Monthly Archives: May 2012

The most important app on your iPhone is about to change

There have been persistent rumors over the past month or so that Apple will be replacing (upgrading?) the current Maps application with the new version of the iPhone operating system (iOS 6).  This has been expected for a while as Apple has purchased a variety of companies that work on parts of the map ecosystem. The screenshot above is a speculative screenshot of what the new app might look like in 3D view.

I’ve written before about how Maps may be the most important app on the iPhone.  Many people use the Maps app every day and it certainly has changed life for many folks – no more having to print directions or write them down before leaving the house on a drive, walk or trip. Despite any flaws or missing features, the Maps app has been a key part of the transformative experience of owning an iPhone.

Many people refer to the Maps app on the iPhone as Google maps.  It’s true that for now the underlying data comes from Google but like all the native apps on the iPhone, the app has always been built and maintained by Apple. Ever since Google launched Android and incurred Steve Jobs’s wrath, it was assumed that Apple would replace Google as their backend and it seems now is the time.

The rumors are that the app will receive a full overhaul – the backend will be owned by Apple and the visual look and feel will change to, particularly to include a 3D viewing option.

I will withhold judgement on whether or not the app will be an upgrade, but to me, the most important things that should be done to improve the functionality of the maps app are (I’ve written about these before):

1. Include turn-by-turn directions.  This means that rather than having to push “next”, the phone automatically tracks your progress and visually and orally provides the next set of instructions (just like your car’s GPS does).  It also corrects the directions automatically if you go off-route. Google’s app for Android does this well. The reason this used to be hard is due to licensing costs for using the underlying map data in this way. Google got around that by creating their own set of map data.

2. Include an option to download offline versions of maps for specified metro areas.  The GPS doesn’t require the cellular network to work and the app could be fully functional with offline maps. This would serve 2 functions:

  • Maps would load when network service is slow or unavailable (e.g. subway underground). There is nothing more frustrating than being lost and late to a meeting and watching a map try to load in the background.
  • When roaming outside one’s core country, one could use the maps app to navigate in an unknown city without paying exorbitant data roaming charges.
I’m not convinced that Apple will build an app that has great features and functionality vs. just more interesting design and views (e.g. 3D). So, I  hope that once Apple replaces Google from its backend that Apple approves a native Google Maps app for the app store. I also hope that Google builds and submits such an app that’s as good or better than their Android Maps app. Real competition for an app that is as core as Maps would be very healthy.

Does Instagram’s $1 billion sale explain the $41 million investment in Color?

Color  infamously raised $41 million before releasing their mobile app in March of 2011 and has since become the punchline of countless jokes after a spectacularly failed launch.  Their app was widely panned and they have since pivoted (most lately to a live video app) and have shaken up their management team.  There is good reason to question such a large investment in what was just a team and an idea, particularly as the results have been quite questionable thusfar.

However, Instagram‘s success has proven what I suspect was the thesis of the Color investors. That thesis is that the shift to mobile would create an opportunity for new social networks to emerge, particularly around mobile digital photos. This opportunity was likely to be huge. Sequoia and the other investors were betting on entrepreneurs with a very strong track record of success who were pursuing an opportunity they strongly believed in. In fact, not all was lost for Sequoia who invested in the round that immediately preceded Instagram’s sale and doubled their money in a few days.

That said, I’m not sure the Instagram outcome  justifies the investment in Color.  If anything, I would argue that that large investment did Color more harm then good in a variety of ways:

  • It created unrealistic expectations from the press and the public about their app.
  • It allowed and encouraged the team to grow too quickly before there was a product to grow.
  • It did nothing to insulate the team from competition as Instagram and countless competitors emerged with much less capital behind them.

Instagram, by contrast, grew their team very slowly (only 13 people at time of acquisition) and only raised a modest $500k to start.

One wonders if investor pattern matching bias was to blame here.  While there is much evidence that successful entrepreneurs have an advantage when starting a new company, perhaps over-relying on this technique isn’t useful. Also, Color was unique in that it was assembled as an all-star team of serial entrepreneurs who hadn’t all worked together before.  Many would argue that a team that is experienced working well together has a better chance of success than a team of individual stars.

So, a summary of my conclusions:

1. Raising a lot of money isn’t always helpful.

2. Past performance does not necessarily guarantee future performance.

3. Big splashy launches are not only not always helpful but can be harmful too.

4. In almost any scenario, Sequoia still ends up making a lot of money.

Blackberry’s Last Stand?

RIM previewed the Blackberry  10 yesterday.  I won’t talk  about the specifics of the phone, but a couple of things struck me.

1. Even RIM doesn’t seem convinced that they’ve figured things out.  The executives just don’t sound all that convinced.  Also,  look at the body language in the image below. Does Thorsten Heins (the CEO of RIM) seem excited for this launch?  Compare that to Steve Jobs when he launched iPhones.

2. I think RIM had two choices recently  when deciding how to fight back against iPhone/Android.   One was to continue to release phones with physical keyboards and emphasize that they were the best mobile device for creating content.  Build the best e-mail clients/service that one could imagine, recruit developers to build document creation apps, blogging apps, etc.  In addition, continue to develop security solutions that appeal to businesses. While these wouldn’t have enabled them to beat Apple or Android, IMHO it could have enabled them to maintain a solid player in specific niches.

A second choice would have been to embrace either Android or Windows Phone as an OS. This wouldn’t have been an easy road, but at least they wouldn’t have had such a hard job to convince developers to build apps for their platform.

A third option would have been some combination of those two. As it stands, RIM’s strategy will make for a major uphill battle.  I think the path that they have chosen (eliminate physical keyboards and stick with their own OS) virtually ensures their failure.

I sometimes have nostalgia for my old blackberries but mostly I pity the folks that still have to carry them or [perhaps even more] the people that choose to.  The modern business environment means that no matter how well-established your business is, if you stop innovating/competing, you can be disrupted in 5 years or less.

BlackBerry’s Last Chance

BlackBerry’s executives seem to have no idea what the future holds, one of it’s cofounders completely severs ties, and the strategic retreat they have in mind may be too late. Read More RIM President and CEO Thorsten Heins at the BlackBerry World 2012 General Session. Image: Research In Motion Today is the launch of BlackBerry World .

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