The nice thing about being a small company is that you can get big fast. Meanwhile, a huge company won't even notice the gnat bites that the startup takes out of its revenues. And once it does, the huge company can either acquire the startup or try to launch a decent copy of its product.
This comes to mind in considering Localytics, a 120-person Boston-based "marketing and analytics platform for mobile and web apps" startup that tripled its revenues in the second quarter of 2014 and recently moved into a 20,000-square-foot space in downtown Boston.
Localytics claims to be taking customers from
Localytics takes pride in the market share it claims to be taking from IBM and Adobe. Said CEO Raj Aggarwal in an August 8 interview, "We are taking customers from Adobe and IBM. They have been doing web marketing and analytics for years. They thought they could port their old technology to do mobile app analytics. But their approaches and technology don't port to mobile and apps. Localytics is best of breed for that."
IBM does not sound too worried to me. On August 11, Jay Henderson, Strategy Director, IBM Smarter Commerce, told me: "More than 8,000 organizations around the world rely on IBM's Customer Engagement and Digital Analytics offerings, including IBM Coremetrics. Our Digital Analytics business continues to grow with new client signings up year over year. In fact, IBM was just named a market leader in Forrester's Web Analytics Wave for its strength in digital analytics and ongoing investments to bring new behavioral and mobile analytics capabilities to customers."
Adobe declined to comment. David Olsen, Senior Manager, Public Relations for Adobe Digital Marketing said on August 12, "I don’t have a spokesperson available to comment."
But Localytics believes that it is growing much faster than the market for traditional web analytics. Noted Aggarwal, "The market for traditional web analytics is slowing down -- growing at 5% to 10% a year -- because people are moving to mobile apps. But we are growing 2.5 to 3-fold a year. We are getting customers because over the last two years, users have gone from spending 10% to 15% of their digital time on mobile apps to between 50% and 60%."
Localytics -- which has raised about $25 million in capital -- is growing fast and hiring. Said Aggarwal, "We had 60 people in 2013, have 120 now, and will end 2014 with 150. And in addition to engineers and marketers, we have added senior executives such as the former CFO of HubSpot. I spend a ton of my time networking with the highest level talent. And we have a culture that attracts the best problem solvers who collaborate with each other to execute well."
Forrester Research -- in its July 9, 2014 Brief: Vendors Scramble To Enable Contextual Mobile Moments -- wrote that Localytics is ahead of the curve in which "mobile analytics vendors shift from insights to experience delivery." By this Forrester means that rather than provide marketers with reports on how apps are doing, some vendors offer services that automatically interpret this analysis to boost app performance by matching specific app versions to individual consumer preferences.
Localytics appears to be ahead of its rivals. Wrote Forrester, "Mobile analytics vendors such as Adobe (Omniture), Apsalar, Flurry, Google, and IBM analyze in-app behavior to help marketers optimize performance. Some of these vendors are shifting the delivery model from pure-play analytics tools to making insights directly actionable via tailored app experiences. For example, Localytics now integrates messaging and push notifications to deliver personalized messages and offers based on user behaviors."
If these vendors can catch up with a better service, Localytics's growth rate might suffer. If not, perhaps one of the big companies will acquire Localytics -- as Yahoo did with Flurry (and its 110 employees) for $240 million on July 29.
