I recently read David Card’s post on Gigaom, “Local Social Media Revenue Models to Watch”, and I think it highlighted a number of exciting possibilities for unlocking the huge local and hyper-local advertising market.
But I think players in the space need to take care of the user value proposition first, before getting too carried away with proving their revenue model. I know this is a long-running debate: whether to follow the Facebook and Twitter model to build a useful product first, or be more conservative and try to generate revenue early and often.
In this case, I strongly believe that building a great product that will attract and retain a large user base has to come first. Why? Because without a large base of users, none of the business models are sustainable. And I don’t think the current crop of geo services are sticky enough to go mainstream yet, for a couple of reasons.
First, the novelty of the end-user features in these apps quickly wears off. Most people I know who have tried Foursquare or Facebook Places eventually check-in less and less. Sure, it’s fun for awhile to collect badges, but only for so long. Game mechanics are a great way to incentivize new behavior, but I know very few games that can hold the attention of players over the long term. Especially when the game is endless, and new badges are added almost every day. The same goes for discounts and coupons—it was exciting to get my first freebie, but soon after I stopped going out of my way to unlock discounts.
The second major obstacle location apps face is the very real privacy concern of posting your whereabouts online. Not to mention the side-effect that a constant steam of check-ins can quickly become a nuisance in your friends’ social streams.
Privacy is one of the core issues we had in mind when were designing Blacktop. We wanted to give you a lot more control over what you share, by allowing you to group your check-ins into meaningful chunks. For example, I choose not post any of my Facebook check-ins to my feed, largely because I don’t want to spam my friends with my every move. But when I’ve got a particularly interesting group of check-ins (what we call a “trip”) that I want to share, I can do that easily from Blacktop. More important, I can provide additional context with photos and comments, adding a layer of meaning which otherwise would be lost. Here’s an example of what I mean. Our hope is that this kind of narrative, contextual information is a better long term motivator to use an app than badge-collecting.
Now, I’m not saying we’ve found the right formula for a sticky geo-location app. But we do have a range of ideas on ways to broaden the user value proposition for location-based apps, and we’re working like mad to build them. One of those ideas is Shindig—a geo-photography app we’re working on that I’ll write more about soon.
I’d like to see other startups experiment more with different end-user features before running after revenue models. Give the users a reason to stick around first.
