The first million people who bought VCRs bought them before there were any movies available to watch on them. They just wanted to “time shift” TV shows – what we use DVRs for today. Once there were millions of VCR owners it became worthwhile for Hollywood to start selling and renting movies to watch on them. Eventually watching rented movies became the dominant use of VCRs, and time shifting a relatively niche use. Thus, a product that eventually had very strong network effects* got its initial traction from a “standalone use” – where no other VCR owners or complementary products needed to exist.
I was talking to my friend Zach Klein recently who referred to products as having single player and multiplayer modes. I like Zach’s terminology because: 1) it is borrowed from video games where a lot of thought has gone into making these modes compelling in distinct ways, 2) the word “mode” reminds us that people can switch from moment to moment – that even when a product is primarily social or networked and has reached critical mass it might still be useful to offer a single player mode.
Many products that we think of as strictly multiplayer also have single player modes. In many cases this single player mode helped adoption in the early stages when the network effects were not yet strong. For example, you could use Flickr just to store photos privately if you wanted to. I thought of Foursquare as strictly multiplayer until my Hunch cofounder Tom Pinckney told me he uses it solely to keep track of restaurants he’s gone to so he’ll remember which ones to go back to. For some products it’s really hard to imagine single player modes. This is true of pure communication products like Skype and perhaps also social networks like Facebook (although apps like games seem to have provided single player modes for Facebook).
* Products with so-called networks effects get more valuable when more people use them. Famous examples are telephones and social networks. Network effects can be your friend or your enemy depending on whether your product has reached critical mass. Getting to critical mass in network effect markets is sometimes called overcoming the “chicken and egg problem.” More here.
Mary Meeker’s presentation this year on internet trends was all about mobile. Inasmuch as data-heavy research report from a major investment bank can be said to have a “climax,” it was probably these slides:
The assertion seems to be that there is something special about the mobile internet that compels people to pay for things they wouldn’t pay for on the desktop internet. It is this same thinking that has newspapers and magazines hoping the Kindle or a tablet device might be their savior.
It is certainly true that today people are paying for things on iPhones and Kindles that they aren’t paying for on the desktop internet. Personally, I’ve bought a bunch of iPhone games that I would have expected to get for free online. I also paid for the New York Times and some magazines on my Kindle that I never paid for on my desktop.
But longer term, the question is whether this is because of something fundamentally – and sustainably – different about mobile versus desktop or whether it is just good old fashioned supply and demand.
I think we are in the AOL “walled garden” days of the mobile internet. Demand is far outpacing supply, so consumers are paying for digital goods. I don’t pay for news or simple games on the desktop internet because there are so many substitutes that my willingness to pay is driven down to zero.
What are the arguments that the mobile internet is sustainably different than the desktop internet? One of the main ones I’ve heard is habit: digital goods providers made a mistake in the 90′s by giving stuff away for free. Now people are habituated to free stuff on the desktop internet. Mobile is a chance to start over.
I think this habit argument is greatly overplayed. The same argument has been made for years by the music industry: “kids today think music should be free” and so on. Back in the 90s, I bought CDs, not because I was habituated to paying for music, but because there was no other reasonably convenient way to get it. If tomorrow you waved a magic wand and CD’s were once again the only way kids could buy the Jonas Brothers and Taylor Swift, they’d pay for them. It’s the fact that there are convenient and free substitutes that’s killing the music industry, not consumers’ habits.
As the supply of mobile digital goods grows — the same way it did on the desktop internet — consumers’ willingness-to-pay will drop and either advertising will emerge as the key driver of mobile economic growth or the mobile economy will disappoint. I was going to buy a Chess app for my iPhone this morning but when I searched and found dozens of free ones I downloaded one of those. At some point there will be lots of Tweetie, Red Laser, and Flight Control substitutes and they too will be free.
An obvious but surprisingly under-practiced design principle is to “embrace the medium.” Applied to software, this means building applications that take advantage of the strengths of the platform instead of trying to mimic the strengths of another platform.
iPhone and Wii games provide many stark abuses of this principle. Call of Duty is perhaps the single best franchise on the XBox and PS3, but the Wii version is almost unplayable. They basically just did a straight port of the game, with worse graphics and using the Wiimote as a shaky aiming device. It’s not an accident that the best Wii games are made exclusively for the Wii (and that most of those games are made by Nintendo itself).
iPhone games are perhaps even worse violators of the “embrace the medium” principle. Recently I was thinking about downloading Madden 2010, but as soon as I saw the screenshots I knew I’d hate it:
You can see they are trying to force the XBox/PS3 control scheme onto a device with completely different set strengths and weaknesses. The iPhone’s strengths are: touchscreen, gestures, accelerometer, networked, always with you. Its weaknesses: no buttons, small screen, poor graphics/processor (compared to consoles). The best games – Flight Control, Spider, Rolando – are designed from scratch to take advantage of the iPhone’s strengths. Take Flight Control as an example:
You guide the planes by mapping their routes with your finger. It’s such a simple, elegant and fun game, and one that could only exist on the iPhone. It embraces the iPhone-ness instead of fighting it.
According to the Business Insider, Facebook is “‘Beating The S— Out Of Its Numbers’ Thanks To Zynga’s Virtual Goods.” I wanted to try to understand this new, emerging economy.
It all starts when a user sees an ad on Facebook:
After clicking and installing the app, she gets a little farm where she can grow tomatoes and such.
Game seems pretty fun. But she runs out of seeds, and wants more. So she goes shopping for virtual goods.
Let’s say our protagonist is too young to have a credit card, so she decides instead to buy coins by signing up for a free offer.
She decides to download a toolbar. Free greeting cards seem like fun.
The download puts an Ask.com search toolbar in the user’s browser. Ask.com makes money off search ads. Ask probably paid $1 to $2 for the install. Some portion of that goes to Zynga, and then back to Facebook when Zynga advertises.
Farmville apparently does not advertise on Ask.com:
Thereby preventing the entire new internet economy from imploding in an endless cycle of circularity.
Ok, Enigmo is awesome. i downloaded (and purchased!) the mac os X version of Enigmo and also the sequel Enigmo 2.
I am embarassed to say it is so addictive I won all 50 levels on Enigmo last weekend. It’s really an incredibly clever and fun game and better on the Mac (although still good on the iPhone).
I found Enigmo 2 interesting at first (the laser and magnets are neat) but the true 3d interface gets kind of tedious. Instead I downloaded some user created levels for Enigmo 1, and continue to enjoy it (albeit in smaller, healthier doses!).