It’s Harder Than Ever to Launch a Hit App
💥A Boom with a View💥 is a column about startups and the technology industry, written by Erin Griffith. Find them all here: fortune.com/boom.
Call me cynical, but every time I read about a new app launch, all I can think is, “Not gonna happen.”
It wasn’t always that way. When smartphones were still new, apps made them more useful and exciting, which Apple (AAPL) encouraged with its trademarked catchphrase, “There’s an app for that.” Developers happily populated the iOS and Android app stores with new and novel curiosities, some of which were actually magical (Shazam, for example), and many of which were pointless (iFart, anyone?).
In 2012, when Facebook plunked down $1 billion for Instagram, an 18-month-old app with 13 employees and no web product to speak of, the tech world let out a collective iShart. A billion dollars for a stupid little app?! Suddenly everyone’s uncle had an app idea. How hard could it be?
Four years after the Insta-deal, we’ve hit peak app. At least a thousand new apps pour into Google (GOOG) and Apple’s app stores every day, but the vast majority will struggle to find an audience: Smartphone users download zero new apps in a typical month. Teenagers are especially notorious for deleting all but the most essential apps on their phones, which is great news if you’re Snapchat and bad news if you’re, say, Domino’s Pizza. Further exacerbating the “haves and have-nots” problem, a full 94% of revenue in Apple’s App Store comes from just 1% of all publishers.
The smartest people in tech have already figured this out. Rather than try to convince us to download new apps (the theory behind the whole “App Constellation” trend of 2014), they’re pulling everything we could possibly want inside the apps we already have. Facebook (FB) is building ways for us to transact and communicate with businesses inside Facebook Messenger. Same idea behind Kik’s Bot Shop. Snapchat wants us to shop directly from its ads using its own currency, Snapcash. You can even order an Uber car from inside Slack.
Messaging apps haven’t taken over our phones quite yet, but from where I sit, they’re in a good position to. Next time your uncle has a great new idea for an app, tell him it’s too late—the app gold rush is over.💥