The idea that you can now run an entire commercial operation for web browsers doesn’t seem particularly shocking to us today. But the fact that it is a financial reality right now is a real victory for entrepreneurs and something that was almost completely unimaginable just twenty years ago.
Early Web Commerce and the Economics of Reduced Friction
Engineers and software developers got the ball rolling in the 1995 to 2000 period. During this era, web browsers reached a level of utility that made them viable for mass-market commerce. Internet Explorer, the tool Microsoft developed, captured a whopping 95% market share, connecting consumers to the businesses they wanted to find. While basic, this was the foundational infrastructure for the digital economy, reducing friction between buyers and sellers.
Web Applications and the Shift Toward Lower-Cost Revenue Models
Between 2004 and 2006, the value proposition changed again. With the advent of new tech, the web became a genuine application platform. Suddenly, businesses could offer a host of new tools to their customers, including curated experiences on apps. These were necessary to drive higher sales and increase engagement among customers who wanted to feel they had a specific platform on which to buy, sell, and experience services.
“This era really showed what businesses could do online,” DOCX web editor developer, Apryse, explains. “Entrepreneurs in the field could see what was coming down the pike and imagine the applicator bill for their customers. Not only could they provide a better experience, but they could also lower costs.”
That didn’t quite happen immediately, of course. Most apps remained clunky. But the financial principle was clear—it was possible to essentially outsource software provision to third parties and use their expertise for entrepreneurial activities that simply weren’t possible before.
Speed, Conversion Rates, and Revenue Growth in the Browser Economy
In 2008, Chrome came along and shifted the market dynamics again. Google’s new browser was significantly faster than anything else on the market and dominated the space, pushing out legacy alternatives like Internet Explorer. In the online economy, speed equals revenue. So companies finally had a tool that was lightning-fast and could provide the functionality they needed, without the long wait times that kill conversion rates. In fact, many credit Chrome’s growth to Google’s overriding financial success in the years that followed. Companies had a browser they could use to sell services more effectively to customers, driving more entrepreneurs into the e-commerce space.
Mobile, Cloud Computing, and Expanded Addressable Markets
The cloud and mobile expansion that occurred between 2009 and 2012 became even more critical to the profitability of browser-based businesses. Now, consumers can complete transactions from any location instead of waiting to get home to their desktop computers. Everyone had iOS or Android in their pockets, expanding the addressable market for digital services. From a P&L perspective, writing a web app that worked everywhere was vastly cheaper than anything that had come before.
By 2015, the ecosystem was mature enough to bring powerful, enterprise-grade functionality to businesses.
SaaS, Browser-First Companies, and Scalable Profitability
During this period, Google began its push toward better web apps. These were supposed to be installable and offline capable, bringing the high retention rates of native apps to the low-cost distribution of the web. The goal was to help brands increase customer lifetime value (CLV) while ensuring users had sovereignty over the systems they were using. During this period, brands like Starbucks and Twitter saw significant improvements in their engagement metrics and ROI, finding they could offer users a seamless transaction experience without the friction of an app store download.
However, that wasn’t the end of the story. During the latter half of the 2010s, SaaS essentially took over the browser. Top companies, like Linear, Notion, Airtable, Pitch, and Coda, all became “browser-first,” meaning that their primary revenue existed on people’s web browsers when they opened the internet. What this meant was that it was possible to build billion-dollar companies that never shipped any products or software. It was all contained inside the browser.
“The ability to do all of this through browsers is something that many entrepreneurs still find remarkable today,” Apryse explains. “They don’t even need to create an app that sits locally on machines anymore, as long as users have a stable and quick internet connection. It’s reducing costs for businesses and making it simpler for them to get ahead of the competition.”
During the pandemic, the economy shifted again, and more browser-based opportunities attracted firms. Suddenly in 2020, work became almost universally remote, and businesses needed tools that fulfilled their day-to-day workflow requirements.
Zoom, for instance, was one of the companies that came to the fore during this time. It was a serendipitous moment for the company because it was highly scalable in a way that other services weren’t.
Remote Work, Pandemic Economics, and Browser-Based Survival
Then there was Slack and Miro. All of these became browser-based by default, especially given the challenges of BYOD and putting actual software on employees’ actual computers. Tools that weren’t accessible during COVID-19 essentially died out, which was damaging for businesses and money-making projects that couldn’t adapt.
What Browser-Based Business Models Mean for Entrepreneurs Today
What this means for entrepreneurs today is that the platform is king. If business leaders can find services that allow them to distribute their creations, digital products, and service creations to their customers more efficiently, they should use them. Company bosses should think carefully about how web browsers and similar technology affect this. It affects the market’s flow and their marketing machines.
“This shift means that it’s much easier than ever before to make money on these apps. Even consumers can benefit from in-app productivity,” Apryse explains. “There’s less friction and a much greater ability to get work done in record time without tiring tasks taking up mental bandwidth, which is great for side hustles.”
Companies will need to keep a close eye on how artificial intelligence will affect their product distribution in the future. AI systems are going to evolve, but not in a way that anybody can predict right now. While web browsers were the distribution channel of choice over the last 20 years, artificial intelligence systems will likely replace them in that role over the coming years. Financially, this means companies need to shift their revenue and profitability models. There needs to be more focus on providing valuable content and less on simply raising awareness.
Featured Image Credit: 2H Media; Unsplash; Thanks!
