When It Pays to Start With Mobile
Instagram started out by building its app for a mobile platform rather than a full-on personal computer. Targeting handhelds first is a growing trend for startups -- small platforms have their advantages. True, the mobile device is rather dumb compared to the big CRM system, but it is a vital link.
CRM vendors that have wondered about the necessity of porting their applications to the small screen (i.e. mobile) should take note of last week's acquisition of Instagram by Facebook.
Instagram is the tip of a big iceberg and is perhaps a signal of yet another disruption in a disruption-prone industry. It represents a big trend by emerging companies to build their applications first for the handheld device market and later for larger environments like laptops and conventional desktops. Remember when the laptop was a "small" device?
Mobile device uptake is driving demand for applications more suited to business like a flock of Angry Birds. And vendors that build first for the small platform find there are advantages to this.
The New Mini-to-PC Transition
I think this provides an interesting correlation with the early PC era, when mini-computer software companies moved their products to PCs. The ports were largely successful, but they made the PC run like a mini-computer. But when we all saw the kinds of applications, the performance and the intuitiveness of PC-native applications, we all knew that ported solutions were merely a weigh station.
The same thing is happening with the new generation of small and very powerful devices. According to a story in The New York Times, it's not only the companies themselves that are ushering in this phenomenon, but venture capital firms are also fanning the flames.
As a technology decision, going small makes perfect sense. Small means small in most conceivable ways. So why architect an app for a larger computer when you know you will be reducing its footprint when you attempt to cram it onto pocket devices? In many cases apps that are hits on the handheld will transition to the larger formats of more traditional devices, and they can easily grow in the transition once the developers have a clearer understanding of customer likes.
Of course, a growing percentage of device-centric applications have no real analog on larger devices. For instance, Foursquare, an app that enables people to let their social followers know where they are and what they are doing, absolutely requires a mobile device to give it context. Foursquare for the desktop would barely make sense and have to be re-imagined.
So a billion dollars for Instagram not only highlights the importance of mobile devices, but it also reveals many new niches. For example, the already mentioned venture capitalists have another technology area to analyze and invest in. And device makers have greater incentive to be first to offer specific applications running on their infrastructures. Where it was once enough to offer Internet access for first-generation social networks like Twitter and Facebook, device vendors now need to ensure that these third-party apps look completely at home on their platforms.
But there's more. Tool vendors who offer cheap, fast ways to develop, deploy and ultimately port applications from device to device become essential to this play. That means the VCs will quickly need to zero in on the infrastructure that supports device app-building.
The CRM Play
And what does this mean for CRM? A year or two ago vendors realized they needed to scramble to get their applications running well on portable devices because users were demanding it. The mobile salesperson is ditching the laptop, or at least leaving it at the hotel, and managing the day-to-day with a smartphone or tablet. The better networks, more affordable communications plans, and longer battery life (compared to most laptops) open new application areas too.
I am told that one of the favorite tablet applications on the iPad for pharmaceutical salespeople is YouTube. That's right -- because instead of trying to ramble through a 30 second pitch, the rep simply asks permission to show a short video. Video packs more information and holds attention. It's also more passive for the viewer so it has a future in CRM and thus so do smart and inexpensive devices.
The only yellow flag I see is the monetization issue. How do you make money at this? With many applications available for free and most costing under five bucks, it's hard, if you are a VC, to see how these emerging vendors might become the billion-dollar success stories of the next decade. Facebook can only buy so many companies.
Finally, for a long time we've been attributing the success of Arab Spring and Occupy Wall Street to social media. And while there is no doubt that social was a big component of the success, we've overlooked mobile devices, which are inseparable. Increasingly, as social media spreads around the world, it is being driven by the affordability of mobile technology. Mobile might be just another form of computing we all use, but for a growing segment of the global population, it is the computer.
In a world of Big Data, you don't need to fret about CRM going away. The back end becomes more, not less, important as analytics surges. Big Data is surging too because social networks and by extension the mobile devices that inhabit them are generating the avalanche of data that must be processed.
And here we can see the most efficient model taking shape. The mobile device is rather dumb compared to the big CRM system, but it is a vital link. It sends data to the mother ship and expects information back fast so that the user can leverage the knowledge it contains and drive faster decisions. Time to invest in faster networks.