Accelerators and Co-Work Spaces After Apps?

An Aug 22 Readwrite post drew our attention to a potential “peak app” period arising. That wasn’t the intended conclusion of the ComScore, Inc. according to the authors of the white paper, The U.S. Mobile App Report. The report’s focus is on how much of the digital media market is dominated by mobile devices so companies should direct more of their advertising budgets here. There are a few compelling stats, though, that should have many in the accelerator, co-work, and weekend/bootcamp/competitions wondering about the future viability of all of the new app-oriented startups we’re encouraging people to create. 

Perhaps the private sector doesn’t have to worry about it too much because market adjustments are part of the sector’s or industry’s business cycle. That’s why it is called risk capital and pivoting, after all. But should public policymakers and practitioners take a closer look at the expected outcomes of any publicly funded spaces in light of market trends or new realities?

Here are the stats from the report:

Nearly two-thirds of all smart phone users do not download a single app each month.

“[T]he total number of app downloads is highly concentrated within a small segment of the smartphone population, with the top 7 percent of owners accounting for nearly half of all download activity in a given month.”

Because of those heavy hitters, the monthly “average [number of downloads] among the entire smartphone population comes out to slightly more than one.”

“A staggering 42 percent of all app time spent on smartphones occurs on the individual’s single most used app. Nearly three out of every four minutes of app usage occurs on one of the individual’s top four apps.”

The comScore report also breaks down usage in greater detail, for instance, by app use and age cohort. It reveals six brands –Facebook, Google, Apple, Yahoo, Amazon and Ebay – “account for 9 out of 10 of the most used apps, 16 of the top 25, and 24 of the top 50.” This confirms for app accelerators and new coding entrepreneurs that designing an app that provides access to new or different personal information could provide a route to lucrative niche markets could be the most compelling way toward a successful exit.

Accelerators and co-work facilities also may need to recognize their already growing value for talent screening and recruitment by existing businesses needing freelance and full-time developers. There has been more than one description of co-work spaces and innovation hubs as being little more than talent development centers and holding pens. That is not necessarily a bad thing from a regional development perspective, but are these services/benefits properly included in the marketing or talent recruitment?

Other questions arise for the policy space: Will we see a rapid decline in the number of private mobile-based accelerators as they move to other areas (hint – note the recent increase in health and biotech accelerators)? Will the media and blogosphere pounce on bubble bursting and fad-bashing, ignoring the value other accelerators might retain? Will accelerators and lean startup and incubation converge into a different animal yet unknown?

What else does it mean specifically for regional innovation initiatives seeking economic development opportunities from these policy interventions? Does your portfolio of app-based companies in development or receiving entrepreneurial assistance reflect the market trends?  Are community stakeholder expectations properly including outcomes other than wealth creation for investors and sustainable startups?

Want to know what economic development leaders from around the country think about the role accelerators and co-working spaces play in innovative regions? Interested in how industry trends, including the rise of the mobile economy, will drive the evolution of these spaces? SSTI’s 2014 Annual Conference, Regional Prosperity Through Innovation, will feature an in-depth, interactive conversation on the use of accelerators, co-work facilities and incubators in regional economic strategies. Learn more…