A Lesson in Global Markets

The latest season of The Apprentice has set its contestants some tricky challenges, but the one that caught my eye was creating and marketing a smartphone application. The fact that mobile applications are now being featured on reality TV shows demonstrates how far they’ve come in the past few years. In The Apprentice, Lord Sugar describes how today’s entrepreneurs have tremendous business opportunities to sell their products direct to an online global audience. And he’s right.

app_renticeOf course, developing an application is by no means a simple task. The two teams of male and female contestants initially struggled with creating a single idea on which to base the app. And even early market research proved ineffective, as high-street respondents failed to say what they wanted, other than something “easy and simple to use” that would pass the time. In the end, both teams developed programs based on sound clips. Slangatang, by the boys, played several slang phrases, mainly from the UK; Ampi App, from the girls, featured generic — and annoying — noises, such as animal sounds and cheering.

More intriguing was the steps taken to promote their respective products. The teams competed to get their apps promoted on the home pages of Wired, Techcrunch and Pocket-Lint and then attended a major tech conference to speak directly to a roomful of bloggers. Understandably, some of the hurdles that developers usually face were glossed over for the sake of the show. For example, the teams received free assistance from professional coders and free promotional deals. Nevertheless, it still it provided a snapshot of the process involved in bringing an application to market.

However, what ultimately disappointed me was the business aspect of the venture. The task lasted 24 hours, after which the apps went live for another 24 hours. The team with the greatest number of downloads at the end of the day won. Yet the applications were free downloads, which is hardly a good measure of business success. We don’t know how many customers genuinely downloaded the app because they liked it and whether they would continue using it later. And this is important, because the male team said they planned to introduce in-app purchasing, from which revenue could be collected. This wasn’t fully explored, so we don’t know which team would have been most profitable — an important measure of success in the mobile world.

If anything, I thought the biggest lesson learnt from this task was the significance of a global audience (which Lord Sugar did hint at during the start of the episode). The men appeared confident after their Slangatang generated just under 3,000 downloads after six hours, most from people in the UK. However, as international audiences came online over the next 18 hours, it gained only 1,000 more hits. The women started slowly, with fewer than 1,000 downloads for Ampi App after six hours, but reached an astonishing 10,000 hits after 24 hours, thanks to downloaders outside the UK. Whether by intent or not, the female team showed that developing an application with more global appeal was the smarter move. Colloquial phrases from the UK clearly have a limited audience.

Regardless of the merits of the teams’ applications, the episode demonstrated the size of the global market. As smartphone sales continue to grow in emerging markets, so do the business opportunities that lie ahead.