DiogeneX

The web’s poor economics, which Jeff Zucker famously called “digital pennies,” were not inevitable. They were the result of a clamor for content and audience, pursued with little regard for costs or building self-sustaining business models.

Some will argue the mobile web is no different. I disagree. The web’s economics are what happens when “free” capital and eye-crossing business logic is injected into a gold rush.

In fact, to believe that web economics will prevail in the mobile application space, several things must hold:

• the lowest friction and most lucrative path to money is selling your audience’s attention (and data)
• mobile applications benefit from massive scale
• companies with persistently negative profit margins can survive on tide-over capital
• getting there first matters

There are companies, notably print publishers, hoping that mobile applications offer a second-chance to undo the mistakes of their web ventures. This is foolish. The companies that will thrive in the mobile applications space are those that understand the unique advantages and limitations of their platforms of choice, and build products to suit.

Google, Amazon and Facebook have built mass-scale businesses, and organizations staffed by people deeply skilled in solving scale problems. Unsurprisingly, these companies have thrived amid the low barriers to entry, discoverability problems and uneven quality of the web.

Yet the web is also populated by businesses that have not succumbed to web economics, which I might call “indirection economics.” It isn’t sacrilegious to expect those who use your product or service to pay a fair price that covers your costs. Making money isn’t evil.

Today’s mobile web is a beach at high tide. It’s easy to misinterpret the high volume and velocity of apps stores, platforms, and SDKs for the web’s chaos when it fact it is no different than any other stage of computing, compressed. And there will be losers. (Noah Kagan’s How Mint beat Wesabe)

Rather than focus on mobile meta-trends, focus on things that you can control: the kinds of products you want to build. If the products that excite you are platform-agnotic services, build on every platform — including the web. If the products that excite you are experiential and design-heavy, build on the platform that offers you the best tools (Marco Arment’s The Two App Stores). And for goodness sake charge your customers for it.

(Edited) Added image above from Mary Meeker’s Internet Trends presentation from June 2010. Added a few clarifying points.