No One Downloads Apps
Average Monthly App Installs Across
• 65.5% = 0/mo
• 8.4% = 1/mo
• 8.9% = 2/mo
So Where Do You Focus?
• Hybrid Web/Mobile Transactional Platforms
• Whether the
hook is a tool,
must be a
Web 1.0 vs Web 2.0
• The early generation of consumer victories –
from eBay, Opentable & Zillow to as recent as
Grubhub – was about digitizing offline
• The next wave is about re-imagination of
consumer behavior: Airbnb, Uber.
– What would the world look like IF
– What macro trends do we see appearing in the
Dwindling Opportunities (But still exist)
• Digitizing offline processes (few pockets still
• Vertical commerce ($400M upper band for
• D2C branded products – Honest Co, Casper,
Harry’s – winners in many of the big
categories though food (the largest prize) still
• Geo-located/Mobile On-demand: Few
markets support better, faster, AND cheaper.
Larger Pockets of Opportunity
• Concierge/Conversational Platforms – Trunk Club
may have pioneered but The Middleman Has
Struck Back. [Stichfix, Laurel & Wolf, Havenly].
• Low Cost of Capital Arb Models – Avant, Beepi
(managed marketplace that purchases cars
upfront & holds inventory), Opendoor (managed
marketplace that purchases homes upfront &
holds inventory) [Window may be closing].
– Unclear if investors still have appetite for this category
of investment (high capital requirements) as market
We are entering the “reimagination” phase of Venture:
• Millenial Reimagination – Common, Room Service,
• Gen Z Reimagination - Younow
• Adult Home Living Reimagination – Blue Apron, Casper
• Professional/Office Reimagination – Breather, WeWork
• Healthcare Reimagination - Oscar
** Must be going after LARGE markets: Living,
Transportation, Food, Jobs, Fashion, Health
• Dependent on existing macro factors. Millenials
– Less time
– Overwhelmed by life & optionality, resentful
– Cash constrained
– Looking to avoid friction, encumberment
– Distrust of corporations, government, authority
– Focused on community, relationships
– Re-emergence of the family
– Independence, control over work life.
Example 1: Spothero
• Description: Mobile app for on-demand or
scheduled booking of parking spaces.
• Why Fundamentally Broken: Pricing
information entirely opaque, horrific customer
service, no quality control.
• Macro Trends: Distrust, Time Constrained
• Verdict: Cheaper, Good margins AND better
• Category: Mobile On-Demand
Example 2: Sprig
• Description: Vertically integrated mobile app for
on-demand food delivery in <15 mins with
• Why Fundamentally Broken: Grubhub digitized
food ordering but choice remains a burden. Blue
Apron still requires meal choices a week in
advance. Choice remains a burden.
• Macro Trends: Overwhelmed by choice, less
time, looking to avoid friciton.
• Category: On-demand, Millenial Reimagination
• The focus MUST be on reimagination – nuanced
difference from “disruption”! They will be the biggest
• Very unclear if low cost of capital arb models won’t be
HUGE implosions, but we learn that challenging
transactional status quo has value.
– Are consumers en masse willing to sacrifice economics for
• MUST own the BRAND. Huge loss of value if you don’t
OWN the end consumer.
• Brand Building is Expensive!! Unlike SaaS which is now
all about cash efficiency, I am not convinced that B2C
startups must be perfectly cash efficient.
– Healthy unit economics + Growth are Primary.
– Cash efficiency is important but ultimately secondary
because appetite still exists for GO BIG plays.