It’s time for a new breed of super-app
Today’s super-apps like Alipay, Grab and Gojek are amazing platforms. They are super-platforms.
They can add all sorts of additional services - adjacent services - because they bring the customer to one place (their platform) and use the data from one service to enable the second.
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Once onboarded, users can access a range of applications that take advantage of their personal data, all managed by the platform. Re-using it from one service to another.
It makes these super-apps incredibly useful. It makes them super-flexible, super-expandable, and they become super-valuable.
Both to the users, and to the tech providers who take a handsome cut of all the transactions on the super-app platform. Now THAT’S super-valuable as a business.
Today’s super-apps have seen explosive adoption and growth in their core markets. Users come for product A, and stay for service B.
When you look closely you’ll see an incredibly efficient data flywheel that’s driving these network effects. It’s an oversimplification, but the platforms can offer me product B because they have my data from product A.
Over time, they collect even more data from product A and B. They can then start to build an excellent picture of how I behave on the platform, what else I do, and therefore what I might like. Which services to offer.
Not only does this enable pretty good personalisation, but a tight recommendation engine.
From a customer acquisition point of view, the killer feature is seamless - and nearly instant - onboarding flows. From product to product to product.
You ordered a taxi today, so we can now deliver food to you tomorrow. You made payment today, so we can now offer you insurance tomorrow. You ordered online today, so we can now stream movies to you tomorrow.
All the value, all the customers, all the network effects.
So what’s the downside?
Super-apps are able to create this flywheel precisely because they control the experience end-to-end. It’s all locked in. A walled garden.
The platform alone decides what other apps and services are made available to users. Offering additional user applications and services mean agreeing:
Commercials - who pays what, and how does the value flow from the super-app platform to the application, and to user?
Legal and data - what data is collected and flows to and from the application, and to and from the platform? What is stored where and why?
Technical - how is the app integrated into the super-app platform, and what other extensions and platform dependencies are there?
Experience - what is onboarding flow, and how does the experience integrate with the super-app platform overall?
In the super-app world, it’s the platform owner that decides and controls all this. Short term, of course, this is a great. These super-apps are doing very well, thank you very much.
But zooming out a bit, this platform model and control presents a limit. To the growth. To the value.
I’m sure the super-app platform providers would like to expand into more areas. To offer more applications. To drive even more growth. But these commercial, legal, technical and user experience questions are barriers to that growth.
Perhaps they sometimes identify a knock-out commercial opportunity. But there’s a blocker around technical integration. Or perhaps it’s via a 3rd party provider, and they can’t agree terms around access to platform data.
Can super-apps become more open?
In yesterday’s post I pointed to the ideas around ‘Web5’. A new category of digital wallets and customer tools that typically build on ‘Decentralised Identifiers’ (DIDs) and ‘Verifiable Credentials’ (VCs).
And I mentioned that we’ll see huge waves of user adoption when Web5 credentials can be used on Web2 platforms (which I jokingly called Web7 experiences… don’t @ me).
Here’s another prediction. Web5 platforms are going to unbundle super-apps in marvellous and exciting new ways.
Because anyone will be able to prove anything, to anyone, anywhere.
You used your employee app today to log in, so you can now use it to get a free taxi ride tomorrow. You used your flight app today to check-in, so you can now use it to get free access to the gym and pool nearest to your hotel. You used a student app today for access to the learning system, so you can now open a student bank account in under 30 seconds, and with 3 taps.
This new approach isn’t immediately going to disrupt the super app-model. But it will open it all up. We will be able to access many more applications. Many more services. And create more value.
It’s a new breed of apps that will not only become possible, but will become inevitable.
Because the (customer data) sum will be greater than the (digital wallet) parts.
Digital wallets with DIDs and VCs will be better than super-apps. Maybe we’ll call them ultra-apps.
They will be ultra-flexible, ultra-scalable, and ultra-valuable. But they will be more than that too… they’ll be ultra-private. Ultra-secure. And ultra-personal.
‘Ultra’ comes from the Latin for ‘beyond’. It’s time to move beyond the super-apps of today. Beyond walled gardens. And beyond today’s limits of creating value for users.
Ultra-apps will be the next generation of platforms for the digital economy, and will open up a limitless set of use cases and new value for people and businesses.
I’m excited about where this is all headed.
I’m beyond excited.
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Platform data hoarding is indeed bad for the economy. In their paper on “The Data Economy: Market Size and Global Trade” for the Economic Statistics Centre of Excellence (part of the UK's National Institute of Economic and Social Research), Diane Coyle and Wendy Li talk about the growing "data gap" and argue that this data gap is a a barrier to entry that affects not only businesses but also aggregate innovation, investment and trade:Large data holdings, rich in volume and variety, thus give large online platforms a significant competitive advantage, powered by network effects and the virtuous cycle between data and the AI algorithms improving the services and increasing revenues.This advantage means that platforms obtain insights about adjacent sectors and can then enter them more easily. Potential new competitors without access to that data and the advantages it confers therefore struggle to enter new markets.