Apps Are Not Necessarily Companies

Mobile apps are not necessarily companies. Finally, people who seem to understand that! Here's a post from Om Malik about a fund that is offering a new kind of financing model specifically tailored to mobile apps: Om's post After spending a year advising a number of mobile app start-ups I'm predicting that a lot of the angels who funded them won't get washed out by subsequent financing but they will lose money when the flips they counted on don't materialize. Why? Well, very few mobile apps are well-designed products that either consumers see value in and are willing to pay for, or companies value and want to bring into their fold.

Further, those mobile apps that are decent products usually are not companies - meaning they only produce a small revenue stream and usually not enough to cover lots of employees, big marketing budgets, etc.

Why I like this new financing angle is that apps behave a lot like music singles. Only a few are immediate break-out hits, but many apps, like songs, have long tails.