A few months ago I wrote an introduction about the opportunities in indoor navigation. Please read the comments as every single one adds an additional piece to the puzzle. My question today focuses more on the business perspective and less on the technical solutions. Who can make it happen? What can we learn from the evolution of Location Based Services in general and Personal Navigation in particular?
Inferences from the LBS industry
If you look at the automobile industry, you will find a defined ecosystem with clear roles and niches. There are auto makers, spare parts manufacturers, dealers, authorized shops, independent mechanics, parts distributors, etc. There are also customers that know exactly what they want. You, the customer, can actually enter any dealer and leave driving.
While comparing the LBS industry with the Auto industry, my impression is that in the LBS industry you have many Auto Parts manufactures, but no Auto Makers. If you want to provide a service (drive anything), you need to buy parts and preassembled kits to build your own car and hope that every piece is compatible with the other. Moreover, when you need a “LBS mechanic”, they usually know how to fix specific parts for specific models. Does a LBS ecosystem actually exist?
“…While comparing the LBS industry with the Auto industry, my impression is that in the LBS industry you have many Auto Parts manufactures, but no Auto Makers…”
James Moore introduced the concept of business ecosystem in 1993. In his book “The Death of Competition” (1997-p26) he defines ecosystem as:
“…An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. This economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organizations also include suppliers, lead producers, competitors, and other stakeholders. Over time, they co-evolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments and to find mutually supportive roles…”
Can we include the LBS industry into this definition? Are there any organizations that foster the “LBS world inner laws of nature”? Are there any central companies that the community look as leaders and is aligned to? Are those companies leading us to a shared vision? Is there any shared vision?
“…Are there any [LBS] central companies that the community look as leaders and is aligned to? … Is there any shared vision?…”
In his 1993 paper “Predators and Prey – A new Ecology of Competition” published at the Harvard Business Review, Moore identifies 4 distinct stages for an ecosystem: birth, expansion, leadership, and self-renewal or death. During the birth of an ecosystem the companies try to figure out what customers want, the value proposition, and how to deliver it. After so many years the new LBS industry is in the dawn of the birth stage, trying to figure out the differences between users and customers, how to create cooperation channels and dreaming about certain standards that can unify the community to the second stage (expansion) where suppliers and partners work together to achieve a mass market profitable for all.
Indoor Navigation – The Big Bang
The indoor navigation is – literally – an uncharted territory. There are a few companies that started to produce small components, filling localized and specific needs.
In order to materialize as a profitable business a leader must emerge. This leader will set the roots of the indoor navigation ecosystem, provide the platform technological direction and create the conditions where developers, providers, consultants, contractors, customers and others can gain some benefit.
Going back to Moore, there are two conditions for an ecosystem to expand “(1) a business concept that a large number of customers will value; and (2) the potential to scale up the concept to reach this broad market”. I’m convinced that condition number 1 already exists. The challenge is to identify the organization with the capability and willingness to scale up the concept to a mass market.
There are many companies in the market capable to implement core technologies, foster innovation, attract partners to cooperate and support the right birth and growth of the indoor navigation ecosystem. The only question remains, as usual, where is the money? What are the business models that will support the ecosystem? This is the topic for a third article; and if you consider your company as a viable candidate to lead this new business opportunity I’ll be glad to exchange some ideas with you.
Twitter lines (cut and paste)
@schapsis Indoor Navigation: The new Gold rush? Part-2 – Ecosystem and opportunities. www.bdnooz.com http://ht.ly/1Q6EP
Comparing D LBS & D Auto industry, my impression is: D LBS industry have many AutoParts manufactures, but no Auto Makers http://ht.ly/1Q6EP
Are there any LBS companies that the community look as leaders and is aligned to? Is there any shared vision? http://ht.ly/1Q6EP
Is Indoor navigation a viable business? What R D main biz factrs that will determine D adoption of indoor navigation? http://ht.ly/1Q6EP
2 Comments
Comment by michael — May 26, 2010 @ 10:42 am
Claudio, there is no doubt about the potential to create a a business from Indoor Navigation as there was no doubt either about the ‘Outdoor’ one. We’re always seeking direct answers/directions to get to where we want faster and more efficiently so the fact that this problem is being run through the mill of ideas and startups will eventually lead to a solution. I think that the ecosystem that will bring about this may occur something along the lines of how Google brought us the maps, then begun to add names and addresses of businesses, then photos, videos etc etc. As far as leaders go it’s far too early to predict even if Google, Foursquare, Facebook, Twitter and others are pumping serious energy into this area. Someone like a ‘Wikipedia’ could come along and steal the show. On this point too, TechCrunch discussed the idea of establishing a universal database which we also commented on (http://iguidez.com/blog/2010/04/18/open-geo-database-of-places-for-all/) and of course makes sense. This sitaution is similar to traditional encyclopedias where one company produces their own, followed by the next and so forth. In the end everyone wastes time and money replicating the same content. With the internet now we can simply cut that wastage away, however, as the need to keep it open and fair is obviously a huge dilema. Lastly, there’s also a fascinating race on to produce more AR apps over LBS and this too may reveal surprising winners.
Comment by Udi — May 27, 2010 @ 4:36 pm
In today’s Tight GPS, outdoor advertising, and LBS (Local Based Services) market, Indoor navigation (pedestrian) where we spend more than 80% of our time may represent a new and promising market ( especially with recent GPS and mobile advertising market moves and the latest prediction by Mobile World Congress).
Since early 2005, our company has engaged in research for indoor navigation solutions; our indoor positioning and navigation engine answers to the special needs for indoor navigation – superior accuracy below 5m to even a product in an aisle, speed, low cost and easy deployment all to the “user” mobile phone. Aside from the technology, our patented business model and digital marketing provides set of application that any “user” will need indoors: from directory, mapping, navigation of sales and specials to emergency alarming and notification. Our ‘Sales Sense’ innovation, which includes marketing and privacy control tools, bring web-like sales tools to the real life and real time application benefits the facility business owner.
It is our belief that indoor navigation represents the next LBS market and any company wishing to enter that promising field will need to consider our innovation – the technology, the model, and our intellectual property. Our mobile infrastructure platform and application can be easily integrated with existing locating and navigating solutions and serve as a Turn- key for Tel /GPS/ manufacture/operator and local search and advertising applications by the huge emerging market around the world.
The market possibilities are endless!
Short presentation can be view at : https://www.box.net/shared/1jqf90it36
Short view about our innovation : https://www.box.net/shared/ke16vg7de2
Stay Tuned to our news release soon!
Regards,
Ehud (Udi) Mendelson
President
Blue Umbrella Inc.
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