By Raam Thakrar and Freddie Gjertsen, Touchnote
Going mobile isn’t easy
Anyone can turn out an iPhone app nowadays (even my local curry restaurant), but for those looking to create a viable business, ‘going mobile’ is more complicated. At Touchnote we developed the first version of our postcard-sending app in 2009. Our partnerships with mobile manufacturers have since allowed us to create a thriving business. Here’s what we learned from the experience.
Mobile manufacturers need apps
Mobile manufacturers want to sell phones. They’re always looking for ways to show-off the expensive hardware they’ve packed into a new phone, or to extend the life of an existing model (perhaps by dressing it slightly differently) or to more clearly differentiate one phone from another.
In the good old days (a couple of years ago) manufacturers could incorporate ever more impressive hardware to make a device stand out. However, doing so is increasingly difficult and expensive. Another megapixel on a phone camera piqued consumer interest at one time; nowadays an adequate camera is a given.
This makes apps increasingly important. The absence of certain ubiquitous apps can be actively damaging. Their presence is assumed, their absence a frustration. No Facebook app? You don’t have Angry Birds? Oh dear. On the flip side, new and novel apps are a means to be cooler than the competition and a cheap way to tailor a phone to specific demographic.
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If they need an app, mobile manufacturers are prepared to offer distribution in return. Get into partnership and you can suddenly see your user base increase one thousand fold.
But before you start chasing a partnership, bear in mind that if you’re targeting the most trendy and glamorous area in the mobile industry, everyone else will be too. Mobile is illusory in that the manufacturers selling the highest volumes of phones are not necessarily the ones receiving the greatest attention in the media or showing the highest growth figures. Those manufacturers not currently receiving plaudits may be easier targets, they’re likely to be looking for new ideas.
Also, be aware that phone manufacturers are not app wholesalers. You won’t get them handing over several million pounds to license an app across a portfolio of devices. While this might have happened once upon a time, it’s now extremely rare. Budgets are tighter and the advent of app stores means companies don’t need to pay for your apps — the consumer can do it directly. If you’re angling for a deal that will see your app pre-embedded on a phone (that is, your app will be on the phone when it’s sold) you need a viable business model. It’s that model and a distribution deal with a phone manufacturer that will get you in front of millions of users from whom you can set about making money.
Working with a big company
If you do enter partnership, as a small company working with a big company, at times the process can seem opaque and protracted. As a small company, Touchnote operates in terms of hours, days and weeks. We turn things around in days and like to see an immediate impact. It’s hard for us to justify work that won’t see a return within three months. Big companies work on very different timescales. Quarters, halves, years and more. An eternity to a small company is a brief moment to a big one. Going through the process of agreeing and signing-off a contract can take a painfully long time.
Another problem with big companies is their sheer number of employees. At Touchnote, like most small businesses, we have one person for every job, sometimes one person for several jobs, and everyone in the company knows everything or can find it out quickly. With big companies we often don’t know if we’re talking to the right person. We might be contacting an “Account Manager”, but there may well be nine other account managers, each with a tightly defined area of focus — one of whom would be more appropriate. To complicate matters further, when personnel change within a big company you might not find out about it. Your link can suddenly be lost.
Finally, be aware that partnerships with big companies carry real risks. You will be tied and exposed to a company’s strategy and its shifts.
Operational nitty gritty
One noteworthy aspect of working with big companies is the financial and operational robustness that they enforce. It can be painful, but ultimately such rigour is extremely beneficial.
We were fortunate. Most of our systems and controls were already robust thanks to our web business - meeting the requirements of big companies hasn’t been a problem. But it’s worth listing the areas we modelled and audited to ensure readiness. These included ensuring that our payment and reporting systems could handle a massive spike in load, that our website was secure and that our testing process was thorough and robust.
Big companies are extremely sensitive about bugs in the software that they ship. Their testing cycles are incredibly thorough and have strict deadlines. Some of their tests may be normal for a large organisation, but are time-consuming for a small company. For example, we wouldn’t normally test whether an app can cope with a user repeatedly switching back and forth between Chinese and English whilst in the middle of sending a postcard.
Get distribution and prosper (we hope)
How to summarise what we’ve learned about creating a mobile business? Your app has to have a business model - and then all about distribution. Having a great app goes a long way, but getting in front of the user is the most important thing. By the end of 2011 our partnerships with Sony Ericsson, Microsoft and Palm will sees our branded app on over 30 million phones. To reach similar volumes of users you either need to have a massive brand, be one of the tiny minority of apps that 'just take-off', or start pursuing distribution partners.