How to build a Billion Dollar app? | George Berkowski | TEDxCityUniversityLondon

good afternoon great to see you all here I love all these talks that have been going on today because it really is about persistence never giving up I want to talk about ambition ridiculous ambition billion-dollar ambition we keep hearing you know over here in the UK that we need to be like Americans that Silicon Valley is the only place that can make this happen but having been part of halo from the very beginning that company is halfway there it's a half a billion dollar app done here in London co-founded by cabbies and real people just like you and me here so let me sort of walk you through the stories of what a lot of billion-dollar apps have done and how actually they're not remarkable people they're not crazy different people dissimilar to you and me but actually how those journeys really make sense the more that you know about them but let's start by blaming someone this guy I think caused all the problems that we have today this guy was the world's first billionaire john d rockefeller self-made man built his business in oil became a tycoon and at the wonderful old age and in 1897 actually passed away as the world's richest person worth three hundred and thirty six billion dollars and is history's richest person and probably the richest person we'll ever see so now that we know that we probably won't be richer than him or we'll ever see anyone who is richer than him let's sort of figure out where we can go since him as of early this year we've got about eighteen hundred different billionaires around the world and they control and absolutely astounding seven trillion dollars worth of wealth the point here is is that people are becoming entrepreneurial and more and more so the vast majority of that wealth has been created by entrepreneurs by people who started in families that had nothing who were modest who were people like you and me and who saw problems out there and decided to go and address them and do something interesting today we have this wonderful term called unicorns that has really been adopted by the technology industry and again something that used to be so many evil and beautiful and kind of romantic it used to be the realm of girls and their tea parties but now my last slide sort of slipped it's much more kind of aggressive laser beams all kind of crazy and I think really represents and embodies a lot of the characteristics we all need to actually make it there these are the thirteen billion dollar apps that exist today these are companies that weren't happened five years ago these are companies that have incredible a bit of generated incredible amounts of wealth and value because of the amazing things that they're done and we're going to focus on a few of them and go through their stories and how they actually came about this just out of interest represents the last 10 years in the technology industry there have been 78 billion dollar or more companies and in the last couple of years this sort of arm on the right-hand side or has really extended crazily and we'll talk about one of those out company's the guys at who but again an industry where halo is trying to compete but we're you know naturally an American has done better because their persistence and try and figure out really why one of the reasons that Mobile has become such a lucrative and fascinating opportunity it's because of the simple sheer amount of time that we're spending on our devices and whether it causes loneliness or other problems it is one of these behaviors that's not going to go backwards and this is the last three years we have pretty much you know more than doubled the amount of time that we're spending on these devices and it's the people who understand this behavior and are taking advantage of it that are seeing fascinating opportunity astoundingly this is actually a two or three year old slide that I put up there on purpose it's no longer on average that each one of us here will interact with our smartphone 150 times a day it's more on the order now today in 2015 of 200 times a day that these little devices are taking over our lives and taking of our attention and as you can kind of see as we look down the bottom of that whether it's around messaging voice balls clock and music the vast frequency of these kind of actions in the exact actions and areas were some of the leading mobile apps are making huge inroads but the world is changing you know the opportunities that these kind of apps had three or four years ago are quite different the app stores were a lot smaller the competition was a lot lower today if you're starting a business like this and I still want to infuse people with hope but also a reality check if you've got three million competitors out there you also have eighty five billion downloads which is an opportunity in terms of how frequently people are actually down it's apps but here is the really challenging number the number of apps that people have used has flattened it was growing until the end of last year and we don't really see this number continuing to grow people on average everywhere around the world the only opening 28 apps on their phone every single month but the worst B is 75% of that time of your time is actually focused on your top four apps so when you think about these new players and these new businesses that are going out there this is not about creating something that is going to add to the amount of time that you're spending on your phone this is about actually displacing an existing behavior on your phone so the competition the mindset is very very complicated every day in the u.s. there are a hundred and fifty seven million people who go to work every day that's the size of this super active workforce and yet if we look at this app it actually has a hundred and sixty million people who play it every day more than a billion times 540 540 million people play it every month 15 million people every day and they spend over two billion dollars on it and I'm sure you all know it is this a good thing or a bad thing you know I don't know we'll let other people judge that but the simple truth is that that game was made by six people in three months and they thought it was an utter failure it was a small internal project for King that was launched right before Christmas two years ago and actually the team was pretty disappointed in what they did and they launched it in the App Store just before Christmas everyone went home people went on holiday and she didn't come back until the end of January and everyone thought that the analytics and measurements were broken in the because the numbers were off the chart little did they know that it would actually turn into the highest-grossing game pretty much of history so again don't don't be gonna be sad if something doesn't work straight away you know the history of King actually the company behind this game was actually brewing for 11 long years before these guys actually came up with their first blockbuster game I'm not sure whether I would have hung around for 11 years of persistence evolving through web games evolving through Facebook and then finally getting to mobile but again persistence is a long long journey the guys who were the founders of this company four out of the five founders persistent today there were hundreds of millions of pounds are actually happy really nice guys one of them left the company and was bought out for about two million pounds at a time needless to say that he kind of regretted her decision there are really two ways to kind of get into this kind of a billion dollar world these days if you look at the companies that are really really succeeding one is to do something incredibly good and to do it a lot better than everyone else but not just a bit better it's an order of magnitude better the other really interesting way to go about it is to actually do something that no one's really ever thought of before or done before and these are the two kind of stories that I think are fascinatingly interesting the first one whatsapp really starts off with Tyler Durden and Fight Club yonkou and his co-founder the guys who started whatsapp actually spent twenty long years together at Yahoo Yahoo makes all their money off advertising these two guys collectively hated advertising they hated their jobs while they were there post leaving Yahoo they tried to get jobs at Facebook he would turn down so they decided to go create their own company and interestingly Yan decided to create whatsapp but the first iteration of what happened was actually created by him because he wanted an app that told everybody that he was busy at the gym it was a status update app it had nothing to do with messaging or texting and actually for nine months he persisted and built this app that people liked it has probably not the most interesting thing when you plan to go to the gym once a month anyway so much sure how useful this is but he started listening to people eventually and people said actually why don't you put kind of a messaging feature in there that'd be pretty interesting also got a little bit more activity then what actually happened was fascinated listening to people back home in the Ukraine work where he was strong they were saying actually we'd really love to message you because it's incredibly expensive to message people in California in the US and you know our text messages cost us 30 or 40 cents just to get through can you actually build us a version of the app that works over here at the time iPhone wasn't readily available over there so they built a blackberry client so while for the Americans it was all great to have the iPhone version of whatsapp it only exploded and literally in the first week that they had a version of whatsapp on a blackberry did they get 200,000 organic downloads and that's where everything kind of changed these guys became super ubiquitous and as you can see just because they solved a very very simple problem which is making SMS messaging free they were able to grow way faster than any other competing company but they kept their profile nice and low and as of January this year these guys actually carried more SMS volume than the entire world sees on every single occasions company as well which is sort of justifies that wonderful price that actually Facebook paid for them at the end of the day which is 50 percent of Facebook's market caps today most analysts say that that was actually a bit of a steal in terms of the valuation of the company is probably gone up about 50 percent since that acquisition another really interesting example that I want to kind of talk about when you think about you know an astoundingly big opportunity especially in mobile is really disrupting something that's already there and again what's up did that quite well but I think overdid it much better and again this is an area that I know incredibly well with halo is how do we disrupt taxi medallions how do we disrupt a highly regulated industry where the prices are high where the service is not particularly good let's do something really interesting there today the idea of picking up an app tapping twice and getting a taxi or a Black Power private car to appear there a few minutes later is vaguely novel it's not even particularly interesting four years ago when we started halo people didn't believe it was possible both drivers and people alike and yet you start looking at the numbers especially uber yeah this is a sound you know absolutely astounding when you compare the valuation of the company compared to whom compared to Facebook these guys have a growth curve that the world has never seen before because it's an astounding and real business its valuation you know right now it was 41 billion dollars right and I think most people in this room would consider to be absolutely ludicrous it this number makes absolutely no sense to anybody but if you've actually dug into the numbers and understand what this business has been able to do in five years it's something that I we could never fathom even working in the technology industry for a decade there in 45 countries 220 cities and they've employed as of today 750,000 drivers all of that allows them to turn over eight billion dollars in fares last year you know does a valuation of 40 billion dollars kind of on top of that actually make it sound that crazy when you think about opportunities replacing something that someone does every day doing it incredibly well and then figuring out how to scale it is an astounding opportunity and when you think about the future of where their model is going I've got a good friend who used to be in the Android team over in the US at Google and he took one of their self-driving cars to work three times a week out of about a hundred trips he almost died once that's fair but you know in the 99 other times that he went it was perfectly smooth wonderful experience is it that hard to imagine and I only saw this last year when I saw someone's car park itself without them even touching the steering wheel is it that much of a stretch to think that we're going to have driverless cars that look cute just like that one made by Google on the road in two or three years time Google has come out there and said we're competing directly with uber even though they're their biggest investor someone is smelling a huge opportunity here so again the rate of change of technology and mobile is fascinating and interesting and I think that one of the most interesting parts of it is that here in London I think we're seeing it more in Silicon Valley we definitely see it but the future is already here there are early adopters of a lot of this technology people understand but a lot of these things will change and I think interestingly we're adopting them faster and faster if you're looking for opportunities and I'm always looking for opportunities to new businesses one thing that I came across in college when I was in the US was the 67 human Universal so these are the behaviors the traits and the features of culture and society of people that have now finally been documented to exist with every single culture in the world so one of these kind of you know I know but ahead was the min fantastic slide very easily readable from the back of the room but I've also highlighted the areas where people have already built billion-dollar companies there's plenty of black text there that represent fantastic interesting opportunities why is that interesting at the end of this year we'll have three and a half billion smartphones around the world there's a whole segment of the world's population that never had a PC that never went on the internet on the desktop there's a whole slew of people that will come in the next year or two in the billions who will only understand the internet connectedness because of smart mobile devices if you're looking for opportunities yeah there's quite a few right there one thing that I sort of love to point out to to people is that out of all the billion-dollar companies that have been made out there across those sixty eight or so the average age of co-founders of people who started these companies who had these great ideas you know it's not 21 it's not people who graduated from Stanford University for consumer-facing companies it's actually 30 rolls and for b2b companies is actually 37 year olds these are people who have been around the block who have had experience who've done it before who have had plenty of failures but who have built up teams and experience and suddenly understood that they can really launch something and put it together and also again to kind of reiterate the whole notion of perseverance and persistence the average time to actually build one of these companies is seven years so in order to really get there you know don't think that it's a short journey and the one thing that I really kind of want to end on is when you're kind of evaluating what is you know a massively interesting and good idea something that just appears inevitable something that you think really should be there that isn't there is often the answer to building something [Applause]

Channel: TEDx Talks

Views: 1,247,464

Keywords: TEDxTalks, English, United Kingdom, Technology, Apps, Big Data, Business, Coding, Communication, Globalization, Open-source, Play, Sharing, Shopping

Id: OwuEwhX1M_M

Length: 17min 39sec (1059 seconds)

Published: Tue May 05 2015