February 26, 2016: An article by Anne Kadet posted in today’s Wall Street Journal features comments from Didit’s Executive Chairman and co-founder Kevin Lee. The article, Letting an App Rule the Evening, discusses Bivid, a location-based social networking app hoping to gain traction. Ms. Kadet writes: “Last year alone, 95 social networking startups in the U.S. received more than $1.5 billion in venture backing—including 15 based in New York, according to PitchBook. The competition is bonkers.”
Kevin’s comments note that some digital startups — those lucky enough to have deep pockets — can afford to spend considerable sums on acquiring new users. “The churn rate is extremely high,” Kevin observes, citing the fact that some startups pay between $0.50 and $10 for every new app download.
Without a critical mass of users capable of generating the powerful network effects necessary for bringing in users — and the advertisers that follow — the odds of success for these startups are very long. As Columbia Business School’s Olivier Toubia — also quoted in the article — observes, “It’s a chicken and egg thing. The app will be useful only if there’s enough people posting, but people won’t post until it’s valuable.”
The complete article can be read at:
http://www.wsj.com/articles/letting-an-app-rule-the-evening-1456463161
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