Ok that’s it, I’m no longer defending failing LBM concepts for their experimental value, or for a single bright feature. This is 2011. We’ve had two years now to analyse this market and predict its development. So really, there is no reasonable defense to be making old mistakes again, as in the case of Localicious.
Yeah sorry, it’s a mobile, location based, service around the business listings from WhitePages, USA. And it’s going to fail for a couple of reasons. But first let me explain what it is. As a free Android app, you can look around your neighbourhood, find popular and relevant places (restaurants, shops, etc.), tips that people left on other platforms and soon probably deals. If that sounds a lot like your typical check-in app, it’s because it is. Here’s why I think it will fail.
Fail #1: the USPs are not unique
Working with neighborhoods in stead of an exact location is not unique (yelp, Google places). And although it’s helpful for planning a visit (usually further away than where you are at the moment), it’s not a killer feature people will leave their preferred check-in app for. Also, automatic check-in is done by several platforms (e.g. Latitude) as well as aggregators (e.g. Footfeed), plus it’s an easy to copy feature. 21 Million business listings? Big deal, this app is on my Android, which has a search button for that. Getting real-time tips & trends: if you’re getting it from foursquare, why not use that app itself?
Fail #2: it is monolithic and local, hence expensive to grow
Look, this market is spoken for. It’s going to be (a combination of) Google places database, Facebook sharing, Foursquare check-in game dynamics, Groupon (like) deals and a lot of brands. I would predict that, like Twitter, this stuff will be part of the core services on phone OS’s and you can already pick the winning combinations*.
The millions of consumers are already choosing between these great location based networking platforms and another one will not make a dent in their usage growth. Setting up a new app with its own network effect will now require millions of marketing dollars, insane brand recognition OR leveraging the user base of other platforms. Or all of the above.
Fail #3: it’s not playing off the companies’ strengths
Ask yourself what WhitePages would consider it’s core business? Some might say helping you find people & businesses. I would argue it is the reverse; in many ways it is like Google: gathering as many signals as possible to help you find stuff, in order to help relevant businesses find you. Google does a great job at this already, so how come these business listing guys are still around? Well for one, they have something that Google doesn’t have: loads of people selling ads to local business over the phone all day long. In that sense, they are competing with Groupon and LivingSocial more than with Google and they have years and years of experience in that model. Either way, the company is not a social local mobile search giant. Face it.
So what should they do?
First, similar to local newspapers, localized out-of-home advertisers and other companies that are really good at selling volumes of small advertisements, they should focus on their strengths and offer mobile, location based advertising as an option to their advertisers. The local restaurant will not spend time or money on figuring out all these LBM platforms, even though it’s free and all of them try to make it so easy. And for reach to foot traffic, they would need to advertise on all of those platforms. Such a drag. So If you equip your callcenter with the right tools, or outsource the handling to a third party, this is a compelling offer to bring to the local businessman.
Second, you should have always already used all signals you can get to help your customers. So yes, do integrate with the foursquare API, but also with all the others. Make sure people link their online identities to your platform so you can help them find relevancy and value around the business and people you found for them. And off course, use all those signals to enrich the search results on all of your clients, web or mobile.
Finally, get some good advise from neutral third parties that are not selling one app, one platform or even one technology. If you have such a great brand, you should be ensuring that it remains to be valued for what it always meant to people: reaching my very local customers. And guess what that space is still very very hot!
*OK if you can’t: let’s check this post in 2 years from now and see whether a. Facebook Places has been integrated into Nokia/Microsoft phones, b. Google+ is integrated at an OS level into Android and whether c. Apple has bought foursquare and placed it next to Twitter in iOS version 6.