Recently, Dan Holden did a series on how apps are changing the face of the web which came right at the time I was considering a series on that very thing, but a bit more focused. He's right and we need to consider how these technologies are going to affect our lives because in the modern world, the user has a greater stake in the outcome than ever. So today we start looking at on geolocal, or geosocial apps.
These platforms are the latest darlings of the tech world. VCs are throwing money at them like frat boys throw at strippers, the press can’t stop writing about them and, at this writing, there are more than 100 of them launched worldwide. The biggest name, at the moment, is Foursquare, but Gowalla and Booya are making inroads and Twitter, Google and Facebook -- the gorillas of social media -- have launched their own initiatives.
It’s not really a new phenomenon. Foursquare founder Dennis Crowley launched a primitive version in Dodgeball in 2005, sold in the Google, and then left Google to found Foursquare when Google shut Dodgeball down. So significant money has been in geolocal for half a decade and it doesn’t seem to be abating. That the niched is significant is not in debate. There is just one question that has yet to be determined:
What the hell good is it?
And that’s what we will be trying to answer at over the next few weeks.
At its base, geolocal apps are God’s gift for update freaks; the people who feel it is important to let everyone know where they are and what they are doing almost every minute of the day. Some people, like Robert Scoble, have made a good living doing that and he has spawned a host of people who do similar work in promoting and reporting on trends in social media. Many others are just narcissistic enough to believe that lots of people care that they are in a trendy coffee shop at 3 a.m. That s not to say that the latter are useless.
The primary value in geolocal apps is to the business trying to grow their customer base or develop buzz about their business. As a result, they are willing to pay the geolocal companies money to provide access and buy market data on the update freaks and where they go. And the freaks act as a virtual marketing/sales team by pimping their favorite places to their friends in exchange for an occasional coupon for a latte. The Geolocal companies throw in an added psychological incentive by awarding titles like “mayor” to those who check-in at certain places more times than others.
In the end, the vendors get more loyal customers, increased business and hyper-focused market data for a relatively low cost and the users get to compete against their friends for titles and freebies. Nobody gets hurt, everybody wins.
But there are downsides.
“Check-in fatigue” is the primary issue. People, after a while, get bored of the game. Like social media maven Om Malik, who a couple of months ago said he was going to stop check-ins because, well, it was getting boring. Geolocal companies have to get creative to keep the interest high, and that is not easy.
Market leader Foursquare has been promising significant changes to the platform almost every month for a year but hasn’t delivered. Although founder Crowley has been the subject of a lot of society news with all the parties he goes to. The New York press is cutting him a lot of slack because the geolocal industry is based primarily in New York and the city wants to be known for it’s technology development. But if Foursquare doesn’t start making some changes soon, it’s going to see the same drop off in activity that Twitter did.
The second problem with geolocal is the competitive aspect for the end user. Playing against your friends for titles and coupons is fun for a while, but it can also wear on friendships, especially when one friend really gets into it and another “just doesn’t get it.” I’ve experienced that personally actually losing a friend because I wasn’t that into the game, but I have heard similar episodes from others. To an extent its similar to what happens when a friend decides to get into a multi-level marketing company like Amway that relies on growth by tapping the disposable income or friends and family. Eventually resentments grow on both sides.
This second problem actually works against the entire purpose of social media, which is to build communities. You can’t have a community when you are working against one another and the vendors are encouraging it. That flies in the face of all economic theory.
The third and final problem is technological. To be able to participate in geolocal applications, you have to have a device that has a GPS system so the app can find you and allow you to check in. Now with all the hype about 3G/4G phones, iPads and nifty WiFi connected devices you would think that the tech is ubiquitous. Not so.
With the exception of places like New York and Los Angeles, most of the world has not “leapt the chasm” for the latest and greatest advance in communications technology. World wide, only 5 percent of the market for mobile phones is allocated to smart phones. Even the San Francisco is less than 10 percent. And without a smart phone, you can’t really participate. iPads and iPod Touch devices can, some laptops. But the vast consumer market cannot. And until the cost of the service AND the cost of the devices come down, or until the economy significantly improves, that is not going to change anytime soon.
So does that mean the geolocal industry is a bubble about to pop? Not in the least. There are changes coming that overcome all three problems and we will be looking at them over the next few posts.