As the hype has built for social location-based services (LBS) over the past couple of years, I have struggled to form an opinion regarding their mass market potential. Reading about Stalqer recently finally nudged me in to the skeptic’s camp I was leaning towards all along.
I must admit that Loopt and Foursquare have sounded pretty cool to me at one point or another. I totally understand their appeal, and believe that they will be able to monetize their userbases pretty effectively with high-value, hyper-local ads based on what users and their networks are doing, saying, and using. The stampede to invest in Foursquare was completely understandable, especially considering the eventual valuation was about $6M post-money. In my opinion, this compares pretty favorably to other social mobile apps with high valuations and less potential (exhibit A: Bump, $10M post-money).
Yet I continue to believe that the market for these apps remains extremely limited. My experience with social location-based services may be anecdotal, but I believe it is telling. Living in New York until very recently, I had an extended circle of friends I saw regularly that probably numbered 50 to 75. Everybody was in their 20s, well-educated and well-employed, going out several nights a week, and using either an iPhone or Blackberry. Not one of them used Loopt or Foursquare. Exactly two of them used Google Latitude for Blackberry.
The bottom line is that most people don’t want to broadcast their location. Socially speaking, most people have different agendas on different days and nights, and prefer to locate each other and make plans via voice, text, or Blackberry Messenger (BBM). These means of communication are close enough to real-time but allow everyone discretion in choosing who they want to see and who they do not. I could envision some of my friends playing Foursquare for fun, but I can’t see it lasting.
This is a classic example of the early adopter community being unable to see past its blind spots and failing to understand the way the majority of consumers operate on a day to day basis. What sounds groundbreaking to the savvy members of the insular tech/startup scene merely sounds cool, and often less than relevant to the masses. Even if the masses are smartphone and social network enabled.
That is not to say that Foursquare, Loopt, and the like won’t evolve into successful companies. I suspect that they will. I just don’t believe that the majority of the market is anywhere near ready to include them in the fabric of their day-to-day social lives.