from intensive competition, consolidation, and saturation by @andrewchen
Growth is getting hard from intensive competition, consolidation, and saturation
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The reason for the above is that there are multiple trends – happening right now – that impede growth for new products. These trends are being driven by the biggest players – Google/Facebook, et al – but also by the significant leveling up around of practitioners in design/PM/data/growth.
We’ll look at a couple trends in this essay, including the following:
- Mobile platform consolidation
- Competition on paid channels
- Banner blindness = shitty clickthroughs
- Superior tooling
- Smarter, faster competitors
- Competing with boredom is easier than competing with Google/Facebook
These trends are powerful and critical to understanding why all of a sudden, entrepreneurs/investors are starting to get into many new fields (genomics, VTOL cars, cryptocurrency, autonomy, IoT, etc) in order to find new opportunities.
…When the App Store first launched, competition was easy: Boredom. Mobile app developers were taking time away from easy, ‘idle’ activities like waiting in line, commuting etc. But today, acquiring a new app user means stealing a user’s time from their favorite existing app. As we’re near the end of the cycle, companies have moved from non-zero sum to a zero-sum competition. …
How the industry is evolving, in response
The above trends are troubling for new products, and especially for startups. All 6 of these trends are scary, and they’ve emerged because we’re at the end of a cycle. There’s a variety of natural monopolistic trends (like app stores, ad platforms, etc), where everything with related to growth and traction is getting harder.
If companies want to stay in the mobile/software product categories, they need to evolve their strategies. I’ll save a deeper discussion for a future essay, but here are some observations on what’s happening:
- More money diverted to paid acquisition
- Deeper monetization to open up channels – especially paid
- Creation of paid referral programs to complement ad buying
- Personalization features that rely on lots of data to amp up targeting
- Products trying to deepen differentiation by solving hard(er) problems/tech
