#hattery

After working across three cities in two states for the past six months, ARTtwo50 finally has one place to call home. As a new resident at The Hattery (hattery.com), the team is excited to be in one location, as well as being part the community of other startups and the Hattery Team of experts (Win, the developer, is also excited about the free food). This move is well timed as the team gets ready to launch their app this month, and prepares to launch their summer surge campaign of iterating, enhancing, and building their artist/buyer base. So if you like what we have done so far, follow us on Twitter (@ARTtwo50) to stay tuned and share the word with #ARTtwo50 to help spread the paint.

I’m often asked why I am so bullish on mobile, this blog post will outline why.

It is no secret that tech industry leaders are struggling on the mobile platform. A huge reason why the facebook IPO did not meet expectations is because of their inability to monetize on mobile. Facebook is well aware of this issue and isn't sitting idle, out of the eight acquisitions they made this year, seven were mobile companies: Acrylic Software,  Instagram,  Spool,  Karma, Lightbox, Tagtile, and Glancee.

Mary Meeker’s 2012 Internet Trends report delves deeper into the mobile monetization issue:

Mobile eCPM and Average Revenue Per User is 5x lower on mobile than on desktop.

Zynga makes makes 80% less per mobile customer as compared to desktop customer, with ARPU at $5 on mobile versus $25 on desktop.

There is also confusion on platform. Just like the early PCs days, where the prominent battle was between Mac and PC, today we are having a battle between Android and iOS. Which platform monetizes better? Opera says that iOS monetizes way better than Android, but TinyCo claims that Android can monetize well if developers focus on it as much as they do iOS. Let's argue that this evidence is enough proof that you should develop on Android, you then have to worry about development. How do you account for the numerous Android devices? For example, Animonica has to test their application on over 400 devices before they ship. With so much conflicting data and advice, mobile is a confusing place. I truly believe that where there is confusion, there is opportunity.

We are still early, the prevailing thought is that mobile is where the Internet was 7 years ago. When the monetization and platform issues are figured out, there will still be tremendous opportunity, particularly globally.

This chart breaks down mobile phone, Internet, and iOS/Android penetration as a percentage of the world’s population:

Data Source: Flurry

Meeker's report also highlights the room for growth: In just 3 years, Mobile Traffic as a % of Total Internet Traffic grew from 1% to 10%. There are 1.1 billion 3G mobile subscribers globally, which represents only 18% of the world's population.

If all of the aforementioned points are not enough to convince you that mobile is an amazing opportunity, let me highlight the amount of mobile innovation in the emerging markets, particularly in Africa. In many ways, mobile innovation in Africa has leapfrogged that in the developed markets:

Mobile Money

M-PESA, the mobile banking platform in Kenya, has a user base of 15mm and over $400mm is transferred each month. Despite many attempts, no mobile money business in the developing world has come even close to achieving a percentage of the success that M-Pesa has in Kenya. Even the FT is calling on European leaders to look at Kenya’s M-Pesa as a model to improve the velocity of the euro.

Mobile Health

Africa has also seen huge growth in mHealth, in Uganda, a doctor or clinic can be verified and HIV diagnosies can be communicated via SMS.

Hattery Labs’s Wash 2.0 white paper outlines how mobile technology can improve sanitation and reduce the prevalence of disease in Africa and South Asia. Hattery Labs worked with the Gates Foundation to explore how mobile gaming has the potential to change hygiene practices and stop the spread of infectious disease. Two games profiled are:

Soap Wars makes hand-washing an entertaining challenge where players use the soap dispenser as a weapon against dangerous germs.

Sanitation Heroes engages players in the process of sanitation maintenance from capturing, transporting, and disposing of feces to reusing it as fertilizer. It features different scenarios in a memory game that prompts the player to match the solution to each different stage of capturing and treating waste.

This level of mobile innovation is done using a combination of J2ME and SMS technology. Imagine when Androids and IPhones become affordable enough for these markets?

For those of you who don’t know me, I’m Josh To. I’m a designer, an entrepreneur, and a passionate advocate for user focused, socially responsible innovation. I’ll be blogging about the intersection of these: my experience and thoughts on using design and technology to scale businesses and products, company branding, and social entrepreneurship and nonprofit work. Much of this will be informed by what I’m doing right now with Hattery. Hattery is a seed-stage investment fund and consultancy that has a strong tendency toward fostering projects that contribute to a greater social need. It’s the expression of a vocation to build extraordinary and innovative companies that make a palpable, positive difference in people’s lives -- a conviction shared by my partners Josh Mendelsohn and Luis Arbulu. We want to fundamentally change the way businesses are created and scaled, and in doing so we’re equally guided by an exacting focus on user experience, design, finance, and operations. Each of my experiences has led me in some way toward what I’m doing with Hattery -- my passion to work in this space is informed by both inspiration and also frustrations with the current model for startups. Too often I’ve witnessed unsustainable non-profit projects and business models, and organizations that are hindered by excessive bureaucratic processes. But these as well as other experiences have fueled an excitement for enriching the existing startup ecosystem -- many new companies have the ability to make massive change with the platforms they have managed to build; Google, Facebook, Twitter are obvious examples of new companies who have enacted large-scale change in the lives of many.  I studied design/media arts and communications at UCLA and was inspired to harness design in a way that was not purely driven by aesthetics but that was also useful and served a meaningful purpose. While still in college, I co-founded RESONANCE with James Buyayo — who is now a design lead at Hattery — and used design to strongly convey wearable social messages. I then worked at Google in various roles — technology development for global communications, product management, and business development for Google.org, the “philanthropic arm” of Google. Between Google and Hattery, I was an Entrepreneur in Residence at C2, where I ran idea generation and innovation workshops in Saudi Arabia and spoke at TEDxArabia to encourage innovative entrepreneurship among young Saudis. During this time, I also launched BRUTE LABS, a collective of young volunteers with a “do whatever it takes” attitude to fostering socially responsible entrepreneurship and providing open source solutions to worldwide problems. Out of BRUTE LABS stemmed a variety of different projects, from WellDone which brings clean water to African communities to Air, a solution to Silicon Valley public transportation deficiencies.