Everyone wants to build a super-app.
Yet, almost every super-app will fail.
You don’t get to be a super-app just because you have a lot of users on your core app and you now decide to bundle multiple services into the same interface.
You gain the right to be a super-app by
(1) gaining the primary right to customer relationship in a certain category (or in very rare cases, across categories), and
(2) gaining the right to mediate all other services (in that category) through your interface.
That may sound similar to pushing multiple services through an app interface.
But they are not the same thing!
And that’s why, most super-apps will fail to get anywhere close to the success of the ‘OG’ super-app that they all claim to emulate – WeChat.
In fact, there’s an entire continuum of super-app failure and most end up languishing across this continuum.
Let’s unpack this further!
If I had a penny for every time I’ve heard a company claiming they will be the next super-app…
…well, I’d sure be carrying a lot of change!
Everyone claims to be building a super-app. Yet, all of these claims are victim to the same fallacy!
You don’t become a super-app by bundling multiple services into one single app interface.
You become a super-app by becoming the primary interface of choice for all these services (and more).
A small difference in words, a big difference in competitive advantage!
The first is classic industrial economy thinking. We own the supply (in this case, the many services) and hence the right to push them to the user.
The second is attention economy thinking. In an attention economy, the right to serve the user is scarce.
Pushing multiple services through an interface doesn’t make you a super-app, the right to primacy of user relationship makes you a super app.
Becoming the primary interface is no mean feat!
In an attention economy, control of the user interface is one of the strongest sources of competitive advantage!
It is also one of the most deeply contested value bottlenecks in any ecosystem, allowing you greater negotiation advantage over all other players. This is what makes a super-app play exciting!
As I’ve noted before in my post How to regulate Facebook and Google:
Business models are built around scarce and tradable resources.
Tradability affords value transfer and scarcity affords negotiation leverage in such transfer.
Attention is both scarce and tradable.
Attention is scarce – yes, because the sum total of human attention is a finite number.
But more important, with an abundance of content and interactions, our decision-making ability gets depleted, allowing our attention to be more manipulable as a resource.
Attention is also tradable. Sophisticated auction mechanisms, recommendation engines, and decision support systems trade our attention (and the attendant decision – which is already manipulable) to the highest bidder.
Your goal as a super-app is to manage both the scarcity and tradability of attention.
You gain the right to manage attention scarcity by gaining primacy of the user relationship through a core use case on which you have primacy of user relationship.
You gain the right to manage attention tradability by ensuring you own a key control point through which user attention may be traded with third parties.
Let’s unpack both these points further!
Let’s start with the first key priority for winning in the attention economy:
Gaining primacy of the user relationship.
How do we make that happen?
Here, we need to make a distinction between primary demand and secondary demand.
A homebuyer has primary demand for a house. This primary demand generates secondary demand for mortgage.
In healthcare, the primary demand for cure and wellness creates secondary demand for pills and procedures.
The secondary demand is a means to an end, the primary demand is the end.
In an industrial economy, serving secondary demand was hugely profitable as long as you owned proprietary channels (e.g. bank branches, clinics etc.) and some form of regulatory moat (e.g. license to operate).
In an attention economy, where consumers are constantly connected and attention is both scarce and tradable, owning the primary demand is key.
The firms that own primary demand will eventually commoditize the ones that own secondary demand.
This is why banks want to move ‘beyond banking’ because they see profit pools shifting into the primary demand that ‘wraps around’ their product lines.
Back to super apps, to be successful as a super app, you need primacy of user relationship and that is best owned by owning a core use case in the primary demand.
You may be the largest seller of mortgages or health insurance but does the user engage primarily with you for their home buying decisions and their wellness management?
If not, you may not have the right to engage in a super-app play.
Now that you have the right to primacy of user relationship, you need to determine whether all the services in the super-app will be served by you or by other third parties.
The key test here is the following:
Irrespective of who serves the services, your right to primacy of relationship should persist into these other services.
Essentially, if you’re serving a certain use case through your super-app, you can claim to be a super-app only if the user has no other app solving for the same use case on their phone. Absent that, you’re a glorified app bundle.
If you want to avoid being a glorified app bundle and get to super-app status, you need best-of-class apps on board.
But why would third party apps work through you?
Because you have primacy of user relationship… AND, crucially, a key control point. Integrating across primary user relationship and a key control point give you the right to act as a super-app on which third party apps sit.
The right to manage attention scarcity and tradability gives you the right to play as a super-app.
Let’s translate that to product and business model requirements. The following are key components of super-app success.
Not all super-app attempts are created equal.
There are primarily three categories of super-app plays:
These are, by far, the most successful super-app plays, and fittingly, the ‘OG’ super-app play – the play that created the category and this global frenzy to build a super-app.
These plays (I use the plural even though WeChat is the only example truly deserving of this spot) are use-case agnostic, allowing them to absorb and bundle a large scope of apps.
They win because of
(1) access to a key horizontal workflow (in the case of WeChat, the primary communication interface), and vertically integrate that with
(2) the dominant payments capability.
As I explained in last week’s article on Gen AI:
These are the WeChat wannabes who’ve demonstrated some level of narrow success within a vertical. Local services players like Grab, GoTo, and Careem are great examples.
All of these players follow a common path.
As you’d imagine, there are limits to extending scope of services beyond the vertical. This is both a disadvantage (in limiting super-app scope) and an advantage (if vertical focus comes with business model advantages in the vertical).
A third category of players are fintechs – typically payment providers – which wrap additional services around a core payments capability.
These plays benefit from horizontality of payments but may find it challenging to move from the secondary demand layer of payments into the primary demand of the many use cases into which payments can be embedded.
Arguably, these plays are more successful when targeting small businesses. For small businesses, payments and money management – even though secondary demand – are core to day-to-day functioning, and hence, accord the right to primacy of user relationship that may be more elusive for a payments player looking to target the consumer.
And finally, we encounter the graveyard of wannabes. The many companies that claim to be building a super-app but are merely bundling multiple services into a single interface.
If anything, this is a significant step backward. At the dawn of smartphone app development, app developers tried to build apps the way they did websites – with multiple tabs and multiple use cases. Very soon, it became apparent that mobile apps would be ‘thin sliver’ and highly unbundled.
Today’s super-app wannabes who lack the right to play as super-apps are merely taking us back to the failures of 2007-09 when bloated apps failed to gain traction and wondered why they were failing.
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