The iOS app store officially launched on July 10 2008 with 500 apps. Almost overnight, a huge new industry was created around mobile. According to Statista, revenue generated from apps (paid downloads and in-app advertising) will reach $935 billion by 2023, and that doesn’t doesn’t include the many trillions of dollars transacted via apps in the last decade alone (think Amazon, Uber, games, etc).
Yet despite the huge size of the mobile market and the economic opportunity it presents, the process of discovering new apps by consumers has been pretty static in the past decade. As a VC that invests in B2C, I often try to put myself in shoes of a founder looking to grow the audience for their new app to consumers. What are the main channels for app marketing and distribution today?
App discovery today:
- Word of mouth – family and friends remain the #1 channel for new app discovery. Referrals or invite mechanisms remain a strong incentive for app downloads. What’s the last app you recommended to someone or installed because of a recommendation?
- App Store lists/ features – not surprisingly, but a big % of app installs is influenced by app store recommendations and by being featured by the app store. Owners of new smartphone devices are more likely to install a number of new apps at once.
- Blogs/ press – to get consumers to learn about your new app, PR remains a viable source, especially when it comes to buzzy/social apps.
- Social media – while a lot of the social media exposure to apps is done via targeted advertising, with over 2.5 billion users for Facebook and Instagram app startups cannot afford NOT to be discovered on social media. Instagram, Tiktok, Facebook, Snap and Twitter are the top destinations. This works particularly well with visual content apps (like Reface and the various cartoon apps that for a while appeared to dominate my feeds) or by creating incentives for users to share (get 10% off if your friends sign up etc).
- Ads – targeted advertising is perhaps THE most reliable channel to market and distribute a consumer app. Google, Facebook and Amazon are main beneficiaries, by the virtue of the fact they have the most data on consumers and therefore able to slice and dice the target audience and help advertisers find lookalikes. That said, the new privacy settings of iOS 14.6 introduced a feature that stops apps from tracking consumers, which led to reduced spend on mobile ads for the time being.
- Youtube/ Tiktok/ Twitch influencers – while it can be considered part of social media, the use of influencers, particularly in video/streaming platforms has been a recent addition to the app distribution arsenal that so far justifies the ROI. The challenge is that there are millions of micro influencers and still no standard way of booking these campaigns in a programatic approach in the same way that can be achieved with ads.
- ProductHunt/ Reddit/ Directories – another form of PR/social media, directories of new products and forums solicit feedback from users and contribute to discovery.
If you build it, will they come?
Unfortunately not. In June 2021 there were 34,300 new apps released on the iOS app store alone. The current limited discovery methods give huge benefits to established brands/apps, but make it difficult for new apps to stand out. The reality for startups is that it’s not enough to build, design and ship a great looking app – marketing and distribution are critical to success.
Consumer app startups have to frantically watch their CAC<LTV ratio. So while ads can be an effective way to grow, spending on user acquisition before figuring out monetisation is a sure way to shorten runway for early stage startups. Therefore, my recommendation for startups who are pre-monetisation is to experiment with new organic distribution ways.
Lenny Rachitsky shared the 7 strategies that got the top consumer apps their first 1,000 users. Below I added some additional suggestions for increasing your app discoverability in the early days:
- Invest in content – these days, everyone is a creator. More and more platforms are available for apps to tell their story and engage users in new, creative ways. To increase word of mouth, the most popular app discovery method, creating original content and crafting a voice is key to standing out. Video, audio, text and images – it’s all part of the content game and there are plenty of platforms with an existing audience you can leverage. Tiktok, for example, is proving to be a viable organic distribution channel for consumer apps. Several startups, like Copy.ai are trying to automate the process of content creation with GPT-3, but in the early days, there’s no substitution to creating your own voice.
- Build virality into the product – it might be counter intuitive to launch your product as “invite only” – after all, the goal is to grow the audience, not to restrict it. That said, the ‘velvet rope launch‘ approach of signing up for waitlists, sharing limited invites or rewarding user engagement with access codes seems to be gaining popularity (Some of you might be old enough to remember this used to be a popular launch strategy in the early days of web 2.0). Recent examples include Clubhouse, Racket or Polywork. It can also backfire, so execution is key.
- Build a community – often overlooked, but building a community around your app can help you build better products and dramatically increase retention. As Peter Yang puts it in “Why Community-Led Product Development Wins’:
- Announce your product early and invite interested customers to join an online community (e.g., Slack or Discord). Ask them to introduce themselves and start building trust.
- Ask customers about their pain points and share product ideas and designs early and often. Give them product demos and show them how you’re making adjustments to your roadmap based on their feedback.
- Build a casual environment where customers feel comfortable talking about anything. This is the best way to uncover new pain points and walk in your customer’s shoes.
Examples of startups that successfully built a community around their early product include Phil Libins’ mmhmm, Clubhouse with their weekly town hall meetings and many gaming apps like PubG or Fortnite.
- Create multiple ‘launch’ moments – Airbnb famously ‘launched’ their product multiple times. As Brian Chesky shared in a Stanford class with Reid Hoffman: “We actually “launched” multiple times. If you launch and no one noticed?—?you can just launch again. We had press that wrote about us multiple times for launching.“
- Don’t just design the product, design the whole experience – another important lesson from Airbnb is the need to think about the whole user experience, not just about the app itself. I LOVE Brian’s story of designing an 11-star experience
“So what would a 10-star check in be? A 10-star check in would be The Beatles check in. In 1964. I’d get off the plane and there’d be 5,000 high school kids cheering my name with cars welcoming me to the country. I’d get to the front yard of your house and there’d be a press conference for me, and it would be just a mindf**k experience. So what would an 11-star experience be? I would show up at the airport and you’d be there with Elon Musk and you’re saying: ‘You’re going to space.’”
How to Scale a Magical Experience: 4 Lessons from Airbnb’s Brian Chesky, by Reid Hoffman
Any founder of a consumer mobile app should read these lessons and let them sink in.
Shameless plug, but as a VC investor at Remagine Ventures, I’d love to see startups tackling the marketing and distribution of apps and software in new creative ways. If you’re one of them, you don’t need a warm intro to speak with us, just get in touch.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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