How the app phenomenon is changing economics

angry birds by bfishadow

Instagram Hits One Million Users in First Ten Weeks
[Via Daring Fireball]

Off the top of my head, I’d say Instagram is my favorite new app of 2010.

Update: As a point of reference, it took Twitter two years to get to one million users.


One million in 10 weeks. The dynamics of that are just insane.

And the app market place requires them to be very, very attentive to what their customers want. Otherwise, another app could steal those one million even faster.

This rapid adaption to what customers want requires a very different organizational structure than at many companies. It must be able to adapt rapidly to new information and it must move that information around rapidly.

Because now there are a million people who want this app to continue to provide them with new ways to interact with their photos.

You see this in games now. Updates are not just for bug fixes, etc. They include new levels – as seen with Angry Birds – or new swords and enemies – as seen with Infinity Blade. These were both free upgrades that could be developed in a couple of months rather than years. They keep the game in front of people because the updates are downloaded automatically from iTunes. No new marketing costs.

Then when a new version comes out, people are ready to pop some more cash.

Staying engaged and being adaptive – the successful companies will have both of these attributes.