Over the last few months, I’ve had several conversations about mobile business applications that remind me of early discussions and debates around SaaS a decade ago. When Emergence first invested in Salesforce.com in 2003, we heard all kinds of reasons why Software-as-a-Service wouldn’t work. Yet, cloud-based computing enabled a fundamental shift in software design, go-to-market strategies, and cost structure. Today SaaS companies are quickly coming to dominate the business application market.
I feel like we are on the cusp of a similarly fundamental shift in business software. Once again, the change is about rethinking business applications, but this time it is with a mobile lens. When talking with companies that don’t have a specific mobile strategy, I keep hearing about how mobile is just a feature of cloud-based applications. Yet when we meet with entrepreneurs who are building “mobile-first” business apps, we can see a completely different way of thinking: Leveraging the unique capabilities of mobile devices is at the core of every decision they make.
At Emergence, we have put together a first cut at defining the emerging mobile business app landscape based on conversations with over 100 early stage companies. Here’s a look at our findings:
Vertical apps: field-based, on the go
Vertical apps are defined by their singular focus on industries that have a substantial cohort of non-desk workers. Real Estate is a great example. The industry has been notoriously slow to adopt new technology, but in the last two years there has been an explosion in mobile-first technology solutions. For example, Cartavi’s mobile solution for real estate transactions gives agents, buyers, sellers, and related parties (mortgage banks, title companies, etc.) the ability to store, access, update and share transaction documents in the cloud.
On the construction side of real estate, PlanGrid is eliminating reams of paper-based blueprints and change orders with a rich mobile app built specifically for the iPad. Given the field-based nature of the work and its traditional reliance on paper-based solutions, it makes sense that real estate is one of the most crowded boxes on the Emergence mobile business app landscape.
Healthcare and education are other verticals that are particularly well-suited to mobile business solutions. In these sectors, most mobile business apps are enabling entirely new forms of communication, rather than replacing paper-based solutions. Doximity offers a professional networking solution for physicians that hasn’t existed before (Disclosure: The author’s firm, Emergence Capital Partners, is an investor in Doximity). More than 160,000 doctors have joined the network and over 75 percent of their engagement is through mobile devices.
Other vertical categories including restaurants, transportation and hospitality have begun to attract attention, and we predict that we will soon see more apps in the manufacturing, retail and agribusiness verticals, given the “always on their feet” nature of the workers in these sectors.
Horizontal apps: innovating on existing services
Looking at horizontal apps, most start-ups emerge in three sub-sectors: productivity; mobile marketplaces; and sales, marketing and services. A defining characteristic of the companies in the productivity space is their focus on leveraging the native integration of email, desk and calendar in mobile devices. For example, Tylr Mobile has recently launched a new mobile app for salespeople called Workinbox that directly connects salesforce.com data with email. Another young company, Cloudmagic, has developed mobile search capability that allows users to find names, documents, or other files stored in any of your cloud-based applications (e.g. email, calendars, Box, Evernote).
In the mobile marketspace sector, many business apps share a heavy reliance of location-based services. There are several promising car service companies such as Uber, Flywheel, Hailo, and Taxi Magic that enable drivers to find passengers through a marketspace leveraging GPS data. Another interesting company, Quri, has developed a mobile platform that uses both GPS data and mobile cameras to crowdsource in-store intelligence for consumer brands.
Within the sales, marketing & service, ServiceMax, has developed a mobile solution that helps companies manage the entire field service process including scheduling, parts and contracts (Disclosure: The author’s firm, Emergence Capital Partners, is an investor in ServiceMax). The company sells into over 20 verticals, and its bookings increased over 150 percent relative to last year. As we think about the other horizontal sub-sectors, some companies that stand-out have found innovative ways to use mobile cameras (Expensify, Flint), alerts (PagerDuty), and even the headset jack (Square).
Unsolved challenges remain
At Emergence, we feel optimistic about the tremendous growth in mobile business applications that we have seen over the last 12 months. However, like all nascent categories, there are many unsolved challenges. Distribution issues come up during every conversation we have with entrepreneurs. All mobile business app entrepreneurs want to figure out how to leverage mobile app stores more effectively, but most struggle to do so.
In addition, founders are working through the question of whether to native-build mobile business apps or to use a browser-based approach. To date, I have found that native apps tend to provide a better user experience. Further, business users often like access to their applications even when they don’t have connectivity – which makes native apps a better choice today. However, developing and maintaining native apps across multiple platforms is challenging and costly. I am hopeful that the evolution of HTML5 will help entrepreneurs achieve the benefits of both.
As we look ahead, we know the mobile business app landscape will continue to evolve. We realize that we have likely missed some great companies, so please let us know if we missed you. Or if you are thinking about other ways to categorize the companies, it would be great to share ideas.
Kevin Spain is a General Partner at Emergence Capital Partners, a Silicon Valley venture capital firm focused on Enterprise SaaS. He sits on the board of several companies, including Doximity, Viglink, and Welltok.
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