Tuesday, October 11, 2016

How to build a Billion Dollar app? by George Berkowski at TEDxCityUniversityLondon

great to see you all here I love all these talks that have been going on
is it really is about assistance never giving up
I want to talk about ambition ridiculous ambition billion-dollar ambition
we keep hearing you know over here in the UK that we need to be like Americans
at Silicon Valley is the only place that can make this happen but having been
part of halo from the very beginning that company is halfway there
it's a half-billion-dollar app done here in London co-founded by cabbies and real
people just like you and me here so let me sort of walk you through the stories
of what a lot of billion-dollar apps have done and how actually they're not
remarkable people they're not crazy
different people to similar to you and me but actually how those journeys
really make sense the more than you know about
let's start by planes on this guy
I think caused all the problems that we have today
this guy was the world's first billion john d rockefeller self-made man built
his business in the oil became a tycoon and at the wonderful old age and in 1897
actually passed away as the world's richest person with 336 billion dollars
and is history's richest person and probably the richest person will ever
see so now that we know that we probably won't be richer than
him or will ever see anyone who is richer than him let's sort of figure out
where we can go
since him and you know as of early this year we've got about 1,800 different
billionaires around the world and they control and absolutely astounding seven
trillion dollars worth of wealth
the point here is is that people are becoming entrepreneurial and more and
more so the vast majority of that world has been created by entrepreneurs by
people who started in families that had nothing
who are modest who are people like you and me and we saw problems out there and
decided to go and address them and do something interesting today we have this
wonderful term called unicorns
that is really been adopted by the technology industry and again something
that used to be so many evil and beautiful and kind of romantic
it used to be the realm of girls and their tea parties but now my last light
source live
it's much more kind of aggressive laser beams or kind of crazy and I think
really represents and embodies a lot of the characteristics we all need to
actually make it there
these are the 13 billion dollar apps that exist today
these are companies that were happened five years ago
these are companies that have been credited that are generated incredible
amounts of wealth and value because of the amazing things that they're done
we're going to focus on a few of them and go through their stories and how
they actually came to balance this just out of interest represents the last 10
years in the technology industry
they've been 78 billion dollar or more companies and in the last couple of
this sort of arm on the right hand side or has really extended crazily and we'll
talk about one of those outlying companies
the guys at twenty again an industry where halo is trying
to compete but where you know naturally in American has done better because
their persistence and trying to figure out really why one of the reasons that
mobile has become such a lucrative fascinating opportunity is because of
the simple shear amount of time that we're spending on our devices and
whether it causes loneliness or other problems
it is one of these behaviors it's not going to go backwards and this is the
last three years we have pretty much you know more than double the amount of time
that we're spending on these devices and it's the people who understand this
behavior and they're taking advantage of it that are seeing fascinating
opportunity astoundingly this is actually a two or three-year old slide
that I put up there on purpose
it's no longer on average each one of us here will interact with our smartphone
50 times today it's more on the order now today in 2015 of two hundred times a
day but these little devices are taking about lives and taking our attention and
as you can kind of see is we looked at the bottom of that whether it's around
messaging voice calls clock in music
the vast frequency of these kind of actions in the exact actions and areas
with some of the leading mobile apps are making huge inroads
but the world is changing you know the opportunities that these kind of apps
had through four years ago a quite different
the app stores were a lot smaller the competition was a lot lower today if
you're starting a business like this and i still want to infuse people with home
but also a reality check is you've got three million competitors out there
you also have 85 billion downloads which is an opportunity in terms of how
frequently people are actually download these apps but here is the really
challenging over the number of apps that people have used as flat
it was growing until the end of last year and we don't really see this number
continuing to grow people on average everywhere around the world the only
opening 28 apps on the phone every single
month but the worst beers seventy-five percent of their time of your time is
actually focus on your top four apps
so when you think about these new players and these new businesses that
are going out there
this is not about creating something that is going to add to the amount of
time that you're spending on your phone
this is about actually September an existing behavior on your
so the competition the mindset is very very common everyday in the u.s. there
are a hundred and fifty seven million people who go to work every day
that's the size of this super active workforce and yet if we look at it this
app here
it actually has a hundred and sixty million people who played every day more
than a billion times
540 540 million people play every month
15 million people every day and they spend over 2 billion dollars on and I'll
show you all know
is this a good thing or a bad thing you know I don't know let other people judge
that but the simple truth is that
that game was made by six people in three months and they thought it was a
nice fade it was a small internal project for King that was launched right
before Christmas two years ago and actually the team is pretty disappointed
what they did and they want you in the app store just before christmas everyone
went home
people went on holiday and she didn't come back into the end of january and
everyone thought that the analytics and measurements were broken in the game
because the numbers were off the child
little did they know that it would actually turn into the highest-grossing
game pretty much of history
so again don't don't be don't be sad if something doesn't work straight away you
know the history of King actually the company behind this game was actually
brewing for 11 long years before these guys actually came up with their first
blockbuster game
I'm not sure whether I would have hung around for 11 years and persistence
evolving through web games involving through Facebook and then finally
getting to mobile
but again assistance is a long long journey
the guys who were the founders of this company four out of the five founders
persistent today there were hundreds of millions of pounds are actually happy
really nice guys one of them left the company and was bought out for about 2
million pounds of the time
needless to say that he kind of regretting his decision
there are really two ways to kind of get into this kind of a billion-dollar world
these days if you look at the companies are really really succeeding one is to
do something incredibly good
and to do it a lot better than everyone else but not just a bit better
it's an order of magnitude better the other really interesting way to go about
it is to actually do something that was really the thought of before or done
and these are the two kinds of stories that I think a fascinatingly interesting
the first one whatsapp really starts off with tyler durden and fight club yawn
cumin his co-founder the guys who started water actually spent twenty long
years together at Yahoo Yahoo makes all their money of advertising
these two guys collectively hated advertising they hated their jobs while
they were there
post leaving yahoo they tried to get jobs at Facebook and Twitter
he would turn down so they decided to go to create their own company and
interestingly jaan decided to create what's up at the first generation of
what's happened was actually created by him because he wanted an app that told
everybody that he was busy at the gym
it was a status update app it had nothing to do with messaging or texting
and actually for nine months he persisted and built this app and people
like it adds probably not the most interesting thing when you go to the gym
once a month anyway so we're not sure how useful this is but he started
listening to people eventually and people said actually why don't you put
kind of a messaging feature in there that'd be pretty interesting and so you
know we've got a little bit more activity than what actually happened was
fascinated listening to people back home in the Ukraine work where he was wrong
they were saying actually we'd really love to message you because it's
incredibly expensive to message people in California in the US and you know how
text messages costs thirty or forty cents to just to get through can you
actually build us a version of
the app that works over here at the time I phone wasn't readily available over
there so they built a blackberry client
so while for the Americans it was all great to have the iphone version of what
time it only exploded and literally in the first week that they had a version
of whatsapp blackberry do they get 200,000 organic down and that's where
everything kind of change these guys became super ubiquitous and as you can
see just because they solve a very very simple problem which is making SMS
messaging for free
they were able to grow way faster than any other competing company but they
kept their profile
nice and low and as a January this year
these guys actually carry more SMS volume than the entire world sees on
every single telecommunications company as well which is sort of justifies that
wonderful price that actually facebook pay for them at the end of the day which
is fifty percent of Facebook's market caps
today most analysts say that that was actually a bit of a steel in terms of
the valuation of the company is probably enough about fifty percent since that
another really interesting example that I want to kind of talk about when you
think about you know an astoundingly big opportunity especially in mobile is
really disrupting something that's really there again auto did that quite
well but I think whoever did it much better and again this is an area that I
incredibly well with halo is how do we disrupt taxi Mandela
how do we disrupt a highly regulated industry where the prices are high when
the service is not particularly good
let's do something really interesting there today the idea of picking up an
appt tapping twice and getting a taxi or a black power private car to appear
there a few minutes later it is vaguely novel
it's not even particularly interesting for years ago when we started hailer
people didn't believe it was possible
both drivers and people alike and yet you start looking at the numbers
especially twenty
you know this is astounding you know absolutely astounding when you compare
the valuation of the company compared to him
competitive facebook these guys have a growth curve that the world has never
seen before because it's an astounding and real business valuation you know
right now is 40 1,000,000,000 balls and i think most people in this room are
considered to be absolutely ludicrous it
this number makes absolutely no sense to anybody but if you actually dug into the
numbers and understand what this business has been able to do in five
it's something that I we could never found them even working in the
technology industry for a decade there in 45 countries 220 cities and then
employed as of today seven on
and fifty thousand drivers all of that allows them to turn over a billion
dollars and fair last year
it does evaluation of 40 billion dollars kind of on top of that actually make it
sound that crazy when you think about opportunities replacing something that
someone does every day doing it incredibly well and then figuring out
how to scale it is an astounding opportunity and when you think about the
future of where their model is going
I've got a good friend who used to be in the Android team over in in the US at
Google and he took one of their self driving cars to work three times a week
out of about a hundred tricks you almost died ones that fit but you know in in
the 99 other times that he went it was perfectly smooth wonderful experience
is it that hard to imagine and I only saw this last year when I saw someone's
car park itself without them even touching the steering wheel is it that
much of a stretch to think that we're going to have driverless cars that look
you just like that one made by google on the road in two or three years time
google has come out there and said we're competing directly with Lewbert even
though they're the biggest investor someone is smelling a huge opportunity
is so again the rate of change of technology and mobile is fascinating
anything and i think that one of the most interesting parts of it is that
here in London I think we're seeing it more in Silicon Valley we definitely see
it but the future is already there are early adopters of a lot of this
technology people understand that a lot of these things will change
and I think interestingly we are adopting them faster and faster if
you're looking for opportunities and i'm always looking for opportunities that
your new businesses
one thing that i came across in college when i was in the US was the 67 human
so these are the behaviors the traits and the features of culture and society
of people that have narrow file and documented to exist with every single
culture in the world
so one of these kind of you know what I had with them in a fantastic slide very
easily readable from the back of the room but I've also highlighted the areas
where people have already built billion dollar company
there's plenty of black text there that represent fantastic interesting
why is that interesting at the end of this year will have three and a half
billion smartphones around the world
there's a whole segment of the world's population that never had a pc that
never went on the internet on the desktop
there's a whole slew of people that will come in the next year or two in the
billions who will only understand the internet connectedness because of smart
mobile devices
if you're looking for opportunities and there's a quite a few right there
one thing that I sort of love to point out to you
two people is that out of all the billion dollar companies that have been
made out there across their 68 or so
the average age of co-founders of people who started these companies who had
these great ideas
you know it's not 21 it's not people who graduated from Stanford University for
consumer facing companies it's actually 34 year olds and for b2b companies is
actually 37 year olds
these are people who have been around a blog who have had experience you've done
it before
you have had plenty of aliens who have built up teams and experience and
suddenly understood that they can really launched something and put it together
and also begin to go to reiterate the whole notion of perseverance and
persistence the average time to actually build one of these companies is seven
so in order to really get there you know don't think that it's a short journey
and the one thing that I really kind of want to end on is when you're kind of
evaluating what is you know a massively interesting and good idea something that
just appears inevitable something that you think really should be there that
isn't there is often the answer to building something really awesome