8 out of 10 top apps make no money through the app stores

January 5, 2017
by Björn Jeffery
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Medium

Just before the new year, Nielsen published a list of the top smartphone apps of 2016. The list is based on average unique users which is a way of measuring, although it would have a hard time scaling to a longer list due to the lack of data (the sample is 9,000 panelists).

Nielsen image, with my highlighting on the right.

More interesting is the ownership of the apps and their respective business models. There are only four companies represented on the list: Facebook, Google, Apple and Amazon. Two of which own their own app ecosystems (Also, Google Play is for some reason listed as an app in this chart, whereas Apple’s App Store is not). This highlights the difficulty of distribution in the app stores and what scale on other platforms — web primarily — can do for you in terms of mobile discovery.

The business models of mobile, in this context, are simple. You either:

  1. Sell apps, subscriptions or in-app purchases through the app stores. This counts towards the Top Grossing lists. You utilize the billing and payment mechanisms in the app stores.
  2. Sell advertising or other products or services with separate billing. This does not show up on the Top Grossing lists.

Out of the 10 apps on the list, only two of them actually make money through the app stores themselves — category 1 above. Apple Music runs their subscriptions through the App Store (not through Google Play), but it doesn’t rank on Apple’s grossing lists. Not for the lack of subscribers though. I’m assuming Apple don’t want to share that data publicly. The second one is YouTube that sells some of their YouTube Red subscriptions through the app stores. This revenue is of course dwarfed by their ad revenues, so I’m being generous by including them here.

The rest of the list make money from mobile — lots of money from mobile even — but the billing is elsewhere. It is either advertising (Facebook, Google) or purchases with credit cards stored separately (Amazon). This is very significant and often overlooked. There’s a common misconception that the app stores are the main way of monetizing this potential. Generally speaking, it’s not (I’ll list some exceptions in my next post). The app stores are, however, a great way of gaining distribution on mobile. And that, in turn, can make you a lot of money if you play your cards right.

Apps in red boxes make money outside of the app stores.

The snapshot above is the US iPhone Top 20 Free as of January 4th, 2017. I marked the icons with red boxes that don’t bill a single dime though the app stores themselves. Big companies like Uber, Snapchat and Pinterest. They make millions of revenue from mobile, but not in the way you might think.

This wasn’t always the case. In the early days of the App Store, the three lists — Top Paid, Top Free, and Top Grossing — had many more similarities than they do today. I’ll do a deeper dive into these three distinctively different top lists in my next post.

Some Predictions, 2017

January 3, 2017
by Björn Jeffery
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stoweboyd:

I’ve been late to the prediction game, but I will riff on some ideas inspired by recent events. Some of these are a bit fabulous, but bear with me: what is coming could wind up being much more strange than these vignettes. (Numbered but not ordered in any particular way.)

  1. Work chat will continue to dominate the market for enterprise ‘collaboration’, and AI-based ‘team members’ with deep learning skill sets will become commonplace, building on chatbot models of interaction but assuming larger roles in project management, development, marketing, and HR. Slack is acquired by Amazon for $35 billion, and loosely integrated into AWS.
  2. The hottest business trend of 2017 will be AI-based ‘driverless management’, displacing Holocracy and other management ‘business operating systems’ fads. AI will play a significantly larger role in areas that human cognitive biases are most problematic, like hiring and promotion, decision support, and ensuring diversity, equality, and well-being in the workplace. (Daemon (via Daniel Saurez) meets the workplace.) Several unknown start-ups will lead this new exploding sector.
  3. Following Trump’s proposed withdrawal of US supporting NATO troops in the Baltics and Eastern Europe, Vladimir Putin’s Russia will occupy some part of the Baltics, like the Latgale region of Latvia, which is ~40% ethnic Russian. Mike Pence resigns as Vice President following major disagreements with Trump on the Baltics and NATO. Trump nominates Elaine Chao as Vice President, his Secretary of Transportation, and she is appointed in October, the first woman and first Asian American to serve in that role.
  4. North Korea will fire a rocket that hits Kodiak Island in Alaska, although it carries only a conventional warhead. Kim Jong-un says the rocket was supposed to have crashed in the ocean before landfall, but many believe it was on track to hit Anchorage. 
  5. Trump raises massive trade barriers to Chinese goods, sparking a trade war that damages both countries’ economies. This is in part because of an inability to get China to – in effect – take control of North Korea, but also as part of an attempt by US and European companies to make China’s markets more open: a second Opium War. 
  6. Britain begins that actual process of Brexit in mid 2017, leading Scotland to a referendum in favor of leaving the UK and applying to the EU for membership.
  7. The US Congress will pass legislation in early 2017 to repeal Obamacare, but defers any implementation until 2018 at the earliest, because they can’t agree on how it will be replaced or by what approach. Trump proposes a single payer system as a companion to a radical restructuring of the tax code, as he had hinted in his campaign, and falls into open discord with the establishment wing of the GOP. 
  8. Driverless car fleets are rolled out by various car companies (Ford, Chrysler, Tesla, etc.) and car hailing platforms (Uber, Lyft, etc.). Car ownership in major urban areas continues to decline, and many municipalities create partnerships with fleet owners to augment conventional mass transportation solutions. The value of New York City taxi medallions drops over 75%.
  9. Amazon will buy Snapchat, and announce a new take on augmented reality glasses, picking up where Google dropped the ball years ago. Building on the success of Alexa-based Echo devices, Kindle, Fire TV, Amazon Prime, and the growing popularity of Snapchat, Amazon Eyes are the hit of Christmas 2017, with over 50 million ordered in November and December.
  10. The war in Syria comes to a Korean War-like end, with a partition of the country into various regions, and a unceasing belligerence on all parts. It is clearly a shadow war between factions backed by the West, Saudi Arabia, Iran, Turkey, and Russia. The stalemate here is a reflection of the reappraisal of loyalties and goals of the shadow players, more than the aims of the Syrian government and the insurgents. Bashar al-Assad rules a rump state of western Syrian, with much of the rest of ‘Syria’ in shambles.
  11. Hillary Clinton files for divorce from Bill Clinton in March 2017, and assumes the role of president of Harvard University, two weeks later.
  12. Marine Le Pen loses an unexpectedly close run-off with François Fillon, but the close election pulled Fillon and his Republicans farther right than in recent decades.
  13. Oprah announces that she intends to run for President in the next election.
  14. Angela Merkel narrowly wins reelection, after wide-spread controversy of scandals uncovered by leaks generally attributed to Putin’s brigade of hackers.
  15. Barack Obama joins Andreessen Horowitz as a partner, and leads a round funding AdjectiveNoun (fictitious, note), one of the most promising ‘driverless management’ startups. He also comes out in support of Oprah Winfrey’s candidacy.
  16. Microsoft acquires Salesforce for $75 billion. Marc Benioff leaves to run philanthropy (amid discussions of political ambitions).
  17. Apple acquires Tesla for $75 billion. Tim Cook announces retirement, Elon Musk becomes CEO.
  18. Despite inaction by the US Federal Government, and chaos in the EPA and Energy Department, CO2 levels continue to fall worldwide. Environmental groups suggest that we may have turned the corner on energy in 2017, because solar is now cheaper than other energy sources in most places in the world. However, global temperatures continues to rise, and many models show that it might take 1000 years to reduce global temperatures.
  19. California and San Francisco, with support from Uber, Lyft, Airbnb, and other platform companies, announced a project to convert increasingly unneeded parking lots to small ‘park villages’ with dense, micro-apartment developments, for low-income and homeless residents. Trump-sponsored infrastructure funds are directed to US micro-building factories and a new California Construction Corps, which is strongly supported by both Democrats and Republicans. The state’s program is seen as a blueprint for the rest of the country.
  20. Michael Bloomberg announces plans to create a third ‘Pragmatist’ party, based on economic conservatism and social liberalism, and rapidly attracts a large minority of GOP and Democratic legislators in Washington who have been whipsawed by the 2016 elections, and by the growing discord in both major parties over the future of their platforms. Some project that the Pragmatists could gain as many as 30% of the seats in the House, and as many as 10 governorships in coming years. Bloomberg announces his plans to run for President.

This is how you write predictions.

Edit: I did not write these predictions – it is a reblog of Stowe Boyd. Seems to be some confusion around this. I just liked them!

2016 in review

December 31, 2016
by Björn Jeffery
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Years in review

For me, 2016 was a difficult and tiring year in many ways. I didn’t feel like I got things quite right, or that I could be the best version of myself. Not professionally nor personally. I suppose you have an in-between year now and then. And although a year is an arbitrary and fictitious way of looking at time, it does serve well as a marker to look both forwards and backwards. So I’ll take it. Time to look forwards. But not before I take my annual look back.

I’ve done these types of summaries for a few years and they often become heavily tilted towards professional accomplishments or events. This isn’t because they are more important, but rather because they are well documented and easier to understand without context. Many important — more personal — things happened during the year but didn’t make this list because of this. For instance, following my daughter’s development during the year has been incredible, but hard to summarize accurately in bullet points.

If you’re curious, here are the reviews of 2010, 2011, 2012, 2013, 2014 and 2015 too.

That look.

January

  • Watched The One I Love which was really weird and suggestive. Made me think.
  • Listened to Beats 1 on Apple Music and discovered quite a few good songs. Like Somebody Else by The 1975, Low Life by Future, and Nothing Will by Wretch 32. Added them to my Spotify playlist and moved along.
  • My Dad got featured on Lensculture for some of his black/white photographs.
  • Was impressed by a great article on Axel Springer in the NYTimes about how the went to Silicon Valley and changed the way they did business. It was to become very clear during the course of the year that my employer at the time hadn’t read the article.
  • Bought Powerball tickets for $50 with Caroline at our corner shop. If we had won, we would have bought out Toca Boca ourselves. We didn’t win.
  • Flew to New York for a board meeting. It was weird.
  • Celebrated the 10 year anniversary of Discobelle.net. The blog turned DJ act turned record label has come a long way.
  • Started the habit of reading FT Weekend regularly. Still love it.
  • Flew to Stockholm for an intense week of work.

Super Bowl 50 in Santa Clara.

February

  • Flew to Toronto for a brief stop. I would go many more times over the year. Nice place though.
  • Went to the Super Bowl as my first American football game ever. A bit unfair on the average fan, yes. Experienced peak America when fighter jets flew over the stadium at the end of the national anthem.
  • Was interviewed in Quartz about digital, unstructured play
  • Spent a ridiculous amount of time on trying to get Toca Boca sold. Countless hours. More on that below.
  • Toca Boca got a nice mention about gender fluid design in Fast Company.
  • Got a strange visit from the Swedish Government Committee on the Labor Market (Arbetsmarknadsutskottet). I tend not to host these sorts of things, but the thought of having 20 members of parliament in our sofa talking about Toca Boca seemed too weird to miss.
  • Obsessed over Santigold’s Banshee.
  • Was interviewed in a lovely and unusual piece on Recode.

SXSW: A guy with an iPad on top of an Oculus Rift, showing a facial expression. Welcome to 2016.

March

The printed celebratory tweet – with real-life sticker commenting.

April

  • Started baking a lot of bread as a way to unwind. Kept going the rest of the year. I have two breads rising as I write this even. Mainly did the No-Knead Bread.
  • Flew to Stockholm for a two week stint, and stopped off in New York before I headed home.
  • Vice called us “The Disney Destroyers of the App Store” which isn’t entirely fair, but a fun headline for the archive.
  • Digital Arts showed off our new and beautiful Stockholm office.
  • The sale of Toca Boca finally — FINALLY — went through. Such an incredible relief. I was glad to have this super long process behind me, glad to have owners that actively wanted us, and glad that I could start looking forward instead of pedaling water which is what I had done for almost 18 months. I could write a whole (but boring) book on what happened during this process, but I’ll just settle for a few things:
  1. If it sounds like I’m making a big deal about all of this, then it is because I am. It consumed and drained me for almost 1,5 years so I think it’s justified.
  2. It felt like we were so close, with so many parties, on so many occasions. We probably weren’t in reality. But this led to a rollercoaster of emotions for me at least.
  3. I stand behind 100% of the decisions and actions that I did throughout the whole process. That is more than many others close to these matters should be able to say. It brought out some bad behavior in people that I won’t be forgetting anytime soon. Some things were just disappointing. Having management write a congratulatory email is free. And it speaks volumes when you don’t. Makes me never want to go back.
  4. A common threat is a strong unifier. The team working on this formed a very special bond throughout all of this. A special thanks to Jonathan and Caroline.
  5. So much of the media reporting on this story was often close, but incorrect. It was a very interesting and illuminating experience being on this side of the story. The reporting was completely fair game and it was definitely newsworthy. It just wasn’t especially correct, a lot of the time.
  6. It’s over now. Time to move on. Upwards, onwards.

Bocce at Bodega Bay.

May

  • Toca Boca got a huge feature in EDGE which was a landmark in terms of recognition.
  • Took a few days off and went with Miriam and Miranda to Bodega Bay. Great place. Sebastopol is a treat.
  • Heard Drake’s Controlla for the first time and just loved the beat. It became my most played track of 2016.
  • Drove to Monterey and participated at App Camp which feels like a scout camp for grown ups with smartphones.
  • The Atlantic interviewed me about designing beyond blue and pink. A theme for the year in many ways.
  • Caroline officially came back from maternity leave. She was very much missed.

The swapped house + family featuring Emma and Nils.

June

  • Flew to Toronto for a deep Spin Master immersion.
  • Sago Mini started selling their beautiful playsets and thereby entered the toy market for real.
  • Out of all the Linkedin memes over the year — and there were many good ones — this one was the best.
  • Frostberg visited on the official day of closing and wrote this article (in Swedish).
  • Soft launched Toca TV in Canada with a first beta version. Big milestone.
  • Stumbled across a Swedish songwriter called Ana Diaz that made this most lovely track.
  • Flew to Sweden for a (too) long work/vacation summer stint.
  • Started the vacation in Malmö which is always great. We house swapped for the first time and that was great.
  • Laid awake with some jetlag and refreshed the Brexit poll numbers. Couldn’t believe my eyes.

Chocolate babka.

July

  • In the middle of the Sweden trip, I flew to Tokyo with Magnus for a few days of culture, food and laughs. It was spectacular. We stayed at the Andaz which might be the best hotel I’ve ever been to. Exploring in day, swimming and sauna in the afternoons, followed by dinners at night. So, so good.
  • Bought my parents electric bikes. The kind of thing they wouldn’t have bought themselves.
  • My grandmother passed away a few weeks earlier and we had her funeral in Resteröd. She had a good run. She was 90 and the doctor said that if he could chose how to die, this would be the way to go. That provided some comfort in a difficult situation. She was the last one of my grandparents to leave us and the one I had spent the most time with by far. A fantastic person.
  • Made chocolate babka. Took all day to make, but lasted a week.
  • Went to Tomas’ and Kristin’s lovely wedding in Skåne. Wore a decent hat.
  • During 8 weeks we stayed in 9 places in four cities. That’s too much. Especially when you have a small kid and all the stuff that comes along with that. Suffice to say that I won’t be doing that again.

Toronto. Saw a lot of this during 2016.

August

  • Went to a wedding on a boat. That’s a first.
  • Had a somewhat cathartic work session with Caroline and Emil for three days. The timing was bad, but it was well needed. Sometimes you just have to sit down and really talk things through.
  • Flew straight to Toronto and got on stage for the annual Sales Summit. It wasn’t what I expected, but I did my best to accommodate. Added flames to my Keynote slides.

My sister looking at art.

September

  • Listened to Ocean Drive — Hayden James Remix on repeat.
  • My sister Annie visited SF which was fab. We went to the newly reopened SFMoma which looks spectacular. Well done, Snøhetta.
  • Took a day off and went to museums with Miranda. We crafted and made art for a day. Really fun.
  • This month got kind of lost in a blur somehow. Not sure what really happened.

Miranda exploring a tube at the local pumpkin patch.

October

  • Toca TV launched and got this amazing headline in Wired UK.
  • Went to LA and spoke with USA Today and Fast Company visited the Brooklyn studio.
  • Flew to Stockholm for about 48 hours to speak at the Pontus Schultz foundation. Pontus was a former colleague and friend of mine that left us far too early. It was an honor to do this.
  • We bought a house! We weren’t looking for a house and we weren’t looking in the Sunset. But here we are. And we love it.
  • Miranda experienced her first pumpkin patch. Mine too, come to think of it.
  • Watched a lot of Samantha Bee who did some spectacularly funny and sharp pre-election reporting. I think her following will just continue to grow. She’s got it.
  • Went to New York with Martin for a few very fun and relaxing days of art and conversation.

A snapshot from my new commute.

November

  • Toronto again. Had a really rough meeting and was so drained by it all that instead of going back to a meeting room to sulk, we ended up in a Turkish hammam next door instead. Half of the management team, in a steam room, wondering what the hell just happened. It was a bad day, but a good memory.
  • There was this big US election, but you’ve already heard about that.
  • Had Thanksgiving at our place and I cooked for 14 people for the first time ever.
  • Watched The Crown and gained some sort of strange respect for the British royals. I’m sure it will pass.
  • Bought paint for Miranda which she absolutely loved.
  • Clue — my only seed investment to date — raised $20M in a Series B. No thanks to me of course, but I was happy about it regardless.
  • Went back to acupuncture again after a too long break.

Miranda decorating our Christmas tree.

December

  • Tried to close out 2016 and get ready for what’s coming around the corner. A lot of preparation at work.
  • Picked up This is Water again. Needed it.
  • Took Miranda to pick crab shells on the beach.
  • I realized that I missed writing and thinking about things outside of my immediate profession. So I started by ranting a little about why financial forecasting isn’t good enough.
  • I found myself sitting on the floor, building IKEA furniture, and listening to “I’m Sorry I Haven’t A Clue” from the BBC. It reminded me of my dad that often used to do something very similar when I grew up. Getting old is funny like that.
  • Went to the Japanese baths and relaxed more than I had for months.
  • Spent Christmas in our new house which was exactly what I wanted to do.

That was 2016. See you in a year’s time.

Hyundai’s future mobility plans include wearable robotic assistants

December 29, 2016
by Björn Jeffery
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“The automaker is focusing its personal robotic efforts around “wearable robots,” or robotic exoskeleton devices that can supplement or augment the mobility of their wearer. These efforts are organized around three different streams: medical devices for people who would be totally unable to get around without them, assistive devices for people who have difficulty moving around and wearable bots that can boost a wearer’s ability to carry loads or perform other tasks not normally manageable by a lone human.”

More interesting than the “robots are taking all our jobs”-angle. Instead – augmented humans.

Hyundai’s future mobility plans include wearable robotic assistants

Attempting consciousness

December 13, 2016
by Björn Jeffery
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Medium

A challenge worth taking on.

“If you’re aware enough to give yourself a choice, you can choose to look differently at this fat, dead-eyed, over-made-up lady who just screamed at her little child in the checkout line — maybe she’s not usually like this; maybe she’s been up three straight nights holding the hand of her husband who’s dying of bone cancer, or maybe this very lady is the low-wage clerk at the Motor Vehicles Dept who just yesterday helped your spouse resolve a nightmarish red-tape problem through some small act of bureaucratic kindness. Of course, none of this is likely, but it’s also not impossible — it just depends on what you want to consider.”

I received a book copy of This is Water by David Foster Wallace from a friend a few years ago. It is a brief, yet profound, read. One that I’ve come back to several times, and lately even more often.

It’s a commencement speech that encourages the listeners to attempt to be conscious and resist the — often inevitable — default setting of viewing the world through your standard lens. To not draw the obvious and immediate conclusions in the split second you have to assess a situation.

I think it sidesteps the cliché trap in that it so clearly acknowledges the difficulties and impracticalities of living this way. It’s hard. Arguably impossible. But the aspirational trait of not always letting your default view become your reality is something I’m trying to get better at.

Whether you tell it or not — the story gets told

December 6, 2016
by Björn Jeffery
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Medium

If you don’t tell the story, then a story gets told in its place anyway. Likely a different one than you intended.

A friend and colleague reminded me of this old saying the other day. It is very true in internal business communication, where not communicating sometimes makes the loudest noise. This is easy to forget even if you know that it is the case.

With this in mind, I’m going to start writing more often. If I don’t tell my story, what story is then told in its place?

More than anything else, this seems like a missed opportunity. I like writing since it challenges me in ways that I can avoid too easily when I’m not doing it. It requires an opinion and a take on certain issues that otherwise would have been easier to just let slide. But when doing this, I not only miss out on the feedback — I also don’t expect enough of my own thinking. Publishing makes it official in a different way. I’ve missed that.

So with that — let’s start filling in the blanks of that story.

Our struggles determine our successes

October 2, 2016
by Björn Jeffery
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Our culture would tell me that I’ve somehow failed myself, that I’m a quitter or a loser. Self-help would say that I either wasn’t courageous enough, determined enough or I didn’t believe in myself enough. The entrepreneurial/start-up crowd would tell me that I chickened out on my dream and gave in to my conventional social conditioning. I’d be told to do affirmations or join a mastermind group or manifest or something.

But the truth is far less interesting than that: I thought I wanted something, but it turns out I didn’t. End of story.

I wanted the reward and not the struggle. I wanted the result and not the process. I was in love not with the fight but only the victory. And life doesn’t work that way.

Who you are is defined by the values you are willing to struggle for. People who enjoy the struggles of a gym are the ones who get in good shape. People who enjoy long workweeks and the politics of the corporate ladder are the ones who move up it. People who enjoy the stresses and uncertainty of the starving artist lifestyle are ultimately the ones who live it and make it.

This is not a call for willpower or “grit.” This is not another admonishment of “no pain, no gain.”

This is the most simple and basic component of life: our struggles determine our successes. So choose your struggles wisely, my friend.

You probably know to ask yourself, “What do I want?” Here’s a way better question — Quartz