Sunday, February 09, 2014

Revelations Of Apps World North America 2014

I attended Apps World North America 2014 last week in my continual quest for technology market insights.  If there's something in the mobile app world that deserves an investment, I'm destined to find it.  I actually didn't find anything I'd want to invest in at the conference but I did come away a bit smarter about how the sector is maturing.

The legendary Steve Wozniak was the lead keynote speaker right at the beginning.  The more I hear technology leaders talk live, the more I see the common elements of their personalities.  The guru known as Woz was highly improvisational, weaving stories from Apple's early days into the tech news of today.  The most brilliant tech minds express themselves like jazz musicians by riffing through multiple topics that have common connections.  That kind of thinking is probably hard-wired at birth but the rest of us can adopt some of their techniques.

Woz says an intrinsic motivation for innovation comes from an emotional source, and is much more powerful than extrinsic motivations from rewards like stock options.  His favored roadmap for innovators leverages affordability and using existing building blocks.  I take that as a smack to VC-funded tech companies that spend millions on development when open source coding tools are readily available.  I also took something away from his description of Steve Jobs' understanding of product design aesthetics and his talent for reading people.  Startup team members should complement each others' strengths.  Woz's engineering knowledge and Jobs' design aptitude made Apple successful.  It probably wouldn't have succeeded if all of their early employees were clones of each other.

I like his cute equation:  H = S - F, or Happiness = Smiles - Frowns.  That's his shorthand for not looking back or second-guessing decisions.  I promise to smile more when I write insulting things about stupid people, because that will make them frown.  My smiles minus their frowns equals total happiness for humanity.  Woz is a genius.

He seems resigned to the end of privacy in the age of mass surveillance, and to the end of the Moore's Law increases in computing power.  Woz would like to see the dawn of intuitive AIs that replicate the human brain, but truly understanding brain science is hard and the end pf progressively more powerful computers means we may never reach the intuitive AI singularity.  I dunno, Woz, quantum computing may surprise us to the upside.  I was dumbfounded when he praised Bitcoin.  I think a computer genius would be more cautious about the computational limits of crypto-nonsense, although he did mention the risk of Bitcoin mining duplication.

He flicked his wrist to show off a cool high-tech watch hand-built from old parts but I didn't get his explanation of how it allowed his brain to do less work when he checks the time.  Maybe he knows more about brain science than me.  I'll give him the benefit of the doubt, but if he really likes Bitcoin then he's subject to the same cognitive limits as the rest of us.  BTW Woz, if you want a language where people can write their own scripts to interrogate IoT devices, check out HTML5.

Woz took tons of questions from the audience.  He thought Blackberry could have saved itself by making Droid phones and that TV subscriptions should be portable via mobile anywhere.  He looks forward to specialized mini-robots and realistic holographic projections.  He likes Siri enough to want it to manage other apps, but IMHO he'll need to get his wish for AI fulfilled.  I liked Woz enough to photograph him for my blog but I'm not enough of a fan to talk to him personally.  The hangers-on in the audience mobbed him for personal glory while I turned my attention to other talks at the conference.  There he is below, less than two meters away from the greatness that is Alfidi Capital.

Some of the speakers tried to differentiate between an app's user experience (UX) and customer experience (CX).  That's a distinction without a difference.  I do not believe app developers can draw such a clear line for any app other than premium ones that charge a download fee up front.  Other revenue models - freemium, in-app ads, in-app purchases - blur the line.  App developers who apply Forrester's Customer Experience Index metrics to their UX/CX concepts stand a better chance of adoption because they bothered to learn something about how people use tech.

I will hereby announce my disagreement with people who say "tech drives innovation."  Tech is actually the result of innovation, and like Woz said above that comes from a human motivation to make something better / faster / cheaper.  Techies who love tech for its own sake join startups all the time, and they never succeed because they don't solve problems that meet market demand.  I saw lots of that among the gamers' pavilion.

Here's new tech buzzword that makes me LOL:  mind share.  It's so nebulous that it could mean anything in brand acceptance without any underlying data from Forrester or elsewhere.  This makes it fodder for tech charlatans and pseudo-visionaries who can throw it around and impress clueless tech executives.  I'd like to ask the next app developer who claims traction in "mind share" exactly how they measured that in their CustDev process.  Market share counts for more than mind share.  Sales fixes everything.

I saw one really cool slide on an "ROI pyramid."  It linked CRM data to customer LTV in a way that enabled managers to compare the NPVs of capex spent on tech projects.  A Google search for "ROI pyramid" shows a bunch of these models, all of them starting from radically different premises than what seems to be the original version circa 2010.  That original model looks cool but this is evolving in weird ways.  We may have another "mind share" type of concept on our hands here with this pyramid.  I think enough of these ideas strung together will make a convenient checklist for any tech charlatans who want to bamboozle old-school executives.  Mind share?  Check.  ROI pyramid?  Check.  Don't forget your web design wire frame for those startups with no internal HTML developers.  See folks, this tech stuff is easy.

I take experts seriously when they provide how-to roadmaps with verifiable data underlying their claims.  One of the best panels at Apps World 2014 was on boosting app downloads, presumably with such verifiable techniques.  They advocated A/B testing of ad tag lines with a target market in mind.  I've heard tech advocates endorse video walk-throughs of an app in use to aid users but these folks advocated a slideshow.  Okay, but that requires more click-through work than a video.  Truly successful tech appeals to post-modern human laziness.  Good luck getting repeat use after a single activation with a slideshow visual aid; maybe it works best for more complex apps.  I sure would like to see some data on the claims of customer LTV for different app revenue models.  I'd also like to see some data comparing the drop off ratio (i.e., app users who never return after the first activation) of different revenue models.

The dude who spoke on the evolution of mobility in the enterprise was cool.  Big enterprises went through brochureware, limited apps, the mobilization of full business processes, to the fully mobile enterprise of today.  I think that full transformation is still out of reach for enterprises tied to large physical plants; the energy and petrochemical sectors spring to mind.  The mentality that any and all companies can become fully mobile reflects just how limited in scope the prototypical Silicon Valley vision has become.  These app innovators all operate in a universe where games, messaging, and media feeds are the entire economy.  Show me a railroad or construction company that is going full mobile, please.  I did pick up on the need for an enterprise-level "mobile center of excellence" that can push mobile adoption across functional silos.  That one very important C-level insight will get lost among the jungle of developers' tech jargon.

Addressing MDM is getting more difficult as BYOD policies allow device brands to proliferate in the enterprise.  IT departments are belatedly learning the value of app security that ignores device specifics.  They're also learning that VPN is not a panacea because it fails on speed and battery life, crucial things in a mobile UX.  The panelists making these claims all referred to policy limitations rather than tech limitations.  I can read between the lines.  It means enterprise users who bring their own tech to the enterprise risk violating MDM and BYOD policies even if their tech is effective.  Policy exists to protect the enterprise from employees, not the other way around.  The insider threat is too big to ignore.  Employees who think outside the box are welcome to request policy modifications, or start their own enterprises.

There's still tension between developers of Web APIs and developers who prefer a mobile enterprise application platform (MEAP).  IMHO the MEAP isn't yet obsolete because it is still good at applying security protocols.  Gartner's Top Ten Strategic Technology Trends for 2014 still favors MEAP in the rise of HTML5.

The case study from 8tracks was as action-packed as a case study can get.  I learned another new phrase:  cohort retention.  A Google search tells me that a cohort is a group of app users who clustered their adoptions within a certain time.  If I were running an app startup, I'd synchronize my SDLC waterfall chart to these cohorts and measure what each iterative CustDev effort tells me about how I should update the app.  The point is to find some sweet spot that makes the graph of customer adoption rates go asymptotic.  The 8tracks guy was big on assigning success metrics to each group of responsible actors within the enterprise.  I would know what those metrics are if I worked in a large enterprise, but I don't do that anymore because I do not like working with other human beings.  My only success metric is the daily Web traffic I drive, which in turn flows from the number of people I can arouse to anger with my insults.

Some panelists discussed founding an app business because they had done that before.  Their passion for ideation came from the desire to improve something that touched their personal interests.  Hey, me too.  My creativity comes from observing the stupidest aspects of finance - hedge funds, bailouts, preppies - and imagining the opposite conditions.  The opposite of stupidity is the genius of Alfidi Capital.  These founders say leveraging popular keywords in app store searches will reveal ways to raise an app's ranking.  Got it.  The "TechCrunch spike" from a prominent tech media story no longer drives as many app downloads as it used to drive, so PR needs a re-think.  I had to re-think the wisdom of what these people presented when they dropped buzzwords like "concentric marketing," "building communities," and other techno-babble.  Hey folks, there are only a few ways to make an idea go viral and they all pretty much depend on emotional connections.  We all heard this stuff about connecting communities back in the first dot-com boom and none of it was cost-effective.  Virality works because it bypasses community gateways, and there's no way I'm dealing with dot-bomb startups or tech charlatans who pitch community solutions.  Nonetheless, they did close out with a good reference.  Bill Baker's tips on startup fundraising are worth a look.

One other presenter emphasized the aesthetics of design, because the human brain processes info quickly.  Got it.  Steve Jobs got it too.  No wonder adult images are such popular web search topics.  I'll think I'll check out a few images of hot women once I'm done writing this article.  Oh BTW, this presenter also mentioned using excellent economics, which I interpret as capex that achieves intended milestones and variable costs that don't get out of control.  Lining up all the right steps first in product development and CustDev means a crowdfunding campaign will make sense.

One panel on monetization showed me how to take the hard work out of segmenting your target market by demographics and location.  Ad networks gather much of this info, so reading their results is probably a decent shortcut that points the way to CustDev.  The experts say ad placement for in-app ads should be a consideration during the design phase, not an afterthought, because different ad concepts lead to different UXs.  Interstitial ads, for example, have fewer impressions but better overall results in conversion rates.  Banner ads have more accidental clicks so they may not give accurate CTRs even though they run continuously throughout an app's activation.

Another monetization guru mentioned the importance of using collaborative filtering to track and predict the adopting audience's preferred UX.  This requires app marketers to graph the longitudinal expressions of an audience's preferences to see changes.  Like I said above, ad networks and other social media tools have plenty of data on the audience.

One of the final presenters displayed another awesome chart . . . the Gartner Hype Cycle.  There's a hype cycle for just about every sector Gartner tracks.  It sure would be nice if someone could track a meta-hype cycle for the volumes of research that Gartner and Forrester have published on tech since the mid-90s.  I'll bet the peaks in the hype cycles of their publications have driven the peaks in VC funding for baloney startups.  Here's another new tech idea that deserves hype cycle tracking:  mobile backend as a service (MBaaS).  How much you wanna bet that it drives the next round of VC funding once VCs see the huge gaps in enterprise IT?  Yeah, you know it's coming.  I also see the resurgence of "middleware," another popular term at Apps World 2014.  You heard it here first.

The Hackfest sponsored a hackathon and awarded some prizes at the end of the conference.  Hackathons should ideally produce marketable ideas but I got the feeling that some of the participating coders do this to burnish their reputations.  Maybe these prizes are resume builders for techies.  There's nothing wrong with that at all.  I would trust a coder who had a competitive spirit.

I have not yet reached the point of diminishing returns from attending these tech conferences.  The cute new terms amuse me to no end, and once in a while a speaker impresses me with data-driven analysis that can be used to develop strategic business options.  I now have much more robust baloney detection filters that can detect a tech charlatan from across the Interwebs.  My desire to make simple, free apps to show off the Alfidi Capital flair for genius is stronger than ever.  I don't even have to worry about privacy or security as long as my apps don't collect personal data.  Stand by for more genius, at a time of my choosing.