AppGeek

iPhone Application

Hechnr Business Engines Inc. provides business consultation and incubation services for traditional and innovative businesses globally. 2012 Hechnr Business Engines Inc.

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Executive Summary
AppGeek iPhone App Introduction
1.
2. 3.

Utilize persona-types such as Entrepreneur, Scientist, Socialite etc. and compile a portfolio of top 10 iPhone applications aligned with the persona's wants and needs
Segment AppGeek users into three personas utilizing five simple and fun questions Allow users to rate apps, nominate new apps, and build their own personas

Primary Corporate Goal

Focus on growing user base to and maximizing user engagement in order to transition to the "go-to spot for app recommendations Point of View

With access to over 600,000 Apps, seeking out your optimal apps proves a daunting task. We believe there exists a market gap in app recommender systems which match users to the best iPhone apps based on the users interests and personality. We believe AppGeek fills this gap through its ability align all iPhone users to the latest and best iPhone apps optimal to the users needs and wants.

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Vision

We believe smartphone technology enriches human life. The emergence of smartphone applications enable users to; execute daily personal tasks, work functions, and kill time with ease and speed. We believe that every smartphone user should have easy access to applications which cater to the users needs and wants in order to ensure the smartest use of smartphone technology.

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Introduction
Insert Video Link Here

AppGeek

600,00 0 Apps

Top Apps for Athletes Top Apps for Athletes Top Apps for Entrepreneurs

?
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Market Assessment
Whats in this Section:

Market Analysis Competitive Analysis Opportunity Assessment Business Goals ROI Metrics

Sections:
Business Assessment Solution Assessment Roll-out Plan

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Apple and Samsung Devices Own over 50% of Global Smartphone Market
Global Sales Trend of Devices
40 35 30 25 20 15 10 5 0

iPhone

iPad

Samsung Smartphones
Source ARS Technica, Apple, YUDU Hechnr Inc.

Apps for Android will overtake the number of iOS Apps, but both markets steadily grow
Number of Apps In The App Store
1000000
900000 800000 700000 600000

500000
400000 300000 200000 100000 0

Apple

Android

Source Xylologic Hechnr Inc.

Total App Downloads exceed 25 BN and is forecasted to steadily increase

Monthly App Downloads

12
Downloads in Billions

10 8 6 4

2
0

Apple

Android
Source Xylologic

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56% of iOS Apps downloaded are free and 23% are paid*
Average app revenue per user (2010): Developer Income 2010 (source: IHS Screendigest): iOS App Store: $1,782M USD 30/70 rev split, so est. total App revenue: iOS App Store: $2,546M USD iOS users (2010): 120M iOS App Store: 21.22 per user per year ($1.77 monthly) Back of the envelop Ad-revenue calculation with 100,000 users is roughly $9,000 Roughly 9 per download from Ad- revenue (Refer to Appendix 1.1 & 1.2)
Source - AppsFire Hechnr Inc. 9

iOS mindshare commands a higher value than Android mindshare

$10.00 $9.00 Monthly Value of App User $8.00 $7.00 $6.00 $5.00 $4.00
$4.00 $4.00 $7.20 $6.70 $9.50

$3.00
$2.00 $1.00 $Utilities Entertainment App Category iPhone Android
Source mobclix

$1.90

Games

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Canada has relatively few 3G subscriptions but is estimated to grow at 32% Y/Y
Rank Country
USA Japan Korea Italy UK Germany Spain Indonesia France Australia Poland China Brazil Taiwan Canada

Market penetration strategy:

3G Subs (MM)
136.6 106.3 38.8 34.3 29.5 26.5 24.7 19.2 18.8 16.7 15.4 14.5 13.3 11.3 7.3

3G Penetration
48% 106.3% 38.8% 34.3% 29.5% 26.5% 24.7% 19.2% 18.8% 16.7% 15.4% 14.5% 13.3% 11.3% 32%

3G Subs Y/Y Growth

31% 12% 15% 28% 34% 30% 22% 57% 32% 31% 27% 941% 148% 69% 62%

1 2

1. 2. 3. 4. 5. 6. 7.

Canada USA Bangladesh China Brazil Japan UAE

3 4 5 6 7 8 9 10 11 12 13 14 17

Source Morgan Stanley Hechnr Inc. 11

Competitive Analysis
Competitor
Apple Stores App Genius Chomp Facebook App Store Zwapp AppsFire uQuery AppStore HQ Appolicious AppExplorer AppGiveAway RankSpeed

High-Threat

Mid-Threat

Low-Threat

User-base

Webinterface Yes* Yes* Yes Yes No Yes Yes Yes Yes Yes Yes Yes

AppInterface Yes Yes Yes Yes Yes Yes No No No No No No

Usability

Sharing

AutoDiscovery

Discussion

Recommendation engine

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Competitive Analysis
Competitor PC World-AppGuide Discovr Frenzapp AppZapp Yappler HeyZap Chorus StubleUpon Appsaurus Apponnect AppSpace by Zagg Online Articles User-base Webinterface Yes No No No No No No Yes NA No NA Yes AppInterface No Yes Yes Yes No Yes NA Yes NA Yes NA NA Usability Sharing

High-Threat

Mid-Threat

Low-Threat

AutoDiscovery

Discussion

Recommendation engine

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Opportunity Assessment
Barriers to entry

Approval from Apple Competition Cold-start problem

Market Gap
No app currently translates your interests into a persona

Unique Selling Point

Customized personas with top apps for your interests Hand-picked apps

Value Proposition
Equip your iPhone with this free iPhone App

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ROI Metrics
Size of user base Year 1 Target: 1,000,000 users

Revenue from Apple per recommended download

Target: 100,000 purchased at 99

Revenue from Advertisements

Revenue from Sponsored apps

Revenue from companies that pay for app placement

Target: 100 companies

Value of Mindshare

Target: 10,000 purchased at 99

5% per purchase

9 per user

10% per purchase?

$1000 per partnership?

$5 per user?

$4950

$90,000

$990 = $195,940 + Mindshare value

$100,000

$5,000,000

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Solution Assessment
Whats in this Section:

Challenges to consider Solution Requirements System Layout Proposed State Copy Proposed State Look & Feel Solution Design

Sections:
Business Need Solution Assessment Roll-out Plan

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Challenges to Consider
General problems with recommendation engines
Lack of Data

The more item and user data a recommender system has to work with, the stronger the chances of getting good recommendations. It is a chicken and egg problem
Changing Data Past behavior of users is not a good tool because the trends are always changing. Clearly an algorithmic approach will find it difficult if not impossible to keep up with fashion trends. Changing User Preferences The issue here is that while today I have a particular intention when browsing e.g. Amazon - tomorrow I might have a different intention Unpredictable Items The type of app that people either love or hate. These type of items are difficult to make recommendations on, because the user reaction to them tends to be diverse and unpredictable. 26% of apps are deleted after first use* If recommendations and impressions dont satisfy there is a good chance users will not return. Even with high download numbers if the customers never opens the app or abandons it after just a few uses, those high download numbers are really part of a high churn rate.
Source Localytics Hechnr Inc. 17

Solution Requirements
1. The system should be able to collect application metadata
In order to present and filter out applications, the system must be aware of available applications and their attributes. Metadata for each application must be collected and ultimately represented in a generic way in order to be stored and used. Give recommendations on similar apps and not recommend apps the user already has. Already installed applications are filtered out server-side. In some cases however, the server had not yet received and stored information about which applications a user had installed, before the user requested recommendations. A solution to this would be to filter recommended applications in the client application as well. In order to make the application filtering personalized, there must be a user profile. A user profile in the mobile application domain would consist of the users previous consumption of applications. Consumption could be installed applications, liked applications, applications shared to Twitter, time spent using an application and so on.

2. The client of the system should be able to detect applications installed on a device

3. The system should collect usage data from the users device

4. Contextual information should be associated with usage data 5. The system should allow the user to install recommended applications 6. The system should minimize explicit user feedback
Instead of getting users to rate apps explicitly, use implicit rankings

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Solution Requirements
7. The system should provide diverse recommendations to capture the broader taste of a user 8. The system should provide explanation of recommendations to increase user satisfaction and build 9. 10. 11. 12. 13. 14.
trust The system should be able to include exclusive filters (paid vs. free) The system should be capable to provide location based recommendation but prevent high GPS usage by switching it back on only when the device has moved a significant distance/time The system should allow for sharing apps by email/text/social media The system should allow for dismissal of an app from the list The system should have capability to find apps popular among friends The system should cache recommendations on the device Caching recommendations until the next request for recommendations is made to allow the user to accept a phone call perform other tasks, without recommended applications disappearing. Cached applications are removed as new ones are received to save storage. The system should allow a user to install all apps listed under a persona The system should only recommend apps which have a minimum number of explicit ratings The systems should be able to support multi-device, multi-platform per user The system should be security compliant based on a credible 3rd party such as viaForensics The system should allow sign-in through Facebook, Twitter, LinkedIn and Google Users spend 50 percent more time on sites when theyre logging in through social networks thats four more minutes with a social login than with a standard login.*
Source Gyga Hechnr Inc. 19

15. 16. 17. 18. 19.

Insights
Context-awareness of apps Application consumption differs depending on context. Weather, Location, Weekend vs. Weekday, Time, Gender, etc. To make use of this kind of information it is necessary to know which types of consumption may be obtained from a device and to analyze which types are meaningful. Privacy Although this personalization is found useful to the users, it may still cause a feeling of concern or discomfort strong enough to turn them away from a service or system. Privacy risks range from users being afraid that someone else will find out their preferences, to information getting in the hands of stalkers or identity thieves. Business perspective A. Items recommended to users, which have accuracy above random are naturally more likely to be clicked, and in the end bought. B. Companies will buy access to users, through advertisements on the site and also providing special accounts for developers, labels, artists, companies which include purchasable features directed at users with a specified taste. Prioritizing Implicit behavior (See Appendix 1.5) Correctly identifying user behavior for implicit ranking. Is an uninstall action always a bad rating or did the user actually like the application.

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System Layout
Metadata Provider

Server
iPhone Client
Server must be able to receive and store consumption data Receive a recommendations request from the client and respond to this request by computing recommendations Server must also be able to collect meta data for applications

Metadata & Consumption

Recommender Engine

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Proposed State Look & Layout

Login/Sign-up

Slider Question

Situational Question

Slider Question

Situational Question

Top Apps

Venn diagram report

Drag pictures question

Drag pictures question

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Proposed State Look & Feel

Scroll through personas

Nominate apps

Share Apps

Home Screen

Settings
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Proposed State

For 1. 2. 3. 4. 5. 6. 7. 8.

B2B Businesses The Ring Leader The Promoter The Closer The Analyst The Liaison The Boss The Bookkeeper The People Person

Hybrid 9. The Designer 10. The Scientist 11. The Banker 12. The Professor 13. The Entrepreneur 14. The Artist 15. The Photographer 16. The Engineer 17. The Techie 18. The Chef

For 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33.

B2C Businesses The Gamer The Athlete The Traveller The Socialite The Foodie The Yogi The Activist The Fitness Junkie The Goof The Fashionista The Musician The Motorhead The Naturalist The Distinguished The Cinaste

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Proposed State
Screen 1

Indoor --------------------------------------------------------------Outdoor Semi

Scientist Artist Designer Gamer Foodie Entrepreneur Banker Yogi Goof Activist Socialite Traveller Athlete

Screen 2
If Indoor, If you get an unexpected long weekend? a. Work on world changing ideas b. Developing my craft c. Do something colorful and creative d. Play games If Semi, If you won the lottery, what would you do? a. b. c. d. e. Invest in stocks Invest in start-up Discover culinary treasures Make paper-planes Money doesn't make a difference If Outdoor, If you won the lottery, what would you do? a. b. c. d. Fight for my cause Celebrate in style Feel pumped Travel the world

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Proposed State
Screen 3

Instinctive--------------------------------------------------------------Logical Semi
Socialite Artist Designer Traveler Goof Foodie Yogi Entrepreneur Athlete Gamer Activist Athlete Banker

Screen 4
If Instinctive, If you get an unexpected long weekend? a. Work on world changing ideas b. Developing my craft c. Do something colorful and creative d. Play games If Semi, If you won the lottery, what would you do? a. b. c. d. e. Invest in stocks Invest in start-up Discover culinary treasures Make paper-planes Money doesn't make a difference

If Semi in Q1 = Unexpected day-off If Outdoor OR indoor = Win a lottery If Logical, If you won the lottery, what would you do? a. b. c. d. Fight for my cause Celebrate in style Feel pumped Travel the world

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Pic a pic screen

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Proposed State
Screen 5

Scientist

Entrepreneur

You

Traveller

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Proposed State
Screen 6

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Roll-out Plan
Whats in this Section:
Pre-Launch Launch Post-launch

Sections:
Business Need Solution Assessment Roll-out Plan

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Pre-launch Roll Out Plan

QA Rejection Criteria http://10base-t.com/unofficial-appstore-rejection-criteria/ http://blogs.oreilly.com/iphone/2008/12/apples-new-position-on-app-acc.html

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Phase 2
Launch

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Phase 3
Post-Launch

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Appendix 1.1 Ad Revenue

Factors affecting Ad-Revenue

Percentage of ad-viewers who buy (Conversion rate) Partial customer life time value (CLV) Effective cost per thousand impressions (eCPM) The percentage of ad request filled by ads (fill rate) How much time a person who doesn't convert spends using your app What percentage of the install base is network connected

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Appendix 1.2 Ad Revenue

Ad-Revenue Calculation Average conversion rate for the entire mobile apps industry = 10%. So, first calculate the other 90%: 100,000 * .9 = 90,000 How many of those devices are network attached? Let's use 60%. 90,000 * .6 = 54,000 Let's assume that all of the non-converts just installed, tested, and deleted the app. How much time did they spend evaluating the app? Let's assume 5 minutes. For an ad display to count as an impression, it has to be up for 30 seconds, so that's 2 impressions per minute. 54,000 * 5 = 270,000 minutes * 2 impressions/minute = 540,000 impressions. Let's assume you get 100% fill rate for ads and your eCPM is $3. You've served 540,000 ads. So... 540,000 / 1000 (CPM is per 1000) = 540 * $3 = $1,620 So from the original 100,000, those 90,000 that downloaded, tried, didn't like, and deleted the app you made $1,620, or about $0.02 per . Now let's look a the 10,000 converts. You need to calculate their CLV (customer lifetime value). The most simple CLV is how much the person pays for the premium version or your app (or the average spend on in-app purchases) plus the value of the advertising they are served. We'll ignore the purchase revenue, since we're only interested in ad revenue. How long is a user considered a customer? At some point they'll get tired of your app and stop using it. Let's say they use it for an average of 3 weeks. During those three weeks, they use it for an average of 10 minutes a day. 7 days a week * 3 weeks * 10 minutes/day = 210 minutes So a customer uses your app for 210 minutes while they're a customer. How many ad impressions did you serve them? Let's assume a 100% fill rate. 210 minutes * 2 impressions/minute = 420 impressions. How much were you paid for those impressions. Let's assume the same $3 eCPM. 420 impressions / 1000 * $3 = $1.26 So you could make $1.26 per customer serving ads. There were 10,000 converts, but not every customer is network connected. If we use the same 60% figure above. 10,000 converts * 60% * $1.26 per convert = $7,600 and then converts + non-converts: $7,600 + $1,620 = $9,220

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Appendix 1.3 - Filtering systems

Content based

Recommendations can be based on the content of items, comparing the content of previously liked items with the content of unseen items and recommending similar ones. major drawback of the content-based approach is its inability to identify qualities of items, which are not machine readable or understandable. Humor and visual appeal are examples of such qualities. New User Problem Recommend items to a particular user based on how other users have rated items. New user and new item problem Items a user has rated are compared to all other items in terms of user ratings, the most similar ones with the highest average rating are then recommended. New user and new item problem Utilizing a users social network, digital or not, to produce recommendations is in most systems a matter of trust.

User-based Collaborative Filtering

Item-based Collaborative filtering

Social

Hybrid

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Appendix 1.4 - Solution Requirements

H1 Mobile application metadata can be gathered. (Proof- Appsaurus & AppSpace) H2 Mobile application metadata can be represented as a data structure useful for the recommender engine. (Proof Name and Category on Apple)

H3 A new user without a consumption history can be presented with good recommendations. (Ask Questions before recommendation, using location)
H4 A new item, which no users have consumed, can be considered during the application filtering. (Editor submitted) H5 Application consumption data can be collected and used to make recommendations. (Weak- but auto-detect in Zwapp) H6 The existing recommender engine, primarily designed for media, can be used in other domains, such as the application domain. (Fundamentally same principles)

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Appendix 1.5 - Collecting Consumption

The context contains information on the time and location associated with each consumption. This could be extended to include any information describing the context, such as battery status, sensory data, network connection, other applications running, et cetera. As the consumptions are stored locally rather than sent to the server instantly after their creation, they can be retrieved from the database and sent at any time. To save storage space on the mobile device, consumptions are deleted once they have been sent to the server. They are not deleted until the server has responded that everything went fine and that the consumptions have now been stored server-side.

Type Consumed Save Glimpse Consider Mark

Meaning The user ran the app in the foreground The user installed the app The app was shown on screen in a list (of recommendations) to the user The user viewed the details of an app The user placed the app in a list

Associate
Query Delete

The app was returned as a recommendation to the user (but was not necessarily display on screen)
The user requested apps similar to the app The user uninstalled the app

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