Uncompiled Thoughts

Over the past year, we’ve seen location based apps explode dramatically in popularity. And with the growing ubiquity of smartphones with built in GPS units, that trend doesn’t look like it will stop anytime soon. According to recent reports, location based services could reach $12.7 billion in revenues by 2014.

This obviously presents a big opportunity, and many companies have jumped to capitalize on it. At this point, there are dozens, if not hundreds of companies out there building location based apps. The landscape is quite fractured right now, it seems like every day I hear about a new company building sort of location app.

Whether it’s:

• Yelp, Citysearch, or buzzd doing local reviews.
• Geodelic, or Whrrl doing location based discovery.
• Loopt or BlockChalk doing geo-local based tagging.
• Foursquare, Gowalla, or BrightKite doing check-ins.

(Note: apologies if I got any of these general classifications wrong – most of them have overlapping features and fit into multiple categories)

Users have way too many apps to choose from, and not enough differentiating features between them. And users aren’t likely to open more than one or two apps when they walk into a new location, so there isn’t enough room in the pool for all of them. In my opinion, at this point, if location discovery/presence is the primary feature of your app, you’re going to get run over. Either by the dozens of other competitors doing essentially the same thing, or by Google/Facebook/Twitter/ when they make their location based play.

Location in and of itself is not particularly compelling to users, it’s what you do with location that makes your product interesting. And there is still plenty of room for innovation in that department. The winners in this space will be the ones that can leverage location to solve existing problems in new and interesting ways. Some of my favorite location based apps out there right now are ones that have done exactly that.

For example:

• SCVNGR lets you build and run location based scavenger hunts with the help of your phone.
• CitySourced lets you report local civic issues (potholes, graffiti, etc) from your phone.
• Waze reports real time crowdsourced traffic data based on your in-phone GPS.

These companies are really interesting to me because they’re not just thinking about “where am I and what is near me?”, but how to use that information to solve other problems. Location based gaming is another area with huge potential: MyTown has very rapidly built a large audience by focusing on the gaming aspect with their Monopoly-like location based game. Location is going to be the next big opportunity for those who can capitalize on it well.

But in order to do so, companies are going to have to be creative and develop applications that leverage location as a feature, not as their core product.