Mobile 2.0 San Francisco

Orginally published at www.bima.co.uk on 8th November 2008

This week I was fortunate enough to have been able to attend the annual Mobile 2.0 conference in San Francisco, on behalf of O2 Litmus. The one-day event took place on 3rd November at the Hyatt and was a sell-out, with over 300 people in packed into the venue. What was interesting to see was not only the international outlook on the mobile 2.0 scene, but that the mobile application developer ecosystem is rapidly building in size and credibility.

Venture capitalists, start up’s, operators and established application developers sat closely alongside one another in San Francisco. I was one of a relatively small number of Europeans at the event, and it was clear to see the benefits of such a closely knit community both in terms ofcollaboration and ideas.

The topic talked about the most at Mobile 2.0 was what gives mobile applications the ‘X Factor’.

Many of the questions from the floor insinuated that many developers were still working hard to find sustainable business models for mobile. Many were looking at ad funded as the potential solution to their problem.

However the view from the VC panel was as clear as it was stark. Mobile applications which solely rely on advertising revenue are consistently failing to attract any interest from the Bay Area VC community. This is due to high levels of cynicism that mobile will be able to generate the CPM rates & volumes required to sustain a VC investable business.

“VC investable” is the key term here. All on the panel were at pains to state that many app developers will be able to create a business in Mobile via Ad funded, with the potential to scale to single figure millions of dollars per year. However, of course, the VC community are looking for exits of substantially more than that, and you got the sense everyone is still searching for the Mobile poster child company to emerge.

Secondly there was a detectable frustration with a lack of innovation coming through. Too many ideas being presented to the VC community were seen as line extensions, simply taking an existing concept and adding one or two new features - not breaking fresh ground or coming up with differentiated & unique propositions. This view was backed up by Sarah Lacey in her talk entitled “Secrets from Silicon Valley” held in London on 7th November.

An great tip for anyone going in front of these guys was be prepared for the “why now?” question. In these increasingly tough times the entrepreneur must be ready to convince the VC that they can’t afford to just sit back and let some other guy take the risk on their idea.

The theme of negativity on ad funded models was articulated by Tim Chang from Norwest Venture Partners, citing companies like GetJar who are building a sustainable business in Mobile. In anticipation of this focus on monitisable transactions, Tim was particularly supportive of micropayments and companies in the payments space.

I’m not an application developer though, so although the sweet spot for hot applications right now was compelling to see, what I found more insightful was the appetite for the industry to collaborate to create better things in the mobile 2.0 era.

I can see too that it will be important for Mobile operators like us to help bring customers and application developers together and step out of their way to let both parties get the most out of one another.

Consumers want cutting edge apps and developers want to reach an audience more easily. I see no reason why this won’t be the future model, and we will all be able to learn a lot from the journey.