The internet is full of bubbles, trends, and new high tech. The first being the .com madness. Everybody started to create new .com sites with tremendous profits, until the urls were so numerous and repetitive that only a bunch managed to stay current and online.
We saw hosting services explode as people wanted to own a small space on a server instead of deploying on a private server, then this transformed into cloud services.
With cloud services we have seen improvements in both performance and reliability, and we continue to see new features almost every month.
Throughout this amazing journey, the software as a service model appeared. Instead of selling a software license, a company will charge a monthly subscription, generate a steady cash flow, and offer services on demand.
Trendy new terms evolved such as “gig economy” with apps like Uber connecting people and generating profits to individual service providers.
And of course I can’t avoid talking about social media. Sites like Facebook, Twitter, and LinkedIn changed the way we connect, do business, hire new employees, use advertising, and even purchase online.
As a result, businesses were able to take advantage of these new opportunities.
When Facebook emerged, a bunch of other social media channels were competing in the same space, with minor differences in the product. Some focused on high quality pictures, some tried to attract the professional market, some targeted the young millennials, so on. This is an excellent example of how competition drives innovation and creativity to the next level.
Some other companies chose another approach. Instead of offering a similar product and competing for market share, they created a product or service that works symbiotically, and offers added value to the existing company or user base.
When AirBnB was consolidated, property owners found it daunting that they needed to keep answering questions from users interested in renting their house/apartment. They also had to guide them through the process of how to get there, find the WiFi password, and so on. A vertical company then opened a “concierge service” where they offered to manage the host accounts, and take care of everything with a monthly subscription. Now property owners only had to worry about maintenance of the property, and they could avoid the online hassle of multiple users demanding attention. It’s like having a virtual housekeeper!
With Facebook, Twitter, and so many other social media channels, users found that it was difficult to consistently post the same content across all platforms, a vertical company then created a software that allows you to post at the same time, schedule postings and track results.
The list goes on and on with vertical companies that are now very successful, who chose to take advantage of bursting markets and just target the user base of an already consolidated app, service or platform.
Pokémon Go: Boom, Bubble or Bust?
By now you’ve probably heard about Pokémon Go, the new augmented reality app, where you enable your GPS, go for a walk and start catching Pokémon. You can track the number of creatures you have caught, their fighting level, train them, and pick fights in Pokémon stadiums scattered across your city. You need to physically get off your couch, put on your favorite sneakers, and go out in the world to successfully use this app.
Currently their business model is based off in-app purchases. You can buy potions to heal your Pokémon, buy poké-balls, and a bunch of other virtual articles.
The application and business model sound okay, but only a few days after the app’s release, it’s time to take a look at some interesting facts:
- The usage of servers was so massive that the application experienced multiple outages. There were so many that the release was paused briefly in certain areas so they could provision a better plan to sustain the massive resource consumption.
- Nintendo and Niantic Labs companies are behind this new app. Nintendo stock had an increase of 25% in value in just a few days.
- In less than a day Pokemon Go was the most downloaded, and highest grossing app in multiple countries.
- Pokemon Go is about to surpass Twitter on daily active users on Android devices.
- Pokemon Go is not full featured yet. New specs will be released in the next few months. It is also not yet available in all countries.
Some will argue and say that maybe this is just a spike due to the viral advertising around it, and so they expect the app will surpass the novelty hype and then have a steady, more sober usage. Others say this is the next big thing and is here to stay.
Either way, my question is: what would be the first high success vertical to this application? Is it hacks for the game? Maybe some GPS service to improve the user’s performance? Pokémon spot tracking in a searchable map? Social gatherings for Pokémon fans?
The market will tell in time. In the interim, one thing is for sure: any application like this needs a very strong team behind it, with clear ideas on how to grow and sustain its data. This case is very interesting to Pythian, because that’s precisely what we do. Pythian manages information with creativity and reliability.
Find out how Pythian can help you innovate, and stay ahead of the competition today.
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