It's that time of year again, as annual "best of 2016" lists start to emerge. In that spirit, earlier this week, Apple revealed its list of the most downloaded apps of 2016.
Not surprisingly, platforms dominate the list:
- Pokémon Go
- Google Maps
- Spotify Music
As you can see, the top 7 entries are all platforms. Coming in at number one was Snapchat, which is good news for Snap Inc., as it tries to go public next year. Just behind that is the constellation of Facebook apps (Messenger, Instagram, and Facebook), followed by the summer's hit social gaming platform, Pokémon Go, a game that this author knows very well.
Next are two platforms from Google (technically, Pokemon Go is partly owned by Google), YouTube and Google Maps.
Rounding out the top 10 are music apps Pandora and Spotify and Netflix, all of which are linear businesses that license their content for their core offering. That said, Spotify does operate a small platform model through its playlists feature.
This list underscores the importance of having a solid business model behind your app. Apps themselves are commodities - what makes them successful is the business model that drives their usage. And naturally, platforms are the most successful, from both perspectives of usage and profit.
The only platform business that made the list that fails to generate a profit is Snapchat, which is still very young for a platform company and growing revenue quickly. The others platforms here are part of the highly profitable Facebook and Google ecosystems.
Diving a little deeper, you can see that, with the exception of the anomaly that is Pokémon Go, all of the top platform apps are messaging platforms and/or content platforms. (Snapchat is both, for example, while Facebook is a social network and a content platform).
Platforms Dominate. Period.
The one-to-many dynamic of content platforms means their presence near the top of the list isn't surprising. Additionally, messaging platforms are one of the "killer apps" for the smartphone, and they naturally build upon your social network via your address book.
However, if you're looking to launch a platform today, this list is a bit for a red herring. The market for content platforms and messaging apps is much harder to break into today than it was when all these platforms started. While it's not impossible to create a successful content platform today, the barriers to entry are significantly higher than five years ago, especially in terms of consumer expectations.
This high hurdle is another reason why existing businesses will have a big advantage in creating the next generation of successful platform apps. Messenger was only a success because it was built on Facebook's network, while YouTube and Google Maps were both built on Google's network and resources.
Snapchat is the outlier here, as it is the only app not part of a larger platform ecosystem, but it is aiming to build one of its own in advance of its eventual IPO, as evidenced by the limited release of Spectacles, sunglasses with built-in cameras that directly port the footage to the app.
Another boon for Snapchat is that it has built two rather successful platform types within its app, as it successfully integrated its messaging and Stories content platforms.
As Snapchat likely moves closer and closer to going public next year, expect it to begin driving toward profitability and expanding into new platform types.
Who knows what's coming next? A development platform built around Snapchat may not be far off.