[2pasc]

The problem described here is partially inaccurate. The problem of the app store market is that it is largely misunderstood by investors, as it is way closer to the CD-Rom market of the 1990s than it is close to the web of the post Google web. Most apps in the app store are games/utilities/social products...and this is what consumers go out and look for.

Games and utilities can be searched, but the Best Buy truth is that only a few actually make some money, and this tends to be the best ones that are featured in the Top 25 rankings (Turboscan, most camera+ or camera add ons, or SuperCell/Minecraft, etc...). Like at Best Buy, where being featured in the shelves triggered more sales (ask Intuit). Some vendors have created niche businesses for themselves, but they tend to be not VC-funded.

Social is a category with a lot of large mobile only players (Instagram, Snapchat, Tango, WhatsApp, Viber, Voxer, Vine, Grindr, Waze, Kik...) and a lot of web players (Facebook, Twitter...). None of the mobile only players monetize their user base right now appart from WhatsApp. What are the odds that another one can emerge from there in a niche? It's tough, and it's not a discovery/search problem, because the day that Facebook launched in 2004, Mark Zuckerberg could not count on search to drive traffic to Facebook as nobody was typing "pictures of my Harvard Econ 102 classmates" on Google.

If you go back to the web, with the exception of a few social products (Linkedin, Facebook, Twitter), which businesses make money online?

ECommerce? They do pretty well on mobile if you look at older models like eBay or new ones like Uber or Instacart.

SaaS? This one is a tricky one, the Apple Store tax of 30% even on SaaS subscriptions discovered on mobile does not help this market to thrive.

Media? Media is already tough to monetize on the web, but on the mobile with lower CPM, it's mission impossible.

Lead Generation? This is a very search oriented field, and the Google search ecosystem will dominate this market until the Google search stronghold disappears.

Overall, I am not saying that mobile app startups are easy - but I think that there is a misconception about what they really are - thus comparing to their web counterpart, when the right analogy might be the software rack at Best Buy.

[zmitri]

Pretty impressive answer, and I agree for the most part.

I do believe there are a lot of apps that do get Apple's approval and get showcased, but never really make it -- which you do address. A great example in the video space is Vyclone which go promoted very much, and still gets front page promotions quite often, but they never really went anywhere.

[2pasc]

Sure. Your app can be featured by Apple like Intuit got displayed prominently in Walmart in the 1980s. But on the web, Vyclone would be available on download.com, not get accessed through millions of search terms on google (like Yelp, eBay, Airbnb, Craigslist, Amazon, Trulia, Linkedin, even Facebook ...all consumer web public/quasi public Companies ...)

[zmitri]

Do you think that exposure makes the marketplace more attractive or actually has a role in helping make hits?

Even though app search services do exist -- like Quixey https://www.quixey.com I'm not sure if they make sense for most consumers. How do you currently search for apps? Is it by functionality or because you hear about it from a friend?

[2pasc]

Exposure helps make hits for sure... AppGratis was the best proof of that.

The problem of App Search is that app search is a small fragment of the overall search market, and that most searches on the web are for one data point (e.g. search for Chez Panisse restaurant in berkeley or weather in Cupertino). If you have a frequent use case (Yelp, Uber) or an infrequent but very important one (Opentable, Trulia), you are going to download the app. But otherwise? You are going to keep searching on Google, not on the AppStore or on Quixey.

The only way around that would be to index the content of the web content of the app themselves. It would be great, but only Apple can really do that right now... and they are not even trying to. That would be in my mind the only way to make app discovery a reality.

Now for productivity apps/games, they correspond to highly used or niche applications...but are people really looking for them? In the early days of PC games, people were reading review magazines and going to their local Best Buy to discover the best games, and the app store is no exception. I don't see how Quixey would help me there since most of the best games I have played on the iPhone are impossible to describe and you would never have searched for them if Apple had not showed them in front of you...