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Venture Capitalist: App Branding Jumped the Shark

Memo from a major venture capitalist: If you’re starting a company and seeking funding, don’t position yourself as an app provider. That message came through loud and clear to a stealth startup that has decided not to brand around the term.

“The whole app thing is over,” according to the CEO of the stealth startup. “It’s done. Our financial backers love our vision and focus. But they made it clear: We shouldn’t position ourselves as an app player.”

At first glance, such statements are a little confusing. After all, the global mobile app market is projected to expand 24 percent to reach $51 billion in gross revenue across all app stores in 2016. By 2020, gross revenue across all app stores will exceed $101 billion globally, according to the App Economy forecast.

Still, much of the industry involves freemium offerings that often don’t gain a critical mass of paid followers. Moreover, many apps — particularly games — have “fad” followings that flame out quickly. Another potential area of concern: Tablet sales have essentially tanked, while smartphone sales have either slowed down or dipped a bit, depending on the device and region in question.

In the B2B world, it’s now assumed that IT-oriented software will be delivered in cloud and app versions. As a result, positioning a startup as a cloud or app player no longer differentiates the business.

It’s somewhat similar to the dot-com age. Sun, Amazon and Salesforce all branded around the dot-com moniker in the late 1990s, only to change course once that terminology jumped the shark.

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