Emotionally-driven beautiful design has been at the forefront of many of the breakout websites and apps of recent years: Airbnb, Path, Pinterest Instagram, Mailbox; the list goes on and on. Increasingly design is becoming as important (or even more in some cases) as the technology itself, a trend important enough to us to merit an annual event devoted to design called RoadMap.
This transformation is occurring because with the rise of cloud computing and the modularization of the underlying networking technologies, much of the value in web and mobile products has shifted to the interaction with the user. It is no surprise then, that the business model for these digital products could start to look increasingly like the hits-driven business of movies, music or video games.
The bad news is that those are pretty difficult, high-risk businesses that rely on churning out hits and pumping an increasing amount of money into individual products in an attempt to find the summer blockbuster of the season. Replicating hits over and over again is a hard business to sustain over the long run and is something that fundamentally will change the ecosystem of Silicon Valley and the way innovation is created (as Stacey put it in Silicon Valley is Motown and the web is a hit factory).
The Summer Blockbuster
If you think the hits business sounds awesome to you — filled with Will Smith alien movies and Rihanna singles — look no further than Zynga for the uglier side. The company announced this week that it’s cutting 520 people, or 18 percent of its staff, closing some offices in the U.S. It saw its stock fall below $3 per share. As Kevin Kelleher put it on PandoDaily:
Stocks of gaming companies have always been notoriously volatile because their income depends on capturing lightning in a bottle. Zynga tried to get around this by designing data-driven games, but it’s losing its edge. . . Meanwhile, hits remain unpredictable enough that the lightning is showing up in other bottles – like King, the maker of Candy Crush Saga . . .
The movie industry has long suffered from this hits syndrome as well. Back in the early days of film, the movie industry actually tried to use technology as a differentiator, adding sound, color, CG, 3D, and even some technologies that never took off (Smell-O-Vision was a real thing). But nowadays movies are a commodity, and the movie makers turn to content tools to attempt to minimize the risk and maximize the chance of a hit. Some of these things include: formulaic scripts, known star power (Ryan Gosling is in it!), sequels, and the old mainstay of turning a comic book into a movie.
This business model is why a lot of new movies are not worth the price of the popcorn. Is this the future of mobile apps and consumer web products?
The Gigli of the web
Well, there are some key factors that make it a little different. Namely, on the technology cost curve, mobile apps and web products are at some of their cheapest points in history to build. Entire sectors have been built off of cheap computing, broadband and web hosting. So at this point, they’re a far cry from a movie studio spending a hundred million making a movie.
But on the other hand, as mobile apps and consumer web sites become ever more commoditized, the expense to build ones that stand out above the noise — and become hits — could grow considerably. And good design isn’t cheap.
Mobile app startup Sunrise announced it has raised $2.2 million to continue to build out its design-centric calender app that is supposed to rival the free calender app you already get on your phone. The designers behind the app say they looked at the calender as “a design problem, not an engineering problem.” The hot startup behind Mailbox, which redesigned the mail app for the iPhone, was recently sold for a reported $100 million to Dropbox, which wants to expand beyond online storage & syncing and act as your online presence and center for your apps.
But these apps are just the ones that have actually hit some success milestones. As Stacey wrote “the internet has become a wasteland of lame-duck startups and acqui-hires that couldn’t make it to the next level in popularity.”
As this hits-driven mentality emerges, it will continue to transform the more traditional Silicon Valley ecosystem. Inc Magazine put it recently as “venture funds now bet on hackers the way record labels bet on rising pop stars, hoping that someday soon, they will make something wild, new, and insanely lucrative.”
Some of the new mobile app shops are increasingly feeling the necessity of churning out hits more than anyone. The New York investor group Betaworks is already in the business of cranking out mobile apps at a breakneck pace and seems to be doing a decent job at it so far; mobile game Dots is everywhere. But not all the mobile app labs are going to succeed — as a designer I met with last week said to me, how many gorgeous mobile weather apps do we really need?
Mobile app development has really only started, so we’re a long ways off from the crush of the hits-driven industry that now plagues Hollywood. But I think down the road, the pressure of the hits business will increasingly weigh on the internet industry as smart phones and web usage move into utter mainstream usage.
And while this trend is inevitable, it’s not wholly positive, as it will deliver an even greater shift to “the cool,” “the trendy,” and “the celebrity.” Let’s face it: real innovation is often not cool, trendy or made by a celebrity.