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Location Based Social Networks – Building a Framework of Best Practices for Appropriate Business Models that Makes Money

Sunday, January 25th, 2009

In November I started a list of Location Based Social Networks (LBSN) – and in my first post I wrote “The question is how many of those will be alive next year…” Sadly to say, today (February) I started to update the list with those that are already closing or on their way to close.

My answer then was simple, only those with a solid revenue model and clear value proposition will last. Let’s take a first look on what makes a solid revenue model and services that have clear differentiators.

Profit is the only objective. What is the reason we create a new service or put a company together? The only answer is “TO MAKE MONEY”. Any other reason you may think or find is secondary. The source of that money is your customer. The way to get that money (legally) is by providing them goods, services, and solutions. The products and services are not the objective of the company, they exist only as the conduit to get your customers money by providing them something valuable they need and that keeps them happy.

The Business Model IS the differentiator. I may sound extreme here, but what differentiate services and makes them successful is not technology, but their business model. Take a look at the (now) 80 Location Based Social Networks on my list. I don’t believe there is much technological difference between them. Bottom line, only those that will succeed to generate revenues will survive.

Marketing, Business Dev and Sales (MBDS) are a key part of your Business Model. Review the list of LBSN and continue with the following exercise. Cut and paste the message excerpts from their websites WITHOUT the name of the company. Read the document the day after and try to identify who is who. If you are one of the owners of those companies, I dare you to pass the list through your employees and see if they can pick their own company from the list. Close your eyes and imagine taking a goldfish from the water tank and leaving it on the table. That’s your company without MBDS.

Business Models are NOT cross-market portable. Many of the LBSN base their hopes in implementing successful WEB2.0 business models, ignoring that the WEB and Mobile environments are completely different. Messaging in the WEB is free but mobile text messaging cost money. WEB mail has no charge but pushing your email to your blackberry carries its own costs. Even Voice is free over the web (skype, jaxtr, etc) but that’s far from being the reality in the mobile world. Ignoring this and other differences result on a distorted view of customer acquisition costs and wrong operational expenditures estimations that lead to “…We had an amazing and unique technology but we run out of money…”

There are other components in the framework, and each one of the elements here presented has its own subcategories, questions and connectors. Want more info? Quid pro Quo, leave some feedback of value for me and the other readers (or just pay for it). As you may see blogging has also its own business mode :-)

Location Based Social Networks – Is Privacy Overrated? Rules for a New World

Tuesday, January 20th, 2009

I’ve juggling with the idea of writing about location based social networking privacy issues for many weeks. From any side I tried to approach this issue I remained with more questions than answers.

I considered starting with the Fourth Amendment, even though GPS technology didn’t exist in 1791. Not entering into a legal discussion my first impression is that the emphasis here is on personal security. That’s when I remembered my first digital camera and my wife being terrified to put pictures of our kids on the web. It wasn’t about privacy, but about the reasonable expectancy of keeping our kids secure and avoiding people delving into our lives.

I believe this is the paradox of social networks in general and those based on location in particular. I want to make my information public but at the same time I want to keep the information secured (actually not the information but myself).

Looking over the other side of the table, the value of a social network resides on the information you provide. The lack of privacy is one of the pillars that sustain the business models of many, if not all, social networks. When privacy issues are raised, we usually ask what the companies are doing to protect their customers. Expecting the companies to protect your privacy is like expecting the cat to safeguard the cream; this is the fuel for their business. It’s not the companies that need to protect the information, rather YOU the customer.

I reviewed the privacy policies of more than 20 location based social networks and personal locator devices. I recommend you to do so before you start posting When and Where you are doing your What and with Whom. But if we separate the concepts of Privacy and Security, I don’t think the Location Based Social Networks companies are the problem. Technology is usually neutral, users aren’t.

Personally I don’t mind if a company, in exchange for a service, collects information about my habits, locations, and other details IF before using that information ALL personal identification is completely deleted AND is never used to sell something back to ME. The fact I’m a public person and I share information, is not an invitation to invade my space. My space is on invitation ONLY. Once we agree on this principle, we can start talking about other technological barrier and safeguard such as location acquisition and capture, location notification and accuracy, location information accessibility, location history control, location ownership, etc.

Today as in 1791 Privacy and Safety are really a concern and privacy advocates have a central role in corporate LBS

Without any doubt, the accessibility of GPS technology is leading us to new types of communities and services. People participate in a virtual world without borders; People are part of virtual societies, sometime bigger than the population of many countries. Maybe “We the People” needs to virtually govern ourselves and establish the new social conduct standards for a completely different world.

So, where do you stand?

More on Business Models for GPS navigation devices, Location Based Social Networking and RFID applications

Sunday, January 11th, 2009

Sundays is usually posting day, today I’ll take a different approach.

I believe one of the most important results in a post is the readers’ comments. They enrich and bring new perspectives to the initial approach. Skipping over those comments and the exchange of ideas is like ordering a banana split and eating only the ice cream.

I would like to refer you to the readers’ contributions on my post on business models for navigation devices combined with social networking. There, new applications were exposed, a few questions remained unanswered (wireless guys, your input please), and there is an amazing exchange of observations on what is Presence Marketing – how to use it combined with Location Based Social Networks, the extension of RFID applications, and Privacy concerns (my next topic).

My remarks on CES and notes on the Privacy Factor on new business models can wait a day or two.

I encourage you to read the comments to the end and most important, leave yours.

I have nothing more to say but THANK YOU!

Press HERE for the post.

Four Marketing Executives on Location Based Technologies

Sunday, January 4th, 2009

I have the privilege of belonging to MENG, the Marketing Executive Networking Group. MENG is a national network of top-level marketing executives.
Last week I asked four senior marketing executives from the network how Location Based Services and Technologies will affect their practices.
Without more introduction, here are their shots.


— CONTINUE READING THIS POST —

Expert contributor profiles

Sunday, January 4th, 2009

Bucley Brinkman

Buckley Brinkman – Change Catalyst

Change Catalyst and Entrepreneurial Professional with diverse industry experience in both Service and Manufacturing environments. I bring out the best in organizations by galvanizing teams and creating a laser focus on results. My leadership focuses on bringing out the best in people from the board room to the front lines and aligning those abilities with the challenges in the marketplace. I am a true generalist with hands-on experience in Sales and Marketing, Operations, Customer Service, Accounting, and Executive Leadership.
Buckley is a member of MENG.

http://buckleybrinkman.com/

Peter Kemp

Peter Kemp

Peter Kemp – Managing Director, Old Greenwich Partners

Peter has a broad marketing background that gives him a unique perspective on growing revenue and improving the efficiency and effectiveness of sales and marketing organizations. He started OGP as a way to bring a fresh approach to marketing processes, which never seem to receive the same process improvement attention devoted to manufacturing or back office functions. His knowledge of how marketing and agencies operate, combined with experience across a wide variety of industries, gives him a unique perspective on on marketing strategy and operations that is creative, actionable and practical.
Peter is a member of MENG

OldGreenwichPartners.com

Jonathan Paisner

Jonathan Paisner

Jonathan Paisner – Founder and President, CityListen Audio Tours

Entrepreneurial executive with track record in building Fortune 500 brands, driving new initiatives, and developing strategic partnerships – with a particular focus in the media and hi-tech industries. Jonathan has worked extensively with a range of notable brands, including American Express, Fisher Scientific, Reader’s Digest and Cisco Systems. Earlier, Jonathan created and ran the licensing division of A&E Television Networks, building a successful business unit through the development of dozens of partnerships to extend A&E, Biography and The History Channel into publishing, travel, radio, music and interactive.
At CityListen he created a new kind of travel publishing company.They create and electronically publish audio walking tours that can be downloaded and played on any MP3 player.
Jonathan is a member of MENG

www.citylisten.com

Mike Wittenstein

Mike Wittenstein

Mike Wittenstein – Consulting Chief Experience Officer

Mike Wittenstein has been speaking and presenting on the customer experience throughout his professional life. Whether in a tight session with a brand team, one-on-one with Chief Experience Officers and Chief Marketing Officers, or the big meeting with the whole organization, he is always on his feet, leading his audience to understanding and insights that create customer experiences that bring customers — and their friends — back for more.
Mike speaks with the authority born of 20 years of leadership in marketing strategy and technology, and a lifetime devoted to the design and management of customer experiences that bond customers to brands.
Mike is a member of MENG

http://www.mikewittenstein.com/