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Mobile Fix - October 25

Super Apps

The FT looks at the Uber ambition to be the first western SuperApp - like WeChat. Uber seek to be the operating system for your everyday life. As they lost $5bn last quarter they need another plan and across the world are trying lots of different things. But as the infographic shows there are others further ahead in some emerging markets, and the competition in more mature developed markets may make this expansion difficult.

Gaining this status does give lots of advantages - in China the dominance of Baidu in search is being undermined by the power of Bytedance and Tencent. In this FT article they show that Search is used by a relatively small proportion of the Chinese population.

The more likely SuperApp is probably Google Maps. Spending the last few days in Venice highlighted how useful Maps is; in the labyrinths of the city wayfinding is essential but their listings of restaurants was also great and navigating what days which galleries and Palazzos are open were all helped by Google Maps. Booking anUber is already an option on Maps and adding tickets for other transport options (as they do for flights) can’t be far away.

And as Amazon eat into the Google search revenue the incentive for new revenue streams

grows.

Tik Tok

Talking of Bytedance our prediction of US Government concerns proved correct - yesterday Chuck Schumer tweeted about TikTok - the first step to some more draconian response?

I missed John Batelle digging into the TikTok issues but his piece was pretty powerful. Especially when you consider how well embedded in US culture they are - HighSchool TikTok clubs and Kyle Jenner getting a billion views on her hashtag. And major publishers like BuzzFeed, Hearst and Vice all learning from being on TikTok.

It’s clear that political ads are going to be a hot topic right through the next 12 months in the US and this Chinese angle is not going to escape scrutiny. And in the febrile US political climate the fact that Schumer has had donations from Facebook (and that his daughter works there) may draw questions about the timing of this tweet.

Snap

Talking about their really good quarter Snap CEO Evan Spiegel said they definitely see TikTok as a friend and let them buy ads on Snap. But if all that TikTok time was freed up, Snap would surely benefit?

The Snap performance this quarter was really good. Daily active users are up by 13% and ARPU up by 33%. And Discover saw 40% more time watching, with over 100 Channels getting over 10m viewers per month..

newTV

The big news in this space was that Roku paid $150m for the DSP DataXu, enhancing their ability to sell TV ads programmatically. This follows news that in Australia the major TV stations are cooperating to build their own DSP.

Clearly TV - old and new - is going to be bought in a different way going forward and the question is how quickly newTV aligns around one or two tech players. We can’t see the market is going to support lots of new start-ups and instead is likely to quickly align around the major players like Trade Desk, AppNexus and Google, as well as Amazon as they position Sizmek to play in newTV too. I mentioned that Amazon are pushing to get the rights to sell (some) ads on the TV services they help distribute and this deal gets Roku into contention.

Netflix are starting to act against the endemic password sharing - will we see something like the recent Spotify push to have people log into their family accounts through Google maps, so ascertaining location?

Wired have a good piece on AppleTV and their ambitions - clearly demonstrated by the fact the AppleTV app is now available on the Amazon Fire devices. No more GAFA squabbling. And a smart commentator points out the irony of ad free streaming networks buying lots of ads to get subscribers.

DTC

Amazon have not been able to make their private label fashion work (yet) and are trimming their brands. Discovery remains the key challenge in ecommerce and Amazon isn’t good at that - it is essentially a search engine. Other people are trying to sort discovery but the scale isn’t there yet.

The takeaway element of DTC keeps growing; McDonalds shared that 10% of their UK business is now delivery and 950 of their UK outlets work with UberEats. In one day they had 124k orders. With big numbers of downloads for their app too, they are building extensive 1st party data.

Most food brands doing well with delivery don’t have that data - it sits with the delivery platform who take the order, which is why a takeover battle has broken out for JustEat.

Naspers have their IPO proceeds burning a hole in their pocket (largely through their Tencent stake) and own some complementary businesses in Brazil and India as well as (through complicated ownership) a small stake in their rival bidder.

I still think that ultimately this market is won by being better at utilisation of people and hence Amazon or Uber will be a buyer for JustEat at some point.

Ads

The way that discovery gets solved is through ads. That’s always been the way brands tell people about their products and it’s a major way people find new products. Show people the right ads and people will do the right thing. Pinterest is a perfect example - the ads are almost the content and they are now innovating new approaches.

But the format of ads generally lags tech and taste. But there are good examples. Scottish Whisky brand Annandale has a partnership with Netflix film Outlaw King. In China Tencent Video can add ads to movie scenes - but it’s actually a super smart UK firm called Mirriad - some of the team are Fix subscribers.

Quick Reads

A good interview with Ad Fraud fighter Augustine Fou - worth a read and ask yourself if you are protected from this?

Smart thinking from A16Z on Community as a service - more evidence of new business models around direct payment

And Andrew Chen (also of A16Z) on Magic Metrics that demonstrate Product Market Fit

Some good conversation about the CAC and Lifetime Value metrics we discussed last week - this look at Hello Fresh retention data illustrates the problem with poorly defined metrics.

The Guardian on Mind-reading tech How private companies could gain access to our brains

Yet more from A16Z - a new book from their founder on creating the right Culture in companies. Pre order it here

Finally … we have our podcasts sort of ready to roll. Here is the full Directors Cut of my conversation with Rory Sutherland. Our friends as Acast have helped with Distribution and you should find RadioFix wherever you enjoy your Podcasts.

Please Subscribe - and share - as we have another great guest following shortly. And let me know what you think - lots of room for improvement.

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