Sunday, February 14, 2010

When Location Matters

Wow, what a few months. A wedding, a trip to Africa, and a tumultuous return to work that included a last-minute invitation to sit on a panel at the semantic web conference.

Unrelated to all of this I've been spending a lot of time thinking about location-specific mobile applications. Foursquare, Gowalla, MyTown, Yelp! and other apps have people checking in, buying places, and generating a lot of structured data tied to location and community. Having this data - and the basic services, like check-in, that you need to collect it - is only the first step. Owning a collection of users with locations, friends, and interests gives you the foundation of a useful, location-based mobile service. The exciting question is what gets built on that foundation. (Chris Dixon dubbed all of this the geo stack.)

To make a real business you've got to build something on top that someone - a consumer, advertiser, or both - will actually pay for. There are a few different approaches already in use:
  • The Listings Business (Yelp and others)
  • The Local Coupon Business (foursquare, Yelp, Aloqa...)
  • The Search Ads Business (Google Local Search, Yahoo!...)
  • Virtual Currency / In-Game Items (myTown)
  • Premium Services (Skout)
  • Subscription Services (Traffic.com, Inrix, and others)
What's interesting is that we're seeing innovation in both the free to consumer and pay-per-use models. Unlike the wired web, mobile web is taking off after users are already used to paying for services used on their phones - even if they're just buying ringtones. Apple and Google (and, arguably, Microsoft with Zune) have removed a lot of the friction by setting up online payment platforms and providing strong incentives to get users connected. So all you have to do is tap buy.

That said, relatively few of these applications are really enabled by the mobile context. Local search, most mobile games, and traffic information is almost as useful on a PC as it is on a phone. The most interesting apps - like Skout - make immediate use of your location to provide something of value. They're still limited by hardware - for example, you can't do location-based notification on an iPhone - but you can see where things are going.

1 comment:

shanan said...

I think the conventional wisdom has that we're only in the 1st or 2nd Inning of development of this space. Connected devices and applications that use the concept are all in version 1.0 territory, eh?

There's still lots of opportunity to own this space, which is why there's so much investment and innovation going on.

But you like mytown, really?