Some Big Thinking about small phones
Being embedded squarely in the middle of the fast-growing mobile revolution, our company has a unique perch which I've wanted to codify into a vision document for some time. I finally found time to do it, and the resulting video is below, along with the slides below that. I'd love your thoughts & comments on what points you agree or disagree with, and why.
Here's the video:
If you want to play the video faster, say at 1.5x speed, you can download it from the vimeo site (here's where you download it from).
Here's the transcript:
Here's a transcript of the video: (learn how & why I do this)
Some Big Thinking About Small Phones
By Daniel R. Odio
Hi, it's Daniel Odio, I am the CEO of PointAbout Inc. and I'm here today to share with you some big thinking about small phones,or you could also call this, "Why Mobile is Way Bigger Than You Realize."
The way that I am going to do that is share seven things that, I believe, are just going to fundamentally change the way we interact with technology because of the mobile device. I wont go through these here but this is what I'll be going over in this talk today.
I would argue that mobile looks a lot more like this than it does like this. This is today, but within five years, I believe that the majority of the things that I'm putting forward in this talk are going to have happened and I believe that it's going to fundamentally change us as a species. As a human race we are going to be interacting with each other and with technology and information and knowledge in fundamentally different ways. That might sound a little philosophical, but I really believe it's true and if you're laughing , if you don't believe that, then this is a perfect presentation for you to watch, and I would point to you some other people who didn't believe the power of what was in front of them and made a mistake because of it, so, hopefully at the end, you'll be convinced and you might think differently about mobile because of what's in here.
First of all, let me share with you who's talking to you today. My name is Daniel Odio and just a quick video here so you can put a face to a voice, alright? I've been featured in a bunch of publications for applying technology to various industries, including real estate and media, and now mobile, but the thoughts that are in this pitch today aren't just mine, a lot of the credit goes to my co-founders, Sean and Isaac who are just amazing. This was a real photo taken in our DC office...this is Sean down here, he's our Chief Strategy Officer and Isaac is our Chief Technology Officer and yeah, I really am jumping above them there, that's a lot of trust.
Real quickly about us: AppMakr is a brand and it's a platform that was created by PointAbout. Let me tell you about PointAbout first: PointAbout is a mobile development shop based in Washington DC. We do custom mobile projects for large enterprises, so we're talking about large brands, typically the Fortune 1000 with big budgets for mobile. It's just professional services across all the platforms but also we as founders are product guys and we we really wanted to democratize app creation, so in January 2010, we launched a platform called AppMakr that lets anybody make an app. If you don't have a budget or you are not sure about how to apply mobile technology to your business, AppMakr is a really great way to create an iPhone, and now Android and Windows Phone app. Right now AppMakr is free, so you could do it without spending a penny and you can get this really intimate connection with your current and potential customers through AppMakr.
So, having these two perspectives, both the professional services high-end consulting companies like Disney, Northrop Grumman, Cars.com and others, as well as this platform which is a product play, gives us a unique view into mobile and where it's headed and I am going to share as much of that knowledge as I can with you today.
I think I would start about telling you what's happened recently in mobile. A great analogy is that it's a lot like the beginning of flight: mobile had a really bad rap before 2007 when the iPhone was introduced, just like flight did before the Wright brothers figured out to get an aircraft into the air for extended periods of time and I'd also say that where we are in mobile today is a lot like where we were in the beginning of flight! We're just starting to figure things out. It's really this sea-change that we're seeing, especially with smart phones specifically. I think the most amazing thing about this photo is that if you had been standing on this sand dune in Kitty Hawk watching this plane take off, I'd be willing to bet that it would have been hard for you to envision that less than 100 years later we'd see planes that look like this, with hundreds of people and much different technology. Going from this photo here to this photo here is just an amazing rate of change and it's made our world smaller and changed our lives in a lot of ways.
The difference with mobile is that it's, a) much bigger, and b) it's happening much much more quickly. So, instead of 70 years I'm saying that a lot of this is happening within 10 years. From 2007 to 2015, less than 10 years.
Let's talk a little bit about how quickly it's already been happening just to get us started. Marry Meeker was an analyst with Morgan Stanley who has now moved on to a venture capital firm but she's probably the most bullish analyst on the future potential of mobile. To show you some of her slides, the green line here was the growth of mobile. You can see that, normalized by quarters we can just see that we have much faster growth in mobile than even, desktop Internet. Also, by 2014 she's saying that mobile users will surpass desktop Internet users. That's a really big deal because that means that more people will be accessing the Internet from their mobile devices than from their desktop.
There's also a great graphic here from Mashable, it's an info graphic. Let me just pull it up real fast to show it to you. They talk also about this change in 2014, probably pulled that from Mary Meeker's slides. They also show that smart phones are 27% of all phones. That's up from 16% just about a year or maybe two years ago. So, very fast growth in the smart phone space and very fast absolute growth. One really interesting stat here is that 91% of mobile Internet access is used to socialize. We're going to talk today about the power of social in mobile among some other things but that's a really powerful stat.
If you want to find this, you can just Google "Mashable mobile by the numbers" and you'll be able to find it.
Really quickly,blast from the past here, just 10 years ago, let's look at how the iPhone 4 compares to the 2000 iMac. Just to show you how quickly the hardware has been progressing and improving. The iPhone 4 has a faster processor than the iMac did, it has faster data transfer speeds, it's got more storage, but it only weighs 4.8oz compared to over 34 lbs for the 2000 iMac. To me, this is just very indicative of how the hardware platform is enabling a lot of this innovation.
It's also very a "back to the future" type of scenario. If you remember, if you were around or if you've seen this back in the 1950's and 1960's , I wasn't around but there was a client mainframe model where dumb terminals were accessing the computing power of these large mainframes. We're seeing that again, but the difference now is that it's a phone in Cloud model where the phone is the dumb terminal and the Cloud is the mainframe, so data is living up in the Cloud and the phone doesn't even need to be that smart. We call these things "smart phones" but they don't need to be that smart, they just need to be able to just need to be able to access the Cloud effectively and efficiently and even more importantly, they need to be able to provide a great user experience to the user because the mobile use case is different from the desktop computer use case. My co-founder Sean makes a great point: computers haven't changed very much in the last 30 years. There's still a keyboard and still a monitor, but the phone is changing really rapidly. Literally in 60-month cycles, we get new types of phones, new models, new experiences like tablets. The phone is changing very quickly and the use case is different where, on a phone, you typically just want to get something done. On a computer you want to browse, but on a phone you want to take action; you want to find a restaurant, or get to an appointment, or whatever it might be. It's a different use case and we're just starting to transition and understand what those differences really are.
Because of these things, I would definitely pause it that the age of the mobile super computer is upon us but by "mobile super computer," again, I don't even mean that the phone itself has to be a super computer, it has access to the Cloud, which does the super-computing for us!
What's coming next in this massive disruption?
Let's start going through these points: First of all, data mash-ups are a kin to magic. What do I mean by that? Well, we are analogue beings, we don't have the ability to reach out and grab the digital information that's swirling all around us. I joke that the iPhone is like a firefly catching net, that it allows us / gives us this vehicle through which we can access all of humanities knowledge, also known as the Internet, or the Cloud, the data that's in the Cloud. And so, maybe the next version of the Apple ad should look a little bit like this! But, the reason this is so significant is because of some really big changes in the way that data is accessed and shared. In the old world we had legacy data systems. These were data bases were of proprietary format that did not talk to each other, it was not easy to extract data from these systems. Now we are in a world where we are starting to see a large adoption of API's, Web Service Layers, Service Oriented Architecture. It's a lot like the Star Trek universal communicator where companies / brands are agreeing to provide access in controlled and limited ways to their data so that it can be mashed up. What happens when that data gets mashed up is something that we're really going to dig into because that's the part that starts to feel like magic.
Here are some of the brands,you know there are thousands of software platforms, web platforms that have API's and are making them available. In the mobile world also, there are SDK's, which are, you can think of it as a little bundle of code that can be dropped into your mobile application. Yelp is a great example: Yelp is enabling real people to provide honest and scathing or positive reviews of their experiences! That means that data is becoming less "lossy." We experience things and produce data in our daily lives and most of that is lost. It's not captured, but it's starting to be. And not only is it starting to be captured, but it's starting to be put together so that it can be shared though these API's. Yelp has an API, meaning I can get access to these reviews and mash them up with something else that I am working on, a different project.
Even Google is providing API's for a number of it's products. This just shows you how very large companies can be forward thinking in providing access to their data. The important thing here when we talk about API's is that we're talking about controlled access. Google holds the keys to the ways that this data is accessed. Google Maps, for example, will give anybody an API to be able to access Google Maps but if you start hitting that API, if you start pinging it for requests, for Map information beyond a certain volume they start charging for that. So that's a model where Google is monetizing their map API access.
But it's not just software platforms that are starting to produce API's. We're also seeing hardware, which is really software embedded in hardware, which, for all intensive purposes let's just say that we're starting to see hardware has API's. For example, OnStar is embedded into mini vehicles and here's an article in Gadget Article about how OnStar is exploring API's for their cars, meaning, as an developer you would have the ability to create applications that can access the API the OnStar service and you can do things, you can make the car act in certain ways because of this API access.
Here's another example: Ford is opening up it's API for some developers. And I'd like you to think beyond just these early examples because they're just that, they're very early examples. What if your house had an API for a home automation system? What could people dream up then? What if your washer and dryer had an API that could communicate how often you wash your clothes? How many loads do you do? How much water do you consume? What temperature do you wash at? What if your neighbor uses different settings that are more effective? What if somebody could make a "what's the best way to wash your clothes?" application and use real data from consumers to help aggregate best practices among washing clothes. What if there was an API for your wall? It's kind of funny think about that because there's no embedded software in walls today but that doesn't mean that paint couldn't have some type of embedded software in it through circuitry that was baked into the paint! So that when you walk in with your smart phone you can swipe your experience off the small screen on your phone and on to the wall. There's a lot of real estate that's not being used today on walls. If you just walk around and think of walls as potential displays you'd be astounded by how much display real estate there is! Well what if you could access that? What if your shoes had API's? You know it sounds funny, and you might be laughing, but there's a lot of data that's captured by your shoes, especially when they're on your feet! Things like, where you go, how often you go there, what route you typically take, who takes that same route with you? Other things too like, how much you sweat? What kind of shape you're in, how much do you weigh today? There's all sorts of information that can be gotten from your shoes.
Those are just a couple examples. So, really start thinking about if API's could be embedded or if API's could gain access to data that is gleaned from all of these different things that we interact with in our daily life, than what would be possible with this mobile device that you're carrying could make use of all of that data? The problem is that "data" means nothing if it's not information.
This is another great quote from Sean where he says, "Think of the number 1776. What does it mean to you?" And you might make some assumptions about what it means but it could be obviously a very significant year in American history, but it's also the street number for a house: 1776 Main St. Data doesn't mean anything unless it's turned into information. When you start being able to mash data up with other sets of data, you start created context and relevance, and that means that meaningless data turns into very valuable information. Even just 10 years ago, this was what data bases looked like when you tried to mash them up. I spent the early part of my career at GE, in fact in the business of GE is called GE Information Services and we did EDI- Electronic Data Interchange and we would help banks communicate with each other. The mapping that we had to do, we literally had to map fields in database tables because one bank might have one field called First Name and the other bank might have a field called Name_First and we had to tell these two disparate data sources that they contained they same information. We had to create a mapping translation layer!
Well, you don't have to do that anymore. With API's you are defining a common set of criteria upon which people can extract your information and you get to control the way that it's used and you can monetize it. So this is a really big deal; it's the foundational building block upon which all of the mobile innovation is built. On the professional services side under the PointAbout brand, we often have large enterprises come to us and say that they want us to do a mobile project for them. Maybe it's an iPad app, and we typically find that the first thing we have to do go in and clean the data up. Mobile has an uncanny ability to uncover data issues within an organization because the CEO wants an iPad app but that iPad requires the CRM system to talk to the ECommerce system to talk to the various other systems that have never had to interact in this way before. So when we go in to do mobile projects, a large part of the project isn't the mobile development but it's actually getting the data layer fixed first.
This is happening now, today, in ways that in just a couple of years, data will be much more accessible and mobile is really driving that change and mobile is going to be a large beneficiary of that change. We're going to start living in a world where data is mashed up.
There's a great blog from Greylock Partners about why they invested in Groupon. I encourage you to read it. They basically say that Groupon's public-facing business, the daily deals and couponing business isn't the thing that's all that interesting to them. What's interesting the data that Groupon is collecting about the consumer, where the consumer is shopping, about the retailers, about the merchants, local information. There's a lot of data that Groupon is getting and they are going to be able to do a lot with it and that was why Greylock invested in Groupon. You can just Google "Zero to A Billion" and "Greylock" and you'll be able to find this blog.
Another trend here is that the location layer is going to grow up. What I mean by that is that location today is often referred to LBS,location based services, is a lot like a car without a road. The car is a great technology but without a road, it's not that useful. Today, you might use a service like Foursquare and you might check in, and you know, that's fine, it's fun, Foursquare is doing a bit of "gamification," which we'll talk about later, where you can compete against your friends to check in more often and get more points and be on a leader board. But it's not all that useful. It's very useful to Foursquare because they're getting a lot of great data, and again, Foursquare is another example, like Groupon, where they're going to be able to do a lot with that data but from the actual user's perspective, it's just OK. That's changing as this data becomes more accessible and starts to be mashed up and becomes more available through API's. Imagine scenarios where you check in on Foursquare and a separate data source, which is apartments for rent, is mashed up with the fact that you just checked in at 1234 Main St. and that apartment that you've been looking for , and by the way the phone knows you've been looking for an apartment, because you've been using the phone to do your apartment hunting, the phone tells you the exact apartment that you've been looking for just came on the market and the phone knows that you're there because you just checked in to a cafe next door. This is much more meaningful and significant than just checking in for fun. Or what if you were a member of Match.com? You're looking for a partner and the fact that you checked in at a cafe, somebody else checked in at that same cafe that has the exact profile that you're looking for or a very close match, and you find somebody because of that check-in. It turns what used to be just fun and games into very significant life moments for the human psyche. We're talking about mass law's hierarchy of needs here! You know, shelter, and things that are very basic and fundamental to human needs. Finding a partner in life, the mobile device is starting to be able to help you live a better life and a more meaningful life.
Another example, though not quite as deep, is that perhaps you like to collect Star Wars action figures, they have to be in their original boxes and you check in somewhere and the fact that you collect these is known by your phone and there's one that's for sale right around the corner and you get to pick that up. So just a few examples...hopefully you can start thinking about more examples of how this gets to be really powerful.
Next, peripherals get connected and smart; what does this mean? Well, if you've ever watched the TED conferences, there's a great TED video about something called "Sixth Sense." It's by Pranav Mistry. He at least was a student at the MIT media lab...I don't know if he still is, he might have graduated, this is an example of him dialing a phone number on his hand and the way that he's doing that is because he has a camera and a projector on a lanyard around his neck. The camera knows that's his hand, the projector projects a phone number on his hand and the camera knows where's he's dialing because of that.
So we're starting to talk about dumb peripherals, appliances, even things like kitchen appliances just dumb items starting to get smart and starting to be connected, and that's important because, just like your shoes, dumb items capture a lot of data but it gets lost, it's "lossy," but they could be capturing it. And so, here is an example I believe this might be Pranav here with the lanyard around his neck, you can see it right there, and it's projecting onto this student things about this student. The camera here is doing a facial recognition scan and then it's projecting that this person is a student at the media lab so Pranav is getting information. Obviously it's a very geeky example but this is how these things start. Another geeky example,and you can see this is just a homemade EKG monitor,that's being plugged into the headphone jack of an iPhone. Again, there's not a lot of infrastructure and defined product around these things yet, these are just home-brewed. But that's where a lot of this opportunity lives. Also things like your refrigerator or your washer and dryer and other items being connected and you being able to warm the house up before you get home, or do a load a laundry while you're away. Very simple and basic examples but hopefully you get the gist of what I am saying.
Another great technology that's coming to the iPhone 5 is called "Near Field Communications." It allows for mobile payments. Again, this is the phone starting to be able to communicate with things that it couldn't communicate with before so, for example you could buy a soda by swiping your phone in front of the soda machine, or you could pay here with the swipe-to-pay type technology.
One interesting thing is that the iPad 2 has a camera and this is an example Fast Company says, "what if augmented reality is the iPad 2 sacred killer app?" One thing here that I'd just like to point out is, this is iPad 2 is taking a photo or just has the camera open of this picture. This picture is acting as a marker. You can see there's a little play button here, this person can play a video because the app that's running this camera recognizes this picture means something. It means there's a video attached to this so there's no QR code, the actual photo itself is the marker and is telling the app to allow the user to play a video when the iPad sees that photo. That's a very significant thing. The actual real-life item is the marker.
Software Rules the Cutting Edge. There's a big debate raging right now about HTML vs. apps and I'd like to put this debate into context. A lot of people are saying that mobile devices will use the browser and by browser I just mean Safari or whatever type of web browser is running on the phone. The browser will allow and replace a lot of the functionality that we have in apps today. Today the term "app" means compiled software, an app is something you download onto your phone like the Facebook app, whereas you go to Facebook.com in the browser. Those are the differences. I actually think that the browser is a lot like Lewis and Clark exploring the western part of the U.S., where, before, back in the day on the desktop we used to browse a lot. We used to explore a lot, and go to twenty different web pages and you know, when Lewis and Clark were exploring it was literally the wild west! That's what we would do on our computers. We would browse. But the use case on a phone is different. On a phone you don't want to be browsing you want to be doing specific things. So, just like today, we have a highway system with roads. I would propose that apps are the equivalent of roads, where, you just want to get something done! You want to find a restaurant review, you want to get to your destination, you don't need to stop and look at the creek when you're on your way from point A to point B when you're in the car, and just like that, you don't want to be browsing on the phone, you want to be using an app that gets you where you want to go. One thing by the way that I think gets lost in this debate is that people think that browsers are catching up to where apps are and that's true, absolutely true! The browser is catching up! The most recent version of HTML, HTML 5, can pull a latitude and longitude from the phone. It can do local storage. But what I feel gets lost is, when people say that in two years the browser is going to get caught up to apps, they're not thinking, "where are apps going to be in two years?" This hardware is changing so quickly that if you want to be able to do things you need to be using software, because only software can dig deep down into the actual hardware of the phone and extract the full value and capabilities of that phone. Things likes sensors, proximity sensors, the accelerometer, the camera, all sorts of things that exist today, but more importantly will exist tomorrow in this hardware. The browser is not going to be able to keep up with the rapid pace of hardware innovation that we're seeing.
Where you browse on the computer, or maybe you browsed in the past, today you take roads and so you might have a series of apps, let's call it Yelp for restaurants, Facebook for friends, Maps for figuring out where you're going, Camera for taking photos, Run Keeper for staying in shape, Mail for checking your mail and I left the rest blank. You can fill in the other dozen or however many apps you use on a regular basis. But, imagine a world where most of what you need to get done happens through an app and you only browse when you go outside of that kind of, habitual comfortable world that you live in every day. In fact, I think that the definition of "app" is changing to not just be a technical term that means compiled software but actually, the definition of app is turning into "functionality that just works." So, it's possible that there may be, or, in fact, we're already seeing browser-based technologies look and feel and function more like apps where they're imitating what compiled software does today. You might be actually using technology in the browser but it's telling you that it's an app, it's just a little piece of functionality that just works. But I do really believe that software is going to rule the cutting edge. One great example of that is this app, RunKeeper. When you go for a run, you start the app and it tracks where you've run, tells you what pace you're running at, every five minutes it announces by voice,so if you're listening to music, what your pace is and how far you've gone. It lets you upload to Twitter and Facebook information about how long of a run you have taken, it shows you altitude and speed, it shows you were you've gone and imagine what the possibilities here are! You can map out a course and you could "gamify" this! By "gamify" I mean you could turn it into a competition. So, I just ran this course in however many minutes. I did it in 42 minutes, let's see who can do it more quickly than I can and the next person to go out is using the RunKeeper app and the app tells them to take a left at the next street, go one mile, take a left, etc, etc, to help them run the same course that you ran. There's just a lot of potential with the gamification of the world, of the real physical world, through this cutting-edge software.
Another great example is called iHealth, which is a blood pressure monitor but it's an app. It just works. It has a very simple "start" button, you take your blood pressure. But what gets interesting is, what if you could start mashing up data? Let's build on the things that I'm saying here. What if you could mash up this data and you could take your blood pressure, and your blood pressure was then communicated to your doctor, but it's also tracked over time, so you can see how your blood pressure has been over the past two years. Since you have high blood pressure today, let's say it just took your blood pressure today and it was high, when you go to the grocery store your phone might tell you not to buy a certain item because it's high in sodium! It might know that because you're scanning bar codes to check out. So that's the data set from the grocery store being mashed up with the data set from your health and body. That's where this magic starts happening. That's where your phone is telling you, "hey don't buy that today or ever because you have high blood pressure!" So, it's changing that you live your life.
Now, building on these first four points, I think we get to the (?), as it were, of the way we interact with information, which is that information goes from "pull" to "push." Let me give you an example to tell you what I mean: Let's say that you're driving in the car and having a conversation with a friend and you realize that your gas light is on. You think, how long has my gas light been on, um, do I need to take the next exit? Can I make it to my destination? What range do I have left? Well, today you would probably pull information. You would open Google maps, you'd look for an Exon and you'd still have to decide whether or not to take the next exit. So there's a lot of stress that comes to the human psyche from this uncertainty. That's today, you're pulling information.
But let's look at what this same scenario might look like tomorrow, "tomorrow" being within five years. First of all the phone is starting to be used as the hub which is interesting because the car manufactures always considered the car to be the hub and the phone to be the peripheral and they're just starting to wake up and realize that the phone is the hub and the car is the peripheral! By the way, that's a very hard thing for the car manufactures to accept because they make a lot of profit margin off of their multi-media display systems. But I believe it's inevitable, it's going to happen. This [photo] is a production concept from Chrysler. I don't think it ever went to production; it's called the "peapod," where the phone was the actual brain of the car. In this new world where we've talked about API's and OnStar offering the phone an API to it's system, so the phone knows what the gas level is and your phone is your GPS and it's also your calendar so it tells you, "Hey Daniel, stop at the next gas station on the way to your destination," and it knows you have time to stop at the next gas station because it knows what time your appointment is. It also knows your preferences because you have, in some other app, told it that you want to get gas when the tank is half full, not a quarter full, so, even before the gas light goes on the phone tells you to stop at a gas station and it tells you to stop at an Exon and not a BP because it knows that you don't want to buy gas from BP because of the oil spill, because of some other app that you're running.
This idea that it feels like magic, I hope you see what I mean! You're just on your way to a destination with your friend and your phone is telling you to stop for gas. It really feels like magic. It's this very egocentric, very intimate with information that we're going to start seeing because of the mobile device. Today we're dealing with a lot of information-overload but one of the most important characteristics the mobile device will be performing is filtering based on you, based on your preferences and your patterns, and filtering out what is and isn't important to you because it understands that. That's another example and reason why this starts to feel like magic.
Let's move on to some trends, one of which is very significant, significant enough for me to put as a separate point, is the rise of Android and the significance of commoditized hardware, and specifically, tablets. Android and tablets are just on a tear! You can see here that Android is starting to out-sell iPhone in terms of units sold. Just a very fast growth, I do these state-of-mobile panels with about 300 people in a room, two years ago there were maybe 10 hands that were raised when we asked, "who was using Android today?" We just did one about a month ago, and literally half of the room raised their hand. It's just unbelievable growth. We often say, and we have been saying this for a few years now, that we think it's going to be like the difference between PC vs. Mac back in the 80's and 90's where the experience is arguably better on a Mac but there are more PCs in the world. That's how the Android/iPhone Debate could be classified. We do see this trend continuing with massive growth in the Android platform because Android is an open-source operating system. Hardware handset manufacturers don't have to pay anything to use the Android operating system on their phones.
I'm sorry I don't have any legends for this. This next one is units of iPad shipments,or I believe it's actually tablet shipments, in millions. We're starting right here and these are analysts such as Gartner and others saying that tablet growth is just going to explode. I do believe we're seeing that play out. It's very significant because, whereas before,especially in the b2b space or in the enterprise space, large enterprises had to buy very specialized and expensive hardware. Symbolism manufacturer, for example, of devices, when you see your UPS or FedEx rep, they're carrying a specialized purpose-built device but now we're starting to see that commotitized sub $500 hardware can be used for accessing information in very rich ways on the go when you're not in front of a computer. We have one client, for example, that is a tool rental company that wants to create an app so that their field reps can go to construction sites and show how "oh, you're using that front loader? Look at this one, this one could be better for you!" Another example is that Hyundai is making the iPad the owners manual for one of their new vehicles, so we're going to see a lot more adoption of commotitized hardware and a large significant role that it will be playing in the way that mobile will transform the way business is conducted and the way we live our lives.
Let me let you in on one of mobile's dirty little secrets. This is also one of the main ones that our company is working to solve, which is that right now, engagement drops off over time. This is specifically in regards to apps, so mobile applications. You can see that 21 days after install, only 5% of a user base on average for free applications and its the same line for paid applications though it's a little bit higher but it's the same drop-off. Only 5% is engaging with the app after three weeks. We think that is because there is no social aspect in mobile today. Which just blows my mind because mobile is a social medium. Making phone calls is by definition, social. We believe that integrating social into mobile is a killer combination and very significant.
Let me play for you a video, this was a Goldman Sachs Conference that I attended with Max Levchin and Bill Gurley and the audio is really low but I'm just going to play a minute of it here. Let me see if i can get this to play and I'll also re-cap because I don't really think you're going to be able to hear this but let's give it a try. This is Bill Gurley talking from Benchmark, which is a venture capital firm, and Max and Bill are talking here about Facebook and the social graph and how Facebook created the social graph but he was just saying that Reed Hastings from Netflix tried implementing a "liking" system based on your social graph and it didn't work that well.
Ok so, what Bill is saying, and by the way, you can just go to my blog at danielodio.com or just Google "Goldman Sachs, Bill Gurley & Max Levchin" and it will probably come up. If you want to watch this you'll probably be able to hear the audio a bit better. But what Bill is saying is that the social graph, which is taking your offline friends and representing them online through Facebook, for example, which pioneered this, the social graph isn't great for recommendations. You hang out with people who have many different tastes from you so just because a friend "likes" something doesn't mean you're going to like it. What he's talking about is the nirvana, is the interest graph. That's a big bet that our company is making. I could not agree with Bill more. We believe that the interest graph is in some ways, more powerful than the social graph. So what Bill was saying was, if you're into road biking, how do you connect to fifteen road bikers that live near you? The interesting thing about the interest graph is that, we believe, you don't need to know these people in the real world. So where the social graph takes your takes your offline friends and brings them online, the interest graph just means that you care about the same things that other people do, regardless of whether or not you know them in the real world. You would want to connect with them online or specifically through mobile because you share an interest.
Let's talk a little bit more about this. We really believe in the interest graph and the power of the interest graph in making the interest graph available through mobile applications. Here's the problem with the interest graph: Interest-based communities have typically been very nichey and hard to scale. Things like Elk's Lodge or the BMW Club or any sort of interest-based group. But what we realized, and we think this very significant, what we realized was that apps solve this problem for us! So just reflect on this for a minute. It's really hard to figure out how these interest graph networks work and look with interest-based communities but apps define the interest groups. If you download the Green Bay Packers app, you are self-selecting and saying that you care about the Green Bay Packers. Everybody else who downloads that app is saying the same thing. The problem, though, is that all of the people that downloaded the Green Bay Packers app can't talk to each other. Today in mobile, if 100,000 people download an app, nobody knows about any of the other people who have downloaded that app! It's like everybody is in a room but the lights are off! And it's amazing that nobody has solved this problem yet. What we're doing with a technology called Socialize, is we're turning the the lights on in the room so that this community that shares an interest that defines the interest graph can start socializing! So we've created a social layer that we are building into every app made by AppMakr. If you go to www.appmakr.com and you build an app, by default, it will have Socialize built in to it. And you can learn more about Socialize and how it works because I am not going to go into detail about that here, but we believe that, by creating a social layer that can be put into every app made by AppMakr, we can help solve the problem with the interest graph. Not only that but Socialize that something that could be put into every app, not just AppMakr apps. So stay tuned to see what happens there.
For now, you can make an app with AppMakr and it will have a built-in social layer / community baked into the app. A couple screenshots of Socialize just to help you get an idea of what it does. In the app, you're able to see an activity stream not only of who is doing what, but where they're doing that. So you can start connecting with other users in the app. People who are liking or commenting or sharing content from the app. There's also a challenges component that we're building in. This gets to the gamification of the real world piece. For example, if the PGA Tour were to make an app using AppMakr, they could create a challenge and that challenge could be to take your photo on 18 golf courses across the U.S and the first person to do that gets a set of Big Bertha golf clubs. It's the Socialize layer, the Challenges framework layer that's being used to veto or verify that that's actually being done through things like GPS or other sensors that the phone has. So again, we're building on a lot of these early points but the important thing here is that it's changing the way that people engage with apps. In fact, we're just starting to build Socialize into apps made with AppMakr and this is an app I made for Hacker News and you can see that before we put Socialize in, we were getting about 15 sessions a day. The moment we put Socialize in that number jumped up to over 150 sessions a day. So this shows the amazing power of this social layer and this interest graph. So again, Bill Gurley I could not agree with you more on that social graph or the importance of that interest graph. Specifically, what we think this does to this engagement metric is it turns the graph the other way. Instead of engagement dropping over time, engagement goes up over time because the community is forming around the core content of the app. We believe this is amazingly powerful, it's one of the biggest problems in mobile today and we solved this problem first that allows us to solve other problems like the discoverability and recommendations. You can go to www.getsocialize.com to learn more Socialize.
So that's it! I hope I've convinced you and shown you about the power of mobile and specifically, the power of data and data accessibility through API's changing the way we are going to be living our lives even within the next couple of years. I'd love to hear from you, this is my contact information, please reach out to me, leave a comment on the blog where I am going to post this video, and just engage me in conversation.
Thanks.
And here are the slides I go through in the video: