Tag Archives: hard core gaming

Should you go for high quality or high quantity of users before your seed round?

I get this question fairly frequently from folks applying to the accelerator. Usually this comes from a team of 2-3 developers who have built an app and are looking to either a) raise a seed round or b) apply to an accelerator.

The question is a very difficult one to answer and requires a lot of context and specific knowledge about the problem the company is trying to solve.

Lets take an example. You have built a consumer mobile application, and have had the app out for about 1-3 months, and have “organically” grown your user base, with word-of-mouth or referrals. The question is what are “investors” looking for in terms of traction? Lots of users – meaning thousands of downloads and many active users? Or engagement – meaning a high rate of your “atomic unit” usage?

Or in other words should you spend your effort, trying to get more users or to get your current users to use the product more?

A similar example is one around many free users for a SaaS service vs. few paying users but relatively high usage.

The easiest answer is both. The best products and startups get many users and lots of usage.

The more nuanced answer is that it is dependent on what is tougher. Investors (Accelerators in this case, I assume, are investors as well), look for one very tough problem that has been solved by you as a metric for your future success.

That means, if they believe it will be harder for you to scale up the number of users (based on your app) then they would want empirical data to prove that you have cracked that problem. If, however, they believe that your solution has a harder “retention” rate, like a Twitter – (where signup is easy, but getting users to understand and use the product is harder), then they’d expect you to have solved that problem.

Either ways, they are looking for you to have a good answer and some initial experiments on how you will solve the other part of the problem you have not been able to crack.

So, leaves us with the question – What should you do about it? Lets say you have runway for about 3-6 months before you have to raise a round of funding. What should you prioritize between now and than time when you run out of funds?

How do you determine which problem is tougher? Getting lots of users or getting more usage?

This answer depends on your (eventual) monetization technique.

At steady state, you will make money from having lots of users doing the “atomic unit” action more often.

For the initial stage, though, investors (and you) should be looking for the easiest route to monetization and how you can scale that route faster.

So, if you will make more money from lots of users (e.g. social network) then that is tougher. If however, you will make more money by getting few users to use it more (e.g. in-app purchases), then that is tougher.

What if scenarios for mobile phones, devices and thoughts on MWC 2012

The mobile phone is fast becoming to 6 Billion people what the PC was to 2 Billion people – a communications device (voice and text), and entertainment unit (video, music, movies, news & information, gaming), a productivity tool (contacts, email, task manager and calendar), a gadget (camera, mobile wallet) and an Internet access unit (social networking, commerce, etc.).

First the mobile phone replaced the phone booth and the pager. Email has already replaced faxes and postal mail. Given that 27% of emails are read using the mobile phone (up from 20% the previous year). I wanted to speculate all the “devices” that the mobile phone threatens and might replace.

1. Camera – done mostly. The camera market will be largely relegated to SLR, while point and shoot will reduce in # of shipments. With the announcement of the 41MP camera by Nokia, we are now getting high resolution pictures taken by the phone. This will accelerate the downward trend that point and shoot cameras are seeing overall.

2. Television – In the last few months, I have seen more people using their phone to watch movies on planes than ever before. Previously they would either watch it on their laptop or a portable DVD player with an integrated display. I can still see the need for television for the large screen viewing experience with an integrated audio system, but with projectors built into phones, they might soon be used for short movies.

3. Game console – In 3-5 years with motion sensing and gesture recognition coming to mobile devices, and built in projection, I suspect most game consoles (Wii, XBox and Sony Playstation) will go the way of the SLR camera. Hard core gaming will be for the niche market, while casual gamers will use the mobile phone as their primary game entertainment device.

4. Radio – The primary use of radio is during commute. Specialized radio units I believe are already passe, so this unit is also mostly done with. I suspect most kids born today will not even know that stand alone radio units can be bought. They will be a “feature” on the phone as are calculators.

5. Car stereo – With 3G and integrated music output into the speakers of the car, this device will also be relegated to low-end cars alone. Imagine having a “separate” MP3 device just for your songs - bizarre in 3-5 years. Most likely the phone unit will snugly fit into a slot where it will be both charged and can power the music / radio within the car.

6. Projector – this is just starting to happen, and will take longer than 3 years, but with Samsung announcing the new integrated phone / projector unit (its a start), there will be possibly no longer a need to lug large projectors for quick presentations which don’t require high resolution projection.

7. Cash / Payments – This will take longer because of ID requirements than necessarily mobile commerce. The average wallet today contains a government issued ID, a security badge (company / employer issued), a debit card, one or two credit cards and some cash. The cash and credit card can be replaced within the next 5 years, but ID’s will take much longer if at all.

8. Access (Security) device or other forms of ID – I can see the possibility of employers issuing limited ID card applications that function both as an ID and an access unit. They are easier to destroy and manage (if the employee leaves the organization) and cheaper than physical cards. I can also see insurance companies quickly providing their ID for insurance etc. on an app within the device instead of a physical card.

9. Flashlight – useful in countries such as India where you have power outages in the night.

10. Business cards – surprisingly this is taking much longer than most people thought it would. You should be able to bump your business card to another phone regardless of whether they have different platforms. It will happen in 3-5 years, but the business card is going the way of the fax – niche, used sparingly to make a statement, but not pervasive.

11. Keys – This is a lot more tricky. Given typically most people have 3-4 keys – car, home (front / back) and some cases office, replacing these will take a lot longer. I dont see this happening in the next 5-10 years.

If your phone really replaces all these devices, you will need a cloud storage and security because nearly 25% of phone are lost / stolen / dropped in liquid each year. So you should be able to walk into a store, buy a new phone and “log into” your phone, similar to what an IP phone does already.

For women, who have a larger purse or handbag with other items such as a makeup kit or lipstick, I am surprised that phones dont offer that yet (although the Micromax Bling does offer a compact mirror).

Now that all items that you carry daily on your pocket will be mostly replaced by the mobile phone, I think the laptop bag or backpack is next.