March 2, 2016
The three biggest mistakes companies do when going mobile
I often get asked about the most common mistakes companies make when they first come up with a plan to go mobile. It boils down to 3 things: define success, test extensively, and have a clear business model. In this article, which I originally wrote for the Huffington Post, I discuss examples from Trulia, Viber and Yelp, who clearly stand out on mobile and avoided those pitfalls.
With 50% of smartphone apps in the Apple App Store not even downloaded once, and with multinational corporations spending millions (sometimes even billions) to attract attention to their mobile products, succeeding in mobile is becoming increasingly challenging. Here I use the example of three successful mobile companies, Trulia, Viber and Yelp, to describe the three biggest mistakes companies need to avoid when going mobile.
Mistake #1: Don’t define success
Companies that succeed focus on impact. They don’t care how much effort it takes to reach their goal. They care about having more people use them so they can learn faster and get even better. They also realize that what worked a month ago no longer works today. What was enough in a given context no longer is in a different environment.
Real estate marketplace Trulia relies on a metric called Net Promoter Score, or NPS, to measure impact. It asks users a simple question–“How likely are you to recommend Trulia to a friend?”–and captures their answer on a scale of 1 to 10 (1: not at all likely, 10: very likely). If the rating is anything below 8, it assumes that users are not satisfied. The higher its NPS, the more likely users are to recommend Trulia to a friend, so the more people will use it.
NPS is a widespread metric in mobile. Growth hacker guru Sean Ellis, who helped companies like Dropbox and Eventbrite go from zero to IPO, talks about the need to constantly reverse engineer a product in order to make it a must-have experience. “Use NPS to understand what users might like and what they might be disappointed with,” he says. “If you don’t nail the first experience of a user, there’s usually no second experience. And then, the ongoing experience is what referrals are based on, so it’s pretty critical.”
Mistake #2: Launch without testing
The success of a new mobile product often hinges on how it is rolled out. Some companies release very gradually, first to a randomly selected 1% of its users, then 5%, and only then to all users. Others set up sandboxes where they can get things right first, before making a new offering available to all when it’s finally ready.
Mobile messenger Viber, for instance, releases new features in its smaller markets first, then in its larger ones. While it isn’t widely used in the US, over 100 million people around the world use Viber every month to communicate for free with friends and family. The company was acquired in 2014 by Japanese Internet giant Rakuten for close to $1 billion.
One of Viber’s largest markets is the United Kingdom. Because of the strategic importance of such a large market, Viber is reluctant to test new products and features there. Instead, it has identified a couple of markets that behave just like the UK, but are smaller. These markets would normally not get a large share of attention from Viber’s executives, but because of their similarity to the important UK market, they have become vital test markets.
What I find interesting about Viber’s approach is that it uses its own markets as sandboxes to continue to improve its offering and, at the same time, keep the majority of its users happy. Everyone benefits.
Mistake #3: Don’t nail biz model
Take crowdsourced reviews service Yelp. It provides small businesses/private contractors a lot of value – customer satisfaction is broadcast on the internet, and their business thrives – Yelp provides this advertising for free! A great deal for the business, but not sustainable for a company like Yelp.
Like any business, Yelp needs to make money. It initially did so by carving out areas on its website where it could display banner advertising. On mobile, however, there is no space for banner ads because the screen is too small. Mobile banners ads are annoying rather than enticing to users.
So Yelp had to reinvent its business model. The company went back to its users and tried to understand what they would be receptive to. They learned that users have no patience when they search on the go; they want instant recommendations rather than have to scroll through dozens of reviews.
Yelp tried promoting select small businesses in its search results by placing them at the top of the list. It worked. Instead of displaying banner ads, it now charges small businesses a fee in exchange for greater visibility and better placement. Users like it better this way, and Yelp brings in revenue.
Mobile products succeed when the companies that create them define success, rollout effectively and get the business model right. For more information on this, check out my book “mobilized: an insider’s guide to the business and future of connected technology” on www.scmoatti.com.