App Stores and Dinosaurs: Why Some App Stores Thrive and Others Dive

Interesting read yesterday from Jason Kincaid @ TechCrunch about the Google Chrome App Store going through a slow sales period. It begs the question – What does it take for a web app store to be successful? What are the common pitfalls that we find storekeepers doing in both large and small enterprise that make or break adoption? I’m not the biggest expert here, but I’d like to present a couple of ideas here:

  1. Brand Promise – Many sites out there are touting the freemium model these days, which allows users to get a product for free, while knowing that any expansion or excitement about the site will likely lead to spending of some kind. This runs counter to business models run in the earlier parts of the 2000’s, when many sites lived on web advertising, selling their user lists, and/or via 3rd party routes (e.g. indirect sales). Organizations built on this premise have an extraordinarily difficult time getting users who had consumed their content and their UI for free, to start paying for additions. There are countless examples of this, with Chrome being the latest – Chrome has always been perceived as a free product, aimed at giving Google default search traffic. This is the reason why Google’s consumer product suite of Mail, Docs, etc. will likely continue to expand storage to the point that users will never have to consider taking out their wallets to use it. It’s also manifested itself on the opposite side – CRM tools like Salesforce have robust app stores, as does Apple’s iTunes store, and the financial terminal business (Bloomberg, Reuters Eikon, eSignal, etc) – each of these examples have baked in expectations that the user will open their wallets on the site.
  2. Functionality Fit – Many early adaptations of app stores were really glorified affiliate marketing sites, aimed at getting users/subscribers/etc to buy a 3rd party product in an affiliated industry, but not necessarily providing value to the underlying product. The Google Chrome store is an interesting question on this front, as most apps i’ve interacted with there are HTML5 websites, glorified with an icon (think Tweetdeck), without many providing added functionality to the browser itself. I might be splitting hairs here, but I feel like there is a significant distinction here. When Apple adds an item to its app store, it leverages Apple APIs to enhance existing phone functionality. When Bloomberg adds products to its app suite, it allows them to fully integrate into the Bloomberg experience, leveraging existing market data feeds and tools to provide a more comprehensive experience. App stores that focus on integration and enhancing the underlying tool have been more successful than the glorified affiliate model.
  3. Pace/Scrutiny – In line with #2, its quite critical to only add tools/apps that are of high quality to the user, and to overly scrutinize app adds over time. Why is that? There are a few examples of open stores doing reasonably well (think Google Android), but that is an exception, as it is not particularly strong for ‘paid apps’. By and large, scarcity and quality matter a lot, as users assess the value of the store by the products it sells – if its hard to find the good stuff, b/c there’s too much noise, its a problem. Might seem ridiculous, but sadly, its not a practice that everyone follows.

Here at StockTwits, we have focused on adding only the highest quality tools and providers to our platform. Our goal has been to add products that can enhance the underlying platform for our userbase, and help foster more trade ideas. Without giving away too much – I expect 2011 will be a very exciting year, as we expand our offerings on the StockTwits Marketplace, with an eye towards offering the best a la carte configurations for each and every user. Needless to say, if you’re not yet on StockTwits, its time to come aboard…

2 comments

  1. Great piece Ben, I’m amazed by the differences and spectrum of quality in not only App stores but online music stores as well.

  2. Dave Pinsen says:

    Insightful post, Ben.