Archive for March, 2010

Businesses on Loopt and Foursquare: Are Mobile Geolocation Apps Ready for Prime Time?


Tuesday, March 2nd, 2010

Facebook established the online social graph. Twitter established the real-time conversation graph. Who will dominate the location graph?

A number of startups, led by Loopt, Foursquare, Gowalla, and newcomer Booyah! are hoping for a piece of the action. Facebook, Twitter, Yelp, and social games companies like Zynga and SGN are rapidly adding mobile and geolocation features.

The recent success story has been Booyah! MyTown, which launched in December and has already eclipsed Foursquare and Gowalla’s combined user base. But for some context, even at 1M registered users, MyTown’s success pales in comparison to the 30M+ monthly active users of popular Facebook apps like Farmville and Mafia Wars (much less the 400M on Facebook).

How did this all begin? Dodgeball was one of the “original” mobile location apps. It was SMS-only (there was no GPS then). A user, say Dan, could text “@slanted door with friends” to D-O-D-G-E and all of his friends would receive a text saying “Dan checked in at Slanted Door Restaurant, with friends.” Dodgeball was acquired by Google in 2005 and basically shut down. The team went on to found Foursquare in 2009.

The next generation of geolocation apps basically consisted of location reporting and tracking between friends, pioneered by Loopt and later Google Latitude. People could choose to share their real-time location with others and in turn subscribe to friends’ real-time location.

Google Latitude

Google Latitude

Companies quickly realized that people don’t care about location in the latitude and longitude sense. People want to know about the places their friends are going—restaurants, bars, shops, cafes. The current generation has added proactive real-world recommendations and game-like elements like virtual goods, property, and status for “checking in” to certain places. As Foursquare co-founder Dennis Crowley put it, “the point of the service isn’t I’m here, but I’m here, so now what?”

Foursquare badges offer competitive incentives

Foursquare's badges create real-life incentives and foster competition between users to encourage greater use

Foursquare has revived the original Dodgeball concepts of check-in and badges. For example, users receive a “bender” badge for bar-hopping four nights in a row or a “gym rat” badge for checking in to 10 “gym” locations within 30 days. Checking in at a certain location more times than anyone else earns you the title of “mayor,” and some businesses now offer free drinks or snacks to the Foursquare mayor of their location.

Gowalla is similar to Foursquare but with fewer badges and more “items” to pick up and drop off in places (in other words, more gaming, less status). It is the second mover, but regarded by many as having a much better code base and product design.

MyTown is GPS-enabled Monopoly with real physical places. Users can buy places and collect rent from others who check in to those places.

MyTown allows users to buy and sell their favorite locations

MyTown allows users to buy and sell their favorite locations

With its new Pulse application, Loopt has expanded beyond its original auto-location update functionality and now pushes active recommendations for places and events based on where you are and what your friends are doing. They have partnered with Zagat and Citysearch to provide restaurant recommendations and reviews. One of Loopt’s greatest strengths is compatibility across over 100 mobile devices.

Loopt pulse

Loopt pulse

Last month, Yelp too introduced check-in and leaderboard features on their iPhone app, which already has over 1.25M users. Yelp’s augmented reality app, the first released specifically for US iPhones, ignores the personal relationship building, social networking aspect of Foursqare and Loopt and instead connects users to the entire internet spectrum of opinion. A GPS and compass system pinpoints the iPhone’s location, so that pointing the phone at a store, business or restaurant displays icons of Yelp reviews overlaying the iPhone’s live camera view.

Yelp's iphone app offers an augmented reality overlay, displaying icons and tips over a real world view

Yelp's iphone app offers an augmented reality overlay, displaying icons and tips over a real world view

As for the future, the battle continues for user share as swaths of people are buying smart phones for the first time. In parallel, many of these companies are building ad networks and partnerships. Both Loopt and Foursquare are exploring geotargeted coupons (for example, Loopt has partnered with Jack in the Box to serve up coupons when users are in the vicinity of a restaurant). The next frontier may be auto check-ins, to avoid the problem of user drop-off after several months, but privacy concerns will slow this trend. Facebook may be the next to enter the game as well. No doubt geolocation is hot, but here are a few hurdles ahead.

1. Smart phone penetration. Geolocation apps require GPS-enabled smart phones. Thanks to the popularity of the iPhone, smart phone penetration in the US has gone up from a mere 3% in 2007 to nearly 20% in 2010. But we still have a ways to go. (This is the least of the concerns. Smart phones are where we are headed, so this is a problem which I think will resolve itself over time.)

2. Mobile interoperability. There are little to no standards for building and accessing applications across different smart phone devices, which presents an ongoing challenge to these geolocation startups. There are also no standards for geolocation data or mobile ad units, which will be a challenge for advertisers. (This too is resolving itself slowly as the number of mobile platforms is converging.)

3. Security and privacy. Privacy controls were a big reason Facebook won out over other social networking sites, and even those took some getting used to. A secure and private model around sharing our real-time physical location is doubly hard to figure out. A new website, PleaseRobMe.com, has exposed the shocking vulnerabilities of people who publicly share their location and imply they are not at home (creating a target for burglars).

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PleaseRobMe's real-time list of empty homes confirmed by Twitter updates

PleaseRobMe's real-time list of empty homes confirmed by Twitter updates


Acknowledgments: Steve Garrity (my cofounder at Hearsay Labs) for his extensive knowledge of the mobile space and Zoe Leavitt for market research