Appcelerate: Is mobile ready to spawn 'killer businesses'?

San Francisco – As the Open Mobile Summit rolled into the one-day Appcelerate conference here this morning, developers and mobile experts admitted that most large (at least by revenue) mobile businesses are really Web businesses extended onto devices. But given the scale and reach of mobile today that may be changing soon.

“Outside of games, it’s hard to point to a lot of big businesses that were built on mobile first, but I think that’s going to change,” said Sam Altman, CEO of mobile location services company Loopt. Many of the big players in mobile built their audience first on the Web, such as Facebook. Also notable is Twitter, which tried to first launch as a mobile-focused company with mixed success, found itself on the Web, and now today has come full circle such that it gets extremely heavy use on mobile devices.

For more pure-play mobile companies, such as location check-in service Foursquare or photo service Instagram (but hundreds of other apps as well), the name of the game remains building scale, with the aim of finding a way to monetize reach and influence just around the corner. That path to profitability for mobile mirrors the Web before it, said Simon Khalaf, CEO of mobile data analytics firm Flurry.

One major mobile opportunity, added Loopt’s Altman, might be to look for huge markets that haven’t yet been touched by mobile. One example could be the college textbook market, which seems primed for disruption. But an even better example might be Uber, which moves the taxi/limo business into mobile app. Users “call” for a car via app; the user can see cars close to them and watch the car on the way to pick them up; and in the end fees and tip get paid via mobile transaction.

Indeed, what’s required to build a killer mobile business isn’t just an artificial nod to mobility, but building mobility deep into the experience. For instance, consider Groupon, which went public today. The social coupon company has struggled with its mobile play thus far, mainly because it has yet to crack the code on how to deliver real-time, location-based offers that are truly serendipitous – and useful. “Ultimately, mobile will be important to Groupon the same way that mobile will be important to every business,” said Loopt’s Altman.

One of the limits of building a big apps business is the ongoing challenge of discovery. While apps like Tapjoy and Quixey can help users find new apps, a major element missing in the app universe is an easy way to link between apps, a key enabler in the growth of the Web. Also missing, said Tim Chang, managing partner at Mayfield Fund, is a search experience on mobile that is as fundamental as (mainly Google) search on the Web.

The end result, said Flurry’s Khalaf, is that in mobile apps there isn’t necessarily “a discovery problem, there is a traffic acquisition problem.” That problem becomes even more serious as the sheer number of apps grows: it is much harder for a new app to break out of the pack, there simply isn’t a standard mechanism, like Web SEO, to drive growth and traffic acquisition.
The truth is, however, that building a killer mobile business requires not just traffic or customer acquisition, but creative something similar to an addiction to ensure that users come back to the app again and again. And that means tapping into human nature at the deepest level. “If it doesn’t feed one of the seven deadly sins, it will not be addictive,” said Mayfield Fund’s Chang.