Mobile app economy inspires local entrepreneurs

Increased use of smartphones, tablets fuels demand for developers

  • Todd Marks, CEO and pesident of Mindgrub, started the company in the basement of his Oella home in 2002. The company now works out of offices in Catonsville.
Todd Marks, CEO and pesident of Mindgrub, started the company… (Barbara Haddock Taylor,…)
October 23, 2011|By Gus G. Sentementes, The Baltimore Sun

The mobile app economy is real — and it's brewing in Baltimore.

Many businesses are opening their wallets and spending to build mobile apps for customers to use. And developers are in hot demand across the United States, various surveys this year show. It's all a response to a young technology that has become a $6.8 billion market — and is growing quickly.

In the Baltimore area, the mobile app economy is still in its early stages, fueled by a small corps of independent developers, advertising and marketing companies, and a handful of companies that specialize in creating the apps.

But interest is high. Last November, Chris Stone, co-founder of a Harford County-based website development firm, started the Baltimore Mobile group to help build the community of app developers and designers. The group has gone from three to nearly 200 members, with meet-ups every three weeks in Canton.

"It's been a lot of fun," said Stone. "It's grown way faster than anyone expected."

Baltimore's mobile ecosystem is anchored by Millennial Media, a private firm that goes toe-to-toe with Google and Apple in mobile advertising. It's a promising startup that's drawn $67 million in private investment since its founding five years ago.

As of August, more than 116 million Americans were using mobile applications — up 19 percent over the previous year, according to a ComScore survey this month.

"The ramp-up of mobile apps being central to mobile computing has happened so quickly," said Hemang Gadhia, senior vice president for audience intelligence at Millennial Media. "It's just been tremendous, tremendous growth."

It's a familiar story. In the 1990s, companies rushed to build websites to extend their brand or engage in e-commerce, mostly for consumers sitting behind desks at computers. A new economy was built around websites — their design, marketing and behind-the-scenes hardware and software needs.

Now, the mobile app market is a new chapter, as consumers are using powerful smartphones and tablets that are touch-sensitive, location-aware, and socially networked — and these devices shoot photos and video.

Apple's introduction of the App Store three years ago opened up the market, allowing any developer to submit his or her work for approval. Apple's competitors soon followed with their own variations of the App Store.

The global mobile applications market was worth $6.8 billion last year, with more than 40 percent of revenues in North America. It's expected to grow to $25 billion by 2015, according to a survey this year by MarketsAndMarkets, a global market research firm based in Dallas.

Generally, the barrier to entry is low for businesses and developers that want to build mobile apps. Businesses with existing websites can spend hundreds or a few thousand dollars to extend their Internet presence onto mobile phones. More sophisticated mobile apps, though, can cost five or six figures to develop, industry observers say.

And not every mobile app behaves the same. Generally, smartphones can access two types of apps — native or mobile web. Native apps are downloaded from an app store, such as Apple's or Android's, and can tightly integrate with a smartphone's hardware and software. Mobile web apps aren't downloaded, and instead are viewed with a smartphone's mobile web browser, in much the same way a computer user would view a website on a desktop PC.

Among the Baltimore-area entrepreneurs seeking a foothold in the market are Todd Marks, Jason King, and Shawn and Stephanie Grimes. Their stories illustrate the promise — and sacrifices — that have accompanied the young technology.

A startup tale

Todd Marks had been building websites for years in New York and Baltimore, working for a creative agency and later as an independent consultant. But when Apple unveiled the iPhone in 2007, he could sense the coming opportunity in mobile.

Marks, 35, started Mindgrub in the basement of his Oella home in 2002 and nurtured the business in his spare time. In 2007, he hired a full-time employee and the next year, he quit a job that had him telecommuting to New York every week. Early on, he recruited computer science interns from the University of Maryland Baltimore County, where he's an adjunct professor.

The first couple of years were lean times, as Mindgrub had a narrow pipeline of website projects. As the economy cratered in 2009, Marks spent time bartering his services and building his portfolio. He had six employees working out of his basement.

By 2010, the marketing departments in companies were starting to experiment with building mobile applications, and Marks watched business explode. And 2011 has been another busy year, with Mindgrub moving its office to a bigger space in Catonsville to accommodate 30 employees.

"Things just took off," said Marks. In 2010, "we went from early adopters to the early majority. At that point, businesses started to make the switch" to mobile apps.

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