4 ms·

I have no problems with what he said about his model. I have a problem with the larger conclusion that he draws, that the whole space is poison as a result.

lhorie 18y ago
I thought the conclusion was this: >> As a LBS start-up, you need to think about adding distinctive value for users which, afaik, is true of any type of business (especially start-ups). In that aspect, I definitely agree with the author.
- calambrac 18y ago
  You're exactly right, but that's my point. I mean, isn't it always obvious that you need to be adding value? If you're not, how are you in business at all? And yet, he's saying this as if it's a great admission of defeat, that location is dead as a business because you actually need to do something with location information, not just provide it, and the only things he's thought to do that could possibly make money are sex and security. But he's wrong. "Who's nearby?" is still very valuable, just not to the guy holding the handset. It's valuable to the businesses who want those people to walk in their door and buy something. The thing that he talks about being commoditized is your friends locations, the social graphs that we define. But I'm not going to add grocery stores and such to my personal network, so the how are businesses going to know I'm nearby and want to spend money? Well, what if I implicitly gave the companies around me permission to know I'm nearby by pulling them up in search, mediated by my location? The company that sets this up using realtime local search is going to be able to make a lot of money, because businesses are going to pay to know who's around and what they're looking for, and to be able to pitch to them directly (think, as a consumer, how great it would be to have access to a reverse auction from the six stores within walking distance anytime you wanted to go grocery shopping. Then think, as a business, how great it would be to be able to broadcast any price advantages you had over your competition in real time to the people who wanted to buy what you were selling).
  - lhorie 18y ago
    That sounds like a great idea, but again, convincing businesses to join in and participate enough to reach that critical mass needed for a service to allow the reverse-auction-from-the-6-places-closest-to-me kind of deal can be difficult. I don't know how your experience talking to local business owners has been, but mine is that a surprisingly high number of local businesses are small shops who are not techie enough to even care to have a semi-decent brochure website. I suppose that idea would be a lot more feasible in a place like Tokyo, though. These days, they have those 2D barcode scanners on cellphones and all.
    - calambrac 18y ago
      You bootstrap by ripping off yelp to get users. While you're building this traffic, you're investing in systems that let businesses advertise on your channel (handwavy here. Twitter clone? Something to hook inventory records into? I don't think the reverse auction comes until later). Then you find locations that get a lot of search traffic, figure out the businesses at that spot that would benefit most from it, and show them the numbers. Get just one to sign up (FooCorp), and then add a demo to your roadshow that shows the competitors exactly how many folks are being told that FooCorp is selling that widget, and ask them why they think they aren't selling as many of their own as they'd like. Wash, rinse, repeat. You don't have to get every mom-and-pop to sign up, just target who and where you think will pay.
      - lhorie 18y ago
        >> handwavy here hehehe, I wish start-ups worked like that :) I did have a client in the past with a similar business model (much more low tech though), but when I really think about it, it basically boiled down to how good the sales reps were. While that model may work if you are an extrovert who loves chasing people around town all day, it doesn't quite fit with my particular resource allocation roadmap :/

lhorie 18y ago

I thought the conclusion was this: >> As a LBS start-up, you need to think about adding distinctive value for users which, afaik, is true of any type of business (especially start-ups). In that aspect, I definitely agree with the author.

calambrac 18y ago
You're exactly right, but that's my point. I mean, isn't it always obvious that you need to be adding value? If you're not, how are you in business at all? And yet, he's saying this as if it's a great admission of defeat, that location is dead as a business because you actually need to do something with location information, not just provide it, and the only things he's thought to do that could possibly make money are sex and security. But he's wrong. "Who's nearby?" is still very valuable, just not to the guy holding the handset. It's valuable to the businesses who want those people to walk in their door and buy something. The thing that he talks about being commoditized is your friends locations, the social graphs that we define. But I'm not going to add grocery stores and such to my personal network, so the how are businesses going to know I'm nearby and want to spend money? Well, what if I implicitly gave the companies around me permission to know I'm nearby by pulling them up in search, mediated by my location? The company that sets this up using realtime local search is going to be able to make a lot of money, because businesses are going to pay to know who's around and what they're looking for, and to be able to pitch to them directly (think, as a consumer, how great it would be to have access to a reverse auction from the six stores within walking distance anytime you wanted to go grocery shopping. Then think, as a business, how great it would be to be able to broadcast any price advantages you had over your competition in real time to the people who wanted to buy what you were selling).
- lhorie 18y ago
  That sounds like a great idea, but again, convincing businesses to join in and participate enough to reach that critical mass needed for a service to allow the reverse-auction-from-the-6-places-closest-to-me kind of deal can be difficult. I don't know how your experience talking to local business owners has been, but mine is that a surprisingly high number of local businesses are small shops who are not techie enough to even care to have a semi-decent brochure website. I suppose that idea would be a lot more feasible in a place like Tokyo, though. These days, they have those 2D barcode scanners on cellphones and all.
  - calambrac 18y ago
    You bootstrap by ripping off yelp to get users. While you're building this traffic, you're investing in systems that let businesses advertise on your channel (handwavy here. Twitter clone? Something to hook inventory records into? I don't think the reverse auction comes until later). Then you find locations that get a lot of search traffic, figure out the businesses at that spot that would benefit most from it, and show them the numbers. Get just one to sign up (FooCorp), and then add a demo to your roadshow that shows the competitors exactly how many folks are being told that FooCorp is selling that widget, and ask them why they think they aren't selling as many of their own as they'd like. Wash, rinse, repeat. You don't have to get every mom-and-pop to sign up, just target who and where you think will pay.
    - lhorie 18y ago
      >> handwavy here hehehe, I wish start-ups worked like that :) I did have a client in the past with a similar business model (much more low tech though), but when I really think about it, it basically boiled down to how good the sales reps were. While that model may work if you are an extrovert who loves chasing people around town all day, it doesn't quite fit with my particular resource allocation roadmap :/