Originally posted on VentureBeat:
The market is flooded with addictive mobile apps that generate millions of downloads but not millions (or even thousands) of dollars.
Where does this leave mobile-focused investors?
Skeptical, to say the least. “Millions of users does not translate into millions of dollars in revenue,” said Jenn Wei, an investor at Silicon Valley-based Blumberg Capital. In New York, FirstMark Capital’s Matt Turck shares similar concerns. He refers to mobile apps and games as a “trickier group” to fund because they have traditionally been so focused on user acquisition.
According to Sidecar cofounder Jahan Khanna, that tech entrepreneurs build apps that people think are cool — but not worth paying for — compounds the problem. “While these seem aligned, they often are not,” he said, and as a result, mobile startups often hemorrhage cash.
He continued, “The original Harlem Shake video has over 40 million views on YouTube. What does that make that dance worth?”
View original 656 more words