Book SummaryHow to Build a Billion Dollar App, by George Berkowski

1-Page Summary1-Page Book Summary of How to Build a Billion Dollar App

The Potential of Mobile Apps and Its Evolution

Berkowski starts by illustrating the massive and rapidly expanding mobile app opportunity that's come about over the past decade. He points to the remarkable growth of smartphones and applications since the iPhone's debut in 2007. Within just eight years, smartphone adoption has already tripled compared to desktop-computer adoption.

Mobile Domination

Berkowski argues that mobile is excelling on all fronts and this is evidenced by numerous factors. The mobile sector is growing at a jaw-dropping rate, fueled by an insatiable consumer demand for apps and smartphones.

Exponential Mobile Adoption Compared To Desktop Computing

Berkowski points out that the uptake of mobile computing has been over three times quicker than that of desktop computing. Microsoft released Windows during the 1980s, and it required 12 to 15 years to control 96 percent of the desktop computer market. The iPhone and Google's OS completely dismantled Microsoft's almost monopolistic hold on the personal-computer operating-system market in less than five years.

This rate of adoption points to a fascinating shift in consumer behavior: people desire computers that are mobile, and they are increasingly turning to smartphones to achieve that goal.

Context

• Mobile devices often have a lower entry cost compared to desktops, making them more accessible to a broader range of consumers, including those in lower-income brackets.
• Apple and Google employed aggressive marketing and strategic partnerships with mobile carriers, which facilitated the widespread distribution and adoption of their operating systems.
• The rise of social media platforms and messaging apps, which are primarily accessed via mobile devices, has driven the shift towards mobile computing.
• Touchscreen interfaces and intuitive design have made smartphones more user-friendly, attracting a broader audience, including those who may not be tech-savvy.

Mobile App Usage Dominating Time Spent Surfing Online

Berkowski reveals that apps now receive four times the daily attention as the web on mobile devices. It appears that the typical person using a smartphone is exceeding the 150 interactions-per-day milestone, and an average American is spending more than two hours per day (and that's almost 20 percent of their waking hours) using apps on a smartphone.

Practical Tips

• Optimize your mobile workspace by organizing apps into folders based on the frequency of use. Place the apps you use most often on the home screen or in a folder labeled "Daily," and less frequently used apps in a folder labeled "Occasional." This way, you can access your most important apps quickly, reducing the time spent searching for them and minimizing distractions from less important apps.
• Track your smartphone interactions for a week using a tally counter app to establish a baseline. By understanding your current usage, you can identify patterns and times of day when your interactions peak. For example, if you notice a surge in interactions during lunchtime, consider setting that time aside for a phone-free break.
• Establish a 'no-phone zone' in your home where smartphones are not allowed, such as the dining room or bedroom. This can help you create boundaries for app usage, encouraging more face-to-face interactions with family members or promoting better sleep hygiene by reducing blue light exposure before bedtime.

Global Smartphone User Base Exceeding 2 Billion

The phenomenal growth of mobile means that the next billion internet users will skip desktop computing and use mobile instead. In 2016, the global smartphone count surpassed 2.1 billion, with projections to reach over 2.3 billion in 2017. This represents a massive momentum shift toward mobile, making it hard to question that mobile apps are the most exciting business opportunity that history has ever witnessed.

Context

• The proliferation of smartphones has enabled the rise of the gig economy, with apps facilitating services like ride-sharing and food delivery.
• Many new smartphone users came from emerging markets where mobile infrastructure was expanding rapidly, providing internet access to populations that previously had limited connectivity.

Other Perspectives

• There are specific software applications and services that are optimized or only available for desktop platforms, which might necessitate the use of desktop computing for certain users or industries.
• The growth in mobile device usage does not address potential issues such as digital divide, where certain groups may not have equal access to mobile technology, or the environmental impact of producing and disposing of billions of smartphones.
• The saturation of the mobile app market means that competition is fierce, and not all apps will be successful or profitable.

App Revenue Generation

Berkowski argues that this impressive involvement with apps is producing revenue worth billions for everyone involved in the mobile industry. Revenue from app stores globally amounted to $51 billion in 2016, and in 2015, U.S. retail sales through mobile were as high as $80 billion. He notes that several clear strategies are at play, generating impressive revenues for the most savvy app entrepreneurs.

The App Store Ecosystem: Sales, Purchases Within Apps, and Ads

App marketplaces are producing enormous revenues. Developers pay Apple and Google a 30 percent commission on all paid app downloads and in-app purchases. In addition to selling apps via this payment mechanism, developers can also offer digital services and virtual goods within their apps. A standout among billion-dollar smartphone applications, the popular title Clash of Clans generates all of its income from in-app purchases. App stores appeal to developers due to their vast user bases of hundreds of millions, along with their user-friendly and secure purchasing systems....

How to Build a Billion Dollar App Summary Building and Expanding a Profitable App Company

Testing Whether Your Billion-Dollar Concept Is Valuable

Berkowski now shifts into a set of pragmatic steps about how best to go about creating your own app worth a billion dollars, beginning with an idea that can reach that value. He encourages 'thinking big', arguing that you should always begin with the most ambitious vision to ensure you push your limits and address the biggest problems.

Identifying a Large Market With a Widespread Issue

Berkowski defines a 'big problem' as one that affects millions or even billions of people and presents clear-cut examples with the emergence of Square, Instagram, Snapchat, and the famous puzzle game. He also suggests brainstorming to see if your app idea maps to one of Donald Brown's 'human universal' traits, which will enhance its widespread attraction.

Context

• Successful apps that solve 'big problems' typically leverage technology to simplify, enhance, or transform existing processes, making them more efficient or accessible.
• Games like Candy Crush Saga or Tetris address the universal human love for problem-solving and entertainment. They provide a quick, engaging way to pass time and challenge the brain,...

How to Build a Billion Dollar App Summary Securing Capital and Financing the Development Path of an Application

Raising Initial Capital

Berkowski emphasizes that raising funding should never be your ultimate objective; it's simply a means of accelerating your aspirations. Before seeking investment, you should ask yourself some difficult questions about your dream company: what does it look like to create a business that supports your billion-dollar app? Would the organization have 10, 100, or 1,000 people?

Attracting Supporters and Initial Investors

Berkowski argues that in these early seed funding days it's about attracting investors who are more willing to invest in a vision, a team, and a business model, rather than requiring an app with a solid revenue stream and a huge user base. The author suggests starting with your friends and family, and then moving beyond those willing to invest smaller amounts, like $5,000 to $100,000.

Practical Tips

• Create a "team portfolio" that showcases the skills, experiences, and achievements of your team members. Include brief bios, relevant professional milestones, and testimonials from past collaborators or clients. This portfolio can be shared with potential investors to demonstrate the strength and capability of your team. -...

How to Build a Billion Dollar App Summary Expanding the Organization, Creating Products, and Technical Aspects

Finding Top Employees

Berkowski explains that rapid business expansion relies on putting suitable individuals in the appropriate positions, so that all areas of the organization have sufficient expertise, experience, and passion to effectively execute the company vision. Founders can't (and shouldn't try to) do everything, so the best strategy is to pinpoint the critical, high-impact roles and then fill those with individuals who have previous experience and who can guide the growing company into the future.

Hiring Experienced Leaders in Marketing, Engineering, and Operations

Berkowski suggests that the three core roles that should be filled early in the expansion are the leaders of marketing, engineering, and operations. He emphasizes that the person leading marketing efforts should be a data geek, who understands how to attract and keep users and can measure and justify their performance with data. A vice-president of operations needs to have experience of efficiently building and managing teams, implementing processes at a large scale, in addition to ensuring a consistent and pleasurable customer support experience. On the engineering front, a vice-president...

How to Build a Billion Dollar App Summary Maintaining Culture and Making Strategic Decisions

The Importance of Culture

Berkowski explains that to build a company that will last, you need something people love, a business framework that can power that product, and a great team that can both build and manage it all. But there's an additional crucial component you need: culture.

Motivating and Empowering Your Employees Through Core Values

Company culture will evolve regardless of whether you try or not, so Berkowski stresses the importance of being deliberate to ensure you create the type of culture that fits your vision. He argues that culture is about encouraging a trusting atmosphere where concepts can be exchanged and where employees feel supported, empowered, and valued. He provides numerous examples of how the billion-dollar apps we've seen have achieved that goal, and why it is critical to their long-term success. The author argues that your company's culture is a dynamic asset that reflects how your organization makes decisions, how it communicates, and how problems are resolved—and one that should be continuously upheld and maintained.

Practical Tips

• Create an "Idea Passport" for yourself where you log different ideas you've contributed to...