How to Fix the Android App Store

Let’s face it the iPhone app store is more popular and more profitable than the Android app store. In recent reports 65% of the Android app store is free, while only 30% of the iPhone app store is free. It begs the question of why companies and developers are avoiding Android.

It could really be many facts, but here are some that are evident:

  1. It’s really a chicken and egg problem: either the app store doesn’t have any quality apps and no one wants to buy them, or because no one buys apps on Android no one wants to build quality apps.
  2. There is no quality control on the Android unlike the iPhone where every application is filtered and approved by Apple.
  3. Android is used as a cost cutting OS, therefore being put on cheaper phones where people are less likely to purchase applications.
  4. Apple came first. A lot of companies have already invested in Apple and it seems to be profitable, why build for another platform.

Google can’t really change most of these, but the first two. The second is problematic since it is an open platform, but I argue that the first is actually their biggest problem that they need to tackle and they are in luck since that one can actually be solved.

The solution is simple. Apple and Amazon are already doing this and very successfully. People need to be comfortable with the idea of buying applications. What Google can do is remove the barrier of thinking about your purchasing decision. Make it one click. Apple/Amazon don’t accidentally collect your credit card and enable one click shopping. How does Google do it? Here it goes:

  1. Any android has to be registered with a Google account.
  2. Offer users $5-15 of app store credits when they associate an account with a credit card. Make the credit subsidized by the cost of the phone.
  3. Enable one click buying.

This solves the problem #1 from above. Once more apps are bought on the Android, companies will flock to the platform. This than makes the Android app store more profitable.


Why Apple TV Fails and What Apple Can Do About It

One of the biggest announcement today was the new Apple TV. The giant is continuing it’s model of making their devices smaller, thinner, and more colorful(I call it the  iPod model). However, this device is not portable and although it looks “cooler” it is by no means any more functional or useful. The reception is lackluster just like when the original Apple TV was announced.

The iPod model doesn’t work for TV smart boxes. When the iPod came around it was a complete replacement for your music device. No one used CDs anymore, or record players at least for the most part. This is why this device is no game changer. I still have my blu-ray player because it isn’t the same quality, and I still have my cable because it isn’t the same breadth of content. It doesn’t win.

What can Apple do about it? I think the real innovation is not in the device, it’s in the pricing model. I wont purchase a show on Apple TV every day unless I missed one and really wanted to watch it. How can you get people to purchase couple of shows every day? By abstracting the purchasing decision. What Apple needs is a subscription model for TV content. This way they replace your cable, and they truly own your TV. This removes the user from the penny gap, the decision to watch something becomes unconscious.

How do you sell something like this? I think it is easy. Comcast charges you at least $100/month with 90% of the content you do not watch. Apple can charge $60  and  it’s exactly what you want to see and when you want to see it. $60 dollars buys you 60 episodes — that’s 2 a day. Some people will watch less(big profit), and some more(small profit), but the margins would be significantly more than what Apple would be making just selling the device.

The Design of the Tip Jar

Every coffee shop and bar you visit you usually notice one uniting element: a tip jar. Some are overfilled with bills while others have a few measly quarters. At times it makes you wonder. Why the inequality? What can a business do to improve? What lessons can we learn?

I step back and think: why do people tip?

  • Good service.
  • Customer loyalty.
  • You see other tips/peer pressure.
  • Person in front of you just left a tip.
  • You get some change back, you don’t want it.
  • Quality of product(more you pay for your coffee, the more you will tip).

I’ve listed these in order of importance. How can we optimize? Good customer service is hard, and customer loyalty takes time. The third point is by far the lowest hanging fruit. If I can’t see the tips/opaque then I will assume that no one else has tipped, if I do see the tips/transparent and there are a lot then there is communal pressure for me to leave something as well. The tipjar should be transparent. What if I just opened, how do I get better tips from my early customers? Bootstrap your business with money in the tipjar, even if it’s your own.

Wikipedia is a good example of a successful tipjar. They raised a lot of money in their annual fundraiser, by employing two strategies: being transparent about their overall fundraising progress, as well as people’s individual contributions(point 4 above).

This idea of course extends far beyond tips. If you have a story to tell (business, religion, history, fable) be transparent about the support, and create even artificial support if necessary to get started.

No Free Lunch

You always hear: there is no such thing as a free lunch. The common train of though is if I don’t take any money out of my wallet and I use a product then it is free. I can read Wikipedia, without paying for it. I can keep my contacts with Gmail without paying a dime. Read the New York Times without shedding a nickel. All my lunches are free!

Time to burst the bubble: no they are not. There has  been a gradual shift catalyzed by the Internet where your information is the new currency. Which sites “cost” you the most information? The ones you use the most: email, facebook, myspace, etc. Just check out the infamous Gmail privacy policy, which outlines how they own any email that enters your inbox. Delete an email? We got those too. Think your Facebook information is private? Think again. Google is not shying away from this philosophy, in fact they are embracing it according to VP Marrisa Mayer who announced that the “free” service Google News is actually worth about 100 million dollars through referred search advertising (reference).

People have reduced their use of email as as instant messaging and social networks have seen rise, but most still use a single email address to login to many different sites with. This is another shift in the online world, your email is your identity.In the online world, your email address is what your name is in the concrete world. There are companies that have wised up to this and taken charge such as the successful San Francisco startup Rapleaf that sells your information tied to your email address to companies that want to know more about you.

Only two questions remain, how much am I worth monetarily and where is this money coming from? There are some helpful empirical figures — Facebook last valuation suggests $300/user, but realistic figures show $21 for Bebo and $27 for Myspace or a rough $24/user average (reference).  The money is coming from purchases made by the fastest growing product of the web: advertisements. The more information that is known about you the better the ads can be targeted, which makes the ads more relevant, and  the likelihood of a purchase significantly higher.

The end lesson: be conservative with your identity. Using more than one email address by all means is a good idea. There is a silver lining; if a company knows what music, movies, or books you like they can customize the experience for you and make their product better for you(you win). This makes the potential of online advertising to be far richer than what you see on TV and newspapers. However, having your future employer discover incriminating information about you can be detrimental so always take caution.

First post

This blog is going to be about life, work, news, politics, food, and photography. All that inspires me and all that I want to discuss.