While there are many different approaches (and we might present some of those in the future), Xtify, a company based in New York City, caught my attention. They are creating a cloud of location information where authorized service providers can make available services using the location of their subscribers.

As usual, I was more interested in the business perspective of their operation. The following is a synopsis of my conversation with Josh Rochlin, CEO of Xtify.

I want to thank again Josh for his time and kindness to open up his business for us to learn. I believe many will have much to comment and say.
Follow up.

What is the difference between Xtify and other companies providing similar services?
We are currently the only company that is deriving location persistently from mobile devices and then building business rules around it. We source the location directly from the mobile device, rather than through the wireless carriers. This allows us to make location information available on a persistent and affordable basis.

Normally, you will need to pay per dip if you source from the carriers themselves – currently in the US, this is only possible from Sprint – with other carriers working on their own solutions). This approach can only work when you require location data occasionally. If you want to take advantage of persistent user location, a per-dip model becomes unaffordable.

“We are …deriving location persistently from mobile devices and then building business rules around it…We source the location directly from the mobile device…This allows us to make location information available on a persistent and affordable basis”

Xtify allows the mobile user to (1) persistently publish their location to a “cloud” and then (2) provide permission for a third-party to access their data in order to provide location-related information and services.
An example on how Xtify can be implemented is at http://www.seemywhere.com – which requests the latest location of the user.

So I can see your position all day long without your permission?
No! SeeMyWhere is designed to expose my location only to those with for whom I choose to share it.
Another example can be seen in at http://www.myeverymove.com. This application keeps a diary of your locations throughout the day. Because Xtify sources persistent location, I can choose to have the diary automatically update, without any user input.
These applications are only examples of services leveraging our push and pull API’s information from the “cloud”. A typical implementation using Xtify might not provide this level of visibility into my whereabouts. The location information would simply be used by an algorithm to inform a service, message, or advertisement.
To try www.seemywhere.com or www.myeverymove.com you can point your smartphone browser to either of these sites and download the applications.

Can you give me an example of a commercial application
Take, for example, companies that provide text-based mobile content (i.e. www.4info.com, www.chacha.com/, and http://pingmobile.com/). The way they work is that the user sends some these services a question, and the service replies with an answer, usually through SMS. I was trying out one of these services recently and I received strange answers to my question “Hotels in Manhattan.” The “IN” was interpreted as Indiana (a state in the USA) and the results came for hotels in Manhattan in Indiana. Then I asked for “Hotels NYC” and the results where close – I received hotels in Upper East Side of Manhattan. But at that specific moment, I was in the SoHo district of Manhattan, several miles away.
What Xtify can provide today is the capability to geo-tag an SMS that comes to the system and do this in such a way that the system will know where I am; replying with answers (and advertising) that are geographically-relevant and will therefore garner higher advertising rates.

“What Xtify can provide today is the capability to geo-tag an SMS that comes to the system and do this in such a way that the system will know where I am; replying with answers (and advertising) that are geographically-relevant and will therefore garner higher advertising rates.”

Can you elaborate on the implementation?
As I mentioned before, Xtify sources location from the mobile device. We use the best available source, GPS, Cell Tower and Wi-Fi information to determine your position and push that information to our secure servers. When a user sends a question to an SMS service, they could route that message through the Xtify database, then correlate a location-relevant advertisement to be included in the response. Xtify can communicate that “this phone is currently in SoHo, NY” and that service provider can associate an advertisement that was paid for by a business in SoHO, New York. Now the answer and the advertising have complete geo-awareness.
The market has been waiting for a solution that adds location context to their service – a solution that Xtify now provides.

So how do you make money?
We charge based on the value we bring to a customer and on the basis of the volume of transactions or processes. Let me illustrate this with another example. On many occasions, Madison Square Garden (MSG), an arena in New York City, could have unused tickets before a concert or a game. We could provide a service to MSG to set up promotions based on time before the concert and distance from the MSG arena. We can set radii around MSG (i.e. 5 blocks, 15 blocks, 1 mile). We then set time intervals (i.e. 3 hours, 2 hours, 1 hour before the event). Xtify can then push a promotional message to the people who are proximate to the venue and who have asked for a discount ticket promotion from MSG.

“Xtify can … push a promotional message to the people who are proximate to the venue and who have asked for a discount ticket promotion … This model applies to any business that has perishable inventory such as empty restaurant tables”

This model applies to any business that has perishable inventory such as empty restaurant tables.
Of particular importance to our business model is the way that Xtify is shipped on every Peek device [www.getpeek.com]. This allows developers to create services similar to the one we’ve just discussed, as well as services similar to www.peekmaps.com.

So, is it fair to say that your business model is only a B2B business model?
Absolutely, we are not a customer facing company. We provide persistent user location information for use by marketers, business developers, and web application providers. We have products and API sets that offer the ability to take an action (i.e. send a text message) based on the location of customers and users. We also look forward to working with carriers and handset manufacturers in the same way we have integrated with Peek.

How is the location relayed from the phones to the cloud?
We install a small application that pushes location information into our secure servers (“the cloud”) using TCP/IP protocol via your mobile data connection. We have intelligent algorithms that adjust the reporting frequency as necessary. That means, if you are stationary, there is no need to continually resend the same information. This minimizes the data transmitted.
Note that Xtify works today only on smartphones. Xtify requires a mobile device that can run the Xtify process in the background. We currently function on Blackberry, Windows Mobile, Symbian, and Android Devices. Once the iPhone allows background processing, we will run there as well.

“…we need to encourage service providers to rethink the way they collect and access location and realize that a much affordable solution exists…”

Who do you think are your competitors today?
The biggest competitors for us are time and intertia. Meaning, we need to encourage service providers to rethink the way they collect and access location and realize that a much affordable solution exists. Additionally, other companies will soon realize the benefits to our approach and attempt to enter the market.

A question about privacy. How are people reacting to the fact that 100% of their location information is going to be recorded and available somewhere in a cloud?
We believe the user must have complete control of his privacy and location information. Our location servers do not collect any personally identifiable data, and therefore we don’t know who is in the cloud. There is no profile, phone number, or personal email that can identify the person. All we can see is a bunch of secure user IDs running around the world. The user opts to have a trusted relationship with a service or advertiser or any other business. The user then shares their information with that service provider based on the conditions of that trusted relationship.

But the system is prone to misuse, isn’t it? What can block me from installing the application on that person’s phone without their knowledge and track them all the time?
We specifically chose to include a shortcut / link / bookmark on the mobile device so that the owner of the mobile device will know that it is there and can turn location notification off if desired. However, there is nothing that we can do about human nature, any technology can be misused.

“…We believe the user must have complete control of his privacy and location information. Our location servers do not collect any personally identifiable data, and therefore we don’t know who is in the cloud…”

Is your application for domestic applications only?
There is nothing about our business that is only domestic. Our system can work any place a mobile device works around the world. We welcome companies outside the United States to leverage Xtify for their local or global business needs.

So there is a reason for you to come to Miami to speak with the Latin American operators at LBS LATAM 2009
Absolutely! I am looking forward to participating at the event.

Personal Notes after the meeting:
It was hard for me to process during the conversation the concept of “know ALL my personal where” available in a cloud. Then I understand Josh’s point on inertia. I remember then Newton’s First Law of Motion that, when translated to business terms, can be defined as, “The tendency of the market moving in one direction, to remain in that motion direction, unless it is compelled to change that state by forces impressed upon it”

I can see now many forces that can influence this process, but this is a subject for other conversation (and for your comments).

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?

We are witnessing a new evolution in the online world. The “WHO are you” and “WHAT are you doing” is rapidly evolving to “Who are you” “What are you doing” “WHEN are you doing” and “WHERE are you”. We can fairly say that the WWW became the WWWW

The When and Where pose many questions, most of them associated with privacy. For example:

1- How is the location captured: Automatic by the system, Others on demand, You on demand
2- What type of location notification: Descriptive text (i.e. “At gym”, “at Starbucks”), area in a map, zip code, exact address, a point in a map
3- How is the sharing: Reciprocal, one way, only on authorization
4- Location History: Movement patterns, Tracking, Monitoring
5- Location Ownership: Resale and/or disclose of the information

But the same concerns for privacy were raised before we published our family photos and videos to the world. The fact is that the accessibility of technology creates communities and services. The simplification of web page building facilitated the rise of communities like FaceBook, MySpace, LinkedIN and others. The commoditization and accessibility to digital cameras, camcorders, and webcams has paved the way to communities like YouTube and Flicker or services like SnapFish. GPS devices became a commodity, and soon GPS in a cellular phone will be as common as a camera. As a matter of fact, you can get your position without a GPS (see Google maps) and Location Based Services can simply be added as a feature to mass social networks like Facebook. Location Based Social Networking is not a question of IF, it’s a question of WHEN and the when is NOW.



“A social network service focuses on building online communities of people who share interests and activities, or who are interested in exploring the interests and activities of others. Most social network services are web based and provide a variety of ways for users to interact, such as e-mail and instant messaging services”. [1]

The key of the social networks is interaction, and mobile interaction = money. Who is going to pay the bill?

Virtual meet Mobile: Interaction in the virtual world is free. On the other hand, interaction in the mobile world is expensive. On the virtual world all messaging services are free (MSN/AOL/ICQ/Yahoo messenger) but in the mobile world you pay for every single SMS. On the virtual world email is free (Gmail/Hotmail/etc…) in the mobile world your BlackBerry pushed email comes at extra charge. Even voice services are free in the virtual world (Skype/Jaxtr) but that’s far from reality in the mobile world.

In my next article I’ll address some business models and we’ll see that everyone in the value chain has something to gain: wireless carriers, handset manufacturers, application developers, maps providers, etc. The ultimate question is “What is the real value for the end user?” I doubt you can base your business model on the hope the Facebook / MySpace “exhibitionistic” generation is ready to buy “stalk/being stalked” as a main added value.

As I mentioned above, the accessibility of technology creates communities and services. So, is there a case for Location Based Social Networking? Yes. But as I wrote in my first post, before you start wondering about your business model (profit), think about what is the service and real value you provide to your customers. Otherwise, after the novelty period they will run away or simply stop using it – particularly if they need to pay for it.