This document provides an overview of mobile app strategies and marketing. It discusses why strategy and marketing are important for app developers, even for those just focused on building their app. The document covers mobile app strategy fundamentals like understanding market dynamics and competitors. It also covers app marketing 101, including the importance of testing all marketing approaches. Platform vendors are using apps to market their platforms and control the app stores and ecosystems. Within these constrained environments, app developers must leverage unique aspects of their app to compete on platforms.

1. Mobile Apps
Marketing & Strategy
Joe Hayashi
VP Product Management
May 27, 2010
joe.hayashi@palm.com

2. “Business” of Mobile Apps - Topics
• Why should I care about things like “strategy” and
“marketing”, I just want to build my app?
• Strategy stories
• Marketing stories
• Mobile App Strategies 101
• App Marketing 101
• Gateway Apps Summary (15 min)
• Q&A

3. ST
R AT
EG
Strategy - Playing to win Y
• OMG, I have a killer idea for XYZ
• You want to “win”
• What is winning?
• Measurable Objectives - Market share, profits, world peace, fame
• What game are you playing?
• What are the rules of the game?
• What are the dynamics of the game?
• Are there others playing this game? What are they doing?
• Does it matter what others are doing and should that change what
you do? Why, why not?

4. ST
R AT
EG
Strategy - Keep your eyes wide open Y
• Business people LOVE to give advice
• Just because XYZ CEO used strategy A in market B
doesn’t mean you should
• Specific strategies and tactics do not work in all situations
• Everyone follows the same advice, not everyone can
“win”
• Copying your competitors (especially leaders) is almost
never sufficient

5. ST
R AT
EG
Instant Messaging Land Grab- Excite Y
Joe Kraus, bnoopy.typepad.com
“Flossing and startups”
“We explosively grew our way to irrelevance in the
IM market.”
Lesson: Set goals that can be measured in a way
that matters - Meaningful depend on the dynamics
of the game

6. Network Effects
• The more people who use something, the more valuable
it becomes
• Examples
• Phone system
• Fax system
• Web search
• Operating systems, other platforms
• Facebook
• Instant Messaging

7. ST
R AT
EG
Instant Messaging Wars Continued Y
Land Grab
• 1996 AOL ships “buddy list” feature
• 1997 Standalone “AIM” application Market share growth
at any cost
• 1998 AOL buys ICQ, consolidates #1 position
• 1999 MSN ships 1.0 of Messenger - interop wars Network effects take
hold.
War!
• Strategy Part #1 - Unauthorized interoperability
• Strategy Part #2 - Bundle How the heck do
• 1999 Jabber / XMMP you compete with
• Documentented, open protocol -- too important for one company to control that?
Pax MS
• 2003 Windows XP Mature - Uh, can we
• Bundling was a winning strategy in the long run make money at this?
• 2005 Yahoo & MSN Interop announce
Flankers
IM is important, but
• 2005 Gtalk, eBay buys Skype
what people really
• 2005 Skype introduces video telephony want is ....
• 2006 Gtalk in Gmail
• 2008 Facebook Chat

8. ST
R AT
EG
Strategy Example - Yacht Racing Y
Not all strategies make sense for all players

9. ST
R AT
EG
Common Dynamics and Strategies Y
• Early markets are a land grab
• 1) Get the right product
• 2) Grow as fast as you can
• All out war for #1
• Use every possible advantage to get the pole position
• Raise the most money
• Hire the best people
• Why? Leadership becomes a self fulfilling prophecy

10. ST
R AT
EG
Common Dynamics and Strategies Y
• Mature markets are more complicated
• 1) Get to #1
• 2) Find profitable niches, dominate and defend them, figure out the cost
of market share growth, attack #1 if it makes sense
• Marketplace dynamics become very important
Fair Unfair
“Treadmill” - Commodity products Network effects
in level marketplace Constraint dynamics - resources,
regulatory, access to customers
• Compete on price, value, first with features, scale, “better”
• Leaders have option to be fast followers
• Unfair leaders can milk markets

11. A comment on “better”
• For better to matter, it must be an order of magnitude
better
• Examples & Counter examples
• Sony Playstation 3 vs. Xbox 360
• Nintendo Wii

12. Why is this so confusing?
Coming June 6th!

13. M
AR
KE
TI
Marketing NG
• What do we mean by marketing?
• Wikipedia - Process for figuring out what the market wants,
strategies for sales, communication to customers, and growing the
business
• AMA - the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large
• Marketing Mix - Product, Price, Place, Promotion
• Does marketing matter?
• What matters more - technology or marketing?

14. M
AR
KE
TI
How big is the market for... NG
$15B
13.20
$11B
9.60
$8B
$4B
0.50 0.12
$0B
US Hats, Caps WW Swimwear US Bathrobes US Lingerie

15. M
AR
KE
TI
A little wager, circa 2007 NG
• What if I told you I had an idea that would let me, as a
single company, sell an additional $300M in the “robe”
market in 18 months?
• Can it be done?
• How is done?
• Marketing
• Technology
• Both
• None of the above

16. M
AR
KE
TI
NG
Introducing....

17. M
AR
KE
TI
NG

18. M
AR
KE
TI
More than $300M in robes NG
• Product - “Warmth, comfort, but with utility”
• Snuggie vs. Slanket vs. Freedom Blanket vs. Robe
• Tag line “the blanket with sleeves”, position “be warm anywhere”
• One-size fits all
• Burgundy, Royal Blue, Sage Green
• Price - Only $15, two for $20 (great as a gift!)
• Promotion
• Pictures of couples snuggling in snuggies on couches
• “Blankets are OK but they can slip and slide plus your hands are trapped inside. The
Snuggie keeps you totally warm and gives you the freedom to use your hands. Work
the remote, use your laptop, or do some reading in total warmth and comfort.”
• Any PR is good PR - It seems silly, but people love it. e.g. Weezer Snuggie.
• Placement
• Direct to consumers via TV with promos
• ...act now and we’ll send you a free reading light, 2 for 1, etc.
• National retail, Internet

19. M
AR
KE
TI
What can we learn from the Snuggie? NG
• What is your product? Why do people value your product?
• People have blankets and bathrobe, but they don’t have a Snuggie
• New use cases for existing product can create whole new market
opportunities
• Who is going to buy your product?
• Understanding your customer doesn’t have to be hard or
complicated, but it is critical to success.
• What is the sales dynamic?
• Channel, sales process, scale, approach can be critical for success
• Don’t underestimate the importance of marketing,
especially in mature markets

20. M
AR
KE
TI
Marketing Aphorisms NG
• Best marketing is invisible to the consumer
• Word of mouth
• Product sells itself
• But there is a lot of marketing work to make it invisible
• What’s in a name?
• It’s simple
• Value is apparent
• It solves a real need in (ideally) a unique way
• Customers can find it easily
• Marketing is something you experience
• I bought that, how do I feel?
• Body Shop, Peets, Stanford, Volkswagen

21. Mobile Apps Biz

22. ST A
RA PP
TE
Mobile Apps Stores - What’s going on? G
Y
• Platform vendors using apps as a marketing angle
• Apps market the platform
• More apps = more use cases -> network effects
• Control points owned by platform vendors
• Monterey aquarium vs. open ocean
• Merchandizing, distribution, fulfillment, transactions, policy,
functionality may be cordoned off
• Key advantages
• Simple for consumers
• Safe - not to be underestimated

23. ST A
RA PP
TE
Four main types of fish in the fish tank G
Y
“Creative” treadmill with
leadership advantages for
Entertainment Games, toys, trifles
franchises. “Hits business” - fad
dynamics, many substitutes.
Mobile is a distribution
Service Facebook, Dropbox, opportunity for service, business
endpoints Yelp, OpenTable, etc. model outside the app. Only area
that is long term defensible.
Utility / “Product” treadmill with
Tip Calculators,
leadership advantages. Utility,
Productivity Translators, etc.
need based dynamics.
“Creative” treadmill with
Children’s books, leadership advantages for
Other Content travel guides franchises, perhaps different
timescale

24. ST A
RA PP
TE
How are the fish behaving? G
Y
Many generations into the war. Land grab was
Entertainment over a while ago. Opportunity on newer
platforms. Cranking out titles. Franchise building.
Looking to achieve ubiquity on mobile platforms.
Service endpoints Competing on the dynamics of the broader
service space.
Land grab is over on some platforms. Leaders
Utility / Productivity hunkered down and fast following.
Platform dynamics changing / evolving around
Other Content content types. Land grab over. Not moving as
fast.

25. ST A
RA PP
TE
If you are this fish G
Y
Entertainment Hopefully you are a creative genius!
Service endpoints Good for you. Mobile is the new opportunity.
Hopefully you are a product genius! 2x better is
Utility / Productivity not enough. Go for 10x.
Hopefully you are a creative genius and interested
in building a franchise! And if your are nimble,
Other Content you can navigate format change opportunities to
your advantage.

26. M
AR AP
KE P
TI
App Marketing 101 - Dynamics N
G
• Marketing within a constrained environment
• Basically a level environment with leadership dynamics
• Platform owner can stir the pot
• App developer leverage
• You can go to new platforms, platforms are like new
aquariums
• If you have something unique, leverage it
• In addition to total market size, look for the ratio of effective
devices per app
• Apple: ~500, Android: High 200s, Palm: > 500

27. M
AR AP
KE P
TI
App Marketing 101 N
G
Build a great product, clear UVP, great name Must
Test all marketing Must
High impact free / cheap - social media, Twitter, FB, blogs,
Must, subject to noise
Public Relations
“Sells itself” Lite / free version your app Good idea
“Sells itself” User advocacy Good idea, but are you
ready?
Community leverage How crowded
In app ads, swap links, app URLs $$ - ROI
Lifecycle Marketing Must
Engage users - talk to them, be where they are, listen and Must
respond
Iterate & go fast with the goal to be #1 Must

28. Final thoughts
• Lots of opportunity, especially for broader services
• Mobile is going to be big
• App dynamics have been under pressure from the get go,
will create new opportunities
• Inherent within every system are the seeds of its eventual
passing
• Platform vendors looking to provide access to the ocean,
while keeping the benefits of the app model

29. Further Reading
• One quick read
• Marketing Warfare, Ries and Trout, http:/
/amzn.to/bo5WDz
• One TV episode
• Mad Men: The Wheel, http:/
/bit.ly/acVt19
• Strategy
• Seeing What’s Next, Clay Christensen, http:/ /amzn.to/9MT376
• Thinking Strategically, Dixit and Nalebuff, http:/
/amzn.to/dsrg4m
• Competitive Strategy, Michael Porter, http:/ /amzn.to/dx3gPM
• Marketing
• Marketing Management, Kotler and Keller, http:/
/amzn.to/d5zY2I

30. Q&A
joe.hayashi@palm.com