This is a time of WAR.

The New York Times published in October Stops and Starts of GPS Apps “… those portable devices [GARMIN TOMTOM etc] are under attack from a new source: the smartphone, and particularly Apple’s iPhone. The newest version of the iPhone’s operating system supports turn-by-turn navigation …  According to a report from the iSuppli research firm, GPS applications for smartphones are about to explode, growing from 2.5 percent of users today to 10.5 percent in 2013. And half of those will be iPhone owners…”

Even Forbes Magazine refers to this trend in warfare terms Google’s Navigation Bombshell “…Location-based service providers suspect the search giant is working on a free navigation app… Google, which generally gives its software away for free and recoups its investment through advertising, would likely sell ads within the navigation application rather than charge users… In early October, Google decided to use this data for its U.S. maps, ending a licensing agreement with map provider Tele Atlas…The shift is telling because companies like Tele Atlas require partners (such as Google) to pay fees for each person who uses their data…”

Having Google in the market with free navigation applications redefines the battle. Companies will need to be really brave to fight this giant. Without any doubt Google gave a completely new meaning to “The Land of the FREE and the home of the Brave”…

If War is what we are speaking about, Sun Tzu teaches us three valuable lessons. The first is that “…in war, numbers alone confer no advantage…”.  The second is that “…as flowing water avoids the heights and hastens to the lowlands, so an army avoids strength and strikes weakness…”, and the third is that “… those skilled in war subdue the enemy’s army without battle …. They conquer by strategy…”

If this is about strategy, this is my game!

Avoiding the competitor’s strengths and striking at their weaknesses

All (accurate) navigation systems are based on GPS data. If the weakness of GPS receivers is that they need a clear view to the sky to successfully determine location, the strategy is to attack the indoor world. Additionally, the GPS accuracy lies between 50 to 500 feet, the strategy then is to find customers that need higher accuracy (~10 feet). The third, but not the last weakness, is the need for maps. As we saw before, Google has generated large amount of map data, and in general the market is dominated by TeleAtlas and Navteq. The strategy is to navigate to “uncharted territories”.

Redefining the Battleground – Embracing indoor navigation.

A few weeks ago I was approached by an inventor with a (published) patent. The general idea calls for an indoor navigation system that uses no GPS data. His idea is very good and to my judgment relatively easy to implement.

The system automatically detects a signal directly from sensors, without requiring the communication with a central system, data plans, or even cellular communication. These sensors are small pocketsize Bluetooth transceivers. There is no need for pairing as every Bluetooth device’s tag has a unique ID. This ID can be used for locating the tag.

Indoor navigation – A winning strategy that redefines the navigation ecosystem?

There is infinite number of indoor navigation applications. The most intuitive one is a person walking into a mall that wishes to locate a specific store, or a particular aisle in a department store or even a specific item on a shelf! From here, you can apply the same principle to a customer looking for a specific conference room, a particular booth in a tradeshow, a ride in an amusement park, or a known piece of art in a museum. If not for the convenience, do it to save a tree. No more printed maps. Go Green!!!

The advantage of using Bluetooth is that this technology is ubiquitous, it’s implemented everywhere. Additionally, is a low cost, low power technology, and when it’s relatively free of obstruction it can provide a ~2 meter error range. Furthermore, a Bluetooth infrastructure can be used for purposes like remote monitoring and control among others.

The ecosystem is completely redefined. An architect with CAD drawings is now a map provider. Every single facility is now a navigable site. Every big retailer willing to drive customers to specific products is a potential customer (they can “route” them through the sales isles if they want).  Every shopping property management firm is a customer, as well as convention centers organizations or associations like the Global Retail Executive Council.

We have an ecosystem where the traditional navigation giants are not necessarily present, and there is no defined leader (yet-11/09).

The business opportunity – define a new market

Indoor Navigation redefines Location Based Services as we know them today. The first companies to enter this market will be able to define, create, implement and license ($) new standards and applications. Imagine this: I installed an indoor navigation application in my phone/PDA and subsequently downloaded the map of the mall I usually go to. Next week I’ll visit San Francisco, and upon arrival I would like to visit a local shopping center, or use it at the convention I’ll attend. My application will be useful ONLY if the map of that SF mall or convention center is compatible with the one installed in my phone. For sure I’ll NOT install an additional application per site I visit. This is just the tip of the iceberg.

Sounds interesting? Ring a bell? Would you like to exponentiate these ideas?  Maybe invest time AND money?

Give me a call! (And leave your comments).

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).

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.