How large does the userbase of any consumer platform need to be before it can produce huge successes? For the “Idea to Successful Business” panelists at today’s f8 Facebook conference, who included Netscape founder Marc Andreessen and Matt Cohler of Benchmark Capital, the iPhone isn’t there yet.
“The iPhone doesn’t have a large enough network effect with only 50 million users,” said Cohler toward the end of the panel. “What’ particularly exciting is not only the innovative things Apple is doing, but the potential of things like the Android platform.”
Cohler’s examples of successful platforms included Facebook, with over 400 million users, and the internet itself after the 1990s, when Americans with broadband became the majority. Those two are among the few platforms that have produced the kind of huge business hits that venture capitalists are interested in –- like Google, which hit its stride with the spread of broadband, or Zynga (founder Mark Pincus also sat on the panel).
So what’s wrong with the iPhone? Pincus had two complaints that have kept Zynga off the iPhone: insufficient communication channels between users, and the slow pace of submitting and updating iPhone apps.
But Apple could potentially correct those problems (it’s already working on user communications with Game Center). Cohler, on the other hand, had deeper criticisms. Apple, he says, is in the business of selling pricey hardware, which supports the existing mobile model of signing up user for pricey contracts –- an inhibiting factor to growth.
Not so with Google. “The interesting thing about Android is that Google has no interest in hardware or software sales,” Cohler said. “Insofar as Google can find a way to profitably subsidize the sale of those devices, we could see a world in which hundreds of millions of people have 3G connected devices much faster.”
The only panelist who really seemed to appreciate the iPhone was Jeremy Stoppelman of Yelp –- and that’s no surprise, since Yelp’s audience of urbanites is almost perfectly matched to the iPhone’s userbase. Yelp also has a successful website, making its mobile side a bonus instead of the centerpiece.
There was definitely no lack of admiration for the iPhone — see our Inside Facebook coverage of the mobile panel for more. But it was clear that nobody is yet certain how the mobile market will develop, or whether Apple will remain the smartphone leader in years to come.