I recently read an article on Tech Crunch about Evernote, a startup that “allows users to capture, organize, and find information across multiple platforms. Users can take notes, clip webpages, snap photos using their mobile phones, create to-dos, and record audio.” Click here to read more (this link takes you to their Crunch Base page. If you haven’t used Crunch Base before, check it out as it’s a great resource for information on startups, VCs, etc).
The thing that caught my eye about the article was the stats on who is using the product:
A full 79 percent of its daily mobile usage is on the iPhone OS, including the iPhone itself (63 percent), the iPod Touch (7 percent), and the iPad
(9 percent). Android makes up 12 percent of daily mobile usage, and Blackberry is only 2 percent. On the desktop, Windows rules with 49 percent of daily desktop usage, followed by the Mac client (38 percent), and the Web (13 percent).
I was particularly interested in the Mac/Windows comparison as I think there is less noise there. About 8% of people browsing the web globally use Macs. But 38 % of this product’s usage on the desktop is through a Mac. To me, measuring the user base of new and rapidly growing products like Evernote is an interesting way of spotting trends in other markets. If you believe that early adopters are also influencers, then you can see how user data on companies like Evernote are quite relevant to the broader technology marketplace. Here, the implication of the leading trend is that more and more people will buy Macs in the future. There is a higher percentage of Evernote users coming from the Mac relative to the market as a whole. If these users are influencers, then their behavior predicts an uptick in the overall market share of Mac. Similarly, it appears that blackberry’s 2% share implies they are on a downward trend versus the iPhone and Android operating systems.
Thinking in this vain reminded me of another company called Recorded Future. Recorded Future basically takes events happening now to try and predict the likelihood of future events. Sound familiar? This is basically what any type of predictive modeling does. But, they seem to go about it in a different way.
Recorded Future is, according the WSJ, the only Google Ventures portfolio company not publicly announced as such. The business generates what it calls momentum curves which predict the likelihood of an event happening. For example, the momentum curve (which is computed through a computer algorithm) of a HP/Palm merger would rise if management from both companies were known to have visited Aspen within the same week. This would imply that there was some sort of meeting to discuss plans on structuring a deal and integrating their businesses. I’m not sure of the validity of this type of rational (or where they’d get this sort of data) – but it is a very interesting concept!
Similarly, trends in certain emerging technologies are probably predictive of trends in other, tangential markets. But, it would seem that picking which markets are strong predictors is challenging. For example, the Mac/Windows split of the Microsoft Office suite may not be all that telling. For starters, the penetration of this product amongst all computer users is fairly high, and so it will be more or less reflective of the overall current Mac/Windows market share (as opposed to being reflective of early adopters which we are assuming are predictive of trends). We can also note that applications like Evernote are for consumers, not businesses. And so, while Macs may be picking up speed in demographics like college students, the popularity of Evernote doesn’t mean that in 5 years investment banking analysts will be using Numbers on their Macs instead of Excel on a Windows machine. There is probably also geographic concentrations of Evernote users meaning that our 8% penetration rate needs to be adjusted.
In order to use this type of analysis, one also has to take a stance on where the web and technology is going. If Evernote (or a similarly fast growing and viral company – say FourSquare) is a predictor of broader technology markets, that implies that in the long run these types of applications will be common place. However, I could envision a future where there is a large subset of the population that uses technology for a few basic things (email, word processing, spreadsheets, research) and shuns the future iterations of applications like Twitter, FourSquare, etc. But, even if this is the case, the early adopters could still be influencers on the broader population, and their purchasing decisions affect even those who shun web X.0.
I’m really curious if there are any readily available past examples of trends in nascent, tangental markets being leading indicators for what happened in related but more mature markets. I’m sure there are historical examples to prove and disprove this trend theory. If anyone knows any relevant data points, feel free to send me an email: phil (at) philstrazzulla (dot) com, or post in the comments.
Also, writing this post has inspired me to follow up with a short post on how companies are mining users’ social graphs and activity in social media in a few interesting ways. Be on the lookout!
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