LBS LATAM 2010

GyPSii, Market Approach and Business Models for a Truly Mobile Digital Lifestyle Application

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INTRODUCTION:
For a few months I’ve been writing about Location Based Services business models and how to monetize LBS applications, particularly in the newest area of Location Based Social Networks.
I invited a few companies to share their vision and show how they approach this market. I would say it takes leadership and real confidence in your business to open your company strategy for others to learn. It is not surprising that the first company to accept this challenge was GyPSii. They were recently awarded a core patent in mobile social networking, but GyPSii goes beyond the mobile social networking platform, it is a mobile digital lifestyle application.
I had the privilege to share some time with Shane Lennon, GyPSii’s SVP Market Development (Thank you again!). The result of our conversation is summarized in the following text. In my next post I’ll evaluate the interview, add the full interview on podcast, and comment about their market / business approach. In the mean time please leave YOUR comments

Q: Can you please give me a few words about GyPSii, how it started and your perspective of the company?

GyPSii is a global company, unusual for a start-up. The founders are based in Amsterdam. They had a mobile lifestyle vision that’s more than an LBS vision: “I want to capture my world; I want to be able to share with others”. On the technical level, it translates to creating a searchable mobile index of user-generated content based on the actual world. This is different from what you see on Internet today, which is built by companies, indexed on search engines, and driven more from their perspective and less from that of the user.
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Location Based Services Value Chain – Part 2

Have you read PART 1? I’ll strongly recommend reading part 1 first.

As mentioned in part 1 the main components in the LBS Value Chain are: the location based service provider or developer (LBS APP), the data carrier (a cellular provider like T-Mobile, AT&T, etc), and the customer.

As Part 3 will talk about Web 2.0 strategies for Location Based Services and particularly for Location Based Social Networking, we need to completely understand every piece of the puzzle. Otherwise your model will be leaking money (pouring in some cases). Moreover understanding the players and trends will allow you to craft long term solid strategies.

A more comprehensive value chain shall include:

Location Based Services complete Value Chain by Claudio Schapsis

MAPS: Most LBS applications utilize maps; therefore their cost shall be added to the equation. The map market can be considered a duopoly dominated by Navteq and Teleatlas.

Consider: those companies were acquired recently by Nokia and TomTom.

Ask: How can they affect your business by controlling the LBS market. Can your application change the map provider easily? Do they cover all the areas you plan to service? Can you grow to other markets (internationally)? Does your international strategy fit your provider’s existing maps? What are their plans of expansion? How are you getting charged? What layers of information are included in that charge? The list of questions doesn’t end here and is closely related on the type of service you are planning to offer.

MAP INTERFACES: If you want to use map providers like Navteq and TeleAtlas you will need to pay a premium price to companies that provide interfaces to those maps – such as Autodesk, Decarta, etc. Your applications can also be based on Google maps (TeleAtlas data) or Microsoft maps (Navteq data) API’s.

…Read the rest of the post

Location Based Services Value Chain – Part 1

As I mentioned in my previous post, the main components in this chain are the LBS service provider or developer (LBS APP), the data carrier (a mobile operator like T-Mobile, AT&T, etc), and the customer. We can identify 3 basic types of relationships.

In the first one the LBS APP provides an application to the carrier and the carrier provides the service to their customers for a fee – or free of charge to encourage the use of data services. For example companies like Loopt are offering their LBS social networking services through carriers like Verizon Wireless, applications like Autodesk family finder, and others.

Location Based Services Value Chain 1

The main challenge for the LBS APP is to find one of the mobile operators willing to buy and offer the application through their network. Once the service is running, all the promotion, billing and collection is performed by the mobile operator. The LBS APP revenues can be smaller but the risks are reduced as the investment in infrastructure and operations are minimal. On the other hand, the ownership of the customer usually remains with the mobile operator, minimizing the LBS APP possibility to up-sale other products.

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