The Rise of ‘Best of Breed’ Applications
The Great Dissection of Bloated Multi-Purpose Consumer Apps
“There are two ways to make money in the software business: bundling and unbundling” — Jim Barksdale (Former Netscape CEO)
Facebook recently announced that it plans to discontinue supporting the core P2P messaging functionality from within its mobile app. Its standalone messaging application, Facebook Messenger, is to become the primary messaging experience for consumers going forward. Although I was mad as a wet hen standing in a pot of earth when they decided to coerce me to download yet another app, I totally got the rationale.
This is probably a direct reaction to a big trend we are seeing in both the enterprise and consumer spaces, at the heart of which is the unbundling of integrated enterprise software suites and bloated multiple-purpose consumer applications into leaner and more focused, ‘best of breed’ applications that focus on customers performing very specific tasks within a specific vertical.
Some good examples that help illustrate this are shown below. This list is merely an illustration and is not intended to be exhaustive:
Craigslist
Craigslist is a prime example of a bloated service that has been unbundled by hundreds of more focused software companies.
PS: I am still fascinated at how the strong network effect that exists on Craigslist has made it somewhat immortal and resilient to all the disruption hitting it by best of breed companies emerging from all the verticals it covers.
Unbundled by ==> Instagram (Photo Sharing), Twitter (Statuses), Whatsapp (Messaging), Vine (Video Sharing), Foursquare (Location Sharing) etc.
Unbundled by ==> Hacker New (technology news, startups), ProductHunt (Startups), Pinterest (Visual Discovery) etc.
Angie’s List
Unbundled by ==> HomeJoy (Home Cleaning), Yelp (Reviews), TaskRabbit (Outsource Small Jobs) etc.
Yahoo
Unbundled by ==> Flipboard (News), Google Search (Search), AutoTrader (Autos), Quora (Q&A) etc.
And the list goes on and on…
Note that some companies have also been created by further unbundling certain use cases from applications that were already unbundled instances of a core multi-functional suite.
For example Whatsapp unbundled the general mobile messaging functionality out of Facebook and more specific mobile messaging applications like Kicksend (mobile photo messaging) further focused on much thinner messaging verticals.
Why is the market for leaner and more focused applications blowing up?
The answer is simple. Because there there is no ‘perfect suite to rule them all’ for performing every activity, across every potential customer persona. For the most part, when software tries to be everything for everybody, the core user experience suffers, important features get buried and underutilized, and ultimately applications become exponentially less intuitive to navigate.
The comparative advantage theory shows us that productivity (and subsequently product quality in the case of software) is typically much higher when entities focus on solving the problems they know how to solve best.
The masters of one trade are beginning to rip the Jacks of all trades up piece by piece, and I suspect that this trend will continue as consumers gravitate further and further away from multi-purpose suites and more in the direction of the masters of thin verticals.
Big companies are also beginning to understand this trend, this is why Facebook is gradually forcing unbundled pieces of the larger Facebook entity on consumers as independent single purpose applications and this is also why Foursquare decided to rebrand and split its application into two applications that independently perform each of Foursquare’s biggest use cases and that are aimed at serving two sets of potentially very different customers. Dropbox also recently launched Carousel (a standalone app focused on photo storage). We will continue to see companies break out features from existing bloated apps into more focused standalone applications going forward.
There is currently a big market for startup companies that successfully unbundle important functionality from existing applications like Facebook, and it is very likely that a handful of the next wave of multi-billion dollar technology companies are going to be formed by enterprising individuals who focus on providing services within tiny verticals that existing companies already deliver as part of a bloated suite of services.
Lean and focused is the new cool.
