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Why Facebook Was Right to Unbundle

by Adam Foroughi on Apr 8, 2015

Incumbents call it “unbundling”– taking a feature-heavy app and dividing its component parts into standalone apps. Vine, or for that matter Periscope, could have been just new video features within Twitter, but Twitter chose to launch both as standalone apps instead. Instagram could have made Hyperlapse, or Layout new features in its image-and-video-sharing app, but it released them separately. Riff could have been part of Facebook video, but instead it’s a standalone app. Following suit, apps that are just launching are often not bundled to begin with, while existing apps are choosing to introduce new features as auxiliary apps to their core product. When you think about it, “unbundling” is not the trend with apps as much as “specialization” is.

Lessons learned from Facebook

Facebook, maker of the most popular app in America, saw the app specialization trend taking shape and made the tough decision to retrofit accordingly. The company decided to spin out the Facebook app’s messaging function as its own app, Messenger, which initially had no exclusivity on Facebook’s messaging capability. Then, late last year, Facebook removed the messaging functionality from the original Facebook app, making Messenger the only place mobile users could access and respond to messages sent through the social network. All hell broke loose. Seventy-three percent of the app’s reviewers — 143,000 users — gave the app one star, citing privacy issues, arbitrary inconvenience, and a host of other factors.

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Photo credit: flickr user Pestoverde

Ultimately, the risk Facebook took paid off in spite of the outcry. Facebook’s recent F8 conference was basically a victory lap for Messenger. Today, 600 million people use Messenger, and Facebook is pushing it as its next platform for developers. It was the 7th most popular app of 2014 with 53.713 million average unique users, according to Nielsen. Between Messenger and WhatsApp, Facebook is near-dominant in the mobile messaging space. It was clearly a good company decision for Facebook, but in the long-run, the end-users benefit as well because the experience of sending a message is much more streamlined, unfettered by the loading of timelines and newsfeeds.

Specialized apps work better, for almost everyone

As Facebook taught us, bundling too many features in one app can clutter the user experience and cause the app to falter by lagging and freezing. Feature-creep can lead to bloatware, the antithesis of what mobile apps should be. In the case of Facebook, and as mentioned above, it doesn’t make sense for users to load their entire timeline if they’re trying to send a quick message to let someone know they’re running late. When you streamline an app, it will run faster and deliver on the specific action the user wants.

Facebook, a tech giant, unquestionably benefits from unbundling/specialization, and the user also gets a better experience out of the deal. But what about small independent developers? There are reasons that specialization can work (and is working) for app developers of all sizes.

This movement toward standalone apps instead of the jack-of-all-trades approach is increasingly becoming an industry standard. One notable exception is the wildly popular Snapchat. Snapchat introduced the Stories feature, through which users can share photos or short videos, in October 2013; Snapcash for payments in late 2014; and the Discover feature, which offers curated Stories, in early 2015. Each of these  could have been a standalone app. Snapchat is as popular as ever, so this “bloat” doesn’t seem to be harming the company (although there are many complaints about the app’s stability). But what opportunities might Snapchat be missing out on, if only they had gone the specialization route? Unless they have a great unbundling of their own, we may never know.

All apps should specialize

Think about it: If you’re looking to pick up a nice cheese plate for a dinner party, you’re likely going to opt for the specialty shop that boasts a range of options and someone knowledgeable enough to walk you through them. Unlike your experience at a one-stop shop like Walmart, at a speciality cheese shop, your customer experience will be more finely tuned to what you’re looking for. The same is true for apps. For the best user experience, you want an app that delivers one specific function, not one that tries to be all things to all users. App developers can pay special attention to specific workflows, knowing that the app is intended to serve one narrow purpose. UI and UX designers can further refine the experience until it represents the intended function of the app in its purest form.

Specializing is also good strategy for app store presence

Google and Facebook own nine of the top 10 apps in Apple’s App Store. Part of this is simple land grabbing. In customer acquisition, as in fishing, it makes sense to have multiple lines going at the same time. Sometimes the differences can be minimal, for example offering  paid and premium versions of the same game. Either way, it’s extra opportunities to get eyeballs for the parent company and for your brand. Additionally, you as you “grab” more app store space, you push your competitors out in app store searches and top category charts. Whether you are a tech powerhouse or a dev shop of one, different apps in the same genre can be used to co-market individual apps, and thereby to build your brand.

Specializing is more cost effective for user acquisition

Economies of scale for cost per install (CPI) work in reverse when it comes to apps, i.e. your first one thousand installs each cost $1, the next thousand are $1.5, and so on. When we extrapolate those costs, the difference is even more exaggerated: You can either pay $40,000 to acquire 40,000 users in three different apps ($120k total, 120k users) or you can acquire 120k users in one app for three to four times that. Awareness of the CPI is important for small shops whose budgets are modest but also for larger companies for which a universe of apps can create opportunities for cross-promotion, integration, and deep-linking.

It makes sense that mobile apps are going the route of specialization because the idea of “apps” is that they are distilled versions of “applications”, thus the abbreviation. In a sense, you could see the specialization of apps as a return to form, or the pendulum swinging back after a features arms race in the app economy. At a certain point, the pendulum might just swing again and we will see consolidation as the new app trend — and Snapchat will be waiting there to say “I told you so.”

What’s more likely a scenario is one in which specialization is here to stay, at least in the mobile app economy as we know it. It’s hard to argue the bear case for any trend that maximizes income and opportunity for developers, while simultaneously raising the bar on quality and end-user experience.

Adam Foroughi is AppLovin’s CEO.

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