#4 :: How 552 apps became $12.1bn
Making a splash on a whole new platform (Or, how to monetise in the metaverse)
The App Store has just celebrated its 14th birthday. This issue, we look back at the principles that carried the original 552 apps to a $12.1bn behemoth.
With the App Store, a whole new domain was born - it changed business, culture, society, and created new careers for millions of people. We’re entering another computing threshold right now. Here we analyse that journey, and extract lessons for future-focused firms wanting a piece of the new immersive ecosystem.
The journey from floppy discs…
To begin this story, we have to wind back to the early days of the home computer. In the beginning, most companies considered the hardware more important than the programs that ran. This was because the computers were costly to manufacture, sell, and needed to generate high revenues. At that time, software for your Amstrad, Commodore or BBC were produced and distributed on floppy discs or cassettes that then had to be loaded ready for use. This is what made the system usable. And users had to do this every time the computer was switched on: Re-load the software, and start again.
It’s 1983, and Steve Jobs has already identified the idiosyncrasies in the distribution system. Companies would manufacture the information of programs into a physical product; this was then distributed to a store and sold; users would then upload that information onto their hardware. But Steve had a vision for selling software through a data cable (i.e. the internet), downloaded by the user, directly onto the machine. Here he is in 1983 talking about this vision. Bear in mind that, in 1983, the internet wasn’t even a thing for consumer use, and online shopping was still more than a decade into the future.
How 552 apps became 2 million…
Fast forward 25 years. iPhone had launched in 2007, with limited functionality. At WWCD 2008, Steve announced this thing called the App Store, where you could download mini programs for your phone. It would initially be available in 62 country markets, and there were 552 “products” on the storefront, selected, vetted and approved by Apple. Some apps were free, others could be bought for between $1-10.
At this point, developers were incensed: The beta was available only to selected developers and enterprise customers. In 2009, the extended SDK (software development kit - i.e. the tools developers need to build for a hardware/software combo) was opened and a new age dawned. The SDK allowed all third party developers to make, distribute and monetise apps on the App Store.
It was at this point that the App Store changed everything. For developers. For how we would use our phones. For business. And for how we would live our lives. It was an unfurling moment for culture, business, society.
Left: App Store, day one - 10/07/08. Right: Today
So why this story, right now? The dawning of a new ecosystem…
What’s really interesting about all of this is the birth of an ecosystem — an industry, a profession, a discipline, a community — all propagated by the App Store. And from here, there are lots of lessons to extract for the threshold we’re at today.
We’re entering a new era. The metaverse. The tech companies are figuring out - how will consumers interact with brands, communities and the world around them? And businesses, are asking: What will users need and desire and expect from immersive experiences? How does this affect what we do? And how, where and when should we enter this space?
This is interesting because…
This is interesting, relevant, noteworthy, for so many reasons.
Here are my top takeaways for brands, startups and developers working out how and when to move into the metaverse, monetise and transform their offering:
Connecting with consumers where they are. Apple had 1% of the smartphone market in 2008, by 2021, it had just over half in the US. Brands need to do the research to understand where customers are spending their time, and connect with them in those spaces. In 2021, Nike started experimenting with connecting with new audiences in its Roblox store.
Be early, even if you’ve not got a huge budget - it’s a level playing field. The first apps on the App Store were universally impressive. Facebook was amongst the original 552, and its mobile propelled it to become a mobile first organisation. Having an app in the App Store is now ubiquitous for companies big and small. But the best apps are those that create a unique experience and bring distinct value to the user.
Creativity + competition + diversity = innovation. A community of developers emerged around the building of apps. This ecosystem was symbiotic. Developers pushed each other creatively, exploring the value of what they were building, and what was technically possible. This competition pushed their products onwards and forwards, to be bigger and better than before. And ultimately, a whole new industry - with new jobs and career paths, new businesses and new methods of monetisation - is what emerged. You need different types of people, skills, mindsets to serve the world.
Working with the right people. The partnerships that businesses formed with developers helped to propel how audiences experienced their brand. Working with the right developers can bring your brand to a new level.
Be bold, experiment, get inspired. The App Store inspired people to want in on the action - to learn coding, to monetise their ideas. It was a huge moment that incentivised people to learn and create. In any new era, the most successful people freely experiment and explore beyond the confines of what currently exists.
Affecting behavioural change only through trying and learning. Many of the original 552 have come and gone. The original apps were for mostly for gaming, commerce, connecting, productivity and utility, and news. (Remember Phone Saber?). We don’t yet know how these use cases are going to look in the metaverse, but we can try and experiment to see what works, and improve based on those results.
And, why is this important?
History never repeats itself, but it often rhymes
— Mark Twain
Or, more accurately, and rather poetically: “History never repeats itself, but the kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.”
The present belongs to the past. Looking back offers signals for the future. Regardless of sector.
Though the technology and frames of reference have moved on, analogous examples can be the barometers of what’s important now. Consolidating what we have learned will always strengthen the future, and steer how we prepare for what’s next.