While the rest of this book focuses primarily on the distribution and development of apps, in this chapter we’ll take a quick detour and discuss the idea phase. While coming up with something completely new is not impossible, it’s very difficult. So it’s important to first understand a few points about the app market, and product development in general.

Competition is good
Let’s say you have idea for your next great app. Photo filters for pets, it’ll be awesome! While you’re thinking about this idea, figuring out what’s going to work best in terms of ease of use, marketability, and engineering, you might also take a quick stop to the app store to look for existing products. What do you see? Uh-oh, there are hundreds of results in the search, almost none of them have any reviews or ratings. With so many competitors, and so many of them not succeeding, what chance does your app have, you may be thinking.

Let me tell you why this is the wrong way to think about competition. In 1997 AOL released their instant messaging software to AOL users. Even at the time this was a somewhat crowded market with many competitors such as ICQ, released in 1996. This didn’t really matter though, AOL had distribution using it’s internet service as a tool to deliver IM to it’s users. The user base grew immensely, despite stiff competition.

Fast-forward 10 years, and AIM is the dominant IM client, serving 64 million users. A true goliath that no company could trump, right? Well, no… Between the years of 2011 and 2012 AIM usage dropped from 12 million users, to just 4 million. In the meantime, a new startup had been gaining ground, Skype. By 2010, Skype had eaten up AIM’s market share, with a whopping 663 million users, more than ten times what the internet giant AOL had commanded way back in 2006.

What was the difference for Skype? You could say that Skype offered better features, it had call support, video chat, a better system of synchronizing messages. But I think it goes a little deeper than that, and it’s highly psychological. Skype was a service that was new and sexy, as opposed to AOL, who by this time was the anti-sexy; A mid-90s internet service provider who once commanded the highest install base over all other ISP’s, who also got the internet totally wrong.

At the time of this writing, WhatsApp had recently sold for $19b to Facebook, on the basis that the platform commands 450 million users. Not too shabby for a platform original released in 2009, in the face of huge contenders like Skype.

The story will continue, and yet another IM platform will crop up to unseat the incumbent. This is the cycle of technology. The lesson to be learned here is that no company, no matter how big, can continue to control markets. Coming up with a new offering can always lead to success if you can execute. In chapter 6 we talk about what this means specifically, but for now just know that competition doesn’t tell you that you should put your tail between your legs and work on something different. What it tells you is that there is a market, and in a few years, it will probably belong to someone else. Don’t ever let stiff competition stop you from pursuing your idea.

Find your customers
When you have a new idea, your first inclination may be to start designing, building, or hiring someone to do these things for you. But, in my experience the most valuable thing one can do at this stage is identify their audience.