Three Mobile Hotspots That Could Spawn The Next $100 Billion Company

July 10, 2014 , , , , ,

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Industry analysts believe that the next $100 billion dollar business will be mobile. Already, many of the largest businesses in the technology world have a mobile component and more are being added every day. But amidst this incredible diversity of fields that can benefit from a mobile offering, where will the true titan of mobile emerge? Here are three hotspots that we believe could easily produce the next major business in the mobile field.

Messaging

With Facebook spending $19 billion on Whatsapp, there is no question that mobile messaging has taken off. The big question for mobile messaging, then, is monetization. Whatsapp pledges to never show ads to its users, and charges $0.99/year. Likewise, Facebook has assured Whatsapp that they will not have to compromise their principles.

This presents an interesting problem for mobile messaging companies with ethics similar to Whatsapp. The first to solve it in a financially viable way will likely be the winner, and could definitely be the first massive mobile company.

Commerce

Shopping is transitioning towards m-commerce with new apps that beautifully showcase products. While massive e-commerce sites like Amazon may have a reasonable foothold on the mobile commerce space, there is still a lot of uncertainty in their mobile offerings.

One of the problems with the modern shopping experience is the massive catalogs of products available to consumers. Smaller e-commerce sites can target individuals to a greater degree and offer a more commoditized product than the big guys. Mobile commerce companies have access to more options than their desktop counterparts, such as better location data and the ability to use push notifications.

Purchasing

Mobile commerce isn’t just about the nice shopping apps that are prominent in the App Store, it is also about making payment more seamless, and the startup that can really get the payment system down will be on top.

With iOS 8, Apple is allowing third party developers to begin using the fingerprint sensor found on the iPhone 5S and newer devices. Some mobile commerce startups will be able to use this functionality to make purchases even simpler, all you need is one finger. This functionality could even be used to have multiple payment methods on one device; one for each member of the family depending on the fingerprint.

Mobile is huge, but even though we’re starting to see some front runners emerge, the kings of mobile have yet to be crowned. It is entirely possible that nobody has even heard of the new billion dollar companies yet. The possibilities are endless.

 

Justin Profile PictureThis post was guest authored by Justin Fowler. Justin is a student at the University of Texas at Austin and the co-founder of Audio Press. You can find him on Twitter and on his blog.

ROI of Mobile Apps for Business

July 12, 2012 , , , ,

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Why would my clients want to spend money on a mobile app? What is the return on investment (ROI) for a business mobile app? This blog post draws upon a white paper we wrote a little while back helping Value Added Resellers and end businesses understand why gaining a mobile presence with an app has a positive impact all the way to the bottom line.

As with any new product or service a business is considering, mobile app ROI is important. Let’s estimate the ROI for a representative small businesses to give you a more concrete idea of what it might be for your clients.

For this example we’ll look at a hypothetical day spa. Let’s set up some assumptions first. Our assumptions are:

  • – Day Spa paid $300 upfront and $29.99/month fee for their app.
  • – Average spa treatment is priced at $100
  • – Average Profit Margin for a spa treatment is 50%
  • – Day Spa has 500 customers who have downloaded app
  • – Day Spa sends one push Deal per week, or 4 per month
  • – Each Deal is for 25% off regular price
  • – Open Rate for “Deal” push notifications sent by Day Spa to customers is 30%
  • – Conversion or redemption rate for a Deal sent by Day Spa is 2.5%

So, taking all of these numbers into consideration let’s calculate the ROI of Day Spa’s mobile app in the first year.

  • – First, based on the numbers above, we’re saying that 4 push Deals were sent in the month and that 150 customers opened the Deal each time for a total of 600 Deal opens.
  • – Based on a Deal conversion rate of 5% that means we sell 15 incremental treatments during the month with the push of Deals.
  • – Based on assumption laid out, the normal profit margin of a $100 treatment is 50%, or $50.
  • – In this instance the Deal is for 25% off, so average treatment is priced at $75. This means profit margin in dollar terms is $25 per treatment sold from the push of the Deals.
  • – 15 incremental treatments sold X $25 profit per treatment equals $325, multiplied by 12 months equals $3,900.

So we calculate Return on Investment with the following formula:
((Return-Investment)/Investment ) x 100

In our case then, ROI would be:
(($3900-($300+(12*$29.99))/($300+(12*$29.99)) x 100 = 491% Return on Investment

Obviously a 491% return on investment is a nice result for any business. When taking into account the fact that it will be so much easier for customers to interact with a business from their smartphones for calling, booking appointments and sharing with friends, and that they’re likely to see your brand multiple times per day if your app icon is on their smartphone screen then it’s easy to imagine actual ROI is much, much higher.

Having a mobile app and mobile optimized presence is becoming table stakes for businesses as web sites were in the late 90’s and 2000 era. Combined with their high ROI potential, getting a mobile app makes sense for almost all small and medium sized businesses, organizations and non-profits.