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.
I completely agree with you. I live in London and I have noticed that smartphones are achieving the level of critical mass necessary for a purely mobile startup to take off. The problem is that the likes of Dodgeball and Foursquare seem to be built for the amusement of their creators rather than delivering anything useful to users.
What I really want to know when I am on a night out is all the cool little places my friends know about and how to get there. I’m less interested in where every single one of my friends actually is at that point in time because, as you say, there are plenty of ways of finding them if I want to (or if they want to find me – they have my number). What I want is continuous access to their knowledge, not continuous access to them.
You’re absolutely right Robleh. The value to most consumers lies in the knowledge/opinions of real world establishments and events – not who the “mayor” is.
[...] Foursquare has been receiving recently, I had wondered whether it was time for me to revise my previous stance on the service’s potential for mass market [...]