AppHero Makes App Recommendations Personal, Adds $1.8M in Funding

Toronto-based startup AppHero, which is taking on the sizeable task of making app discovery easier for everyday mobile device users, today announced that they’ve raised a $1.8 million seed round of funding from OMERS Ventures, Golden Venture Partners, ENIAC Ventures and others. It’s a big round for a young company with a young founder (Jordan Satok, who just recently graduated high school), but it reflects the size of the opportunity around app discovery, which is poised to only grow as app store libraries grow more populated and smartphone users more numerous.

And while Satok is young, he also already has a lot of experience around app discovery thanks to his first venture, website App of the Day. The site suggests one iPhone and one iPad app every day for download, along with a running list of apps recommended in the past. Through that and his own experience with Apple’s App Store, Satok realized there was a much bigger opportunity to provide ongoing personalized recommendations to users to help them make the most of their mobile devices.

“People are very aware that they’re underutilizing their device,” he said in an interview. “When you say to someone, ‘We’ve got this great app for you,’ people are so receptive to it, because they look at their bill at the end of the month, and they spent $100 on a phone, and that device they had in their pocket felt like a waste.”

Satok believes that while others (YouAPPi, App-o-Day to name just two we’ve covered here recently) have realized this as well and attempted to solve that problem, most have gone about it in a way that wasn’t ideal in terms of generating really useful suggestions. Too often, he says, recommendation services aren’t looking at the big picture.

“[AppHero] isn’t just looking at things you already own, and finding other things you might like; it’s looking at things you already own and being smart about it,” Satok explained. “Classic recommendation apps see that you own a to-do list app, and recommend other to-do list apps. But if I’ve got a to-do list app and I’m actively using that app, don’t recommend me another one.”

Instead of that fundamentally flawed approach, AppHero asks users to sign in with their Facebook credentials so that it can learn more about them, their interests and their social graph. That’s designed to help inform its recommendations in a way that simply surveying their past app shopping activity can’t. AppHero also takes contextual cues, including location information, to recommend a BART app in SF, for instance, and not merely a transit app because you seem to like transit in a general sort of way. It’s geared toward utility, and, as Satok puts it, towards “helping people improve their lives.”

Satok recently had the opportunity to meet and talk with Apple’s Craig Federighi, Eddy Cue and Scott Forstall at WWDC, and he said that everyone seems “really positive” about the things they’re doing, and that the general consensus is that this is something that’s needed in the market. You can’t get much higher praise than that in the app space.

Of course, app discovery isn’t just an issue for Apple users; Google has potentially a bigger problem in that area, which translates to a massive opportunity for AppHero. That’s something Satok and his team are very aware of, and they definitely have plans to move beyond iOS in the future.

The biggest challenge for AppHero, on any platform, will be maintaining and growing its revenue model, which depends on collecting affiliate fees for recommending apps for users to purchase, while also ensuring that recommendations remain highly relevant to users. Satok says they’d never suggest something a user wouldn’t be interested in, however since it’s worth passing up a sales opportunity to win a lasting and loyal user.

If it can gain and maintain a reputation for high-quality content suggestion delivery, AppHero could go far. It might even become an acquisition target for someone like Apple down the road, as they look for new ways to bring quality apps to the attention of their users.

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