Category Archives: GeoDisruption

How the GeoWeb Will Change Consumer and Business Behavior

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Reposted from Street Fight.

How the GeoWeb Will Change Consumer and Business Behavior

30 JULY 2013 BY 

The new Google Maps personalized interface.For about 2000 years, ever since Ptolemy wrote his treatise Geographia, maps and geography have helped humans understand their surroundings in the context of their neighbors, their town, their country, the Earth, and the Universe. For about 400 years, since Mercator figured out how to portray the curved Earth on a flat piece of paper, not much changed in the world of geography — until the launch of 24 GPS satellites by the U.S. Department of Defense about 30 years ago.

Digital location-based technologies are now a transformative force for consumers and businesses, particularly when coupled with the rapid adoption of mobile and the growth of big data. I’m a big believer in the future for “GeoDisruption” — the potential for consumers and businesses to interact in fundamentally new ways to take advantage of increasingly precise location-based technologies.

This is the debut of a column I’ll write for Street Fight exploring the growth of the “GeoWeb” and the emergence of GeoDisruptive trends and companies. When I’m not writing columns, I am the CEO/founder of On Grid Ventures, an investment and advisory firm focused on digital and location-based technologies.

GeoDisruption:  Where we are
Location-based technologies have already been a dislocating force in many industries.

  • Automobile marketing at the local level used to be all about newspapers and television, and companies like Autotrader, Cars.com, and Autobytel have used geo-based lead generation to irrevocably shift in-market auto buyers and local car marketing spending to the GeoWeb.
  • GPS has made paper maps obsolete.
  • General B2C platforms like Yelp are changing the way we evaluate local services.
  • Vertical B2C platforms like OpenTable are changing the way we find and book nearby restaurants.

The major portals and aggregators are all making increasing bets on the potential for GeoWeb.  Google, with Google Maps and Places; Yahoo, with its leadership position in local news and content aggregation; IAC, with CityGrid and UrbanSpoon; and AOL with Patch.Google’s recent acquisition of Israeli startup Waze for over $1 billion is a high-water mark in the development of the GeoWeb as it affirms the importance of user-generated, location-based content.

GeoDisruption:  Where we’re headed
While the growth ambitions of Google, Yahoo, and others will continue to be fed with more acquisitions of GeoWeb companies, the application of location-based technologies is increasing more broadly in three areas: Business-to-Consumer, Business-to-Business, and Consumer-to-Consumer.

  1. B2C marketing (i.e., GeoMarketing) will continue to be transformed as innovative companies apply location-based technologies to how they acquire, transact with, and retain customers. GeoMarketing will be essential for most local retail and service businesses, and the landscape is ripe for vertical players in areas beyond automotive and restaurants, across the entire local landscape. Early stage companies like BeautyBooked are already trying to become the dominant search and booking platform in verticals like place-based salon services. ReachLocal and Yodleare growing fast as companies that help local businesses reach consumers, and national marketers are increasingly shifting dollars to locally targeted digital marketing and promotion.
  2. C2C interaction (i.e., “GeoSocial”) can also be further shaped as individuals increasingly become comfortable with sharing their location with family, friends, colleagues, and people with similar interests. Foursquare has jumped to an early lead as the platform for consumers to share their location, but Facebook, Google, and others are gaining fast.
  3. B2B companies that enable location-based innovation (i.e., “GeoInfrastructure”) continue to be a hotbed for venture investment.  Location itself is nice, but it needs to be in the context of an individual, the surrounding locations, time of day, and other factors.  This all needs to be accomplished respecting an individual’s privacy. Companies like Jumptap and Place IQ are finding new ways to provide marketers with context that makes location relevant.

While I have a background in computer science, I’ve never been a fan of pure technology. I am a believer, however, in the potential for increasingly accurate digital, location-based, real-time data to better inform the decisions we all make every day on where to go, with whom, what to buy, and other areas. The rapid proliferation of mobile devices is certainly an enabler, but the greatest innovation will come from insights into how a consumer’s behavior varies based on his or her specific location. We’re now a long way from zip-code targeting, and more GeoDisruption is on its way.

Jason E. KleinJason E. Klein is the founder/CEO of On Grid Ventures, and investment and advisory firm focused on the startup and reinvention of businesses capitalizing on digital and location-based technologies.  Follow him on twitter @JKNews.

Why Google’s Acquisition of Waze is a Game Changer

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From a recent article in Forbes, here are several reasons why Google’s acquisition of Waze will be a game changer.waze

  • Waze’s community of users is key to helping Google achieve its next big goal: mapping how we move.  Waze simply collects GPS data from its 50 million users. Anyone who drives with the Waze app turned on is passively providing data that the company can use to better understand not only the world that user is driving through, but their intent.
  • Waze is one of only four major companies that built its own extensive maps of the world, the others being TomTom, Navteq and Google. “Just like search became the interface for monetization on the web, maps are going to be a big part of the monetization engine for mobile,” he said, “because that’s what you open when you’re going places.
  • Waze grows organically every day.  Wave’s Wikipedia-style structure of day-to-day contributors, who make up about 10% of users, and voluntary editors, who make up a tinier percent, allows it to chart new roads in new countries, and even include roadblocks and construction zones.
  • Waze understands the intent of its users. “Now that I know where you drive, I can begin offering you deals, I can begin enhancing the experience.”  When a Waze driver in the U.S. is stopped at a light or parked, they’ll often see a ad pop up for Taco Bell, Starbucks or AT&T.  Nearly all Waze’s ads are based on location, cross referencing where the Wazer and advertiser are in a given moment.  The Holy Grail here was cross referencing all of that GPS data with another component: the consumer’s destination, or intention. “If you’re driving to work it’s a different experience than if you’re driving to [the American department store] Macy’s,” said Bardin.

 

GeoConquest

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GeoConquest =

To successfully use unmanned drones (or mobile digital devices) to target unsuspecting civilians (or shoppers) entering enemy territory (your competitors’ GeoFenced locations).

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look up
 

 

 

 

 

 

 

Verve claims a 30% higher click-through rate from GeoConquesting than standard GeoFencing, based on a study of 17 campaigns on Mother’s Day.

Verve CEO Tom MacIssac told Mediapost, “The one big theme from this research is that if you’re going to target users near your own stores … it’s really effective to also target people who are near your competitor’s stores,”  While Verve advertisers have embraced geo-fencing for their own stores, they’re not typically pairing that activity with putting up a geo-fence around rival outlets.

 

 

Entrepreneurs Roundtable Graduates 10 Promising New Ventures

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Entrepreneurs Roundtable Accelerator has graduated its fourth and largest class. Startups in the ERA IV program receive a $40,000 investment, access to nearly 200 mentors, free and subsidized services, and three months of office space at ERA new office in Manhattan.  ERA grads have solid success rates for follow-on funding: nine out of ten from ERA’s first class raised follow on funding, and subsequent classes are on track for about the same.  ERA’s portfolio of 40 companies is worth an estimated $150 million today.

Entrepreneurs Roundtable Accelerator Spring 2013 Graduates:

1. Acquaintable

acquaintable

Acquaintable is a new and clever online dating service to meet friends-of-friends, bringing the social graph to online dating.  If you indicate you like someone, and he/she does the same,  Acquaintable makes the connection. Fifteen percent of beta users returned daily.  I asked 15 friends over 40 if they would use this if they were single and in college, and they all said “you bet!”

2. Cognical

cognical

Cognical offers a service for lenders, providing an algorithm-based underwriting engine to helps lenders identify the loan applicants that will pay them back.

3. Consignd

consigned

Consignd provides a way for anyone, particular popular Pinterest users and bloggers, to set up their own eCommerce site.  Influencers with large followings can create their own storefronts and recommend other people’s products in exchange for 25 percent of any sales.

4. EasyPairings

easy pairings

EasyPairings helps restaurants hire new staff quickly, automating much of the process of finding active job seekers with the necessary qualifications.

monaeo5. Monaeo

Monaeo incorporates geolocation into tax preparation, and provides audit-worthy tracking of location to minimize taxes for mobile executives and rich folk.

6. Startist

startist

Startist brings creative people together to collaborate on projects ranging from film and the arts to games and technology by allowing the showcasing and discovery of work.

7. Suitey

suitey

Suitey plans to disrupt the residential real estate broker business. It combines the best of online real estate services and brokers, and saves money for home buyers.

8. TheSquareFoot
thesquarefoot

TheSquareFoot enables commercial real estate prospective tenants to search for executive suites, industrial, retail and office spaces.  Launched in Houston, TheSquareFoot has 75% of the market online, and moving into Dallas next.

9. Trendalytics

trendalytics

Trendalytics crunches the social web and provides insights on fashion trends.  Ideal for fashion retailers, manufacturers, and fashionistas.

10. VocalizeMobile

vocalize

VocalizeMobile hooks small businesses with a free service to manage their online ratings, then helps them with a suite of marketing tools to improve their web and mobile presence  across online directories like Google Places, Yahoo Local, Yelp, Mapquest and YellowPages.

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Using Location to Book Local SMB Services

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Location is a key factor in booking local SMB services, and these transaction will increasingly move from offline to online.  Streetfight profiles today 6 early stage companies pursuing this vision.Westchester_Chappaqua1-527x375

  1. MyTime takes up to 40% of bookings made through its platform, focusing on filling up slow times of the day for merchants.
  2. ClubLocal takes 20-30% of bookings, and pre-screens merchants before listing.
  3. Booker is appointment scheduling software.
  4. YourMechanic books auto mechanics to come to your driveway.
  5. Thumbtack is a bidding platform for homeowners to get help with local handyman
  6. Redbeacon, now owned by Home Depot, is a booking platform for all those workmen in overalls in Home Depot every day to get jobs with consumers who need help.

More here.

A Yodle IPO in 2013?

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Yodle, the leading Silicon Alley-based digital marketing platform for small businesses, is “strongly considering” an IPO, according to CEO Court Cunningham, as reported by Street Fight.
10590521-yodle-logo

Yodle is profitable and generating over $130 million in revenue annually, Cunningham said recently.

Yodle bought Atlanta-based Lighthouse 360, it was reported today.  Lighthouse 360 has built an advanced customer relationship management (CRM) system for dental offices which reportedly does a terrific job integrating all those systems in a dentist’s office.  Yodle plans to expand the technology each of its 30 verticals.

Read our 2012 Yodle post here.

Some other metrics of note.

  • Yodle has $130 million annual revenues, and 30,000 mostly smaller clients with an average of $4k per client per year.

ReachLocal stock closed today at $13.50, up more than 2x in 14 months.

Update:  March 7

A Yodle source gave me some other revenue numbers, expecting 35% growth this year.

2011:  $75 million

2012: $130 million

2013F:  $175 million.

SMB: A New $2 Billion Business for Newspapers?

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Selling digital marketing services to 27 million small businesses (SMBs) could become a $2 billion new business by 2016  for newspaper companies, according to Ken Doctor.

Some benchmarks:Westchester_Chappaqua1-527x375

  • ReachLocal, with $430 million in most recent 12-month revenue.
  • Hearst’s LocalEdge, a reincarnation of its Buffalo yellow pages business, with 1,000+ full-time salespeople.  Customers include the Minneapolis Star Tribune (Radius, averaging client paying $426 per month), and the Dallas Morning News (508 Digital), Morris Communications, Wehco Media, Newsday, and the New York Daily New
  • Dallas Morning News Speakeasy, a 12-person start-up, with an average client paying $3,600 per month.

Ken Doctor’s well-researched piece is here.

With ad revenue dropping by more than half in 5 years, to $22 billion, the $2 billion could make up barely 6 months of average industry ad revenue declines.

Is Hyperlocal Dieing?

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Hyperlocal journalism took two big hits this week.

everyblockFirst, NBC closed EveryBlock, a pioneer in the emerging field of data journalism that started with $1.1 million in funding from the Knight Foundation in 2007 before being acquired by msnbc.com in 2009.  Everyblock was innovative in bring highly community data-driven, with open data and custom maps.  The original open-source code is actually still available. I don’t have the facts to know if EveryBlock can truly be viewed as a failed experiment in hyperlocal journalism, or if fell victim to the legacy of the General Electric cost-cutting knife, as new management at NBC, the former GE subsidiary, gained control of the site last summer.

And, second, AOL admitted what most observers expected, which is that its hyperlocal news network Patch will miss its ambitious revenue prediction of as much as $50 million in 2012 revenue, with only $34 million in 2012 revenue. AOL reportedly lost $100 million on Patch in 2011, a number which they denied.  And so the cost cutting axe will be falling on Patch since AOL CEO Tim Armstrong is committed to bring Patch to profitability by the fourth quarter of 2013.

The right formula for sustainably profitable hyperlocal journalism is still elusive.  The search, however, is far from over.

Five Geo-Marketing Platforms for National Brands

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Increasingly, major brands like Vicks and Nestlé are using location-based marketing platforms to help direct consumers where to buy their products.

Here from Streetfight are five platforms for  brands a way to take advantage of location-based services technology .

1. JiWire’s Compass: Brands such as Clinique, Bobbi Brown Cosmetics, and Jeep utilize real-time product availability data to point consumers toward local retailers that currently have their products in stock.

2. Point Inside: Sprint, Clear Channel, and Meijer use indoor mapping technology to identify consumers’ “micro-locations” inside stores.

3. inMarket: Coca-Cola, Levi’s, Nestlé, and Unilever has used inMarket apps CheckPoints, Extra! Extra!, and List Bliss to target geographic regions, specific retail chains, or individual stores.

4. Swirl: The Swirl mobile app lets consumers “follow” their favorite brands and notifies them when they’re close to retailers like Nordstrom, Macy’s, and Old Navy having sales.

5. Foursquare: Marketers like MTV, Bravo, and People have their own “brand pages” with content and location tips.

 

The Pitfalls of Mobile

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The push for mobile-first makes good sense, but the mobile landscape is fraught with difficulties, as highlighted by Semil Shah in TechCrunch.

Mobile has low barriers to entry, particularly in apps, and a proliferation of aspiring players in most every mobile category.   Reaching scale in mobile is elusive, and many startups might wind up as profitable ongoing ventures, without a huge exit, disappointing investors.

As Shah points out, citing VC Andy Weissman: investors in mobile services and apps may “wait and see” which services are scaling best.

You can read Shah’s full piece here, also crediting Albert Wenger from Union Square Ventures.