Apps: Fad or the Future?

A river of apps… Fad or future? Is the app ecosystem fundamentally changing the way we live and work? philaaronson/Flickr

There’s always discussion of “bubbles” when apps like SnapChat get lofty valuations. With a new raise at a valuation of $10B from KPCB, you can’t blame some observers if they balk at the company that has yet to present a clear business model or revenue streams. Rightfully so: app developers know that monetization or user engagement are slippery slopes that don’t always work the way they intend them to. So what makes this different from the tech crash of the early 2000s?

Speculation aside, there’s is a far more significant trend underlying the whole economy. From generation to generation, one of the most important activities has always been the human transfer of knowledge and skills. Knowledge was documented in books and teachers gave lectures to classrooms of eager students. For as long as we can remember, this is how we have advanced as a species. However, this is shifted dramatically over the last century.

As computing and the internet have become a dominant part of the economy, the transfer of knowledge has increasingly become machine-to-human. Knowledge is now stored on countless servers, displayed on webpages, and accessible by apps. Even universities aren’t safe, as many potential students now turn to Massive Online Open Courses (MOOCs) from likes of Udacity and Coursera.

But the next shift in knowledge will be far more dramatic. Advancements in Artificial Intelligence (AI), robotics, and the Internet of Things (IoT) is ensuring that the prevalent transfer in knowledge and skills won’t be to humans at all. It will be machine-to-machine (M2M). Objects from connected cars, wearables, smartphones, iBeacons, and cameras will begin to communicate in ways that no entrepreneur has yet to imagine.

A simple example here is Nest, the learning thermostat company acquired by Google. Here is a single device that is making choices based on observed behaviors, and sharing that information with other devices. In enough homes and over longer periods of time, these silent activities will generate huge amounts of data on household behavior that will in turn become knowledge for other machines. And that is just one machine. As these connected devices penetrate more deeply into homes, offices, and spaces everywhere, the sharing of data between machines will exponentially increase. It’s this amount of data, both in amount and in velocity moved, that human minds have no chance of matching.

You might be tempted to just call this the power of big data, but let’s set the record straight: big data is nothing without analysis, analysis is nothing without actions, and actions are exactly what apps allow us to perform. Each layer has it’s purpose, and it’s the apps that provide the real value. Matthre Panzarino at TechCrunch said it well:

“We’re entering the age of apps as service layers. These are apps you have on your phone but only open when you know they explicitly have something to say to you. They aren’t for ‘idle browsing,’ they’re purpose-built and informed by contextual signals like hardware sensors, location, history of use and predictive computation.”

So what does all this have to do with SnapChat? While $10B for an app may seem ludicrous now (and could still very well be in future), it’s still early early days for how the app ecosystem is fundamentally changing the way we live and work. In the early 2000s, the combination of hardware economies, data speeds, and mass of software entrepreneurs had not cropped up. We now have fertile grounds for apps to grow and become the future.

Colin Chong heads up product management at AppCarousel.