tag:stream.growthink.com,2013:/posts Growthink: The Stream 2015-01-26T19:43:10Z Growthink tag:stream.growthink.com,2013:Post/802906 2015-01-26T19:41:27Z 2015-01-26T19:43:10Z Business Fundamentals Bootcamp! Our Company will be presenting at the Business Fundamentals Bootcamp, on Feb.10, 2015at the Beverly Hills Women's Club!  The theme of this event is “Think Big, Go Big!” To register and for further info please click here.
tag:stream.growthink.com,2013:Post/800728 2015-01-23T01:31:14Z 2015-01-23T01:31:14Z Thank You! Thanks to the Growthinkers who traveled far to Los Angeles today - Alicia, Bridget, Dave, and Stacey - for a great day of strategy sessions, brainstorms, and re-connecting.  And also a thanks and kudos to everyone who filled the day with such positive energy and "optimism bias"! Onward and upward for 2015 and beyond!  

tag:stream.growthink.com,2013:Post/799625 2015-01-22T00:07:33Z 2015-01-22T00:13:02Z L.A. tech funding hit $3 billion in 2014

Annlee Ellingson - Staff Writer-L.A. Biz

Something's going on in L.A. all right. The region earned its reputation as the fastest-growing startup ecosystem in the world in 2014. Digital tech companies in the county raised $3.04 billion last year, according to Built in Los Angeles' annual report— a 188 percent surge over 2013, when the local tech scene raised $1.06 billion. And 82 firms saw $5.9 billion from exits — up a whopping 430 percent.

"2014 was a banner year for L.A.'s tech ecosystem, which has helped grow our economy and reduce our unemployment rate by 2 percent," Mayor Eric Garcetti said in the report. "This report shows that Los Angeles has the creativity and talent needed for the digital tech industry to thrive."

Last year, more than 250 companies got funding, and 172 of them raised more than $1 million, with Snapchat's $486 million round right at the end of the year leading investments. In addition, 80 companies were acquired and two went public, led byMaker Studios' $500 million sale to Disney(in a deal worth up to $950 million) and TrueCar's $1 billion valuation after its IPO.

Other 2014 highlights includedConversant's $2.1 billion buy by Alliance Data SytemsInternet Brands' $1.1 billion acquisition by KKR, Ad Colony's $350 million sale to Opera, LegalZoom's $200 million investment by Permira, true[x]'s $200 million acquisition by 21st Century Fox,StyleHaul's $107 million sale to RTL Group, and the Rubicon Project's $102 million IPO.


Melissa Welch

Director of Client Development



(310) 846-5015

Melissa Welch
tag:stream.growthink.com,2013:Post/798420 2015-01-19T18:48:33Z 2015-01-19T18:48:34Z The 2015 Consumer Electronics Show: the Future Looks Amazing!

The recent International Consumer Electronics Show (CES) in Las Vegas featured more than 3600 exhibitors and was attended by over 170,000 people, both show records. It’s a trade-only event for the consumer technology industry and not open to the general public. Exhibitors include many startups up to Fortune 500 companies like Ford, pictured below.

​Ford’s display was over 25,000 square feet, featured a live jazz band, and had a 250 square foot video screen behind the band. It was estimated Ford spent over $1 million on their CES display.

Among the hottest products on display were drones. Over 80 exhibitors featured drones, a 500% increase over 2014.

​In the midst of the intensity of commerce, one exhibitor still found time to honor the victims of the French terror attacks.

Virtual reality was immensely popular. Occulus had a huge display and offered virtual reality demonstrations which were easily among the top three experiences of those attendees who often waited hours to participate.

​CES 2015, for the first time, featured a separate Bitcoin area with 11 exhibitors (in 2014 there were only two Bitcoin exhibitors). Two of the Bitcoin exhibitors, Blockchain and BitPay, have each received over $30 million in investor funding.

​CES is the world’s largest trade show. It would be impossible for one person to even walk by every exhibitor’s display during the four days of the show. It gives one an idea of just how massive the US economy is and is a great gauge of what consumers want. New products and services offered by startups give a glimpse into a fast-changing future which promises to be amazing and profitable. At CES, the spirit of entrepreneurship is front and center. That is a great sign for the American economy.

Luke Brown
tag:stream.growthink.com,2013:Post/793330 2015-01-08T17:23:49Z 2015-01-08T17:23:51Z The Entrepreneur Boom is a Bust

Reliable news sources -- including CNBC, the Kauffman Foundation, US News & World Report, and others – have published articles about the boom in entrepreneurship. While it may make for a great story, a quick look at the numbers shows otherwise.

According to recently published statistics from the U.S. Labor Department, just 3.6% of Americans under 30 own equity in a business, a drop of over 66% since 1989, when the US population was 247 million compared to the current 327 million. That’s a drop of almost 15 million individuals.

A number of factors can help explain this long-term trend.

·         Debt from student loans  Money spent to repay student loans means it takes longer to save money to self-fund a business. With high student loan default rates and flat or minimum increases in wages it’s difficult to save enough money to start a business.  

·         Post-recession fallout  Prior to the Great Recession, Millennials had generally grown up in an economy which was stronger than the historical average. Seeing job losses and company closings is scary for those undergoing their first economic downturn. Safety and stability often become more desired than controlling one’s destiny by starting a business. It takes time and maturity to understand that the economy is cyclical.

·         Fear of failure  Some social scientists have pointed out that over-protective parents with a risk-averse mentality cannot possibly create a home environment conducive to the curiosity and joy of discovery needed by entrepreneurs.

·         Lack of exposure to conventional business models  Starting on a shoe-string budget, slowly building revenues, taking on little or no debt or investor capital, and being profitable from the beginning are business attributes seen as boring by many Millennials. Ignoring business models in non-tech industries reduces the number of opportunities available to potential entrepreneurs.

·         The political environment  Anti-business activist groups ignore the many positive contributions made by small and startup businesses. Lack of exposure to positive contributions by businesses reduces the desire to be an entrepreneur.

·         Fewer workers and more independent contractors  As companies outsource more jobs to independent contractors, many workers are self-employed yet have few or no benefits and low pay, factors which contribute to an inability to grow their independent contractor businesses.

Trends like this don’t turn around overnight but there have been positive signs lately. Lower gas prices have increased American’s confidence in the economy according to the University of Michigan’s Index of Consumer Sentiment, up 13.5% in 2014 compared to 2013 and up 5.4% in December, 2014 compared to November, 2014. Confidence in the economy generally means an increase in the number of business startups.

More Millennials are moving from their parent’s homes into their own dwellings. This requires the purchase of household items which gives an overall general boost to US GDP.  This also contributes to consumer confidence.

The “Internet of Things”, which brings technology to items typically thought of as non-tech, opens many opportunities for those who have grown up with, and are comfortable using, technology.

More colleges and universities are now offering degrees in Entrepreneurship which can hopefully give potential entrepreneurs some of the skills and confidence they’ll need to start businesses.

Just as the Depression spawned the mindset of The Greatest Generation, I’m confident the Great Recession and the slow recovery have taught potential entrepreneurs how to be resourceful, which is one of the most powerful skills an entrepreneur will need. 

Luke Brown
tag:stream.growthink.com,2013:Post/790629 2015-01-03T14:19:49Z 2015-01-03T18:45:20Z Happy Anniversary Andrew Bordeaux Please join me in congratulating Andrew Bordeaux on his EIGHTH anniversary at Growthink.

Andrew started with us on January 3rd 2007.

Andrew has and continues to make great contributions to both Growthink and Guiding Metrics -- thanks for all your hard work!

Dave Lavinsky
tag:stream.growthink.com,2013:Post/789616 2014-12-31T16:17:42Z 2015-01-04T15:31:45Z Market Research Team Welcomes Alicia LaDuke

Growthink's Market Research Team is thrilled to welcome Alicia LaDuke!  With 10 years of research and business analyst experience, most recently at Kelly Services, a $5 billion firm,  and a Masters in Library & Information Science from Wayne State University.  Alicia is a great addition to the team and a valuable asset for our clients and expanding market research practice. 

Alicia will be in Los Angeles on January 22nd to meet the team, but until then, please join me in giving her a warm Growthink welcome!

tag:stream.growthink.com,2013:Post/785411 2014-12-18T21:29:18Z 2014-12-18T21:37:57Z Happy Holidays from Growthink LA!

tag:stream.growthink.com,2013:Post/774567 2014-11-24T19:09:35Z 2014-11-24T19:09:35Z Happy Thanksgiving from Mt. Kisco! Great to visit with the NY gang - old faces and new!  Happy Thanksgiving to all!

tag:stream.growthink.com,2013:Post/771226 2014-11-18T00:40:12Z 2014-11-18T00:40:12Z What Makes a Great Growthinker? (Kudos Jonathan Gomez!) Nice kudos to Jonathan Gomez for suggesting this great Monday morning meeting question - "What Makes a Great Growthinker?"  Here were some of the answers the LA Team shared:

"Be Quick but Don't Hurry"

"Patience and Persistence"

"Client Focus"




"Attention to Detail"

Many of these are included and expressed in our values, our client promises, and our company culture as expressed on our website, but is a great reminder as we start our week to share them in our own words.

tag:stream.growthink.com,2013:Post/771075 2014-11-17T17:43:54Z 2014-11-17T17:43:54Z Anna Vitale with A Shine & Co. in New York

Best shoeshine in New York City from Growthink client A Shine & Co. at the Chelsea Market last Friday. Thank you, Kevin!! 

tag:stream.growthink.com,2013:Post/769260 2014-11-13T18:09:28Z 2014-11-13T18:35:50Z Congratulations Bret Stewart for FOUR YEARS at Growthink!

Bret Stewart has been living the dream in his career at Growthink.  Bret is a humble and great team player, helping everyone around him succeed.  Today we celebrate his four year work anniversary!! 

tag:stream.growthink.com,2013:Post/769181 2014-11-13T16:49:01Z 2014-11-13T18:35:33Z Growthink #61 on the List of the Fastest Growing Private Companies in Los Angeles! Proud and excited to make the list!

tag:stream.growthink.com,2013:Post/767950 2014-11-10T23:15:54Z 2014-11-11T13:53:24Z Another great shout out to our market research team! "This is one of the most awesome services I've ever discovered online! I appreciate what you and your team do!"  

-Roy Cotton

tag:stream.growthink.com,2013:Post/766738 2014-11-07T16:56:53Z 2014-11-07T16:56:53Z Venture in Los Angeles - Brazilian Edition at USC

Luke Brown
tag:stream.growthink.com,2013:Post/764523 2014-11-03T16:30:09Z 2014-11-03T20:03:25Z Great Work by Maria Williams of the Growthink Market Research team! "What else can I say but, WOW! I am absolutely blown away by what was compiled for my market research, impressed I mean. How could I have EVER produced such a compilation? Not easily I can assure you, and now that you have completed it, and with only a brief perusal I can see the depth and clarity of the information. I suspect you have some pretty nifty computing power, but how it was done is irrelevant, I cannot thank you all enough. Very fine work!

A very grateful start-up owner, 

Patrick Minns

Solar Tech DIY, Inc"

tag:stream.growthink.com,2013:Post/762886 2014-10-30T23:37:01Z 2014-10-30T23:37:02Z Aaron Levie Honored at Silicon Beach at USC Event

Aaron Levie, co-founder and CEO of enterprise close company Box, was honored yesterday as the USC Alumni Entrepreneur of the Year. The Lloyd Greif Center for Entrepreneurial Studies, part of USC's Marshall School of Business, hosted the event, which was attended by over 500 entrepreneurs, investors, service providers, and students.

Levie spoke for about an hour, then took questions from students in the audience. He was funny and engaging and offered up a superb gem of wisdom when he said Box really started to grow once they adopted a mindset of "Constant, relentless execution mode."

Now in its third year, the event featured break out panels on diverse topics for entrepreneurs such as:
  • Business models and business plans
  • Apps and the growth of mobile phones
  • Legal advice and structures
  • Marketing
  • Cryptocurrency (such as BitCoin)
  • Generating revenue
$50,000 in prize money was also given away in the finals of the Venture Competition. Each team gave an eight minute presentation followed by five minutes of Q&A from four judges, including Lloyd Greif. The winners were:

1st prize, $25,000 to LeadBoost
2nd prize, $15,000 to StatisLabs
3rd prize, $10,000 to Movn​
Luke Brown
tag:stream.growthink.com,2013:Post/754807 2014-10-13T18:23:51Z 2014-10-13T18:23:52Z Client Success - Studiovox Signs Partnership with Sundance Group StudioVox Partners With Sundance Cinemas to Expand Opportunities for Creatives With New Professional Network


LOS ANGELES, CA--(Marketwired - Oct 8, 2014) -StudioVox, a Los Angeles-based online network for creative professionals offering a platform for visual artists, photographers, interior designers, performers, filmmakers, musicians and other artists to network with likeminded colleagues, agents, companies and fans, announces its partnership with Sundance Cinemas Galleries, of Robert Redford's Sundance Group. StudioVox serves as the submission and curation platform for artwork to be exhibited at Sundance Cinemas' fine art galleries in West Hollywood, San Francisco, Seattle, Houston and Madison, Wis.

Unlike LinkedIn and traditional social media sites,StudioVox fills the gap as a credible site for showcasing creative talent, connecting and collaborating with others, finding work, building teams and hiring talent. StudioVox allows creatives to promote themselves by creating a comprehensive profile with which they can share their portfolios and work.

"Our partnership with Sundance mirrors our purpose. It offers our community of artists a chance to be seen and have their art recognized by a brand built on creating opportunities for new voices in the arts to be heard, as well as its continuing commitment to quality in the arts," says StudioVox CEO and Co-Founder Amanda Slingerland.

StudioVox' platform offers instant promotion and exposure, with the additional abilities to schedule and invite people to events and house personal blogs, as well as soon-to-be-added capabilities that will streamline the ability for users to push their StudioVox content out to Facebook, Twitter and LinkedIn profiles and sell art, music and merchandise directly from the site.

"Our new relationship with StudioVox is a gift. It's a gift to us, as we are now able to draw upon their fantastic connections in the art world, and a gift to the artists, as not only will they have shows at Sundance Cinemas, but StudioVox will be enhancing the way the shows are marketed, thusly giving the artists much deserved acknowledgement," says Nancy Klasky Gribler, Executive Vice President of Marketing, Sundance Cinemas.

The partnership is being celebrated with a private party at Sundance Cinemas in West Hollywood on Oct. 9, where StudioVox artist and Los Angeles-based abstract painter Lori Dorn's artwork is exhibited through November.

To submit your artwork for consideration for exhibition at the Sundance Cinemas Galleries, peruse artists' portfolios and creative works, or look for talent, visit StudioVox.com.

Source: See articles on StudioVoxMarket Wired or Yahoo Finance.

tag:stream.growthink.com,2013:Post/753154 2014-10-09T17:48:18Z 2014-10-09T17:48:19Z Teens are officially over Facebook

(Paul Walsh/Flickr)

By Caitlin Dewey

Since children are the future, and no one over 21 really knows what they find “cool” (do the kids even say cool these days…?), researchers have devoted many, many surveys to the exact quantification of what it is #teens do online.

In May 2013, they were fleeing Facebook’s “drama.” A year later, they flocked back to the network like lil’ lost sheep.

Now, a pretty dramatic new report out from Piper Jaffray — an investment bank with a sizable research arm — rules that the kids are over Facebook once and for all, having fled Mark Zuckerberg’s parent-flooded shores for the more forgiving embraces of Twitter and Instagram. Between fall 2014 and spring 2014, when Piper Jaffray last conducted this survey, Facebook use among teenagers aged 13 to 19 plummeted from 72 percent to 45 percent. In other words, less than half of the teenagers surveyed said “yes” when asked if they use Facebook. (A note: There’s no spring data available for the “no networks” option, which is why that spot is blank.)

Surveys of this type are, of course, a dime a dozen, and teen whims are as volatile as Twitter’s trending hashtags. That said, Piper Jaffray’s research is pretty thorough: It surveyed a national group of 7,200 students and accounted for variables like gender and household income.

Among the survey’s other findings: Kids love Apple products above any other consumer tech brand, though only a sliver — 16 percent — were interested in the iWatch. They overwhelmingly predicted that, by 2019, they’d watch all their movies on Netflix. They’re cooling on Pandora radio, which has seen a host of streaming apps and other competitors crop up in the past five years.

Alas, none of this helps explain why teens like the things they do, a question as old and impenetrable as time. Both research and anecdote would suggest, of course, that it has something to do with the presence of adults on the site, as well as the typically high-school plagues of oversharing and in-fighting. The recent rise of anonymous social apps — things like Whisper and Yik Yak, which is dominated by college students — would also seem to suggest a youthful wish to escape the confines and responsibilities of a fixed online identity. (Facebook certainly seems to worry that’s the case: On Tuesday the New York Times reported that the Web site was working on an anonymous, stand-alone messaging app of its own.)

That should perhaps worry parents, of both the helicopter and cool-Dad variety: You can’t really interact with — or “check up on” — your kids on Whisper the way you do on ye olde FB. (Whisper users don’t have friends and go on under pseudonymous usernames, which, arguably, is the app’s main draw.)

Facebook needn’t panic, though. Even if it’s namesake platform is now totally passe, the kids still love Instagram — so Zuck wins, either way.

Luke Brown
tag:stream.growthink.com,2013:Post/752755 2014-10-08T20:59:25Z 2014-10-08T21:44:34Z Growthink Exhibits at LAEDC 2015 Economic Forecast On October 8th, LAEDC presented the 2015 Economic Forecast Event.
LAEDC’s twice-yearly economic forecast events provide insight and planning information to our members, partners, LA County leaders, and the general public.  For this event, LAEDC shifted its format to include a five-year planning horizon, and with the help of our guests such as Cal State University Chancellor Timothy White and expert panelists, we discussed the drivers in the economy related to education and skills.

The industry panel discussed how their workforce needs are changing and made recommendations on the skills needed to remain relevant and in-demand

  • Jodie Lesh of Kaiser Permanente
  • Michael Bissonette of AeroVironment, and Steve Nissen of NBC Universal
  • Art Yoon, FilmLA
  • David Rattray of LA Area Chamber of Commerce
Growthinkers Myke Andrews, Luke Brown and Justin Goodkind represented Growthink, below.

The full industry report is available here.

Luke Brown
tag:stream.growthink.com,2013:Post/750664 2014-10-03T21:20:25Z 2014-10-03T21:20:26Z Tips on Negotiating a Termsheet

Last year, OpenTable founder and all-around great guy, Chuck Templeton, asked me to put together a talk on negotiating termsheets for participants in his Impact Engine program. Although Chuck thought he was asking a favor of me, I found the process of organizing my thoughts on negotiating termsheets (and in general) a personally useful exercise. Below is a digest of the talk including some of my tips.

You see, I got a “B” grade in my negotiations class at Chicago Booth. It’s my own fault for not doing a great job on my final paper. The only time I’ve ever tried to discuss a final grade with a professor (in undergrad or grad) was that class, since I figured that a negotiations professor would have no choice but to appreciate a student trying to negotiate a better grade. The professor never responded to my request for a meeting, which branded upon my forehead one of the great tactics in negotiations: don’t negotiate at all. Well that’s why he was the professor and I was the student.


Ever since then, I’ve been trying to make up for my “B” and have given much thought to the many negotiations I’ve been through in the last 13 years (including buying cars). I’ve paid close attention to great negotiators and bad ones.


Sharing these tips may come as a surprise to people– a VC sharing the secrets of negotiating?! But I don’t see it that way. My philosophy is that I want an entrepreneur to understand in detail the deal they are signing up for. Anything different results in disappointment and a bad partnership eventually. A good negotiator on the other side will express the principles behind their goals (not positions) and we can get to a solution (or not) quickly. Bad negotiators hide their true intentions, obfuscate and confuse, which makes it much harder for the other party to fashion an agreement that satisfies the counterparty. It’s like refusing to tell your spouse what types of gifts you would like for the holidays– you are less likely to be happy with the outcome, or worse yet maybe you won’t get a gift at all!


Not all negotiation tactics/strategies are applicable for all situations. And the approach you use will also depend on your personality and style. It will also depend on your business. For example, distressed investors negotiate with the power and asymmetric leverage of certain doom as an alternative to their deal. Yet a different approach is required for the president of the tiny country of Maldives trying to convince world powers to stem global warming (see the film The Island President in my list of documentaries). So this advice below is applicable in situations where there is balanced leverage.


I like to approach negotiating and a problem solving exercise. I find that makes it less confrontational and less uncomfortable for everyone. When I was negotiating the Base CRM investment, Uzi and I sat at a Carribou Coffee on Clark Street with the cap table in front of us on one computer, and we would just change the numbers together to find something that was fair, Excel goal seek be damned.


Here are some of my observations from great negotiators over the years:
Some of these are worth highlighting. Finding “trades” is a great one that you learn playing Monopoly. When two people assign different values to items in a negotiation, there arises a great opportunity to trade. Without Park Place, Boardwalk isn’t as valuable to you as it is to the owner of Park Place. And if that owner has a property you need to complete a monopoly, that they in turn value differently than you do, there’s a good chance for a deal. This is a great example of how negotiation can create net value– both sides gain. This is opposed to value-claiming, when creativity doesn’t result in more total value- it’s just a land-grab for the existing value. Given the endless customization of termsheets, there usually lies opportunity to create value for those who are creative. So when in a negotiation and there is disagreement about what terms are important, that’s generally great news!


Seeking fair deals may also surprise some as a tip. I’ve seen countless examples of deals that were funded with unfair terms in earlier rounds. Regardless of which side “won” the negotiation, it winds up biting in later rounds, especially as one side feels scorned.


And in contrast, here are some of the mistakes I’ve seen lousy negotiators make:


There is one mistake I’ve seen a lot of entrepreneurs make that ultimately costs them: singular focus on valuation. The truth is that economic value in a termsheet is a function of many terms: pre-money valuation, liquidation preference, size of the option pool, if the option pool is pre or post money, warrants, anti-dilution provisions, dividends, etc. Good negotiators treat all of these as a package. And while each of these economic terms have different magnitude and behavior (some are a function of time, some emphasize downside others upside, likelihood of being negotiated away), they all play a part in the overall economic outcome for a founder. I understand that it’s more impressive to the market to have a big valuation, and no one is going to write a blog post highlighting your small, post-money option pool. It’s just not as exciting. But if all of the PR and personal pride is at the expense of all the other economic terms, that ability to brag has a real cost to it. Per-money valuation is like the MSRP of a car– every educated person knows that’s not what it’s really worth, and that there are a lot of factors that determine the true value.


So good luck on whatever you are negotiating. And here’s to hoping that my former professor reads this post….
Luke Brown
tag:stream.growthink.com,2013:Post/749181 2014-09-30T22:35:34Z 2014-09-30T22:35:34Z Definitive Guide to Crowdfunding Sites (Infographic) In the last few years, the crowdfunding scene has exploded. Now there are hundreds of platforms to choose from, with more popping up every day. But which crowdfunding site is best for your small business? Or charitable cause? We covered 26 Top Crowdfunding Sites by Niche, and now we've created an infographic with all the essential details. 

Check it out! 

26 top crowdfunding sites to choose from for your next campaign

Melissa Welch

Director of Client Development



(310) 846-5015

Follow me on Twitter: http://twitter.com/MelissaAWelch

Join my network on LinkedIn: http://www.linkedin.com/in/melissaawelch

Become a Growthink Fan on Facebook: http://www.facebook.com/growthink

Melissa Welch
tag:stream.growthink.com,2013:Post/748940 2014-09-30T16:36:49Z 2014-09-30T19:02:10Z Happy Anniversary Kevin McGinn Please join me in congratulating Kevin McGinn on his SEVENTH anniversary here at Growthink.

Thanks Kevin for all your contributions over the year!

Dave Lavinsky
tag:stream.growthink.com,2013:Post/747305 2014-09-27T00:10:56Z 2014-09-27T13:10:00Z Welcome to the Team Krissy Nguyen!!

Congratulations to Krissy Nguyen on her first week here! She's a great addition to the team and brings a positive attitude! 

tag:stream.growthink.com,2013:Post/747120 2014-09-26T15:15:11Z 2014-09-26T15:15:11Z The All-You-Can-Eat Apps Mobile Trend Coming From Asia
Editor’s note: Jay Eum is a co-founder and managing director of Translink Capital.

Although the word “disrupt” has taken a lot of flak recently, there are still innovations that can reorder an entire market – and one has just crossed the Pacific Ocean.

On Tuesday, August 19, Sprint announced the release of App Pass, a subscription service that allows customers to access a curated selection of premium apps and games for $4.99 per month. Subscribers also get a monthly $5 credit to spend on in-app purchases. Essentially, it is Netflix for mobile apps.

This announcement sparked little interest from mainstream media. However, if you look at the rise of app-bundling in East Asia, you’ll understand why this business model could disrupt mobile development and consumption throughout the U.S.

Telecom Operators Strike Back

According to a March press release from KDDI Corporation, Japan’s second-largest cellular service, the company’s app-bundling program called “au Smart Pass” reached 10 million subscribers just two years after launching. For the basic au Smart Pass, subscribers pay ¥372 per month, or roughly $3.50 USD for unlimited use of more than 100 apps. This means that KDDI, now the county’s largest app bundler, is raking in a half billion per year from the app market.

This is significant because up until KDDI and its competitors introduced app-bundling, telecom providers were effectively cut out of the app ecosystem. Back in late 1990s and early 2000s –the days of the Nokia 6110, Motorola RAZR and games like Snake – telecom operators owned the distribution channel for all services and applications, which was appropriately labeled as their “walled garden”. When the Apple App Store launched in 2008, that monopoly ended. App developers, Apple and eventually Google both captured the market for extra services and applications. Through app-bundling, telecom providers finally get piece of the action back.

Considering that Sprint is owned by SoftBank, Japan’s third largest cellular provider and one of KDDI’s bundling competitors, it is no surprise that they are the first carrier in the U.S. market to offer an app-bundled subscription. In fact, App Pass is the first coordinated service launched together by Softbank and Sprint since the completion of their merger in July 2013. Although Sprint now has a lead on Verizon, AT&T and T-Mobile, I suspect that App Pass may soon face stiff competition. Much the way that NTT DoCoMo launched their own app-bundled service about a year after KDDI, Verizon, AT&T and T-Mobile may try to launch similar services in the near future.

So Who Wins?

If app-bundling takes off – and I suspect it will – we should consider this a win for app developers, consumers, cellular operators and Apple and Google. Let’s imagine that for a $1 premium app, currently 30 cents goes to the App Store or Google Play, and 70 cents goes to the developer. With a bundler like Sprint in the equation, perhaps the developers takes 35 cents and give the other half to Sprint, which will put the app in front of more than 50 million mobile subscribers.

In terms of customer acquisition and marketing, that is a tremendous win for most app developers. The expanded user base will offset the acquisition cost. App-bundling is also a great deal for any consumers that spend money on apps – especially since the $5 credit each month to spend on in-app purchases offsets the $4.99 monthly subscription fee.

The App Store and Google Play don’t necessarily lose anything in this new dynamic. They still take their cut from downloads and in-app transactions. Interestingly, iOS 8 is actually going to let developers create their own bundles with up to 10 apps, but Apple is not yet facilitating a bundled subscription model like Sprint’s.

So app-bundling appears to be a win-win-win for everyone involved. It is extraordinarily lucrative in East Asia, and it appears likely to succeed here. Device makers like Samsung, HTC and Sony may try to come out with their own app bundles, too. This would create competition among bundlers and exert pressure to curate the best selection of apps.

However, app-bundling services are not as simple as they sound. Somebody has to integrate SDKs and connect everything to a billing system that enables revenue sharing on the back end. This is probably why Sprint outsourced this function to Mobiroo, according to the App Pass press release. Carriers may have the resources to replicate this technology, but how quickly? What will waiting cost in the long run?

Will NFC Arrive Next?

The irony of app-bundling coming to America so quickly is that the U.S. has, for over a decade, withheld from importing one of Asia’s most popular mobile technologies: Near Field Communication (NFC). It undergirds the entire public transportation and point-of-sale (POS) infrastructure in both Japan and Korea. In fact, in Korea you need to use the T-Money NFC payment cards if you want to transfer buses and subways at no extra charge.

With Apple embedding NFC technology into the iPhone 6, this could be a year where we see two major mobile trends spread from Asia to North America. NFC technology would allow your smartphone, smartwatch or other wearable device to store information and complete transactions for public transportation, e-money payments, boarding passes, ID cards, loyalty points and more.

Whereas app-bundling can launch and scale within a year or two, NFC mobile payments will take longer to gain a foothold. The U.S. has been slow to adopt most POS technology because infrastructural upgrades are madly expensive. For example, the total estimated cost of adopting Chip-and-PIN (EMV) card technology in the U.S. ranges from $15 billion to $30 billion, according The New York Times. For NFC, too, every point-of-sale terminal would need to be replaced. In places like Japan and Korea, which have high population densities and small land masses, the costs and speed of transitioning to NFC weren’t as daunting. In U.S., NFC won’t pay off or catch on very quickly. In contrast, app-bundling will produce a quick return on investment.

The Future of U.S.-Asia Mobile Exchange

The U.S. and Asia have a habit of exchanging mobile trends, and the Asian trends often seem ridiculous to Americans technologists. The first camera phones came out in Japan in 2000, but at U.S. tech conferences in 2002 and 2003, panelists were still debating why anyone would want to take photos with their cellphones. Speaker phones, color screens and SMS were once controversial topics in the U.S tech community.

It’s inaccurate to say that the U.S. is always behind Asia in mobile technology. Let’s not forget that Apple created the app ecosystem in the first place. Cross-pollination between markets is one of the keys to sustaining global innovation. Foreign mobile markets can become laboratories for observing what business models and technologies will or will not work. So far, app-bundling is thriving in the markets where it has been introduced.

So here’s the takeaway: based on KDDI’s au Smart Pass’s rapid success in Japan, app-bundling has the potential to disrupt the North American mobile market within a few years. While North America will start following Asia towards NFC, adoption will be significantly slower, even if the iPhone 6 does include a NFC chip. Before you spend too heavily on individual apps or a new wallet, recognize that both are in line for disruption.
Luke Brown
tag:stream.growthink.com,2013:Post/747067 2014-09-26T13:22:40Z 2014-09-26T15:31:57Z Great work by Marci Haire of Growthink's Expert Market Research Team! Awesome client testimonial for work done by research analyst Marci Haire! Great job!

"I clicked through to the Growthink website with some trepidation - most internet promises are only virtual.

On completing the process - after watching an engaging video (if you like to read!) - I was surprised at how easy it was to acquire (download) the Business Plan. A minor glitch connecting with the Market Research section was quickly resolved as there was a real person monitoring the web stuff. Another surprise. And when the report I asked for came through, it really came through! I had expected something pretty generic, and not australian specifically. Wrong on both counts. Delighted on all other counts.

Thanks Growthink - you made me think I could grow."
Dr Kim Kendall Cat Vet
tag:stream.growthink.com,2013:Post/746789 2014-09-25T22:01:26Z 2014-09-25T23:47:28Z Justin Goodkind, One Year Anniversary at Growthink!

Congratulations to Justin Goodkind on his one year anniversary at Growthink! He's a great team player and always brings fresh ideas.  

"Growthink has provided me with a tremendously rewarding opportunity to help entrepreneurs grow their business and succeed in their aspirations."- Justin Goodkind, 9/25/2014

tag:stream.growthink.com,2013:Post/746657 2014-09-25T17:50:23Z 2014-09-25T17:50:23Z MEET JUSTIN, LUKE AND MYKE AT THE FORECAST!

Justin Goodkind

Luke Brown 

Myke Andrews

Meet Justin, Luke and Myke at the LAEDC 2015 Economic Forecast Event- Introducing A Long-Term Look at Our Economy!


Wednesday, October 8th 

7:00am -11am (PDT)


L.A. Hotel Downtown 

333 S. Figueroa Street 

Los Angeles, CA 90071

Register Here

tag:stream.growthink.com,2013:Post/745743 2014-09-23T20:01:06Z 2014-09-23T20:05:25Z Great Teamwork on Aladdin! (Healthy Fast-Food Middle Eastern Restaurant) Samuel Park

Darlene Fukuji

Phillippe Chau

Melissa Welch

Aladdin is a Middle Eastern fast-food restaurant looking to open locations in Southern California and Amman, Jordan.  Growthinkers provided value with market research, a business plan and financial model. Bassem Zraikat, Aladdin founder and CEO, wrote this note: 


It was a great pleasure working with you and the Growthink team.  You have been instrumental in making this possible and I truly appreciate all your efforts!

I hope we stay in touch and I will keep you informed of Aladdin's progress.  It would be real nice to see this come alive and have you as Aladdin's guests.

Once again, thank you all for a job well done!

Best Regards,

Bassem Zraikat

CEO & Founder of Aladdin " 

tag:stream.growthink.com,2013:Post/745145 2014-09-22T15:59:26Z 2014-09-22T19:26:31Z Stacey Polychronis 5 Year Growthink Anniversary! All - today is Stacey's 5 year anniversary of starting work at Growthink!  Stacey - thank you for all of your hard work and fantastic attitude - very much appreciated and looking forward to building on our work together in the months and years to come!!

Jay Turo