Kevin Smokler is the co-founder/CEO of BookTour.com, an Amazon-funded startup which offers affordable software tools for authors. He is based in San Francisco, and can be found on on Twitter at @weegee.
There’s a ton of cleanup to do after coming home from a conference-laundry, follow-up emails, business-card filing and dropping swag off at the nearby Goodwill. But following SXSW Interactive 2011, I had a new receptacle to empty and set neat: my smartphone.
Since both Twitter and Foursquare hit their first inflection points at SXSWi (in 2007 and 2009 respectively), location-based app companies have sought to repeat the feat in Austin each spring. And even though I’ll try anything when drunk on new ideas, conference camaraderie and breakfast tacos, using a half-dozen apps to say, “I’m at Mustang Sally’s-Coffee-Barge” doesn’t make much sense after you get home, when you don’t have to coordinate meeting 12 friends and colleagues in that many hours.
I sorted and rejected these apps largely based on not wanting to spend time learning something that another tool already does just fine, or because not enough of my friends are already using them. That process taught me two things: The first is that the location-based app market has hit its first milestone of maturity: Users will now go from asking companies “what is it?” to asking them “what are the benefits of your app over those of your competitors?”
The second takeaway flows from the first. What will differentiate one location-based app from another is more content — users adding friends, making recommendations, leaving tips, etc. Some companies seem to believe that this type of content is like solar energy — i.e. that there’s basically an unlimited supply of it. In fact, it’s more like fossil fuel. “Users” are human beings with finite time, attention, resources and desires. And that has implications not just for the growth of location-based services but for any industry placing long bets on user-generated content.
We check email, Twitter and Facebook obsessively because they provide a never-ending stream of new information. But few of us go to an entirely new set of places every day. So a location-based app not only needs consistent user participation but must keep changing the game to make that participation seem worthwhile and thus encourage deeper involvement with the app. “Where have I been” is of enormous benefit to the app company and its business partners, but minimal to me the user and my friends unless they happen to be at that same florist or in need of a reasonably priced hydrangea.
I’ll review that flower shop, recommend the hydrangeas, and leave a tip regarding their Valentine Day sale (in other words, generate content) — but not out of the goodness of my heart. And the question of how to compel my participation is far from settled. King of the castle Foursquare launched version 3.0 just before SXSW by adding recommendations and coupons based on your location and re-tweaking how you receive points for each check-in. Austin-based crown prince Gowalla released its Local Rewards program during the festival, in a continued attempt to brand itself as an app with journeys, rather than destinations, as its currency.
Foursquare is on quite a run, reaching its 7 millionth user in February. But with similar features at more ubiquitous companies like Facebook and Yelp not gaining traction, it looks like the general interest “check-in-get-stuff-see-coupons” table may be filled. San Francisco-based PlacePop has already scaled back development on its check-in-app (which was based on building up a reward card each time you visited a business) after hearing from its users that they’d already had enough of getting points and recommendations of places to eat lunch; the company is now working on ways to sort, process and act on those recommendations.
I tried out newcomer Bizzy (which has you “check out” of places you visit and then turns the data into recommendations for your friends) when I saw their team at SXSW Interactive, but soon stopped when I discovered none of my friends were on the service. And Hashable (where you check-in when you meet with someone as a way of sharing contact information and building personal-network data) seems to be one of the first to strike in the location-based market’s growing specialization, as LinkedIn may have been to Facebook a few years ago.
All new businesses need to justify their existence and develop niches — that’s not unique to location-based apps. The greater lesson here is the potentially dangerous dependence by location-based services on user-generated content. I can watch and post videos on Youtube until the end of time and interact with no one. Although it wouldn’t be much fun, I could do the same on Facebook — playing games, collecting coupons, answering requested when they come. But a location-based app, no matter how compellingly designed its badges and rewards are, is useless if users don’t agree to add friends, make recommendations, leave tips and reply to one’s users. The oxygen for the location-based ecosystem is not simply announcing that “I’m going to Jennifer’s Bakery” but telling others that I’m going to Jennifer’s Bakery and why.
Citizens of the 21st century have a glut of platforms on which to tell their story — and a limited amount of time and energy to do so. Generally, they will default to where their friends already are, which technology is easiest to use, or which one scratches a desire they didn’t know they had (like accumulating imagery “badges”). For the companies that can reach all three of these summits, below lies the sunlit valley: a kind of biography of their habits and aspirations that consists of a giant pile of user data on where we go, who we go there with, how often and how much money we spend upon arrival. To imagine what can be built using that information as data or as platform boggles the mind.
But the companies that don’t reach those summits should not be under the illusion that users will keep giving forever.
This article originally appeared in BookTour.com.