Monica
💫 Summary
This video discusses the state of the App Store, including top apps and trends, such as the rise of social apps and the challenges of reaching and staying at the top. It also explores the interplay between digital and physical worlds, giving examples of apps that impact real-world interactions. Lastly, it mentions the longevity and success of the game "Subway Surfers" and its strategies for staying popular.
✨ Highlights📊 Transcript
This section discusses the opportunity to build and monetize mobile apps, the success of the App Store, and Olivia Moore's compilation of the top apps in the US App Store.
00:00
Apple announced that developers have earned over $320 billion since the launch of the App Store in 2008.
Olivia Moore compiled a list of the top apps in the US App Store throughout 2022.
Many of the top apps are in the social category, indicating a new wave of social apps.
The section mentions various examples of successful apps, including a Beanie Baby app, a viral talking dog app, an app from 2012 that reached the top 10, and a Chinese app that has been number one for most of the year.
Getting millions of people to hear and learn about a new app is crucial for achieving a high number of downloads, but competition from other established companies and short-form video platforms like TikTok makes it challenging to stand out.
07:58
It takes millions of people learning about a product over just a few days to achieve a significant number of downloads.
Established companies like NBC's Peacock, Planet Fitness, Doordash, and HBO Max have a significant advantage with their marketing resources.
Short-form video platforms like TikTok and Instagram Reels provide a unique opportunity for apps to go viral and reach millions of people in a short period of time.
However, the competition on these platforms is fierce, with many startups vying for attention.
It is not only difficult to reach the top but also to stay at the top, as apps often have short-lived stints at number one.
To sustain success, an app needs to have a strong product with network effects that encourage users to share it and continue using it regularly.
The difficulty of reaching the top spot on the app store is illustrated by a boating app that had over 20 million views on TikTok but couldn't reach number one.
15:57
The boating app's video on TikTok had over 20 million views.
Despite the viral success, the app couldn't reach number one in the app store.
The app store requires a significant number of downloads to reach the top spot.
Widgets became popular after Apple allowed users to put them on their home and lock screens.
Lenza, an AI Avatar company, has made millions of dollars by selling avatar packs and constantly releasing new styles and packs.
23:55
Lenza made upwards of 20 million dollars in a few weeks by selling avatar packs for $8.
They are constantly releasing new styles and packs, such as dog avatars.
Lenza's strategy is to capitalize on the potential of sending notifications to users and continue monetizing in the future.
There is a shift in willingness to spend money on apps, especially among the younger generation.
Optimizing keywords in the App Store can help with lower cost ads and reaching more users.
31:56
Lenza, a mobile app for creating personalized avatars, had a significant advantage over web-based applications in terms of user experience and convenience.
Lenza's mobile platform allowed for easier access to photos and enabled push notifications for new styles and updates.
Tick Tock's strong AI backend makes it sticky by following users' interests and evolving with their preferences.
39:54
Tick Tock's AI backend serves users content based on their interests, making it stickier than apps reliant on word of mouth.
Users stay on Tick Tock as it evolves and follows their journey of liking different types of content.
The AI algorithm of Tick Tock provides enormous reach for products quickly, reversing the trend of previous years.
There is a rise of apps focused on relationships, prompting users with daily questions and ways to enhance real-world relationships.
47:54
The first wave of subscription products focused on optimizing oneself and habits.
The new wave of apps focuses on enhancing real-world relationships.
An example is the widget app, created by a college student for his long-distance relationship.
Subway Surfers, a gaming app launched in 2012, has gained longevity and popularity with over 10 years of downloads, reaching the top 10 most downloaded apps worldwide and seeing a 50% increase in downloads last year.
55:54
Subway Surfers has been downloaded by almost 40% of the population.
The app uses a world tour strategy, changing graphics and locations every two weeks.
Subway Surfers has built a strong presence on social media platforms like YouTube and TikTok.
The app has gained popularity by being featured in split-screen TikTok videos to capture viewers' attention.
00:00I think the opportunity maybe has never
00:02been greater to build and monetize a
00:05mobile app quickly make a few million
00:07dollars and retire if that's what you
00:09want to do welcome back to the a16z
00:11podcast and also welcome to what I think
00:13is one of our best episodes to date
00:15today I talked to a16z Consumer partner
00:18Olivia Moore about what I'm calling the
00:20state of the App Store so look a few
00:22weeks ago Apple released a stunning
00:24statistic they said they feed developers
00:26over 320 billion dollars yes billion
00:29since the launch of the App Store in
00:312008 and around the same time I saw
00:33Olivia post a tweet where she'd
00:35basically compiled a list of the top
00:36apps in the US App Store throughout 2022
00:39so in this episode you'll not only get
00:41to hear what made it to the top but also
00:43what they have in common hint a lot of
00:45the big winners are in Social but
00:47perhaps a new wave of social apps we
00:49also get the scoop on not just what it
00:51takes to hit number one but to stay
00:52there and we covered tons of examples
00:55many of which I had never heard of
00:56things like a new age Beanie Baby app a
00:58viral talking dog an app from 2012 that
01:01finally hit the top 10 and a Chinese app
01:04that's been number one for majority of
01:05this year and that's not Tick Tock there
01:08are endless learnings about how Founders
01:10can take advantage of these
01:11opportunities including Olivia and I's
01:13Master plans to top the charts ourselves
01:15so stick around to the end if you'd like
01:17to hear that let's get started
01:19as a reminder the content here is for
01:21informational purposes only should not
01:24be taken as legal business tax or
01:25investment advice or be used to evaluate
01:27any investment or security and is not
01:30directed at any investors or potential
01:31investors in any accz fund for more
01:34details please see acc.com disclosures
01:38[Music]
01:42foreign
01:45[Music]
01:47welcome to the show and I'd love to
01:49start out by hearing how you compiled
01:51this data in the first place
01:53thank you I'm excited to be here and
01:55talk more about this data so I used an
01:58app data source called app follow dot IO
02:01and they publish a daily ranking chart
02:03where they show the top iOS apps every
02:06day based on the Apple App Store ranks
02:09and so I went in for every day of 2022
02:12and I recorded what the top app was for
02:15that day oh my gosh
02:17it took a while but the end result ended
02:19up being pretty interesting because I
02:21was able to run a bunch of numbers and
02:22analysis on the apps that did crack that
02:25number one spot first like Kudos let's
02:28let's all give you know listener claps
02:30for you actually going in every single
02:33day and pulling this data but let's talk
02:35about the results what were the top apps
02:38of 2022 and let's just start with the
02:41top three and then we'll get into some
02:42of the ones that followed so there were
02:44three big winners of 2022 which were be
02:47real which is a new social media app
02:49Tick Tock of course was number two and
02:52then gas app was number three gas app is
02:55an interesting story because it was
02:57actually released later in the year in
02:58the fall so it kind of came from behind
03:00with less time to grab the number three
03:02spot for the year overall I have to say
03:04that I'm not really very active on any
03:08of those three apps so I feel super old
03:10hearing that they are the three topping
03:12the charts but um just to reiterate so
03:15these are the three apps that hit number
03:16one the most yes they spent the most
03:19number of days at the top in the number
03:21one spot on the U.S App Store I feel
03:23like the natural question is are we in a
03:27new age of social because all three of
03:29these happen to be social apps and again
03:31I'm feeling kind of old here but during
03:33my era you know we're thinking of
03:36Facebook we're thinking of Twitter
03:37Instagram Snapchat and none of these
03:41appeared in the top three and so I don't
03:44know what's your what's your take there
03:45are we in like a new age are we
03:48diverging from the past in terms of what
03:50people want in terms of social yeah it's
03:52a great question and none of the the
03:54kind of Usual Suspects the Instagrams
03:56the Snapchats or the Facebooks appeared
03:58in the top at all let alone the top
04:00three the top five apps this year in
04:03terms of days at the top were actually
04:04all social media products and three out
04:07of those five were apps that didn't even
04:09exist two years ago that is definitely
04:12not always the case I pulled the data
04:14for 2021 as well and the top five for
04:18that year was a mix of some social media
04:20but also fintech more utility or
04:23business apps like zoom and then
04:25traditional media apps like kind of HBO
04:27Max to me the fact that Instagram and
04:30Snapchat didn't appear at the top
04:32doesn't necessarily mean they're kind of
04:34dead as products I think part of what it
04:37means is they've saturated the US user
04:39base so they aren't getting a ton of new
04:41downloads every day I also want to think
04:44about how these social apps differ
04:46because it feels like the old generation
04:49of social apps were pretty similar
04:52they're more of like a feed-based social
04:54application and it feels like again I'm
04:57not I'm not native to these three that
04:59made it to the top but they do feel kind
05:02of fundamentally different in what
05:03they're providing to the user I
05:06absolutely agree I think we've seen this
05:08broader shift towards authenticity and
05:10towards more interactive experiences on
05:13social and a way for maybe the
05:15traditional scrollable feed where
05:18everyone has like this perfectly curated
05:20profile and and maybe you post once a
05:22week or once a month three of the kind
05:25of top five apps were new social media
05:28apps Tick Tock is kind of in its own
05:30world there's already a giant company at
05:32this point but be real is a front back
05:34camera that only is live once a day for
05:37a limited period of time so you have to
05:39be very kind of honest about what you're
05:41actually doing it shows both sides of
05:43the camera gas app of course is about
05:45giving Anonymous compliments to friends
05:47mostly aimed towards high schoolers and
05:50then living also made the top five and
05:52this is an app that lets you send kind
05:54of random pictures directly to your
05:56friend's home screen widgets similar to
05:59be real they're usually pretty candid
06:01shots I think those three in common for
06:04me are about having more like delightful
06:07and consistent ways to interact with
06:09like a smaller group of close friends
06:11versus maybe these large feed products
06:14where you're seeing tons of posts from
06:16influencer and Brands and and larger
06:18companies and it's a very kind of
06:20curated experience I also think about
06:22the fact that they're kind of like
06:24pushing back on the previous generation
06:27of social apps
06:28it feels like you know in in the
06:31generation that I grew up with we
06:33were so heavily curated that the next
06:36generation is like I don't like this I
06:38don't like the fact that everyone looks
06:39like a supermodel on Instagram let's
06:42just be real literally and you know take
06:44pictures of us throughout the day I also
06:46think what you mentioned about the fact
06:48that a lot of these are new apps like
06:50even gas you mentioned like just showed
06:52up in the second part of the year
06:55how hard is it for these apps to stay on
06:58top it also feels like we were in this
07:00Heyday several years ago where something
07:02like a Facebook was top of the charts
07:04for a very long time and there wasn't
07:07really this cyclical nature of like a
07:10new app a new app a new app and today it
07:12feels a little different I don't know if
07:13it's just me no I I absolutely agree
07:15with you
07:16um my data shows that there's kind of a
07:18lot more new number ones every year and
07:21kind of the pace of that is speeding up
07:22every year apple is a little bit
07:25secretive about what actually makes a
07:27number one most people think that the
07:29biggest factor is daily downloads and
07:31then of course they add in maybe some
07:34filtering around okay are people
07:36actually opening the app are they
07:38engaging with it but my data polls show
07:40you need probably around or maybe a
07:43little bit above a hundred thousand
07:45downloads in the US on iOS on any given
07:49day to hit number one whoa okay yeah
07:52that's super high yes
07:54very high and so if you think about the
07:58path of a normal consumer discovering a
08:00brand new product
08:02100 000 people knowing about that is
08:05huge about that brand new product but
08:08also not everyone who hears about it or
08:10learns about it is actually going to
08:12download it and convert to a user so you
08:14actually probably need millions of
08:16people to hear and learn about your
08:18product over just a couple days to get
08:21to like a hundred thousand downloads a
08:23day and you're competing against like
08:25some of the other number ones this year
08:27were like NBC's peacock streaming
08:29service Planet Fitness doordash HBO Max
08:32these big companies that have tons of
08:34marketing resources my view is that Tick
08:37Tock Instagram wheels and these other
08:39short form video platforms have created
08:42this very unique opportunity where you
08:44can go viral and have something be seen
08:47by 10 million people in a day and shoot
08:49to this top but now every new startup is
08:52competing against all the other startups
08:54that are also trying Tick Tock so it's
08:56still not easy at all is there also an
08:58element of Just Not it being so hard to
09:01get to the top but all also staying at
09:03the top it feels like we have
09:05smaller attention spans people are
09:07excited to move on to the next thing
09:09instead of sticking with the
09:10applications that they know and love is
09:13that just me interpreting the data or
09:16are we actually seeing something here
09:17where it's not only harder to reach the
09:20top but it's also harder to stay at the
09:21top I completely agree that the largest
09:24number of apps that hit number one this
09:26year were number one for just a day or
09:29maybe half a day not that long at all
09:31and more than half of the apps at number
09:33one were up there for less than five
09:36days throughout the whole year not even
09:38five consecutive days what I've seen is
09:41you know it's if you have a tick tock
09:43viral hit you can maybe get a lot of
09:45people to download it but then it needs
09:47to be a very strong product with network
09:50effects that encourages people to share
09:53it via word of mouth and to keep using
09:56it every day beyond that initial oh I
09:58saw this cool video about this app and
10:00I'm gonna download it so my view is it's
10:02in some ways easier to break into the
10:05top dropped and it was five years ago
10:07but it's probably actually quite a bit
10:09harder to stay at the top unless you
10:11have a very kind of magical and
10:13retentive products and how do you think
10:15about creating that product because I
10:17think about so many applications that
10:20are really exciting and play into this
10:22need for us to just have constantly new
10:24things on our screens I mean something
10:26that even comes to mind there is I've
10:28been seeing articles about how people
10:30are speeding up songs or we all are
10:32familiar with like The Tick Tock split
10:34screen it's like we actually need to
10:35pack more information into our content
10:38because we need to have that level of of
10:42Interest how do you build that level of
10:45retention when it does feel like there
10:48is this interest of again novelty like
10:50give me something new all the time I
10:52think it's largely a couple things I
10:54think it's a product question of like
10:55have you built something that kind of
10:57delivers value day after day and ideally
11:00those are network effect products which
11:02means the product gets better the more
11:04people are on it like think about the
11:06early days of Instagram like as more of
11:08your friends came on Instagram it was a
11:10better experience for you and a better
11:12experience for them because you were
11:13seeing a lot more posts of from people
11:15that you know and care about I think the
11:18other interesting element that we're
11:19starting to see companies index or lean
11:22towards more is these hooks within the
11:25product or around the product to
11:28encourage people to both come back but
11:31also to share or broadcast their
11:33behavior so two of the top three this
11:35year be real is one of them and because
11:39the be real drops at the same time per
11:42day for everyone it creates this moment
11:45in the real world actually where
11:47everyone is taking out their phones and
11:49being whether it's in you know a
11:51classroom I've had people do it in
11:53meetings if you're in line for something
11:56and that is a very kind of powerful and
11:59unique like Word of Mouth in real life
12:02moment where if you don't have the be
12:04real and you see everyone get the ding
12:06and pull out their phones you're gonna
12:07check it out
12:09gas app is also has a very kind of
12:11clever hook they went in through high
12:13schools the mechanism of the product is
12:15that you vote for which of your friends
12:17is kind of the top under XYZ all very
12:20positive criteria and so it creates this
12:23kind of fomo again in the halls of the
12:25high school where people are saying oh
12:26did you see you know who got this on gas
12:28app or you're getting a notification of
12:30your friend voted for you for this and
12:32it's very hard to resist that kind of
12:34pull when you're both hearing about it
12:36in LA on online and you're seeing the
12:39people around you in real life utilizing
12:41the product yeah your point about be
12:44real made me think of I think it was an
12:45SNL's kit where they were joking about
12:49you know be real popping up during a
12:51bank heist yeah like wait just a second
12:53I need to be real and yeah there is this
12:55like behavioral element where to your
12:57point it feels like you need people to
13:00build these habits and not just
13:02internally but to share them externally
13:04so you can have those Network effects
13:05and Word of Mouth growth but on that
13:08point about growth you mentioned a
13:11hundred thousand downloads in a day that
13:12is huge like any marketing budget
13:15probably can't hit that purely through
13:17paid growth and so there does need to be
13:19this viral element what would you say
13:21about being able to do that effectively
13:23because you know I think about gas app
13:26for example which was recently acquired
13:27prior to the acquisition Nikita the
13:29founder went on the Today Show and had
13:33this big exclusive segment which in the
13:34past would have been like huge for for
13:37an application or a company and he said
13:39he thinks it generated a thousand
13:41downloads so I guess what I'm getting at
13:43is like how do you effectively grow an
13:46app when a lot of the existing channels
13:48just don't really compare to this idea
13:51of Word of Mouth I see word of mouth as
13:54kind of the purest maybe form and most
13:57lasting if you can get it right form of
13:59acquisition just because the barrier
14:02that's probably hardest to overcome like
14:04I mean you can pay people to download
14:06your app you can pay influencers to talk
14:08about it but to get a normal person who
14:10isn't looking for startups every day to
14:13recognize a new product and then go use
14:15it and then tell someone else about it
14:17because it's that valuable or
14:18interesting to them that's kind of the
14:21ultimate to me like the peak of a great
14:22consumer product I do think we still see
14:25like Tick Tock as an organic channel is
14:28still very powerful it's probably harder
14:30to build an audience on Tick Tock
14:32especially as a startup than it was a
14:34year and a half ago or two years ago and
14:37it'll get harder and harder over time
14:39companies are starting to use tick tock
14:42ads which is also interesting again like
14:44low cost for now great channel for now
14:47similar to how Instagram and Facebook
14:49ads got so much more expensive kind of
14:52the Arbitrage opportunity of these new
14:54platforms tends to go away over time
14:56what is interesting and always fun to
14:59see is sometimes there's these big
15:01acquisition moments that aren't at all
15:03orchestrated by the company but
15:05orchestrated by the user base and
15:07they're almost their own kind of special
15:08form of Word of Mouth but at like
15:11massive scale one of the top apps this
15:13year was called Talking Ben the Dog
15:15which is a kids educational science game
15:19where you're taking care of this fluffy
15:21dog and you can ask him questions about
15:24science and do experiments with him but
15:27it went viral after this YouTuber with
15:2915 million subscribers an adult YouTuber
15:32started making videos of himself trying
15:35to debate really serious topics with Ben
15:38and then of course it turned into a meme
15:40and everyone else made their own videos
15:42about it and then this the app was
15:45Suddenly at number one again after being
15:46released you know years and years ago by
15:49by an app Studio who made it for a
15:51completely different use case than than
15:53where it actually took off I know the
15:55users have a mind of their own the the
15:57other story I like was shared by your
15:59sister which was this boating app right
16:01there was a a girl whose father had
16:04created this boating app and then
16:06there's this clip of him at a conference
16:08where he's trying to get people to
16:10download the app and quite frankly it
16:12was really sad or it sparked that
16:14emotion and it just said something like
16:17hey
16:18please help my dad's boating app or
16:20something like that a really really
16:21short video as you said on Tick Tock
16:23which seems to be a place where people
16:25are getting these viral hits and I think
16:28it hit number seven or something in the
16:30app store which maybe people are like oh
16:32number seven is not that high but again
16:33you said hit number one all of these are
16:37social apps General Mass marketed apps
16:40and they require a hundred thousand
16:42downloads so that's still a lot of
16:44downloads in a day a lot of downloads
16:46and it illustrates just the pure
16:48difficulty of getting to number one
16:50because her Tick Tock had more than 20
16:53million views and then she made several
16:56follow-up videos that also had hundreds
16:58of thousands if not millions of views so
17:00if that can't even hit you know number
17:02one for the day then it kind of just
17:04puts into context how much of a
17:06challenge it can be there have been some
17:08other apps which as you said did not hit
17:10number one but still really hit some
17:12traction and I want to talk about the
17:14different categories outside of social
17:16that saw some movement in 2022 so what
17:20were some of those categories that we
17:22saw outside of social there were two or
17:24three kind of themes that to me
17:26dominated the apps at the top this year
17:28and two of them were actually what I see
17:30is Tech shifts or Tech progress that
17:33enable new consumer Behavior so one big
17:36example of that is widgets we saw a
17:38couple of widget apps at at the top at
17:41some point mostly in summer 2022 and
17:44these kind of exploded after Apple made
17:47a change to iOS 16 that allowed users to
17:50put widgets on their home screen of
17:52their phone and also on their lock
17:53screen of their phone so you didn't even
17:55have to unlock the phone and you could
17:56see what popped up on a widget so then
17:58there was a group of new companies noted
18:01for example as one where you could send
18:03little notes to your significant other
18:04or little drawings locket widget was
18:07probably the first one to explode in in
18:09January and then was followed by live-in
18:12widgetable a bunch of other apps that
18:14really capitalized on this kind of not a
18:17full platform shift but kind of a maybe
18:19an operating shift system shift by Apple
18:22that allowed for this
18:24another big Tech shift that became a
18:27trend in top apps was AI of course of
18:31course and that came as mostly in the
18:33fall when models like stable diffusion
18:36became available to fully build into
18:39mobile apps and create experiences where
18:42you didn't have to have your own AI
18:44model as a developer but you could still
18:46allow people to kind of spin up
18:48beautiful art or avatars we saw those
18:50apps basically dominate The Late Q3
18:53early Q4 top charts and the last theme
18:56is actually not at all unique to 2022 in
18:59my opinion but is kind of Evergreen
19:02which is anonymous social apps we see
19:05these pop up pretty consistently every
19:07year when I was a teenager it was like
19:10honesty box on Facebook and then ask FM
19:13and form spring
19:15gas app was of course probably the best
19:17example of this for 2022. Nikita the
19:20founder just sold the Discord and he
19:22actually developed a very similar app
19:24back in 2016 2017 that he sold to
19:27Facebook that also hit number one for a
19:30while so I think the big lesson there is
19:32like the fomo poll especially for
19:35teenagers of what are my friends saying
19:37about me is very very hard to resist
19:39it's so true and I can think of so many
19:41apps from when I was growing up that
19:44were really successful for a period of
19:45time and then you've seen iterations of
19:47them since and to your point like Nikita
19:49literally just copied what worked before
19:52what he sold to Facebook before and then
19:55repurposed it created gas and has not
19:57had another acquisition so I mean maybe
20:00this is a silly question but is that
20:02worth doing as in if you're if there's a
20:04Founder out there or potential founder
20:06should they just be combing through
20:07previous successful apps like a Yik Yak
20:11for example and just creating the Yik
20:12Yak of 2023 because we've seen mean how
20:17effective they can be and how also kind
20:20of Evergreen they are because there's
20:21these like innate human emotions like
20:23gas up to be complemented or be real to
20:28like to be understood right there's like
20:30these fundamental human emotions that
20:32don't change across Generations I feel
20:35like a consistent debate in the tech
20:36world of like who's gonna build the
20:39first Anonymous social app that has like
20:41true staying power and becomes a billion
20:44dollar company on its own there's
20:46already in 2023 a new app that just
20:49raised a seed round that hit number one
20:51in Germany it's called slay very similar
20:54to gas app and TBH so another example of
20:57kind of a friend playing out I think
21:00there's I mean Nikita himself has said
21:02this there's always going to be a
21:03question of um these apps that are based
21:06around kind of anonymous uh networks can
21:10you really build like a lasting social
21:12network because people aren't really
21:14storing relationships on the the app
21:15they're not really communicating or
21:18direct messaging through the app so they
21:20get very popular very very fast if
21:23there's no maybe Act 2 of the app like
21:25if there's no what's next then they can
21:27also kind of decline very very fast as
21:30that core dense group of people that
21:32joined unravels a little bit more and
21:35moves on to the next thing I also wonder
21:37we've talked already about this
21:38phenomena where it seems like people are
21:41cycling through apps more quickly and if
21:43that really is an underlying
21:45foundational trend
21:46is there maybe an argument to say like
21:49you don't need to last very long and
21:51really the goal is to create some sort
21:53of viral sensation but also build
21:55monetization in from the get-go I mean
21:58gas I feel like is is a good example of
22:00this I think an Akita has publicly said
22:02that they made millions of dollars in
22:05the several months where they were
22:07trending prior to the acquisition and so
22:09ignore the acquisition if someone a
22:11Founder built a successful social app
22:14that trended even for a few months and
22:15made several million dollars like I
22:17would say that's a success it's not a
22:19Fang level success where you go on to be
22:21multi-billion dollar company but I think
22:24maybe would you say there's an argument
22:26to people focusing more on that given
22:28the state of the App Store
22:30oh absolutely I think it all comes down
22:32to what you as a Founder are wanting to
22:34build and I think the opportunity maybe
22:37has never been greater to build and
22:39monetize a mobile app quickly make a few
22:42million dollars and retire if that's
22:44what you want to do uh clearly Nikita is
22:47still building so he's not at the
22:49retirement Point yet um but I think his
22:51one of his last tweets about the app
22:53before the acquisition said they had had
22:55like 10 million downloads and 6 million
22:58in Revenue which is just amazing there
23:00used to be this kind of Paradigm and
23:02consumer where the goal was to build an
23:05app get it to the mainstream get it to
23:07Facebook level Instagram level Millions
23:09if not hundreds of millions of users and
23:12then you would monetize people through
23:13ads like the user kind of becomes the
23:16product and now I'm I've been trying to
23:19pinpoint exactly what it is I think it's
23:21a mix of like Apple pay and Google pay
23:23adoption and saturation people getting
23:26more comfortable making purchases online
23:28maybe it's the younger Generation
23:32Um who is you know happy and feels safe
23:34buying something on their phone versus
23:36my parents generation is still like
23:38suspicious of venmo and thinks their
23:41money is gonna get stolen every time
23:43um but we are seeing many more apps get
23:46big and make money at the same time and
23:49at an early stage in their life lenza is
23:52another really good example of this
23:53which was a number another number one
23:55from late 2022 they are an AI Avatar
23:59company and some of the external app
24:01data estimates say that they made you
24:03know upwards of 20 million dollars in a
24:07couple weeks getting people to buy a
24:09pack of avatars for eight dollars I
24:11certainly participated in that I did too
24:14it's hard to resist if you see everyone
24:16else posting them on Twitter and and it
24:18seems like a fairly minor payment at the
24:20time I think lenza is an interesting one
24:23um because you then want to say like
24:25what's the next Act of the company is
24:27the goal to get people to give you money
24:29once and then they get all the value out
24:31of the product and leave lenza has been
24:34Smart in that they're constantly
24:35releasing new Styles new packs new
24:38avatars they did dog avatars for the
24:41first time a few weeks ago which I
24:43bought so I think once you're on
24:44someone's phone and can send them
24:46notifications there is a potential to
24:48kind of continue to capitalize on that
24:49down the line yeah I like your point
24:52about the younger generation being maybe
24:54more willing to spend money online
24:57because it reminds me of how not that
25:00long ago people were really resistant to
25:02even spending 99 cents on an app and I
25:05know there's a difference some of these
25:07apps are charging up front versus having
25:09in-app purchases versus monetizing in
25:11other ways but it's kind of interesting
25:13how there was a period of time where
25:15people were just really resistant to
25:17paying for apps or things within apps
25:20even if they brought much more value
25:21than for example five dollar coffee they
25:24were like no way this is unfair this
25:27should be free and I think there is a
25:29shift there where people maybe it's just
25:31the younger generation growing up with
25:33these apps and and seeing that people
25:35are starting to pay for them but it does
25:37seem like there's a more willingness to
25:39spend but I'm also curious to know
25:41across the different apps that you've
25:43explored already mentioned lenza as an
25:44example like are there any themes or
25:47learnings from the ways that people have
25:48decided to monetize is it better to
25:51charge up front for the app is it better
25:53to have these in-app purchases and if
25:56you're doing in-app purchases it's like
25:57are there learnings or themes in terms
25:59of how people have been able to
26:01effectively get people to give their
26:03credit card
26:04it's a very good question and I actually
26:06feel that kind of gaming companies both
26:08apps and and just traditional games have
26:10kind of you know paved the way here in
26:13gaming they have kind of this concept of
26:15like the whales which is that of the
26:18vast majority of your user base is
26:20probably going to be free users or
26:22generate very minimal Revenue but then
26:24you'll have some people who spend
26:26hundreds if not thousands of dollars in
26:29in you know every month on your app and
26:31and it really adds up over the course of
26:33a year and so the goal is to kind of
26:36acquire free users as much as possible
26:38and then convert you know the ones you
26:40can into that whale type Behavior I
26:43still think we've yet to see an app hit
26:45number one that charges for a download
26:47for some reason that kind of cognitive
26:49shift of like I can't even see what it
26:52does or how it works before I pay still
26:55seems to be like a barrier for most
26:56consumers what we're seeing most apps do
26:59is in-app purchases similar to games and
27:02that's something like what lenza did
27:04where you know you get to the moment
27:06where you can deliver a lot of value and
27:08they'll pay for that specific item or
27:10that specific deliverable subscriptions
27:12are maybe the more classic for Consumer
27:14apps of how they monetize I wrote about
27:17this the other day but we had this first
27:19wave of consumer subscription apps that
27:21were all charging sixty dollars a year
27:23like think about the comms of the world
27:26the head spaces all the fitness apps
27:28many of those are amazing companies but
27:30it's hard to generate hundreds of
27:32millions of dollars of Revenue on on
27:34things like those so we're seeing
27:37subscription app developers start to be
27:38a little more aggressive in their
27:41pricing whether that's charge everyone
27:43more if they're willing to convert to
27:45paid or have different tiers of pricing
27:48Tinder for example is supposedly testing
27:51a 500. this year
27:54there's been a lot of skepticism about
27:56that but I mean from my perspective it
28:00doesn't hurt the people paying less and
28:01if someone's willing to pay 500 and feel
28:04like Tinder is delivering that value to
28:06them with maybe a more sophisticated
28:08product like I think they should go for
28:10it I agree and it actually fits what
28:12we've seen in many other Industries to
28:14use apparel as an example the messy
28:17middle is what typically doesn't do so
28:19well it's really the the really cheap
28:21options that resonate with one user base
28:24or Firebase and then the really
28:26expensive luxury items that do really
28:28well for the people who want that and
28:30want to be able to signal in certain
28:31ways and again that messy middle doesn't
28:33really serve anyone and so I don't know
28:35I hear the skepticism but I'm very
28:37interested to see how Tinder works
28:39because there's also you know the
28:40argument with dating apps which is that
28:42they don't have the the aligned
28:44incentives to actually want to match you
28:46because they want you on that forever so
28:48yeah that'll that'll be fascinating and
28:51I I think you can do it by charging the
28:53user directly but we're also seeing
28:55subscription apps
28:57um really evolve in who they're making
28:59the money from so in some cases
29:01subscription apps are going B2B or even
29:04developing new versions of the product
29:06that are sophisticated enough to get
29:07like an insurer to pay for it so com
29:10just launched an actual clinical mental
29:12health offering that's catered towards
29:15people with anxiety and depression that
29:17they've partnered with insurers who will
29:18pay quite a bit more every year than the
29:21than the 60 that a year annual program
29:24to have people on that so I feel we've
29:26kind of entered a new era of
29:27subscription pricing which is very
29:29exciting yeah you know that reminds me
29:31of an app that I have not seen it might
29:33exist in the US but a friend of mine
29:35this was years ago so this is not new
29:37had their insurance company
29:40um would give them this app and when
29:42they completed certain activities like a
29:45workout things like that they would get
29:46points because you know the account
29:48calculus for the insurance company was
29:50okay if they're doing these activities
29:52they're likely going to be a net lower
29:54cost for us because they're living a
29:56healthy lifestyle and they would get my
29:58friend Ed he would get like Starbucks
29:59gift cards or things in return for those
30:02activities and I was like man I really
30:04want this I do have a lot of these
30:05activities and I don't get rewarded for
30:07this yeah but I haven't seen that and
30:09that's a great example of how the end
30:12user of the app is not paying anything
30:13and in fact they're actually getting
30:15paid through those rewards but there is
30:17someone on the back end which is the
30:19insurance provider who is paying and
30:21yeah to your point probably a lot more
30:23than the 99 Cents that some apps are
30:25charging for yeah that's a fascinating
30:27idea I think we'll see more and more
30:29gamification of kind of good behavior as
30:33apps become more addictive sitting on
30:35Tick Tock and scrolling for hours we're
30:37starting to see the this rise of new
30:39Focus apps where you kind of grow a tree
30:41or grow a pet for every 10 minutes you
30:44spend off your phone I've also seen
30:46similar apps where you get kind of
30:48reward your points for not being on your
30:51phone while driving so the phone can
30:53kind of detect when you're in movement
30:54that feels like a car and then when you
30:57don't pick up the phone it gives you X
30:59number of points that this app was
31:00focused towards college campuses so you
31:02could redeem them at a campus restaurant
31:03or something but I love those types of
31:05ideas that's a great example of similar
31:08to the widgets when you pay attention to
31:10some of these software changes like the
31:12ability to detect when a phone is moving
31:14or in the widget example when they have
31:16that different UI I mean it's incredible
31:19like you said some of the widget
31:20companies Rose close to the top and I
31:23think that's a maybe a good learning one
31:26learning we've already discussed is
31:27maybe paying attention to some of these
31:28like apps of the past that had the
31:30transient nature but also linked to
31:32fundamental human desires but then this
31:35is another one like paying attention to
31:36the different technology changes that
31:38apple is releasing as potential layers
31:41that you can integrate into a new
31:43application absolutely and I think like
31:46the the fact that there were so many
31:48widget apps and so many AI art apps that
31:51made it to number one shows that it's
31:54not necessarily the first to Market that
31:56kind of wins the space or gets all the
31:58value out of the space once consumers
32:00are kind of aware of something new and
32:03exciting is out there there's an
32:05opportunity to kind of optimize your
32:07keywords in the App Store if they're
32:09searching for things like widgets to run
32:11lower cost ads to do you know Tick Tock
32:14videos and there's still lots of room to
32:16build compelling and kind of engaging
32:19products beyond the first one that maybe
32:22breaks open the market for everyone else
32:24lensa is the perfect example of this
32:26right so there were at least I'm aware
32:28of two or three different web-based
32:31applications profile picture.ai and then
32:33Avatar AI as well which had come out
32:37first with this idea of creating
32:38personalized avatars I believe all all
32:41of these products are based off of the
32:43same apis and the same infrastructure
32:46and so yeah maybe they might have
32:47slightly different prom but it was the
32:49you know relatively the same output as
32:51well and these web-based applications
32:54did relatively well I think they had at
32:56least a several week Head Start but they
32:58were web-based and what was fascinating
32:59about lenza was I mean just maybe the
33:02the ux of having it on your phone maybe
33:05a better name to your point like really
33:07um not drastic changes in the product
33:10but then I I believe the first few that
33:13I mentioned they did well but maybe they
33:15made a hundred thousand dollars or
33:17something nothing close to the network
33:19effects or the the virality of lenza
33:22which to your point had millions of
33:24downloads and made millions of dollars
33:26in a very short span of time that's so
33:29true I think to your point about
33:31analyzing maybe what's behind the
33:33consumer behavior and consumer interests
33:35for AI avatars I tried many of the
33:38web-based platforms which are fantastic
33:40but it is kind of a pain to airdrop or
33:43email yourself all the photos that you
33:45want to use to train the model from your
33:48phone to your computer and so I think
33:50lenza really being the first kind of
33:53aggressive push on mobile for that was
33:55really smart and then on mobile you can
33:58enable notifications so lens is able to
34:01say hey we added this new style that we
34:03think you might be interested in hey we
34:05added this kind of you know avatars for
34:07dogs or avatars where you and your
34:09friend can be in it together like
34:12um I think them their capitalization on
34:15mobile as a platform was really smart
34:17and kind of vaulted them ahead of a lot
34:19of the web-based Avatar products that
34:22did come out first and and have similar
34:24quality images but were just harder to
34:26use that's such a great Point even just
34:29the push notifications in the other
34:31cases they also added pets and and
34:33different prompts that evolve the
34:35product but every time they did that
34:37it's like oh you have to send out
34:38another email and there's a limitation
34:39to the number of emails you send out and
34:41the conversion rate is going to be lower
34:43and so that's such a great point about
34:44just the idea of being mobile native and
34:47then also potentially having access to a
34:49larger swath of of people who are on
34:52mobile let's pivot a little bit we
34:54talked about different categories that
34:56might be interesting or surprising you
34:58mentioned one already but I want to hear
35:00what other individual apps maybe you
35:03thought were surprising that showed up
35:05in this list and you know been the dog
35:07Talking Ben the Dog was one for me where
35:09I was like what is this why is it in the
35:12top of the app charts so were there any
35:14others that you were kind of surprised
35:16to see in that list I am always obsessed
35:19with App Store data because the stories
35:21that it tells about what's happening in
35:23the real world are just always really
35:25fascinating another one that I think a
35:27lot of people were surprised to see hit
35:29number one this year was the 7-Eleven
35:31app for the convenience store chain but
35:34that almost always hits number one on
35:36free slurpee day July 11th every year
35:40because you have to have the app to get
35:42the Slurpee and then actually two days
35:44later we saw McDonald's hit number one
35:47on July 13th because it was free French
35:50fry day for National the national French
35:53fry holiday I was not notified of this
35:55holiday exactly so we're seeing these
35:58kind of larger more Legacy companies get
36:00these fun one-off spikes that that
36:02happen when they kind of combine their
36:05real world events and activations with
36:07something in the app this also I've seen
36:09plays out with a lot more kind of
36:11serious real world events so starlink
36:14which is kind of the satellite internet
36:16provider hit number one in September
36:19when they actually launched 52 new
36:21satellites into orbit wow and I think
36:24the news articles the Twitter videos
36:26everything around that kind of
36:28monumental launch then made people think
36:30you know I want to check this out
36:31another big one was the NOAA climate app
36:36hit number one during Hurricane Ian this
36:38fall
36:39and then another really interesting and
36:41kind of cultural moment app there's a
36:44next-gen period tracking app for women
36:46which claims kind of special encryptions
36:48that make it harder for you know
36:50subpoenaing the data or anything like
36:52that and that reached number one just a
36:54few days after the Roe v Wade verdict so
36:57after it was overturned in the U.S so I
36:59think you know 5 10 15 20 years down the
37:03line actually uh the stories that come
37:05out through this you know data that
37:07might not seem the most Monumental or
37:09actually going to be kind of really
37:11interesting and revealing about what
37:12happened in a given year I love that I I
37:15love that you can almost see yeah like
37:17the the moments of the Year embedded
37:19within the charts so let's look forward
37:22we're now in 2023 we've got some great
37:25data from 2022 and I know you actually
37:27looked at 2021 as well so I'll include
37:29that too in the show notes but as we
37:32look forward like what should we be
37:35paying attention to what kind of apps do
37:36you think are going to thrive in this
37:38new year so there's already an early I
37:41don't want to say winner but maybe an
37:42early leader for 2023 which is temu
37:46which is a new Commerce app developed by
37:48a large Chinese company called pinduo
37:51Duo and in China the version of this app
37:53is a full group buying experience say
37:56You're Gonna purchase a bag of apples or
37:58something and the price on the app is
38:00two dollars the more friends you invite
38:02to add a bag of apples to the order the
38:05price can go all the way down to like 10
38:06cents five cents
38:09um so it kind of gamifies Commerce the
38:11US version of it is a a little bit less
38:14sophisticated so far but it is basically
38:17deep discounts on these products that
38:20are largely kind of shipping from
38:22overseas there is quite a bit of
38:24gamification around inviting your
38:26friends to get extra points that then
38:28you can win free items shipped directly
38:30from you or even withdraw cash from the
38:32app by inviting other friends to
38:34download it so unsurprisingly that has
38:37resulted in a ton of downloads yeah free
38:40money yes from my most recent check I
38:44think of of the 25 days so far this year
38:47temu has been at the top for like 22 of
38:50them they were not number one on New
38:52Year's Day because some like habit
38:54Tracker app or New Year's resolution app
38:56hit it but otherwise they've held the
38:57top spot and that number of days would
39:00be good enough to break into the top
39:02five last year so I'm gonna make an
39:04early call that we'll see TAMU at least
39:06in the top five if not higher hammu is
39:10an interesting example of another kind
39:12of trend I expect to see in 2023 which
39:15is AI almost invisible AI products where
39:19we've seen these AI first products all
39:21the Avatar and art apps but Tick Tock
39:24was actually one of the first and still
39:25best examples of invisible AI where the
39:28reason the product is so addictive is
39:30because they have this algorithm then
39:32that becomes catered to you temu does
39:34this really well also they have this
39:37Marketplace in the back end of inventory
39:39from thousands of suppliers but as soon
39:41as you've browse the app for five or ten
39:43minutes they can tell pretty quickly
39:45what is she clicking on what is she
39:47interested in and then they'll serve you
39:49deals and products that are really
39:51catered to your interests so I expect to
39:54see more companies kind of utilizing
39:57that almost AI infrastructure you know
39:59that's a great point because we've seen
40:01the rise of tick tock as people shift
40:03from what people might say is more
40:05connection based or contact based
40:08interaction on social to interest-based
40:10where it doesn't matter if you know the
40:11person but Tick Tock because it's got
40:13such a strong AI back end is servicing
40:16the things that it knows you're going to
40:19like and it gets better and better over
40:20time and I think this actually fits into
40:22what we discussed before about how it's
40:24really hard to create stickiness with
40:27these apps over a period of time and
40:29again I think it's because you know on
40:31one hand and it's really nice to be able
40:33to leverage word of mouth as people tell
40:35you something but on the other hand that
40:37word of mouth changes very quickly but
40:39if you have a strong back end where you
40:41can evolve that and you can kind of
40:43follow the user through their journey of
40:46liking something and then liking
40:47something else later I think that's why
40:50Tick Tock has been so sticky because you
40:51know I've heard people who start on Tick
40:53Tock and they listen to dancing videos
40:55but then all of a sudden Tick Tock picks
40:57up that they like power washing videos
40:58or like keto recipes or and and it
41:01follows them through that journey and so
41:03there's no need for them to go look for
41:05something else and so I I like that you
41:07mentioned these two applications that
41:09have ai in the back end but I also think
41:11there's a nature to that that is much
41:13more sticky than AI That's in your face
41:15as you said like a lensa for example
41:17yeah this is also a fascinating point
41:21because it brings up another Trend that
41:22I think we expect to see in 2023 that's
41:25very counterintuitive and I think kind
41:27of reverses a wave that we saw in 2021
41:30and 2022 which is that the AI algorithm
41:33of tick tock is so good that it will get
41:36you enormous reach for your product very
41:39very quickly and so we've seen this
41:41trend with a lot of early stage consumer
41:43companies where a video will hit and go
41:46viral and suddenly have a million five
41:49million 10 million views and they'll get
41:51a flood of users that the product is not
41:54actually ready for and that the product
41:56isn't kind of equipped to retain and so
41:59we've seen actually a few startups I've
42:01talked to recently have started limiting
42:03their own virality which sounds
42:06impossible because virality is
42:08theoretically organic but what they'll
42:10do is if a video starts performing too
42:13well on Tick Tock it gets too many views
42:16they will actually temporarily shut off
42:18the video or archive a video because
42:21it's driving too many downloads and they
42:23feel like they're not necessarily
42:25converting those downloads into engaged
42:27users quite well enough yet so I think
42:31we'll see maybe the strategy around how
42:33Founders utilize Tick Tock hopefully to
42:36their advantage also evolve quite a bit
42:39in this coming year yeah it also reminds
42:41me of something you've mentioned before
42:42which is that
42:45Tick Tock is so good that even users as
42:49well are kind of limiting themselves
42:51from the app I do this I don't go on
42:54Tick Tock because I am very well aware
42:56that tick tocks algorithm is better than
43:00my self-control and so I need to just
43:03shut it down and and not go on the
43:05application because I know I will
43:06inevitably find myself two hours later
43:08yes looking up and asking what happened
43:11so are there are there examples of apps
43:14that you've seen that kind of Leverage
43:16this pushback on how good some of these
43:20apps are at capturing our attention
43:21first of all I think the trend is very
43:23real and probably underestimated right
43:26now this is to me comparable to the
43:29moment for Millennials where Selena
43:31Gomez was like I can't go on Instagram
43:32anymore like the biggest most followed
43:35star we're seeing like Emma Chamberlain
43:37Jenna Ortega all of these gen Z Stars
43:40saying I'm not going to do Tick Tock
43:42anymore because it's too addictive a
43:44couple things have come out of that I
43:45think Instagram reels and YouTube shorts
43:48benefit from that it's funny I have a
43:49younger brother he's 22 and he told me
43:52like I had to delete tick tock because
43:54it's too good it's too addictive I'm
43:56just gonna watch Instagram reels and
43:58then I was telling him but you're giving
44:00data to Instagram Royals that allows
44:02them to make that algorithm better and
44:04soon enough there'll be no escape from
44:06these like hyper curated short form
44:08video algorithms I do think like on a on
44:11a higher level maybe this ties back to
44:13what we were talking about with new
44:15consumer social things like be real to
44:18me are like a direct example of that
44:20kind of pushback on be real you go in
44:23you take a picture you have to take it
44:25in a two-minute frame maybe you scroll
44:27through and leave an emoji on some of
44:29your friends pictures but you're not in
44:31the app for usually more than a few
44:33minutes a day and so I think users find
44:35that to be kind of a more fulfilling or
44:38healthy way to engage with social media
44:40than ending up on a scrolling feed for
44:42hours at a time I'm trying to think of
44:44examples where they're does seem to be
44:46this healthy level of interaction
44:48between people one example that comes to
44:50mind is Strava to me which is the app is
44:52not focused on just the nature of being
44:55social like hey I'm going to comment on
44:57your posts and I'm gonna post you know
44:59this image of my life but really fixated
45:01on an activity so in Travis case running
45:03or cycling and then there's social added
45:06on to that the social app is not fixated
45:09on just trying to be social it's fixated
45:12on something else are there other
45:14examples that you can think of where you
45:16know social is almost like a modifier
45:18instead of the core of the app itself
45:21it's a great question I think there's
45:23this new wave of like what we would call
45:25kind of vertical social networks which
45:27is where the network is focused on a
45:30specific interest and then ideally uses
45:32kind of real world data and connections
45:34from that interest to build a product
45:37that kind of becomes a system of record
45:39for you in that activity so let me
45:41explain Strava is probably a great
45:43example where the product where works
45:45best when you're actually going on bike
45:47rides and tracking them in the app and
45:49you know accumulating trophies Goodreads
45:52is another kind of interesting and early
45:54example of this where kind of the core
45:56unit of Engagement is tracking your
45:59progress through a book and maybe you'll
46:01meet friends join book clubs interact in
46:03that way on the app but it's not the
46:05same sort of like hyper curated
46:08influencer first Kind of Perfect Vision
46:11product another very interesting one
46:14this didn't hit number one this year but
46:16I'm watching it there's this app for
46:19tracking squishmallows I don't know if
46:21you're familiar with them they're this
46:22new very popular type of stuffed animal
46:25that people actually go oh I know squish
46:28yeah I didn't realize they were called
46:31squishmallows but yes I love those and
46:34people will go like literally diving
46:36through bins in Target to find these
46:38rare squishmallows that they've never
46:40seen before and I think this was mid or
46:43late November but an apps specifically
46:46to track your squishmallow collection
46:48broke into the top 200 on the app store
46:50which was incredible and the reviews
46:53they were mostly from kind of teenagers
46:55or younger kids maybe some adults with
46:57squishmallow collections were just
46:59saying it was like such a fun and
47:01rewarding way to both like Express their
47:04interests track their collection and
47:06then also browse the collections of
47:07other users like oh this person you know
47:10found this squishmallow that I've been
47:11searching for for years so I I do all
47:14this to say I do see these kind of more
47:16verticalized social platforms is also a
47:18potential maybe source of respite away
47:21from these broad-based networks that
47:23really suck you in I'm so glad that you
47:25mentioned that example and I just outed
47:27myself as a squishmallow fan but I mean
47:31I think some of the themes that we've
47:33discussed keep coming up and one of them
47:35is this idea that there are these Trends
47:38from the past that re-emerge and this
47:40theme of like collecting swish Mellows
47:42and having you know having rare ones is
47:44like a a classic and collectibles and
47:46it's almost like exactly parallel to
47:48beanie babies but
47:50it's fascinating to see how this digital
47:52element is coming to play because that
47:54didn't exist during that prior era and
47:57just as a fun fact if people uh Google
47:59there was uh once a a lawsuit or a court
48:02case between a married couple because
48:05they couldn't decide who got the beanie
48:07babies so
48:10um anyway let's let's move on to a
48:12question that's related to what we're
48:13discussing here which is just the
48:15interplay between digital and physical
48:16so something that's fascinating about
48:19something like a Strava is it's not just
48:21me on my phone clicking on on the app
48:25and interacting with people I'm doing
48:27some sort of physical activity but I
48:29think there's maybe a further extension
48:31of that which is not just solo
48:34interacting physically but also how do
48:36these digital apps potentially
48:39impact the way that we engage with other
48:41people physically right like kind of a
48:43cyclical nature to our digital and
48:46physical lives so are there examples of
48:48apps that you've seen that our online
48:50Behavior actually penetrates the
48:52physical world or changes it yeah
48:54absolutely and and I think like the
48:56first wave of subscription products uh
48:59like the comms the head spaces the
49:01fitness apps the nutrition apps we're
49:03very much kind of single player mode and
49:05helping you optimize yourself and your
49:08life and your habits we've definitely
49:10seen kind of this rise of this new wave
49:12of apps focused around relationships and
49:15really you know the app just needs you
49:17and one other person to work but they'll
49:19prompt you with daily questions about
49:21the other person things you want to talk
49:22about basically ways to use this digital
49:25product to enhance this real world
49:28relationship that's happening and to
49:30maybe make things easier or to
49:32strengthen or to improve these
49:33relationships the most kind of basic
49:36version of this was the widget apps that
49:38went popular
49:39locket Widget the founder
49:42um he's a his name is Matt Moss I think
49:44he's either a college student or a
49:45recent college graduate he made it for
49:47his girlfriend they were in a long
49:49distance relationship and they wanted to
49:51see what each other was up to every day
49:53and I think that use case is is very
49:55strong of kind of how can we integrate
49:58technology more seamlessly to help us
50:00have better in person or in real life
50:03relationships another Trend that we're
50:05seeing quite a lot of is apps and
50:08products and especially platforms like
50:10Tick Tock to be honest driving traffic
50:13and driving engagement towards real
50:15world businesses so gen Z Yelp is not
50:19their favorite place to be
50:22they've never really been big adopters
50:24of Yelp and so they're looking for a new
50:26platform Instagram is trying to build
50:28this Tick Tock has kind of emerged as an
50:31early home for this where people are
50:33discovering restaurants places to go
50:35things to do around them from Tick Tock
50:37and then driving kind of similar to how
50:40Tick Tock can drive a wave of people to
50:42your app it can drive a wave of people
50:44physically to your storefront door which
50:47is interesting there's a food reviewer
50:49named Keith Lee I think he has a couple
50:52million subscribers at this point his
50:54account took off in November on Tick
50:57Tock and he only reviews food from small
51:00businesses that he either picks up or
51:02kind of gets sent to him and there's so
51:04many stories out there now if you Google
51:06him of businesses that were really
51:08struggling and he was able to generate
51:10tens of thousands of dollars in revenue
51:13for them in just one or two days through
51:16these food reviews that went viral and
51:17like changed the game so is the lesson
51:20there that these apps or companies with
51:22apps should really be working with these
51:25creators and being on a platform like
51:27Tick Tock the reason I ask that is you
51:30know in some sense I feel like the
51:32answer is of course but then I also have
51:35been on the other side as a marketer
51:37where I'm like I'm working with these
51:38creators is we're not getting you know
51:40the hits that we're looking for and so
51:42you hear of these viral Sensations but
51:45obviously there's like a lot of trial
51:47and error as well so do you have any
51:48thoughts on like is that just the move
51:50given the the state we're in or do you
51:53have any thoughts on how else we can do
51:55that effectively I do think we've seen a
51:57lot more businesses both in real life
51:59businesses and apps invest in Tick Tock
52:03acquisition or trying to engineer
52:05Tick-Tock virality over the last year I
52:08think it's honestly very very hard to do
52:11um similar to how not every business
52:13needs an Instagram page with you know
52:16hundreds of thousands or millions of
52:18followers I don't necessarily think
52:20every business needs you know a tick
52:22tock page with a huge following if I
52:25were a small business probably what I
52:26would look out for is kind of very
52:28organic ways to engage with maybe
52:30smaller creators who have audiences that
52:33are very kind of targeted to the type of
52:35people that I'm looking for I would also
52:38just keep in an eye on what platform
52:40seems to be winning on this next-gen
52:43Yelp Vision that I think we believe is
52:45going to play out over the next two to
52:47three years will it be Instagram with
52:49their new searchable map will it be Tick
52:51Tock will it be something else entirely
52:53because there probably is an advantage
52:55if you're one of the early businesses to
52:58capitalize on that platform something I
53:00want to ask you about before we close
53:02out is something you mentioned in your
53:05thread was the difference in geography
53:07and this is pretty front and center when
53:09you think about it like Tick Tock is
53:10obviously a Chinese company you
53:12mentioned temu which is like your your
53:14horse for the year in terms of what
53:16you're watching and so there does seem
53:18to be more diversity not just from China
53:21in terms of the apps that are rising to
53:23the top versus I believe it used to be
53:26more U.S concentrated apps that were
53:29trending in America so any learnings
53:31from that or why are we seeing that
53:34change in in the in the Matrix of apps
53:37rising to the top it plays out in the
53:39data too as well as kind of just the
53:41eyeballing the App Store charts and and
53:43seeing where things come from in 2021 of
53:46the new startups that kind of cracked
53:48the top number one for the first time
53:50almost 85 percent of them were developed
53:54in the US but in 2022 that had dropped
53:57to 45 so we're seeing way more apps from
54:00China from Russia from Italy really from
54:04all over be real is originally from
54:06France which is an interesting example
54:08um get mainstream adoption in the U.S I
54:11think there's a couple trends that are
54:13driving this one a lot of the number
54:16ones as we talked about this year played
54:18on themes like widgets and avatars and
54:21there's a lot of great International app
54:23Studios and developers that kind of fast
54:25follow trends that are starting to
54:27emerge and release products that
54:30capitalize on that excitement so you
54:32know when Lockett took off in the U.S
54:34living in China was released a few weeks
54:37later and then kind of a wave of other
54:39widget apps came from all over the world
54:41not just China or any specific Market
54:43Tick Tock of course is another huge
54:46player here to me it's kind of
54:49democratized the ability to go viral and
54:52to see success outside of your home
54:55Market there's one app that hit number
54:57one this year called travel boast which
54:59is kind of an interactive map where you
55:01can visualize all the places you've been
55:03it originated in Russia but it ended up
55:06with 500 million views on Tick Tock
55:09because people globally were are making
55:11videos about kind of their experiences
55:14and putting them on travel boasts and
55:16before like a solo developer app coming
55:18out of Russia like would have very
55:20little chance to kind of see
55:21mainstreaming with success but because
55:23of tick tock it did which is really
55:25exciting
55:26that's a great point because in the past
55:28it was really hard for an individual
55:30developer to have the budget or the
55:33connections to get the kind of traction
55:36we're seeing today but now that we have
55:38access to certain distribution channels
55:39like Tick Tock we are seeing just maybe
55:42more apps come to play but also their
55:44ability to rise more quickly which feeds
55:46into what we said before which makes it
55:48harder to stay at the top but with that
55:51said um Olivia this has been so great I
55:54want to give you the opportunity if
55:56there are any other examples you've
55:57shared so many already of apps that you
55:59think are just worth knowing about or
56:01tell us something about the state of the
56:03App Store absolutely there's one that
56:06comes to mind that I've been fascinated
56:07with recently it's actually in the
56:09gaming category so it's an app called
56:11Subway Surfers that was first launched
56:13in 2012 out of a studio in the nordics
56:16where a lot of gaming apps come from
56:18even just in 2014 people were publishing
56:21blog posts like Subway Surfers has so
56:24much longevity it's been around for so
56:26long which at the time was two years and
56:29is still getting downloads and now more
56:32than 10 years later they just cracked
56:34the top 10 most downloaded apps
56:36worldwide so not just in the US and not
56:39just for games across both games and
56:41non-gaming apps According to some of the
56:44independent data they actually saw
56:46downloads grow 50 last year so they got
56:49like 300 million downloads they've now
56:52been downloaded by almost 40 percent of
56:54the population which is crazy maybe on
56:57multiple devices since they've been
56:59around for 10 years they've made some
57:01really smart moves to kind of stay top
57:04of mind for that decade they have this
57:06world tour strategy where the graphics
57:09and the location of the game changes
57:11every two weeks which is really fun they
57:13also have built great social media
57:15profiles so they have 7 million
57:17subscribers on YouTube another 6 million
57:19on tick tock but this year I was trying
57:23to figure out what could have Juiced
57:25them 50 percent
57:26it turns out that especially gen Z users
57:29but all ages have started kind of split
57:32screening Tick Tock videos because
57:34people have such short attention spans
57:37so they'll put the real video on top or
57:39they'll put you know the voice over on
57:41top and then they'll put a clip of
57:43someone playing Subway Surfers in the
57:46bottom of the video in the hopes that
57:48this will get the viewer to kind of stop
57:50and stay engaged and stay focused on the
57:53video instead of just like scrolling
57:54away that's so funny I've seen a couple
57:57examples of this as you said because
57:59people have short attention spans I
58:01don't know if they're using Subway
58:01Surfers but there's also these examples
58:03of people who are trying to get around
58:05copyright infringement so not
58:07duplicating a video but then they'll
58:09just on the side of a video have like a
58:11game video playing or something like
58:14that
58:15um and so yeah I mean people are getting
58:17so creative these days but I think I
58:19think it's so interesting these examples
58:21where an app is used in ways that the
58:24developers didn't even intend yeah no
58:27and it's the downstream implications of
58:29it are also interesting in terms of what
58:32it continues to do to our attention span
58:34and kind of what we expect from media
58:36there was this meme that came out that
58:38was like you know the Next Generation
58:40Jen Alpha is gonna Riot when they go to
58:43the movie theaters and Subway Surfers
58:45isn't playing on the bottom half of the
58:47screen like they're not going to be able
58:49to focus for that long I don't know if
58:50that's true uh exactly but um I do think
58:54it'll be very interesting to track
58:55whether more videos or fewer videos end
58:58up doing that in the coming year it's a
59:00great point this idea of like reducing
59:02attention spans and what comes next
59:04because if you think about it it used to
59:06be like you read like a 10 minute long
59:07article people got bored of that then
59:10you watched a like five minute YouTube
59:11video people got bored of that then you
59:14had like an image on Instagram and then
59:16a short clip that's 30 seconds and then
59:19even that wasn't enough it's like okay
59:20within the short clip we're gonna speed
59:22up the music we're gonna cut the screen
59:23and it's like what comes next I don't
59:25know how short you can get this we'll
59:27see we'll see I guess I want to end off
59:29with a fun little exercise because I
59:31feel like I've learned a lot in this
59:33conversation there's so many themes so
59:35many ideas if someone's looking to
59:36create an an app you know maybe you can
59:38copy from something that you see on
59:39desktop maybe you can pay attention to
59:41the technology changes happening on the
59:43iPhone maybe you can look to what's
59:46happening in other countries and
59:47duplicate them here and there are a few
59:49others that we've discussed but if you
59:51Olivia having maybe one of the best
59:54understandings of what's happening in
59:57this app store if you were tasked
59:59tomorrow to go and build an app
01:00:02that you wanted to get to number one yes
01:00:05what would you do what would you think
01:00:07about great question
01:00:10you know I have to say and this might be
01:00:12due to personal interest but there's
01:00:13this fascinating Trend around dog
01:00:15ownership and dogs especially for young
01:00:18people becoming the new children because
01:00:21people are having kids later or having
01:00:23fewer kids they're spending more money
01:00:25on their dogs than ever before and there
01:00:28are not that many kind of digital first
01:00:30Pet Brands
01:00:32um so I would probably develop some sort
01:00:34of app around dog or pet ownership where
01:00:37you were able to show off or track or
01:00:39keep an eye on your pet in a creative or
01:00:41interesting way I think the core of it
01:00:43would be that it generates some sort of
01:00:46shareable asset that then you could post
01:00:48across Instagram and Twitter and Tick
01:00:50Tock and show everyone how cute your dog
01:00:52is so I think I need I might be on the
01:00:55in the idea maze uh um for a little
01:00:58while longer but there's hopefully
01:00:59something there there's something there
01:01:01because to your point pets have been
01:01:03taking off uh for years it's you know as
01:01:06some people say the recession-proof
01:01:07industry if you look at the pet industry
01:01:10growth relative to many other things
01:01:12like typically you'll see like you know
01:01:152008 show up in in sales pets is just
01:01:18like this straight line upwards
01:01:21um and then yes people love talking
01:01:23about their pets sharing pictures of
01:01:24their pets looking at other pictures of
01:01:26pets and so we talked about the need for
01:01:28some sort of sharing element or way to
01:01:30notify other people that you're on this
01:01:33app and so there is something there
01:01:35maybe like oh God this is this is so
01:01:38silly because people people say this as
01:01:40a Trope but like Instagram for pets or I
01:01:42don't know just something where the pet
01:01:44is the is the yeah influencer if that
01:01:47makes you feel bad posting you know your
01:01:50whole Instagram feed being pictures of
01:01:51your pets so then it's like do you do
01:01:52what I did and make a separate Instagram
01:01:54account for your dog or do you not have
01:01:57kind of the the attention for that which
01:01:59I think is most people my sister and I
01:02:01have joked um for probably the past 10
01:02:04years that if we did ever start a
01:02:06business it would be very fun like how
01:02:08those zoos have live streams where you
01:02:11can watch the animals and like see what
01:02:13they're doing throughout the day someone
01:02:14should create that book for puppies
01:02:15where you can just see two puppies
01:02:17running around all day maybe that'll
01:02:20just be a genre on Tick Tock but I think
01:02:22it's pretty popular I know we're in that
01:02:24idea maze where we're like is it a
01:02:25feature or a product
01:02:27um you know speaking of maybe a viral
01:02:29app that could be created maybe it
01:02:31already exists but that I don't think
01:02:33would last long is the um you know how
01:02:35people say that
01:02:37people buy pets that look like them or
01:02:39dogs specifically an app that you upload
01:02:43your two pictures and then it tells you
01:02:45you're like 61 like your dog and someone
01:02:49else is like oh you're 99
01:02:51um I think that could be pretty funny
01:02:52you have something there I'm serious I
01:02:54would download them that could be a
01:02:56number one for 2020 Theory a very short
01:02:59live 2023 app all right well if someone
01:03:02wants to build that go right ahead um
01:03:04Olivia this was amazing I feel like
01:03:06hopefully listeners have so many more
01:03:09angles that they can think about the App
01:03:11Store and think about whether they want
01:03:13to create within it or at least
01:03:14understand the different apps that we're
01:03:16downloading because to your point
01:03:17earlier they really do represent our
01:03:19Behavior what we want to engage with
01:03:20what we're paying attention to so thank
01:03:22you so much for going through this and
01:03:24we will definitely have to do a another
01:03:26episode once we get the 2023 data
01:03:28amazing I can't wait thanks so much for
01:03:31having me this is very fun
01:03:35thanks for listening to the a16z podcast
01:03:37if you like this episode don't forget to
01:03:39subscribe here on YouTube to get our
01:03:40exclusive video content we'll see you
01:03:43next time
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