Analysing the addictiveness of a $200 million USD iPhone app

What’s the secret for a successful and profitable mobile app? It seems that it’s increasingly important to tap into a bag of psychological tricks to create experiences that encourage addictive usage and force users to pay to unlock their full gaming experience, writes Alex Pappademas in his article Sim Kardashian: Dopamine, Gork, and More Rewards for Being Consumed by the Most Important Game in the World

“These games are addictive because they exploit basic weaknesses of the human brain. If we perform a task and get a reward, even a meaningless one, our brains release dopamine; if we perform that task but get the reward only intermittently, our brains release more dopamine when we do get the reward. At least I think that’s how it works; I started reading a Guardian article about it and then went to check my Twitter mentions and got distracted.”

The game is built around the fact that you simply cannnot do that much as a “celebrity” if you don’t have enough “energy.”

“You’re too tired,” the game tells me, over and over. It’s a huge bummer. Maybe it’s the July heat or the side effects of a long gorkday that involved too much coffee and not enough water, but by the end of Wednesday afternoon, as I strain to complete even one job with my meager energy allotment, I’m starting to feel depleted myself.

Obviously, the whole game is built around the principle that you can buy energy. While one might be able to resist initially, it seems that many users give in.

Of course I broke down eventually. I kracked, I kaved, I kompromised my kode. It was bound to happen; in a sense, it was probably meant to happen. On Saturday night I slipped into the StarShop and spent 40 U.S. dollars on 460 K-stars, a package whose contents are cleverly depicted in the StarShop menu as overflowing out of a Louis Vuitton–ish purse. (If you buy 1,250 stars for $100 — “Best Value!” — there’s a picture of stars in a Louis trunk.) The transaction was seamless — one click, one password entry, and an email alerting me that $40 had been charged to my iTunes account.

This sort of gameplay has many parallels with drug addiction. It’s like a drug dealer handing out free “samples” until you become addicted at which point he begins charging you for subsequent “hits.”

This raises a multitude of questions about the way media consumption channels promote reckless spending and whether there should be some form of regulation as a form of consumer protection.


Financial Analysts, Fearful Managers and the Lack of Innovation

It’s not a major revelation that a short-term focus on quarterly results in public companies is detrimental to the willingness to innovate and experiment.

The exhaustive coverage of analysts who try to predict the next quarter and executives fearful of missing quarterly numbers are two major reasons for this.

A recently published study “The dark side of analyst coverage: The case of innovation” looked at the relationship between analyst coverage and firm innovation. It turns out that analyst coverage is negatively correlated with the number of patents generated.

We find that firms covered by a larger number of analysts generate fewer patents and patents with lower impact. […] Our identification tests suggest a causal effect of analyst coverage on firm innovation. The evidence is consistent with the hypothesis that analysts exert too much pressure on managers to meet short-term goals, impeding firms’ investment in long-term innovative projects.

Finally, we discuss possible underlying mechanisms through which analysts impede innovation and show that there is a residual effect of analyst coverage on firm innovation even after controlling for such mechanisms. […]

It’s interesting to see the interpretation of the results and the limitations of implications that the researchers include in their conclusions:

While we have shown a negative effect of analyst coverage on firm innovation, one must be cautious in drawing a normative (as opposed to a positive) inference from our results.

Since a firm’s optimal level of investment mix (short-term vs. long-term) is usually firm-specific and unobservable, it is virtually impossible to determine whether firm managers, in the absence of analyst coverage, overinvest in the long-term innovative projects.

If financial analysts actually prevent firm managers from investing suboptimally by squandering too many resources on long- term activities, then they may be performing a good deed for the shareholders.


Tools for Competitor Research in Mobile App Stores

When developing a mobile application, there will come a time when it is necessary to understand how other applications are performing in your app store.

Whether it is global and local rankings, ratings and reviews or download numbers, this information helps feed one’s curiosity and can be the basis for a competitive analysis of certain niches in the app store.

For different reasons, much of this information is not publicly provided by the app store providers such as Apple, Google or Amazon. For example, retrieving the ratings for an app in a different country is a cumbersome process in Apple’s App Store.

I have discovered one tool for studying the performance of certain applications, which is called App Annie. The free version of App Annie provides stats about historical ranking, ratings, featured apps and reviews for apps on the Apple App Store, Google Play and Amazon App Store for most countries in the world. This feature alone makes it a very useful tool. In case one needs more information such as app sales, market shares and competitor monitoring’, the premium intelligence package will cover those needs as well.

Other alternatives that I have not yes used myself  are Distimo, AppData and AppTrace.


Rules of Digital Transformation: Don’t Stop Once You’ve Launched

The digital transformation of business models requires companies to think hard about how products or services are offered in addition to what is being offered. After operating in primarily physical business models for years or decades, most organizations rely on static processes that cannot keep pace with the digital world. One symptom of this is slow product release cycles.

Very often, this limitation is due to constraints in an IT department that is operating without state-of-the-art hardware, software and techniques. The greatest resistance, however, usually comes from established stakeholders who see digital transformation as a threat rather than an opportunity.

A successful digital transformation must overcome that kind of mindset if an organization is to embrace digitalization as something more than simply a project with a beginning and an end. Instead, it is necessary to understand product development as a continuous delivery process. The adoption of rapid development process capabilities is the cornerstone for business model transformation in the digital age.

One company that understands digital transformation is the Financial Times, as TheMediaBriefing reports. The development of the fastFT, a real-time news stream on the Financial Times website, has created engaging and value-adding services for the paying readers of the Financial Times.

TheMediaBriefing interviewed product manager Alex Walters who identifies 6 product development lessons learned during the creation of fastFT:

  1. Collaborate
  2. You are not your user
  3. Work fast, iterate
  4. Understand how your product is being used
  5. Start with commercial goals
  6. Don’t stop once you’ve launched

Read the full article 6 product development lessons from how the Financial Times built fastFT


Could a Ban on Using PowerPoint Increase Productivity?

The Fermi National Accelerator Laboratory (Fermilab) is trying to improve the quality of their scientific discourse by banning PowerPoint from their weekly Physics forum.

The forum organizers made a switch from slides to chalkboard-style talks about six months ago. This is part of a larger effort by the LPC to shift the biweekly meetings from monologue to dialogue.

“Without slides, the forum participants go further off-script, with more interaction and curiosity,” said Andrew Askew, an assistant professor of physics at Florida State University and a co-organizer of the LPC physics forum. “We wanted to draw out the importance of the audience.”

It’s an interesting approach, especially since PowerPoint is such an important tool in business that it’s nearly impossible to communicate in any organization without sharing an electronic file with the omnipresent .pptx extension.

Obviously, the use of PowerPoint is not just a time-waster, as even the participants in the physics forum at Fermilab realize.

PowerPoint gives speakers an easy way to document their presentation so others can readily review the material later. But Elliot Hughes, a Rutgers University doctoral student and a participant in the forum, says a ban on slides has encouraged the physicists to connect with the present audience.

This distinction between these different use cases for PowerPoint also guides when to use PowerPoint in business. In situations when communication is important, such as real-time and late stages of conversation, PowerPoint remains valuable. In moments when collaboration and discussion are important, a different approach using whiteboards and flipcharts might yield better results.

Such rules work in fields where knowledge is deterministic such as physics, chemistry, computer science,etc. In business, many of our arguments are non-deterministic. For example, there is no proof that a strategy is “correct,” even though we may try to leave an impression of determinism. This quest for determinism is also one of the main reasons for the abuse of PowerPoint however. Because even when theories are flawed, a highly-polished PowerPoint presentation contributes to an impression that what is shown is definite and flawless.

Read more about the switch from PowerPoint to Whiteboards at Fermilab.


A Database of Wearable Devices & Technology

The early days of new industries are characterized by a high number of companies entering with new products and technologies. There were hundreds of automobile manufacturers in the early 20th century and dozens of computer manufacturers in the 1980s when the personal computing industry first took off.

With the emergence of a new industry around wearable devices and wearable computing, a similar pattern can be detected. Every week, new companies are started, new products are launched and new services offered. Keeping an up-to-date overview of this industry is difficult.

Vandrico, a R&D and consulting company in the wearables industry, has created an online database of wearable devices and technology. Not only does the database contain more than 100 devices, it seems that the database gets nearly daily updates as well.


Further Reading:

Vandrice Wearable Technologies Database