The State of Apps

Episode Summary

Executive Summary: The episode analyzes the 2022 U.S. App Store through the lens of daily #1 apps, showing a shift toward new social products, faster app turnover, and stronger monetization. Olivia Moore argues that viral distribution via TikTok, mobile-native UX, and timely use of platform features like widgets and AI enabled rapid breakout success, but retention remains harder than ever.

Main Topics: 2022 App Store winners and the rise of new social apps (Priority: 5/5): The top apps by days at #1 were BeReal, TikTok, and Gas, indicating that social apps dominated the App Store, especially newer formats emphasizing authenticity and close-friend interaction. How apps reach #1—and why it is harder to stay there (Priority: 5/5): Olivia explains that hitting #1 likely requires around 100,000 U.S. iOS downloads per day, and most apps only stay at the top briefly due to rapid consumer churn and intense competition from both startups and major incumbents. Product design shifts: authenticity, interactivity, and smaller networks (Priority: 4/5): The episode contrasts older feed-based social apps with newer products like BeReal, Gas, and LiveIn, which are more candid, interactive, and oriented toward intimate social circles rather than broad public broadcasting. Tech platform shifts create breakout app categories (Priority: 4/5): Apple’s widget support and new mobile AI capabilities created openings for apps like Lockit/LiveIn and AI avatar apps such as Lensa, showing how changes in the OS or infrastructure can unlock new consumer behaviors. Virality, retention, and monetization in the new app economy (Priority: 5/5): The discussion emphasizes that app growth is increasingly driven by TikTok and word of mouth, but sustainable businesses need network effects, repeat usage, and monetization from the start via in-app purchases, subscriptions, or B2B backends. Globalization of app innovation (Priority: 4/5): The data shows a shift away from U.S.-only app dominance, with many breakout apps originating from France, China, Russia, Italy, and elsewhere, aided by TikTok’s global distribution power and fast-following app studios. Vertical social, physical-world effects, and unusual breakout cases (Priority: 3/5): The conversation highlights apps tied to hobbies, pets, fitness, and real-world events, such as Strava, Squishmallow tracking, 7-Eleven, Starlink, and NOAA, illustrating how digital products increasingly intersect with offline behavior.

Key Arguments: Social apps are still dominant, but the winning format has shifted from curated public feeds to more authentic, interactive, and private or semi-private experiences. The App Store is more dynamic than in the Facebook/Instagram era: more apps can reach #1, but most lose momentum quickly unless they have strong retention loops and network effects. TikTok is the most powerful distribution channel for consumer apps today, but it is becoming crowded and less predictable as more founders chase the same viral mechanics. Viral reach can outpace product readiness; some startups now intentionally limit virality if they cannot convert new downloads into engaged users. Monetization is happening earlier in the life of consumer apps, through in-app purchases, premium tiers, and B2B/insurer-funded models, not just ads. Platform changes matter enormously: Apple widgets and mobile AI unlocked categories that would not have worked as well before. The U.S. app market is increasingly global, with non-U.S. studios quickly copying and adapting successful formats for international and American users. Some of the best app ideas are simply old human needs in new packaging: compliments, FOMO, pet obsession, collecting, and self-improvement.

Data Points: Apple developer payouts since App Store launch: $320 billion - Apple’s statistic cited at the start of the episode, illustrating the scale of the app economy. Top app of 2022: BeReal - Most days at #1 on the U.S. App Store in 2022. Second top app of 2022: TikTok - Ranked #2 by days spent at #1 in 2022. Third top app of 2022: Gas - Ranked #3 by days spent at #1 in 2022 despite launching later in the year. Estimated daily downloads needed for #1: ~100,000+ U.S. iOS downloads/day - Olivia’s estimate of the threshold to hit the top spot. App-store top-five composition in 2022: All five were social media products - Shows the dominance of social apps among daily #1 winners. App-store top-five composition in 2021: Mixed social, fintech, utility/business, and media - Used as a comparison to show 2022’s stronger social concentration. Share of new #1 startups developed in the U.S.: ~85% in 2021; 45% in 2022 - Indicates increased geographic diversity in breakout apps. Gas app revenue before acquisition: $6 million - Mentioned as revenue generated during its viral run prior to being acquired. Gas app downloads before acquisition: 10 million - Shows scale of the app’s virality and monetization. Lenza revenue in a few weeks: Upwards of $20 million - Estimated external app data for AI avatar packs sold at launch. Lenza pack price: $8 - Price of an avatar pack that users bought during the viral surge. Talking Ben viral trigger: 15 million YouTube subscribers - An adult YouTuber with this audience helped revive the old app via meme videos. Travelboost TikTok reach: 500 million views - Used as an example of a Russian-origin app going viral globally through TikTok. Subway Surfers worldwide downloads: 300 million last year - Illustrates long-tail success of a 2012 game. Subway Surfers growth: 50% - Independent data estimate of download growth last year. Subway Surfers audience share: Almost 40% of the population - A rough claim describing how widely it has been downloaded globally. Subway Surfers social following: 7 million YouTube subscribers; 6 million TikTok subscribers - Part of the app’s longevity strategy and social presence. Temu top-spot duration in early 2023: 22 of the first 25 days - Used to argue Temu is an early 2023 leader. Locket founder age/context: College student or recent college graduate - Showcases how young founders are building successful consumer apps. 7-Eleven app event: Free Slurpee Day on July 11 - Explains its recurring #1 spike driven by a real-world promotion. McDonald’s app event: Free French Fry Friday on July 13 - Another example of offline promotions driving app downloads.

Pivotal Quotes: "The opportunity maybe has never been greater to build and monetize a mobile app quickly, make a few million dollars and retire if that's what you want to do." — Host: Framing the core thesis that the app store now enables fast, lucrative consumer businesses. "I think consumers in the U.S. right now and actually worldwide are excited to try something new when it comes to social products, and they're willing to download them in droves." — Olivia Moore: Explaining why new social apps are outperforming legacy incumbents in App Store rankings. "My view is that it's in some ways easier to break into the top than it was five years ago, but it's probably actually quite a bit harder to stay at the top unless you have a very kind of magical and retentive product." — Olivia Moore: Summarizing the paradox of modern app growth: faster virality, weaker durability.

Implications: Founders should build for fast viral discovery, but pair it with retention and monetization from day one. The biggest opportunities are in authentic social, vertical communities, and apps that exploit new platform capabilities or global distribution channels.