Tag Archive for business

A Farewell to ‘App Developers’

I have had the great privilege of really coming to age at just the right time to be able to get into the ground floor of the mobile app development wave starting in 2008. In fact, to my knowledge, I opened one of the first three purely mobile app development firms in my home state of NJ.  While there were certainly ups and downs, I had a blast. Now it’s 2017 and frankly the party has been over for some time; in fact, I’d argue that for many in my position the end of 2014 and a good portion of 2015 served as a well deserved hang over. Before I get into what I really mean here, it’s important that you understand what things were like from 2008 to roughly 2013. Simply put, the market wanted “app developers” and there just weren’t that many, so an outsourcing / contracting boom began — entrepreneurs and enterprises both were handing out five and six figure checks to dumb kids like me with little to no vetting purely out of the ever present fear of missing out. It was an amazing time. Then the inevitable hangover hit. It happened differently for both groups but it happened and at the end of the day a lot of good small app development shops paid the ultimate price.

Every story needs a good fool and most of the app entrepreneurs (“apprenuers if you’re a hipster from Australia) fit the bill perfectly. Like the little girl who’s enchanted with the tale of the frog prince, they went out an got-a-kissin, cracking open their kids’ college funds or their 401Ks to be the next Uber or whatever the hot app of the week was at the time. Basically, they bought the Disney-like fairy tale sold to them by films like the Social Network. Unfortunately, like most fairy tales that Disney spins into feature films, the true source material ends in tears. Their assets drained, the vast majority of these would be Zucks left the app world with red eyes and broken hearts.

The enterprise space is a little more complicated but shares the fundamental error of understanding that the entrepreneurial one does – that mobile apps are one time capital expenditures rather than ongoing commitments. A lot of enterprises made exactly the same mistakes that entrepreneurs did, but their superior capital and (in many cases) diffusion of blame among managerial groups allowed them to simply swallow the pain and move on. Still, most IT managers now consider apps to be like any other piece of software they buy and not just some quick one off that they’ll let the local shop “take a shot at”. Sadly, this shift has greatly disadvantaged small vendors, as IT managers increasingly look to their traditional long-term software vendors for app development services as simple add-ons to their existing contracts. It’s easy to take a Darwinian perspective here but the truth is a little more dirty than simple survival of the fittest in terms of big vendors and small vendors. Large vendors made it a habit (and still do) of externalizing their app development services to smaller more focused shops. I can tell you that this was fine for a time, but then something changed.

The large vendors realized that it was cheaper to just internalize or in some cases contract out to individual 1099s for their app development services and simply cut the little guys out. We’re in 2012 here now and I surmise that beginning of the app market cooling and an increased pool of young app developers out their had a hand in this. Some went as far as using legally restrictive language in their contracts with the smaller firms to prevent them from using the subcontracted work they had done in their own sales efforts. Imagine being one of these small shops for a moment. You wake up one day and in your email is a termination from one of your biggest “partners”, then the same thing the following week, then again the next week. In a month, you’re waking up to having nothing in your portfolio and payroll outstripping revenue on a monthly basis. What do you do? Do you take the risk and breach your contract, risking a C&D or possibly a full scale lawsuit, do you try to dance around it by mentioning the projects verbally but keeping them out of writing? What happens if you finally have a sale about to close but the prospect wants you to “prove it”? Your former client who overnight became the Empire to your rag tag Rebellion sure as shit isn’t going to give you a reference and might even poach the deal if you try to use them. Welcome to 2015.

I’d like to say that this story has a happy ending but in reality it doesn’t. Many shops closed their doors in 2015 or were forced to restructure in some significant way. Put simply a lot of good people lost their jobs, a lot of would be entrepreneurs felt cheated, and the owners / shareholders of the large IT firms made just a little more money. Even among the survivors “app development” as it was in 2008-2012 is over and they are struggling trying to become small enterprise IT vendors but growth is nothing like it was during the nascent period of app development. Let’s all remember those halcyon days as we look at our CRMs and wonder what the Hell happened.

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Business Innovations: Fast Pass

As I sit in the flight back from my family vacation to Walt Disney World in Orlando Florida, I find myself in awe of what I can only describe as the most ingenious business innovation since the independent subcontractor – the Fast Pass. If you haven't been to WDW in a while, Fast Passes are basically attraction reservations and they work just like restaurant reservations. This may seem like a pretty simple concept and not that innovative, but let's take a look at two real-world case studies from my last week in Orlando and note how the Fast Passes proved invaluable to WDW.

WDW is currently in a state of being "re-imaged", the jargon the "imagineers" over at Disney use when they are modifying the WDW attractions. One of the parks that is slated to undergoe and is currently undergoing a good deal of re-imagining is EPCOT, in particular the "World Showcase". One of the most notable changes the "World Showcase" has undergone is the addition of a ride themed after the popular children's film Frozen. As one of the newest attractions and being themed after a smash hit with kids of all ages, the ride has some monster wait lines where you can see dozens of eager little girls dressed up as one of the film's leads, Anna or Elsa. Even my coal black heart wouldn't dare deny these princesses their shot to "experience Frozen" if but for a few minutes. Still, mom and dad don't want to stand in line for an hour and there are meal reservations to be kept as well as other (perhaps more adult appealing) attractions to see. What does a savvy Disney-goer do? You open the My Disney Experience app possibly weeks before you even get to Orlando and book a Fast Pass for a date and time that is convenient with the rest of your schedule for each Frozen fan in your party. That's it. You've just taken a wait that could have been well over an hour and gotten it down to something like ten minutes. This is great for the park-goer and also great for Disney, as it mitigates one of the primary pain points of going to WDW, the lines.

Mistakes happen even in the Magic Kingdom. Systems can fail or employees can just plain screw up. There's a lot of complicated RFID tech being used at any given time at WDW and I saw on more than one occasion in the last week where the Magic Bands simply wouldn't work for some reason. This happened to my family as we entered the Magic Kingdom theme park — for some unknown reason my band worked fine but my wife's failed; ironically, she is an annual pass holder and I am not. We knew her pass was still good but were admittedly a little frustrated after having been asked to step aside at the entry point while the staff could verify that Lara's pass was indeed valid. After a few minutes of waiting, the staffer got back to us with a sincere sounding apology and a couple of Fast Passes to any attraction we like as an apology for the system's glitch. Our frowns were turned upside-down. The beauty of using the Fast Passes like this is that they don't cost Disney anything at all and in this case they still got to do the somewhat awkward pass verification that they wanted, but instead of having an offended guest Lara remains ever the happy Disney princess. They key to this is that there is a difference in the monetary value (read cost) of the Fast Pass to Disney (i.e. $0) and the practical value to the guest.

Many of us struggle in our small businesses in trying to find a way to give something of value to the customer in cases of an error or just as a way to build a better relationship. Unfortunately, very few of us have managed to get up to the level of sophistication as Disney has in terms of having such a wide delta between the monetary cost to our firms and the perceived value by the customer. All too often, we find ourselves doing work effectively for free due to scope issues or eating opportunity costs by going into unpaid "account service" meetings. I wish I had some solution that I could stand on a soapbox and extol, but I don't. Still, I think maybe it's time to take a cue from the house of mouse and re-imagine how we run our agencies.