Venture Capital and Mobile Apps: This is No Small Business. Author: Eric Everson, MBA, MSIT-SE – MyMobiSafe.com
As the app-driven mobile industry is heating up the sharks of the venture capital market smell the blood in the water! Since last week’s Mobile World Congress event, one of the hottest items on the board room table in the weeks/months ahead for venture capital is sinking their teeth into a piece of the mobile app market.
Venture capitalists are beginning to realize that while there are still many hobbyists in this market, there are just as many young fresh companies that are positioning for market leadership for the app-driven mobile future. Some of these companies are building their own portfolio of lucrative apps while generating additional revenue by building apps for other companies that want to get in on this wave of “App Mania.”
Other companies, like my own MyMobiSafe.com for example, are taking a broader view of the market and are not concentrating on a single Mobile Operating System (MOPS) platform, which is ultimately where the REAL money in this industry stands to be earned. The greatest challenge that App Developers face is that to keep even a single product viable in this market, they must at minimum develop a version of their App for the iPhone, Android, and BlackBerry MOPS’. Compared to developing software for the computer industry, this multiplies the cost of bringing a single mobile product to market, which is not the kind of business model that is quick to attract venture capitalist.
On the other hand, as we have done with MyMobiSafe Verified Services, we have positioned in this market with a minimal upfront cost structure and have introduced an industry recognized product that is equally viable across all mobile platforms; our brand is quickly becoming recognized as the mark of quality across all App distribution portals. As veterans in this industry, we learned the hard lessons of trying to develop for every single MOPS and have leveraged our core strengths as a result to streamline our MyMobiSafe Verified Services business. Just for the record, despite some of the venture capital rumors we have read about MyMobiSafe.com, we have also managed to self-fund our venture; yet we look forward to exploring opportunities with the right venture partner.
In this market, there are still many hobbyists that are making thousands of dollars in extra money by building Apps, yet there are also many companies that are positioning to emerge as the next $100 Million goliath in this space. It is the companies that operate seamlessly across all mobile platforms that stand to generate the most wealth in this industry. As any wireless industry analyst would agree, the history of MOPS platforms has always been one of many islands and has never been known for integrated compatibility. Thus it is the firms that position to embrace the broadest spectrum of this market that are the most attractive to investors.
Will the next Microsoft emerge from this market? It is not likely, but there are certainly companies within this market that stand to change the future and are sure to generate a hefty balance sheet in the process… not to mention might create some attractive merger, acquisition, and potential initial public offering opportunities along the way. What is nice about this market is that with already over 3 billion App Store downloads, this is a market where a small business can grow into a big business very quickly!