In February 2014, WhatsApp was sold to Facebook for an unbelievable figure – 19 billion dollars. Within the next few weeks, it was all over everybody’s blogs, Facebook statuses, lunch conversations, and even kids in school were talking about it. People could not understand that a company whose only product is a messaging app could be worth that much money.
WhatsApp is not the only messenger out there. Snapchat, Facebook Messenger, LINE, WeChat, and many others are also stakeholders in the industry. They proved to be a cheap alternative to operator-based text messaging via SMS, and they provide many more features that SMS doesn’t have. According to statistics, in August 2015, WhatsApp has an active user number of 800 million, Facebook messenger has 700 million, and WeChat has 600 million. If we just do a simple math and not include all added features that each messenger provides, all chat messengers have a combined valuation of over 200 billion dollars. That’s half of Google or 4 times more than Yahoo!.
Interestingly on the contrary side, all these messaging apps struggled to figure out their revenue model. Evan Spiegel, the co-founder of Snapchat, acknowledged in an interview the extreme difficulty of making a feasible one. Many internet companies are backed by ads revenue. Google, for example, revealed in their multiple annual reports that more than 90% of their revenue comes from ads. One of their many services, Google Adsense, analyzes a web page and provides advertisements that best fit the content of that page. However, most people on messengers send private messages to their friends, and it is impossible to insert any ad into the conversation. Out of privacy concerns, it is also unlikely to run algorithms on user’s messages to provide personalized recommendations.
Realizing this limitation, apps began to expand their service into other communication areas, such as emojis, playing games with friends, sending money, interesting new content, etc. This is a very successful first step. In 2013, LINE reported in their Q2 quarter report, that out of their $100 million quarterly revenue, game purchase and in-game purchase accounted for 53%, and emojis accounted for 27%. Snapchat is piloting the new discovery feature that pushes sponsored content to the user. With the existing ads before playing video revenue model, the company stated that their revenue is estimated at $50 million dollars this year.
In addition to these efforts, LINE and WeChat also aim to build up their own ecosystems. WeChat launched a feature to send money to multiple friends in January 2014. It targets the Chinese tradition of giving monetary gifts to friends and family for auspicious blessings on special occasions. On 2015 Chinese New Year’s Eve, more than 1.5 billion “red envelopes” were sent on a single day. WeChat also keeps a semi-bank account for a user. Besides sending money to friends from the account, the money could also be used to make purchase, refill phone cards, call a taxi, pay utility bills and many more. WeChat has built a successful image within China and it has penetrated into many aspects of people’s life.
In conclusion, the entire messenger ecosystem is very enormous. The user-to-user communication nature allowed exponential growth in the user base. With the vastly and constantly growing user base, companies are able to reach billion dollars valuation within a very short amount of time. The next step, to achieve their billion dollars revenue, companies are experimenting to expand their services into our daily life. LINE and WhatsApp have built up their ecosystem that allows users to call taxis, stream music, order foods, and we can predict soon other companies will have similar strategies to expand their verticals.
Register now! Become a member! We see and hear these phrases everyday. More and more companies seem to use memberships to get customer loyalty. We see a lot of retailers that display new collections on their mobile apps, provide special offers or interact with customers.
But Björn Borg is trying to out a different strategy. The sports fashion brand had not yet released an app but is now trying to build an entire platform. With their new app, Sprinter, they want to help people find a workout buddy (Fashion Insider, 2015). The application is compared with the dating-app Tinder, where daters are able to see nearby users and swipe to like or dislike them. Sprinter uses the same principle, liking nearby people that you want to work out with. Theory describes both these platforms as one-sided networks, as the users are homogenous, both the buyers and sellers on the network (Eisenmann et al., 2009).
However as we compare Tinder and Sprinter there are some differences. I want to highlight one of these differences. Tinder is owned by IAC, a holding that owns multiple dating sites (IAC, 2015). This means that Tinder and its platform are part of the core business of IAC. Bjorn Borg is a fashion company, specialised in sportswear (Björn Borg Corporate, 2015). By launching this app, Björn Borg is entering a new market. I think that the app will not directly support sales of the goods. Therefore I think that Björn Borg is taking a lot of risk to become the provider of this platform-mediated network. It takes more time to maintain a platform than it will to maintain an retailer app. It is also a lot harder to make changes to the platform later on. In my opinion this is a risky but interesting move, but I will leave it up to you to decide. Do you think Björn Borg’s Sprinter is a good move or should they have stayed within their core business?
- Björn Borg. (2015). Sprinter Campaign. [online] available at: http://www.bjornborg.com/se/campaigns/sprinter
- Björn Borg Corporate. (2015). About Bjorn Borg. [online] available at: http://corporate.bjornborg.com/en/about-bjorn-borg-0
- Eisenmann, T., Parker, G., and Van Alstyne, M.W. (2009). Opening Platforms: How, When and Why. Platforms, Markets and Innovation, Gawer, A. (ed.), Northampton, MA: Edward Elgar, pp. 131-162.
- Fashion Insider. (2015). Björn Borg Launces Free Fitness “Sprinter” Application. [online] available at: http://thefashioninsider.com/2015/09/07/bjorn-borg-launches-free-fitness-sprinter-application/
- IAC. (2014). Our Brands. [online] available at: http://iac.com/brands
I recently found a very interesting app that as I believe has not received enough attention from the public yet given its potential. This is why I decided to share it here and I hope it will bring some joy and excitement to many of the readers of this post.
Spotlight Stories from Google Play, which is available for both iOS and Android run devices, is an application that allows you to watch movies in 360 degrees format on your smartphone or tablet. Given the limitations of the human vision you are, of course, not able to see all 360 degrees at one instant of time. However, as you move your device either sideways, up or down the image changes as if you were moving your eyes into the respective direction. So far the app offers four different short animated movies ranging from a windy day in the life of a frog to a very futuristic chase with an alien.
This kind of movie experience, as you can imagine, brings with it a couple of challenges for the directors. One of them being the issue on how to make sure the spectator is always looking into the right direction to not miss any of the main action. In the four exemplary movies that were released so far this potential problem is solved with the inclusion of 360 degree accustic adaption. To put this into simpler words: As you move your device away from the view of the main action the music and conversations in the movies diminuish in volume. As your brain registers this you “automatically” adjust your view.
Although both the app and movies are still for free at the time, the notion “free for a limited time” gives us a hint that Google may be planning to sell movies through this application in the future (Perez, 2015). I therefore inivite you to try the app out as long as it still is for free and give me your opinion on it in the comments below.
Perez, 2015.‘Google Brings Its 360-Degree Movies App, Spotlight Stories, To iOS‘, http://techcrunch.com/, last visited: 06 October 2015.
It might be. Unless pattern recognition saves your eyes.
Pattern recognition might sound pretty nerdy, but you come across it more often than you think. Shazam created an app to find out which song is playing in the club, Spotify predicts which other artists you might like and Google created an algorithm to identify cats in YouTube videos. But while it is cool that a computer can recognize a cat video, there might be more important possibilities for pattern recognition as well, such as in the medical sector.
The CHCF, the California HealthCare Foundation, is one of those organizations that decided to use pattern recognition for more important things. They created an application to detect a premature medical implication: diabetic retinopathy, a long-term complication of diabetes. The implication is caused by damage to the tiny blood vessels that support the retina. If left untreated, you will lose all your vision. This complication actually affects 80% of all patients who have had diabetes for 10 years or more (Kertes et al., 2007).
So how did they figure out how to detect this issue?
The CHCF organized a competition – with a $100,000 prize – on a website called Kaggle. This website has all sorts of competitions for some of the smartest people on the globe – statisticians and data scientists. The CHCF gave participants a database with thousands of images of healthy and affected retinas and let them figure out a solution.
In the end, one smart bloke called Benjamin Graham – who worked as a statistician at the University of Warwick – came up with an algorithm that identifies signs of diabetic retinopathy from an eye scan.
The big advantage of the algorithm is that it is faster, cheaper and more accurate than real doctors. Images are analysed instantly, instead of first having to be sent to a lab. This gives the advantage that there is less work involved, lowering the medical expenses involved. And while normally doctors only agree 84% of the time with each other on a diabetic retinopathy diagnosis, the algorithm agrees with a doctor’s opinion 85% of the time (The Economist, 2015) – so the algorithm can actually be more accurate than a human doctor. Jorge Cuadros, the CEO of Eyepacs, a company interested in using the algorithm, is intrigued by the high correlation between the algorithm and human experts. Even more so when there is a disagreement, sometimes the algorithm proves to be right, not the human doctor (Farr, 2015).
So does this mean the diagnosis will be conducted by computers now?
Even though the algorithm offers so many advantages, it will still take a long time before it has taken a place in clinical practice. Currently the solution is being held back by regulations, such as those from the FDA, the Food and Drug Administration. Fear is another obstacle that needs to be overcome, because who is going to take the blame when something goes wrong?
But in the end it will probably all work out. As pattern recognition software applied in medicine becomes better, institutions will have more incentives to bring the algorithms into the clinic.
The Economist,. (2015). Now there’s an app for that. Retrieved 6 October 2015, from http://www.economist.com/news/science-and-technology/21664943-computers-can-recognise-complication-diabetes-can-lead-blindness-now
Farr, C. (2015). This Robo Eye Doctor May Help Patients With Diabetes Keep Sight. KQED Future of You. Retrieved 6 October 2015, from http://ww2.kqed.org/futureofyou/2015/08/20/this-robo-eye-doctor-may-help-patients-with-diabetes-keep-sight/
Kertes PJ, Johnson TM, ed. (2007). Evidence Based Eye Care. Philadelphia, PA: Lippincott Williams & Wilkins.
Don´t you ever get tired of people posting pictures of their food on Instagram? Then try out the application TwoGrand. It is especially designed for losers: losers of weight. The application for iOs and Android is created on the claim that weight loss accelerates when updates and the process is shared with friends.
Peter, the brain behind TwoGrand, thought of the idea while he was talking to his friend. His friend and he had roughly the same activity pattern: they worked out together and spent time at the office together. However, Peter’s friend was 35 pounds heavier than himself. His friend told him: ‘From now on, I am only going to eat what you are having, because it will certainly be better than what I am eating.’ A light bulb appeared above Peter’s head and TwoGrand was born.
Peter realized that there are millions of people who have a health routine that works for them. Why not help them share it with the rest of us? TwoGrand helps you follow people who are at your goal weight, people who have the same goal weight, and people that are roughly at the same weight as you are. You can easily log your activities through photos or just a simple piece of text. TwoGrand is competing in an existing market of fitness applications. Apps as MyFitnessPal and MiCoach are popular as well, but TwoGrand adds a new feature to the weight loss facilitating programs.
TwoGrand is the first to actually make it possible to follow others based on several metrics, not only the one’s mentioned in the previous paragraph. After creating an account, a series of simple questions is asked about your eating habits and activity pattern. When you have completed this series, you can find people that ‘match’ your answers! So if you’re a vegetarian, exercise 3-4 times a week, are female, like swimming, and have children, you can find several weight loss buddies to follow who are in the exact same situation as you are. So if you are looking for inspiration and like pictures of healthy food, try out TwoGrand for a change!
Source: my own experience with TwoGrand and http://blog.twogrand.com/2013/08/06/the-story-behind-twogrand/