It’s an exciting time to be in the business of helping people get organized. 2013, especially this summer, has seen huge news across the consumer productivity software market:

-Astrid, 4M users, $400,000 in funding in 2011 led by Google Ventures. Acquired by Yahoo and shut down. 

-Orchestra pivoted into Mailbox, shuts down Orchestra to focus. Acquired by Dropbox for ~$100M. $5M A round in 2011 consisting of Charles River Ventures, Kapor Capital, SV Angel and Crunchfund.

-Catch Notes shutting down, 3.5M users reported, $9.3M from Excel Venture Management total ($2.3M seed and $7M A). No reason given (hypothesis from TechCrunch is that they’re focusing on the team version). 

-Evernote crossing 66M users. Evernote raised a set of large seed rounds too ($6M and $3M before a $6.5M A round in 2009). 

-Any.do raised $3.5M earlier this year, after a 1M round in 2011. Investors include Genesis Partners, Blumberg Capital, Innovation Endeavors and Blumberg Capital.

Unlike the enterprise productivity sector (where revenue comes in quicker), consumer is much more dependent on gaining massive adoption, dominating a market and raising on growth. At first, I thought the shut-downs were related to the “Series A Crunch” (investors moving upstream to seed or downstream to B round or growth equity is creating a vacuum of funding at the A round). However, Catch and Orchestra both raised A rounds in 2011 — it seems that the shut-downs (or pivots) are more related to user bases not being able to break out of the “low millions.” As a result of the halting growth, they can’t raise the follow-on financing they need, or monetize enough to support their team sizes.

But survivors remain, and the attrition of companies is creating refugees that feed back into the remaining services. This creates wider separation amongst the remaining players, who are more likely to raise more money and earn a successful exit with more users. Besides my own company Fetchnotes, Wunderlist, Any.do, Springpad, Evernote and many others are still in business (principally focused on funded companies, since that’s where these dynamics matter most) and stand to benefit greatly from the disruption.

This competitive jostling happens in all sorts of consumer app verticals, though, so what’s so special about productivity?

Currently, the to do list industry in particular is immensely fragmented. Not a single app has over 1% market share in the mobile to do list space. That means that as products shut down and see their refugees strengthen existing services (either to do list apps or more flexible note-taking apps), we could be on the cusp of a major consolidation in one of consumer technology’s most competitive categories. Just think of search in 1998 (Google emerging from AltaVista, Lycos, Yahoo, AskJeeves, etc.) and social networking in 2004 (Facebook emerging from Friendster, MySpace, tribe and others). 

Whether we see a “big at the top” dynamic like social networking (Facebook, Twitter, Pinterest, Instagram), or a “gorilla vs. everyone” mentality like search (Google), the abrasion occurring today is going to define the “productivity app” market in the future. I’d also be on the lookout for companies that raised money > 2 years ago. Startups typically raise 12-24 months of capital so if they raised back in 2011 or earlier and still haven’t raised a new round, it could mean they’re having trouble and are likely to sell soon to salvage a return for their investors.

Do you think a king will emerge? Or will it stay fragmented? Email me your thoughts at alex(at)fetchnotes(dot)com.