Open Mobile Map

Two days ago at the Metaplaces conference in San Jose, California, an interesting industry panel gathered several CEOs from location-based social networking services. While the market for location-enabled social applications has attracted a large number of entrepreneurs and venture capital money, sustainable business models are hard to find. Out of the four companies on the stage at Metaplaces three of them completely changed their strategy after finding out their business model was not sustainable in providing a consumer service.

Among the participants was Loopt, well known for its friend finder application, Socialight, which provides white label location-based community tools to media agencies and brands, Abaq.us, which focuses on location-based community tools for sport, outdoor and travel companies and SKOUT, a location-based dating service.

In the case of Abaq.us and Socialight, the initial focus was to provide a consumer service and build a business model around premium services and advertising. However, as they realized after launching their service getting scale is a very difficult task for a small start-up company with limited funding.

Socialight

Socialight initial concept was based on geo-localized virtual sticky notes shared between friends and the community. Not only it was difficult to get a large number of participants, but also to generate a large pool of content. “This is the 95/5 rule: 95% of users consume content while only 5% engage enough with the service to create this content“, explained Dan Melinger, founder and CEO of the company. Last year he decided to transition from being a mobile destination service to offering it as a white label turn-key solution to media agencies and brands looking to engage with their consumers with these social tools. Now the company has customers such as The Travel Channel, Ford and Corona.

As an example, Ford has been using Socialight to power a long-term campaign to promote its subcompact Ka model. Based on a web 2.0 site called FIND IT, which purpose is about discovering the undiscovered in cities and towns across Europe, including social gatherings, street art, music, and design. FIND IT is built completely on top of the Socialight API and has thousands of pins in the map across Europe. The campaign is promoted in eight European markets via traditional advertising, public relations and word-of-mouth campaigns.

Abaq.us initial idea was to become a consumer destination website at mygeodiary.com allowing to easily upload GPS tracks and geotagged media to share with friends and family. Having difficulties to get traction with its consumer service, Abaq.us founder Shailendra Jain finally decided to provide the technology he created as a hosted platform to third parties.



From social to dating: SKOUT

For Christian Wiklund, founder and CEO of the location-based dating service SKOUT, dating was not a first choice when he launched his company: “I had never thought I would end up in the dating business”, he told the audience at Metaplaces. Funded by business angels his first application was a more mainstream social networking, friend finder app. “But we couldn’t find revenue with the audience we had”, he explained. “Since a significant part of our user base was already using the service for dating we found it would be the right way to go.”

Continued…

The team redesigned its application and backend to fit with this purpose and the new SKOUT was launched at the annual Internet Dating Conference in Miami, early 2009. Since then the user base of SKOUT has grown nicely and the business model, based on premium services, is largely proven by the online giants Match.com and eHarmony. This business also has a virtuous circle: the more people use the service, the more they are likely to pay. “Each time you double the number of users in a particular city, you have five to six times more subscribers”, explained Wiklund. According to Juniper Research, the mobile dating market will reach 1.4 billion dollars by 2013, a clear opportunity for SKOUT.

Loopt

Loopt, who provides a friend finder service, was the only company in the panel to have kept the same direction since its inception. So far its success came from forming partnerships with US wireless operators. Thanks to these partnerships its business model is slightly different from its competitors since Loopt has a revenue share agreement with carriers: users pay a monthly fee or the service is included in premium data plans. However, on the iPhone, Blackberry and Android application stores the application is free, which means Loopt has to find other ways to make money out of these users which are likely to represent a majority of its community, if not yet today, certainly tomorrow.

“We have developed an in-house advertising platform” explained Alok Deshpande, co-founder and Chief Software Architect. However, “location-based advertising is still experimental at this stage”, he told us. The company is also said to be working with NAVTEQ LocationPoint to monetize its mobile properties.

Is advertising enough?

Nevertheless, even if the advertising model is successful for Loopt, it might not be enough to make a profitable business. The company will have to really keep its users hooked to the service to generate a large advertising property. A LBS professional met at the conference, who had previously worked on a friend finder application, shared this insightful thinking with us: “the problem with friend finders is that most people don’t use it more than one or two times a week. If we assume they browse a few pages each time it does not make a huge inventory to sell per user and per month.” Indeed, if we assume a CPM of $5, 5 pages viewed per visit and 2 visits per week, this makes no more than 2.5$ per user per year, not a sustainable business unless you have tens of millions users.

Pawel Niechoda, the student I was mentoring as part of the Google Summer of Code OpenStreetMap projects, has passed with flying colours by developing a very cool way to put OSM maps on your website, quickly and easily and with no javascript!

The Static Maps API helps with embedding map images into any website, and it has a wide range of markers and configuration options.

For example: a map with transparent polygons:

and ones with markers

I think the scale bar rocks too.

You can get the code here:
http://gsoc-os-static-maps-api.googlecode.com/svn/trunk/

OpenStreetMap had 6 projects this year with GSOC:

• Preprocessor to add altitude info to OSM data
• Android navigation application using OSM data
• Profile based traffic routing
• OSM direction too for visually impaired
• Automatic street sign detection and reading
• Static Maps API

http://socghop.appspot.com/org/list_proposals/google/gsoc2009/openstreetmap

I really enjoyed being a mentor, and was very fortunate to have a very capable student to work with! Cheers Pawel!