Fourteen years ago, Steve Jobs stood onstage and introduced the iPhone. It wasn’t the first smartphone, but it was the start of the smartphone era. And now 14 years later, we can clearly see some of the effects of this announcement on the ways that we think about and use computers and software.
These changes are clearest when we look at consumer behavior. We’re all consumers in our day-to-day lives as well as being knowledge workers or professionals, and consumer behavior often offers a preview of trends that will be important for business or professional software, too. So let’s look at what’s happened since the introduction of the iPhone.
Global access to devices
First of all, the most important point is that smartphones brought access to computing to almost everyone in the entire world. Smartphone shipments have dwarfed PC shipments by about a factor of 10 to 1 for the last couple of years. Today, there are about 5.5 billion adults in the world and about 4 billion of us have an active smartphone.
A new kind of computer interaction
Along with bringing access to computing to everyone in the world, smartphones also ushered in a completely new experience of interacting with computers. Smartphones might seem limited by their small screens and low power compared to PCs. But in fact, smartphone hardware is much richer and more diverse than PC hardware. Smartphones have multi-touch displays, accelerometers, GPS, gyroscopes, compasses, microphones, front and rear cameras, mobile data connections, and even RADAR and LiDAR.
And it wasn’t just the hardware that was different from PC hardware. The experience of discovering, trying, and using software was completely different, too. First of all, mobile apps are sandboxed, which means you can try a fun new app with confidence that it won’t brick your device or steal all your data, thanks to the much stricter security regimes for software on smartphones compared to PCs.
Secondly, the App Store and the Google Play store made it simple to discover and install new software. You can learn how to download an app once and it works the same for all other apps — you don’t have to mess around with installer files and .exes and so on.
Finally, both Apple and Google handled payment processing on behalf of developers. While you might have trusted one or two recognizable software companies in the past with your payment information, today you can confidently pay an almost infinite array of independent software developers.
The most important internet device
So — mobile brought access to computing to the whole world, and a new experience of interacting with computing that was richer, more fun, and safer to try and buy. And consequently, smartphones have become consumers' absolutely most important internet devices. Ofcom, the British telecommunications regulator, has been consistently surveying consumers' attitudes to the devices they use to go online over the last decade. From this research, we know that 81% of consumers’ time spent online is spent on a mobile device and 60% of consumers consider their phone their most important internet device — that’s doubled in the last six years. In fact, according to another Ofcom report, only half of us go online with a computer at all these days, and that’s down from 81% in 2014.
Changing users’ expectations of how software works
We can conclusively say that mobile has completely rewritten expectations of how software works. And it’s far from the first time that this has happened. We’ve seen this before — except that time, in the business software space.
Twenty years ago, a plucky startup sought to position themselves against the incumbent in the CRM industry: Siebel. To use Siebel CRM, just like all software at the time, you had to first install and manage your own on-premises servers and then install the software on them — before you’d even thought about your users actually using it. Everyone understood that that was simply how software worked at the time.
The startup was Salesforce, and you didn’t need a server to run it. You didn’t even need to install it — you just started using it. Salesforce actually hired actors to stage a fake “protest” outside Siebel’s developer conference holding up signs and shouting “No software!” to point out this difference.
Twenty years later, we can easily say that Salesforce was right. Their cloud-based approach has been unequivocally adopted by the industry and now it feels just as inevitable and as unchangeable as on-premise servers felt to Siebel then.
So, if Salesforce could completely re-write expectations of business software 20 years ago, and mobile could completely re-write expectations of consumer computing 14 years ago, could mobile do the same to business computing today?
I think most businesses are underestimating the impact of this shift, and there are three misconceptions that endure.
1. There’s no money in mobile
If you think about our smartphones as casual distractions from our day-to-day, it makes some intuitive sense that there isn’t any actual money to be made from business software on smartphones. And indeed, this is the conclusion that you’ll find in some analyst reports, like one from Deloitte which attempted to quantify “direct” revenue from B2B apps on mobile. They pegged that figure at about $2bn/year, which might sound like a lot. But for context, HubSpot alone is $1bn/year annually recurring revenue. That figure is dwarfed even by consumer spending on mobile, which is around $100bn/year (most of it on casual games). And that in turn is dwarfed by enterprise software spending, which is almost $500bn/year.
But this kind of analysis has a fatal flaw. It tries to quantify direct mobile business software revenue. Consumer mobile revenue flows through touchless purchases in the app stores. No one is buying multi-year software licenses through these payment mechanisms, so these analyses can’t capture this value at all.
So where is this value? The answer lies in customer satisfaction. When business software takes advantage of all the possibilities of mobile hardware and software and hits the mark on our new, heightened expectations for mobile ease of use, users are delighted. We can see this in our own first-party HubSpot data; HubSpot web users who also use mobile consistently have much higher NPS than those who don’t. Even in March 2019, when HubSpot suffered a weekend-long outage, the NPS of mobile-using HubSpot users was meaningfully higher than those who didn't.
Other fields have wrestled with this before; for example, in customer support, it’s well accepted that investment in better trained, better paid support reps with more time to deal with customer issues pays off in terms of customer satisfaction, loyalty, and in turn, lifetime value and churn, and so on.
So in order to justify and size investment into mobile app development teams, we have to do the same.
2. Mobile is for “on the go”
The idea that mobile apps are for “on the go” use cases dominates marketing of mobile apps, especially in business apps, but in apps for consumers, too. I’ve always felt that this has minimized the benefits of mobile apps. This year, we got to see the effects of a once-in-a-lifetime event where the whole world was stuck at home — not on the go at all. And it turns out that downloads of mobile apps spiked immediately following lockdowns around the world. In uncertain times, we naturally turned to our most important internet devices for escapism and connection to friends and family.
The same was true for the HubSpot mobile app, too. There’s one feature of the app which is predicated on actual face-to-face meetings, and that’s our business card scanner. And indeed, usage of this feature did drop off a cliff in March this year. But the fascinating thing that this data revealed is that usage of the app’s other features actually stayed mostly in line with our web usage. So our mobile app wasn’t only for “on the go” moments at all — the app lets you be productive anytime, not just anywhere.
3. Mobile is a nice-to-have complement to a web app
Our customers are quickly realizing the benefits of work apps on their phones. Salesforce’s annual survey of 3000 sales leaders reveal that mobile sales apps for employees — exactly what we’re building on the HubSpot mobile team — are number three on the list of top sales technologies that have been more important since 2019. Usage of mobile sales apps grew 60% from 2016-2018, faster than any other sales technology that is tracked in this annual survey (including technologies like artificial intelligence, which have a lot of marketing hype behind them). And sales reps with access to mobile sales capabilities, including crucially editing customer, account, and opportunity information, are twice as likely to be “high performers” than those who don’t.
This is just qualitative data, but in fact HubSpot’s own first party quantitative data backs up these attitudes. HubSpot sales reps who use the HubSpot mobile app actually achieve more overperformance relative to their quotas the more they use the mobile app.
So, to summarize, mobile brought computing to the whole world, and with it a completely new set of expectations of how software works, just as Salesforce did 20 years ago when they pitched cloud apps as a better alternative to on-premises servers. With universal access and a richer, safer, and more fun experience of computing, smartphones unequivocally became our most important internet devices. But outside of the giants of our industry, B2B software has been too slow to recognize this shift, in part by failing to correctly quantify the value in mobile. If B2B doesn’t change, they’ll start to lose to mobile-first challengers.
Interested in working with a team that's just as interested in how you work as what you're working on? Check out our open positions and apply.