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Eurapp Project: Sizing And Stimulating Europe’s App Economy

Topic: Mobile Apps, Research | Author: Peggy Anne Salz | Date: July 4, 2013

Eurapp workshopThe explosion of mobile devices, the advance of increasingly improving wireless networks, and the adoption of cloud technologies by enterprises and developer companies alike, have moved the mobile app market into a boom phase. In the U.S. the Application Developers Alliance reports the App Economy is a significant driver, creating 519,000 jobs nationwide. It’s easy to imagine that demand for apps in Europe,  the largest app market based on population size and app usage, is having a similar positive impact with Europe’s homegrown mobile app giants Rovio, SoundCloud and SwiftKey leading the way.

But now there is a solid study underway as part of the Eurapp project to size the European App Economy and produce innovative and pragmatic recommendations aimed to overcome bottlenecks, enable the ecosystem and create the conditions for success.

By way of background, the Eurapp project (which is part of the Startup Europe initiative of the European Commission’s Digital Agenda to help tech entrepreneurs start, maintain and grow their businesses in Europe) is being run by the Digital Enterprise Research Institute at NUI Galway in conjunction with leading tech industry analyst firm GigaOM Research. (Disclosure: I am also a GigaOM mobile analyst and involved with the Eurapp project, which will carry out interviews and surveys with various stakeholders in the App Economy to determine its key characteristics.)

Crowdsourcing kicks off

Under the expert guidance and direction of John Breslin —a lecturer at the National University of Ireland Galway and a research leader at DERI, the world’s premier Semantic Web research institute ­— and Maciej Dabrowski, a Postdoctoral researcher at DERI, NUI Galway, the Eurapp project kicked off in June with a workshop in Brussels.

The workshop brought together a balanced mix of mobile authorities (Eiso Kant, Tyba; Kumardev Chatterjee, the European Young Innovators Forum; Andreas Pappas, VisionMobile; David Card, GigaOM), evangelists (Ruud de Jonge, Microsoft; Tanguy De Lestrè, Agoria App Alliance Belgium) and developers (Ben Medlock, SwiftKey; Cornelius Rabsch, eBay).

Our aim was to discuss interim results, hear from the experiences of mobile app companies and stakeholders and — more importantly — brainstorm key problems in the European App Economy to be fed into two innovation challenges.

The workshop also marked the start of an innovation competition, where good ideas (including yours) are welcome!

Eurapp is crowdsourcing proposals (by harnessing the InnoCentive platform) and awarding two prizes of $5,000 each for winning solutions to solve to two innovation challenges:

  • What are the primary bottlenecks experienced by European app companies (directly related to European location)?
  • In the app aftermarket, what are a company’s main barriers to success in achieving their desired success metrics (monetization, downloads, etc.)?

Look for updates and details about the innovation challenge and how YOU can get involved on the Eurapp website.

Workshop takeaways

Clearly, the aim of the Eurapp project — as part of the Startup Europe initiative of the European Commission’s Digital Agenda, which aims to help tech entrepreneurs start, maintain and grow their businesses in Europe — is to generate ideas and solve key problems affecting the App Economy. A big part of this is identifying the bottlenecks and showing how companies can succeed in the ‘App Aftermarket.’

So, what are the bottlenecks and issues the workshop — and its attendees —revealed?

Granted, doing business for any company, not just app developers, can be a challenge in Europe. However, I also argue that fragmentation of the European market (dozens of markets with unique needs, cultures and languages) also presents more opportunities (and revenues) for app developers that can satisfy Europe’s huge appetite for LOCAL content and services.

Workshop attendees agreed that app developers need expertise (perhaps even a platform?) to turn the ‘disadvantage’ of diversity (multiple languages, local currencies, tax regulations and mobile operator policies and networks) into business advantage.

But the real issue is biz dev support — or rather the lack of it.

Brainstorming sessions and presentations delivered a clear message that app companies and developers alike need marketing assistance (promotion, discovery, search advertising and social media) to extend the lifecycle of their app.

The question is: who is going to provide it?

It’s a tough one to call, but it’s clear that app store providers are not able to fill the gap.

They don’t offer marketing support, unless you count the chance developers have to rank in the list of most popular app downloads. It’s fleeting fame (hardly the basis of a sustainable business) that often comes at a huge price tag if you factor in the advertising and activity costs necessary to generate buzz and be found among the 750,000+ (as of January 2013!) other apps in the Apple App Store, for example. And I wonder how may of those best-seller apps come from indie developers, not blockbuster publishers and brands…

App store providers also don’t share the wealth when it comes to providing key insights that enable app developers to understand (let alone anticipate) user tastes. To make matters worse, app store red tape (and downright control) effectively prevents app developers from issuing updates to their apps quickly so that they might cash in on shifts in customer requirements.

Developers need insights

A long and invigorating discussion with Paul Manwaring, a Eurapp workshop attendee and co-founder off app dev company Glimworm, further opened my eyes to what developers really want (and would be willing to pay for).

As he put it, his business would benefit greatly from just knowing how people (not individuals) are using their devices. This would help him identify patterns and — ultimately — places where an app could be inserted to enhance or enable that routine experience. “It’s all about knowing what people are doing (and context such as time of day etc) so we can be sure our apps are an enabler.”

Speaking of enablers, these are key insights that mobile operators can provide, even charge for. This would enable app developer firms like Glimworm to make the match between what people do and what their apps should do for them.

Significantly, the role of ‘ecosystem enabler’ is not necessarily limited to Europe’s mobile operators. Enablers can also be found among the many clever companies that have followed the blueprint described by Mickey McManus in Trillions: Thriving In The Emerging Information Ecology and developed business models based on little bits of information collected over vast networks.

Already enterprises in industries ranging from telecoms and media, to healthcare and financial services have amassed terabytes of information about their legions of customers. This digital treasure trove can help app developers and companies create great new apps.

The fit is natural when it comes to enterprise apps (thinking here of M2M, for example). But there is also value when applied to consumer-focused apps. Of course, this must be done with respect to our personal privacy concerns, but I believe there is a clear benefit to having relevant and useful mobile apps that help us live and manage our lives.)

Feedback is critical

Another obstacle to the App Economy we discussed during the workshop is the lack of a feedback loop. This is critical because feedback loops, and the networks that enable them, are the foundation for all intelligence.

Without them app developers are running blind.

I base this observation on the insights outlined in Emergence: The Connected Lives of Ants, Brains, Cities, and Software by Steven Johnson.  Ants, Johnson writes, are not intelligent as single insects. But they develop a kind of collective intelligence — which he calls “emergent intelligence” — when they are interconnected in complex colonies. Put simply, a feedback loop between individual ants allows them to organize themselves and adapt to their environment.

Individual app developers are a lot like single ants. They can be seen as lonely, invisible individuals thrust into a complex business landscape without significant community support.  An ant colony is powerful because the members are connected. Mobile app developers could be the same if they had a functional feedback loop and a robust network.

Significantly, the 2012 Developer Economics report, researched and written by VisionMobile and sponsored by BlueVia, further confirms the pivotal importance of feedback. It found that only 24 percent of the 1,500+ app developers surveyed plan their apps based on discussions with users. In other words, “the bottleneck of the build-measure-learn cycle of lean development is the ‘measuring’, or listening in to user needs.” This, the report concludes, “highlights the need for a frictionless two-way feedback channel between developers and users.”

More mobile app bottlenecks

John Breslin posted some of the key takeaways — including this image below ­— in a must-read presentation over at SlideShare. Clearly, attendees feel quite strongly that they need a better network.

What should this new network enable?Eurapp feedback

For one, it should provide the basis for wider marketplace that helps developers connect with companies that need their apps. Moreover, the same marketplace could also pair app developers with companies and mentors that could help with their positioning and promotion problems.

At another level, it’s easy to imagine how this network could play matchmaker between highly talented and technical app developers (primarily male) and the creative UI/UX minds (largely female) that are essential to a successful app.

Other bottlenecks identified ranged from ‘mindset and attitude’ (feelings among developers that making and marketing an app in Europe, or anywhere, is just an uphill battle) to a flawed discovery process (one that bars long tail app developers from ever hitting it big).

Our complete presentations (including my own presentation which outlines the ‘3 Ms’ that can unleash Europe’s app potential) can be found here on SlideShare.

My take:

I applaud the team behind the Eurapp project and I am thrilled to be involved. Yes, it is valuable to size the European App Economy and quantify the impact on job creation. But it is also extremely exciting to identify and solve the issues that are forcing many mobile app developers and companies to run their business blind.

A big part of this is defining the roles of the players and brainstorming who should take a lead in creating and nurturing this new app ecosystem. During the workshop we discussed reasons why app store owners are not really the best candidates for the job. Maybe we should look among the companies/entities that benefit most and have the most to gain. Clearly, app developers are more than the next innovators. They are also becoming stakeholders in an extended ecosystem where they provide the ideas (and apps) that allow other companies to extend their reach, grow their audience and master the challenges of doing business in a multi-channel, multi-device, multi-media world.

If we accept that mobile app developers are becoming the external ‘biz dev departments’ of other companies, then it’s these companies that could step up to the plate. Big-name brands, major retailers, leading software companies that are driving the move to the ‘mobile enterprise’ (as well as mobile government, education and healthcare, to name a few) are among the players that have the capabilities to cultivate and nurture a long tail of mobile developer ecosystems to deliver us the long tail of mobile apps we, as a society, need.

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