Dance with the Devil: Apple, payments and the end of credit cards

*Update at 6:15pm at the bottom in light of Walgreens/CVS & Apple News

It truly amuses me to see the iWatch getting far more coverage than the upcoming Apple payments coup. With the recent news that Apple has struck deals with a group of leading banks (and procured discounts from them) and the major credit card companies, it’s clear that the iWallet (or whatever it will be called) is happening, and it’s happening in a big way. I was astonished when I heard that both the banks and the credit cards were involved, because when combined with the rumors of NFC in the iPhone, iWatch, or both, this starts to smell a lot more like a global payments system than a useful feature of iOS. When naming this post, I originally used the phrase “mobile payments” and then realized how obviously that missed the point. This is just about payments, period. Time’s article “Why Only Apple Has What it Takes To Disrupt Our Wallet” reminds us that these awesome developments in mobile payments have been —up until this point — junior partners to big-boy payments (closest thus far has been PayPal). Cupertino has done it before (smartphones, tablets) and they probably will do it again. This is just the first time that Apple is really going to distort reality without Jobs.

Some of this may be their impeccable timing, and their convenient tactic of always getting last-mover advantage that somehow seems like it was first-mover advantage in retrospect. But chiefly, we are here because true mobile-enabled payments is not a technology problem, it is an anthropology problem. It requires a thoughtful bundler to bring order to the chaos that has reigned early in this market’s life cycle. Apple will likely not be the payment monopoly – potentially Google, Amazon, or an upstart like Dwolla or Venmo or Square could position themselves to get a big chunk of it eventually – but they will be the ones to teach us the UI, metaphors, and framing that we use as a society to organize around a payment system. We’ve had NFC for years, and in reality Apple seems to have been treating those days as a free, extended beta test of the technology. If anyone is going to get NFC into the real world, it will be Apple, while at the same time leveraging their advantage of being able to offer software-based payment integrations (or online shopping at first) in parallel. It is not hard to imagine some sort of Passbook integration in the future with payments providers as diverse as Dwolla, Chain, Bank of America, Discover Card and Western Union.

But surely the executives at Visa, MasterCard and American Express are familiar with how things turned out for the record companies after they fled Napster’s wrath to the shade of iTunes. The obvious question is this: what the hell are they thinking? Why would they participate in magnifying the unparalleled advantage that Apple’s platform commands when, by some counts, upwards of 850 million credit cards are on file at iTunes? Apple could easily commoditize the payment provider as a category, all the while bolstering their demand-side economies of scale. With things like Dwolla and Bitcoin in particular, Apple has a ready-made substitute for credit cards once it establishes its platform of platforms. Money is really just information, and while the credit card companies have built one of the first great shrines to Metcalfe’s law (network effects), in a world being eaten by software, you had better build a big enough moat too.

There are some obvious short term boons here for the credit cards. If Apple passbook containing your Visa card causes you to use Visa more often (say, as opposed to cash), and its convenience maybe even spurs you to spend more online period, you could see some real growth in $$s processed (for a while at least). Maybe Amex can stake a claim as a concierge quality, high-end Passbook app instead of a physical card. Surely the brand is worth something in translation. But then they are simply playing on the home field of Venmo, Paypal, and a host of other payment services at every level of the stack, and who have access to the exact same phonebook graph and preferred identity layers (Facebook, Dropbox, Google etc). Do you really want to bet on a credit card company in an extended hackathon against a payment startup?

So, I’m actually not sure who the devil I’m referring to in the title is. But one way or another we’ll find out – a lot sooner than I expected.



According to Re/code, Apple has inked deals with still more partners for its payment system (believed to be NFC based). By apparently signing up Walgreens and CVS, Apple has paved the way for similar bilateral deals with large chains, and we can begin to see a coherent Apple strategy emerge. By training users to trust this payment mechanism at certain key places, Apple defines the interaction in classic Apple fashion and begins to slowly guide users into the future. Expect to see more large retailers and restaurants getting recruited into Apple’s payment network. This is the strategy that should really scare the credit card companies. One morning we may wake up and find that the big chains all “take iPhone.”

It also dawned on me what the point of the iWatch might actually be. If the iPhone 6 is technically the “first” iDevice with NFC, might iWatch be the cheaper NFC wallet option during the transition to NFC in the iPhone install base? Apple’s crude attempt at backwards compatibility? Perhaps with an old iPhone paired to an iWatch, you too can lose the plastic for iWallet.

Originally published on Medium

App discovery is broken. Can Product Hunt fix it?

With the launch of its new iOS app, Product Hunt is starting to look more and more like the App Store we always wanted

It is said that app discovery is broken. We have gone from a highly searchable, discoverable web dominated by Google Search to a few walled gardens. In the case of iOS, a single list portal has played the role of kingmaker since the 3rd party apps came to the platform in 2008. I think Benedict Evans nails it when he likens our current state of affairs to the pre-Google Yahoo directory where it was “every website on the internet.” Simply put, how can we minimize the epidemic of app store rot that Apple’s neglect of the App Store has caused?

Surely — with 1.2 million apps on the App Store — Apple’s ‘featured’ page and the leaderboards by category are not the most useful way to browse, search, and discover new apps. Apple recently shrunk the App Store’s top 250 to 150, further narrowing the aperture through which new apps could squeeze into the limelight. It is unsurprising that these top lists are dominated by incumbents like Facebook and Foursquare, no matter how rocky their constellation app launches have been. I’ve seen various data points on the disparity by income between the top 0.1% of apps and the rest, but really any way you slice it you keep coming back with Pareto’s Law. However, the result is not that new apps cannot be discovered (see here for the contrarian view that it isn’t broken). It’s that good ones could be discovered much more easily. That imbalance is healthy so long as the “elevator” that brings challengers up to duke it out with incumbents is healthy too.

I’m sure most of you who follow tech saw the news of Product Hunt’s raise and iOS app. Everyone who loves products is excited about Product Hunt for what it is already, but I’m also jazzed about them looking ahead. The web is littered with posts by founding teams glowing over their Product Hunt debut and how it attracted tons of high-quality early adopters. These early adopters are key to helping validate the concept, providing feedback, and spreading products that they love (check this deck out for more on this). They are treated almost as rules of thumb or shortcuts by their friends to the best new apps and products, and so reaching and engaging with them is proving to be crucial. Apps are being disovered on Product Hunt (or as a derivative of being discovered on PH) everyday — even without app discovery being an explicit focus.

I don’t know what percentage of products on Product Hunt are apps, but I would guess that its a pretty healthy one. With that in mind, lets take a look at the new PH app:

                               The new Product Hunt iOS app

Its elegance goes without saying. What I can’t shake is the feeling that this should really be the foundation of where I get my apps in the future. This could be a simple, curated discovery model with the deep install links and everything. We’ve seen plenty of “top free apps of the day” or other half-assed shots taken at app curation, search and discovery, but all have either failed miserably or faced legal action from the likes of Apple. I think some offspring of what Product Hunt currently has here is a better way to do it.

With the rise of anthropology over algorithim and the elevation of the app to pop culture icon status, I think Product Hunt could play a very interesting role. Currently, the non-reviewer users of Product Hunt are themselves also the “early adopter crowd,” but that may not always be the case. I believe this iOS app hints at an eventual wider audience for Product Hunt in the mainstream. A future where everyday people (ok fine — milennials) follow star product experts in the valley for new products the same way they follow reporters for news or their favorite fitness & diet expert for exercise tips. Why shouldn’t we find apps the same way we find stories on Reddit? The app business is likely to remain winner-take-all as always, but that does not mean we should resign ourselves to such a flat experience as the App Store. And despite the misleading articles being passed around lately about how the “average smartphone user downloads 0 apps,” this experience of discovery is becoming more and more important as apps truly become mass media.

Originally published on Medium

Internet of Pings: When Notifications Were Poised to Rule the World

We find ourselves at a peculiar non-equilibrium in apps. Drama in the mobile space has recently been underwritten by the perennial “unbundling” debate, and giants like Facebook (Slingshot, Paper), Dropbox (Carousel), Foursquare (Swarm), and Twitter (Vine) have all faced their share of soul searching in attempts to best position themselves along this continuum. Meanwhile, these new unbundles of joy simply add to the growing stack of notifications we’re forced to either deal with or waste time disabling. Compounded with what I call general “app sprawl” as the mobile ecosystem comes into its own, this march towards “peak notifications” is putting an increasing strain on the useful attention of the consumer. Strangely enough, these shifts may only give push notifications a more important role in making sense of the chaos.

Where should you chat with Facebook friends on mobile, and where should you share your pictures? How many apps can we really keep track of and be engaged with, and what happens as apps get replaced by other apps? These kinds of questions are fundamental, and we can only speculate as to where the chips will ultimately fall. But in addition to determining the winner(s) of the platform wars, this quagmire is also about what the atomic unit of the smartphone interface should be. When your phone is constantly buzzing with notifications – from iMessage to Twitter, to Lyft and Wunderlist – the only real method to the madness is the order in which those notifications appeared on your lockscreen. I have too many apps on my phone to count, and there are a decent number of ones that I check fairly regularly but which are scattered in the corners of my homescreen/folders. Notifications allow me to engage with my apps as relevant stuff happens to me — no hunting around for an icon (especially if I’m sneaking a peek at work). Apps without any notifications may simply waste away in a folder if pings continue to dominate the experience, but there could also be more purging of poorly behaved push notifiers as their intrusions become more and more unwelcome. We can debate all day as to whether Twitter’s or Facebook’s “app constellation” will shine brightest, but what good will the answer be in a mobile world where notifications shuffle deck once more?

One very real possibility is that the continued ascendancy of push notifications portends the future of smartphone UI. The initial logic of push notifications on mobile was to provide a little context along with the alert and allow the user to consume the tidbit of value without having to open the app. Things have certainly evolved. We see that actionable pings have become a powerful way to draw users into the apps themselves rather than taking the long route through the homescreen/general OS layer. Android has robust interactive notifications already, and iOS 8 is about to introduce them. This is why the WSJ called push notifications “ the most valuable property in the entire media universe,” in its write up on Yo. They appear to be the holy grail of user engagement and stickiness, with one recent study finding that adding push notifications increased user response rates by 300% across 6 verticals. A fascinating qualitative study on mobile user interactions found broad user support for a model of mobile interaction that is modular, notification-centric and ambient or MNA. This kind of “system initiated communication” as it is referred to demands less mental effort of the user while still allowing them to exercise control over the context that underpins the notification regime. People are tinkering furiously in this space for good reason. Personally, I would like to see some more experimentation in terms of what is actually in your notifications. I could imagine something cool like a “notification of notifications” summary notification strategy, or perhaps a one-bit mode where all pings from an app trigger a Yo instead of a distracting, readable message on your lock screen.

I don’t think compulsive refreshing of our favorite apps is going anywhere fast, but I think this kind of “push” oriented world as opposed to constantly having to “pull” when we want things is a running theme in mobile tech today (especially as the wearables revolution allegedly approaches). Apps with the strongest and most user-friendly notification strategy will certainly have the upper hand. Stanislas Cavalie pretty much nails it in his blog when he says, “Using push noti­fi­ca­tions is like knock­ing on people’s door. It’s bet­ter to have some­thing valu­able and per­son­al­ized to say, and it’s even bet­ter if you have been invited to enter!”

Notifications are, of course, the bread and butter of messaging, so I don’t think it is purely coincidence that the two have taken center stage around the same time 😉

Originally published on Medium

Pinterest, Layer and the Commoditization of Messaging

Most folks by now have had time to digest Facebook’s $19 billion acquisition of WhatsApp. Such an attention-grabbing headline brought with it a wave of meta-analysis about the future of communication. I’ll leave my take on the messaging app wars themselves to another post, but there is more going on beneath the surface with messaging more broadly as a category of mobile activity.

Let’s take a look at the rollout of Snapchat’s creatively named “Chats” feature that launched not so long ago. Had it not been for Snapchat’s success with “Stories,” the press might have poo-poo’d “Chats” more vociferously, but even still coverage has centered mostly around its “lukewarm” reception with users (citing various engagement sources) and its clever UI. Fresh off of the WhatsApp acquisition, tech-watchers were highly skeptical that another icon dedicated to messaging would make the coveted leap to “homescreen status.” Simply put, how many messaging apps do you really need? Don’t we have WhatsApp, Facebook’s Messenger, and Viber for regular text/picture messaging? That’s the theory, anyhow.

The jury is still out on Chats adoption and stickiness at Snapchat. I haven’t seen any real numbers, but anecdotally some people seem to like it — especially for 3–5 responses to a Snap that then might transition to iMessage. General messaging functionality helps round out the Snapchat experience and enhances their core use cases while allowing Snapchat to dip its toes into adjacent areas. We also saw this earlier in the week with Pinterest rolling out messaging functionality. Pinners can now chat with each other within the framework of shared content. It is easy to see how adding this discussion element to Pinterest could drive more engagement and eyeball time.

This is the commoditization of messaging — and it is not limited to social media. A few weeks ago, I booked my first Airbnb when I visited some college friends in New York. Once I had made the reservation, I was pleasantly surprised to see the seamless flow into a chat with the renter where we ironed out logistics. An ODE (On-Demand Economy) player like Airbnb benefits greatly from rounding out its customer experience with this communication layer. The goal here is different than the social networks: to make the process as easy and seamless as possible so that the customer uses Airbnb for all of their future accomodations. The same means — messaging — being used for a different end.

That brings us to one of the sickest companies out there right now: Layer (@Layer). Layer is the self-described “open communications layer for the internet,” and it provides a set of tools for any developer to integrate messaging (text/pics/video) into their mobile app. They are all-in on the commoditization of messaging, and recently hosted a HackLayer hackathon where developers took their yet to be released SDK for a test drive. Check out a blog post from the company that talks about some of the winning projects and their view on the future of in-app communications. Layer is continuing this trend of the maturation of the ‘startup stack’ in a similar way to Stripe in the in-app mobile payments arena.

A gigantic chunk of what we do with apps involves other people. Talking to other people is a key activity that can be incorporated into a myriad of things. Two taps lets you switch apps, and today’s mobile app power user is so far only minimally annoyed by checking and using 4–5 messaging apps and 5–6 apps with messaging capabilities. I think that this decoupling and recoupling of features x, y and z with messaging is going to yield some really interesting results. In some sense, messaging has gone from being the ‘killer app’ of mobile to being a best practice or ‘killer feature.’

Originally published on Medium