[callmeed]

How on earth is this post getting voted so high right now?

How do you write a post and make a statement like this without one single example? Seriously, give me a list of mobile app companies that failing in this manner and scale.

I could rattle off plenty of mobile startups that went the raise-money -> no-traction -> acquihire route. But I don't know what he's talking about here and he offered no data to back it up.

[zmitri]

As someone who builds an app, he was essentially noting that:

Lots of investors made pre-traction mobile-consumer bets in early 2011. Some even built up teams of 5 or 6 people before having launched a product.

In late 2011 and early 2012, savvy investors quickly noticed that many consumer apps started to stagnate around 300-500K total users. Although their total user counts continued to grow, their active user count did not (often only reaching a few tens of thousands monthly active users) – some even had exponential decay.

Good examples would be something like Highlight (Sorry guys) or Mixel (Very well done app, but never grew that big, and got acquihired) or Cinemagram (Fellow Canadians, raised money, but with Vine and Instagram for Video are now getting trounced).

Another poignant statement is his closing statement on the closed garden App Store model, which seems to be having problem creating big hits now, or as Marco put it the other day, "the rich are getting richer." For example, Apple has been promoting video apps like crazy, stuff like Vyclone, or Directr get lots of love from Apple, but you just can't control the masses.

[wallflower]

> example, Apple has been promoting video apps like crazy

In the early days (2008/2009), a couple people I know got apps featured in the App Store. Basically, they got a call out of the blue from Apple.

Now, it seems that it is back to good old fashioned relationships and community [1] and marketing. Media coverage, for one, being the most important. Media coverage goes a whole long way longer if the editor actually knows who you are (e.g. you met them in person and had a real conversation) and likes what you are doing.

http://realmacsoftware.com/blog/how-to-get-featured-on-the-a...

And they still probably get a call out of the blue from Apple. But not by dumb luck, by doing the work required and getting better and better (at marketing, community building and nurturing, the app, all of the above)

[1] http://www.kk.org/thetechnium/archives/2008/03/1000_true_fan...

[zmitri]

I feel like what you are saying here agrees with the article.

I've had a banner feature on the photo and video section of the app store. It only drives a couple hundred downloads a day. The reality is, the front page in the US is the only section that drives substantial downloads ~50K in a week is possible with 1st or 2nd position. Neither of those things drive great users which is again what Andrew mentioned as building PR hype.

Also believe it or not, our banner feature was more or less dumb luck. I mean, we make a great product, but getting their attention was a lot of luck.

[callmeed]

Your comment has more information than the entire OP, but things still don't add up.

Take the Highlight app, for example. It's still in the app store, was updated today, and they have open positions on their jobs page. That makes them a colossal failure that over-hired and burned through cash like a dot-com startup? Please. They probably wont raise another round until they pivot and find a real business model, but it seems they're still in a position to do so.

[zmitri]

The reality is, people are taking millions of dollars to build an app, and it takes them many months to push it out. With only one dev, me, my cofounder and I lived off of < 25K for a year, and built up an app with +70K users. That's a lot of wasted time and money on the people who took millions in funding and haven't hit millions of users. I don't know what 1999 was like, but it's true that tons of startups raised money, were slow to validate, and are now are dying.

With regards to Highlight I imagine they will likely die before doing that or give up on the original hypothesis. Statistically speaking that is most likely. I was trying to be helpful, and as you mentioned you can just as well list off a list of startups so I'm not sure focusing in on one example is that useful as I can just as easily name more.

[zissou]

Detailed examples of the model of failure described in the post are bound to be few and far between because of the massive selection problem. People who fail are way less likely than people who succeed to to tell the Internet about their experiences.