My name is Andrew Scott; I am currently Founder/CEO of the location based discovery startup 
This post was published on Friday 6th February 2009 as a guest post on Mobile Industry Review
For the last 3 years now I’ve been crowing at conferences that “Who’s nearby” is not a business. I drew this conclusion from running playtxt, Europes first location-based mobile social network.
It started in 2002 and we had an Alpha launch in 2003. It was ridiculously early to market. Back in 2002 most normal people (i.e. those for whom a “tweet” today is still something only birds do) did not know what a social network was, let alone a mobile location-based social network. Thanks to MySpace, Facebook and the inevitable march of technology, even my own mother is now aware of social networking, SMS and GPS.
By 2005 Google had bought our main competitor Dodgeball and although the mobile operators were still charging for Cell ID lookups (ludicrously, they are STILL trying to!) I already believed it was only a matter of time before location became a commodity. It would too easy to do for start-ups to do and even easier for others such as Facebook, which was on its ascent.
I decided that “who’s nearby?” was never going to create a multi-million pound business and I made three predictions, some which are still relevant today:
- GPS will be in every phone as cameras were then becoming. (GPS chipsets are extremely cheap, power consumption is becoming lower, processing power higher and Galileo is on the horizon -literally, haha).
- One of the gorillas (Google, Yahoo et al) will release a free Cell ID/Location API. (Google have and its excellent).
- “Who’s nearby” will also become a commodity
For the last 2 years I’ve been telling any start-up which is building its own Cell ID database, that it must be mad. I see no business model. Google about as likely to charge for Cell ID lookup as it is for its maps API; and that likelihood is slim.
There was (and is) money to be made with tracking and Cell ID technology, but both industries begin with “S” and neither spell the world “Social”. Instead, it is Security (child tracking, staff tracking) and of course Sex (proximity dating, adult services); infact any vertical where a premium can be demanded – we know that fear and shagging both command strong emotions which can result in a buying decision. Wondering “Where are my friends?” does not; unless of course you’re intensely paranoid or have VERY accommodating friends.
There is no mobile internet: there is only the internet.
This has been my other crusade for the last 2 years; and this is probably what Google believes too. What I mean is, that fix-line world-wide-web access is the black & white TV of the internet. Amazing in itself, but without the full functionality of what we recognise as “television” today.
Location, portability and the need for personalisation (a mobile being such a small, personal device) are the three missing dwarfs which give us our Seven Dwarfs of the modern internet. (The first four were IMHO: the web browser as user interface, freedom to publish without government or minority corporate control, always-on fixed cost access, and broadband bandwidth; Snow White being the internet itself).
So in the near future (3-5years?) no one will talk of the “mobile” internet but simply, the internet. You will have an iphonesque device (in size & looks if not in O/S 
which you take home and plug into your 24 inch screen and keyboard …we’ve still a decade to go before we type goodbye to Mr Qwerty and say hello to HAL.
Be under no delusion, Latitude is Googles Trojan horse into the social networking space.
After Googles purchase of Dodgeball it was clear they had every intention to roll out a service such as Latitude and they are perfectly positioned to do so.
Almost by-passing online social networking entirely (aside from Orkut which only took hold in Brazil) I believe Google will pursue a wide-reaching mobile social play. Google will build up a critical mass of users on Latitude; and they will join because:
- It is Google (so its trustworthy; yes still)
- Its easy to use – simple UI and simple privacy model: Automatic, Manual or Hide your location (or as I prefer: Honest, Lie or Paranoia)
- It has reach (27 countries at launch, lots of handsets, no GPS required)
- Its free
They will then likely launch an API (in the process solving some of the standardisation and interconnectivity problems – possibly using the new OAuth hybrid or equivalent) but also roll out other functionality enhancements. Although the latter may take longer than you think.
Latitude has lots wrong with it too e.g. Gmail import only (where is XFN Social Graph import or device address book comparison?) status update is crying out for Twitter integration and a hook into FireEagle (with which Latitude does not compete, yet) would all be very welcome (the last two are unlikely for political reasons but would be a fantastic nod to the open ecosystem) and dont forget part of Latitudes beauty is its simplicity; and Google have time on their side.
Many of us have been waiting for location-based services to come of age for YEARS! but in reality we’re still in the early adopter curve. Infact, I’d go even further than that. At BeingDigital in 2008 I stated on stage to a deluge of ridicule, that Social Networking wasn’t yet main stream. The laughing continued until I asked how many parents AND siblings of delegates had email? The answer was predictable: virtually everyone. Then I asked how many parents and siblings were also on a social network; over 75% of the hands dropped.
150 million people on Facebook is a lot, but 3.2 billion people have mobile phones: that’s a lot more. Email is mainstream, social networking is still maturing. Eventually it will of course become part of everything we do “online” rather than be a destination, with your social graph becoming portable and also actually owned by you, not FaceSpace.
So what does this all mean?
1) Location is already commodity AND your friends location will become a commodity.
Any service will be able to plug in and use this data (with the right permissions). Its already happening – checkout Yahoo’s FireEagle which is an aggregator of location between services.
2) If you’re a start-up building LBS, Cell ID, friends nearby services, or anything else which is being commoditised as we speak, see above.
Loopt; west coast startup run by a bright 24 year old entrepreneur – nice guy, flawed business plan. $13million+ in funding, nudging just 1 million users after 3 years with low engagement metrics. Differentiator? There isn’t one. Case closed, game over.
3) If you’re running anything with the words “mobile social network” in the title, lock yourself in a room with your team and work out how you’re going to save your business.
That means innovate. Mobile is not a differentiator, its an inevitability.
At Le Web 07 I met with Christian Wiklund, Founder of Skout. He had built a cool location based mobile social network (LoMoSoSo anyone?). By Q1 2008 when I met him in San Francisco, he’d already realised that competition was fierce and the concept was flawed — and that was before the gorillas had waded in. I implored him to change strategy (something which infact he’d already started doing). He chose dating. It’s a smart move. Dating generates money—and lots of it. Proximity dating, or infact “mobile dating” in general has never been done really well (even Mr Arrington agrees).
As a LBS start-up, you need to think about adding distinctive value for users; differentiating on location is an oxymoron. I know some of you are making money, some of the pure play mobile social networks are even profitable – great. But there’s an iceberg ahead and it may be bigger than it looks: just ask Captain Edward John Smith.
The future is relevance; the context of not only where I am but what I’m doing, who I am, where I will be. In summary: It’s about the data, stupid.
..and that will be what I write about in my next post; if they’ll have me back!
Thee Page/Brin and Branson empires have announced a joint initiative to go and colonize Mars.
