Last Thursday, Gowalla released a much-anticipated revamp of its location-based application, capping off a blockbuster summer for the geo-social space. The company’s CEO Josh Williams announced the redesign in early September, citing a return to Gowalla’s fundamental mission of encouraging people “to go out and explore.” The driving force behind the Austin-based company’s renaissance appears to be elsewhere — less an ideological about-face and more, an extensive retrofitting aimed at making Gowalla a potentially profitable company.
Gowalla was a fat startup. Between its series A and series B rounds, the company netted upwards of $10 million in funding from a handful of the technology industry’s best-respected investors.
“Gowalla raised eight million dollars and it didn’t do shit for them. They still got their ass kicked by Foursquare,” explained investor and lean startup evangelist Fred Wilson in May. He may be biased — his firm, Union Square Ventures, was an early investor in Foursquare — but if usage and adoption are agreeable metrics for measuring success, Gowalla lost the check-in battle with its New York-based competitor.
In a recent interview with Street Fight, Williams explained that Gowalla’s revamp began with a re-architecting of its database in the Winter of 2011: “We wanted to make it easier to surface information about favorite places, recommendations, social graphs or just where locals went. As we did this, we clearly had the wrong interface — it just wasn’t conducive to digging into the stuff we wanted to get into.”
The subsequent changes were twofold, pushing Gowalla deeper into the travel vertical and diminishing the check-in as the application’s primary operation. It is unclear which development came first, but the underlying motivation appears to have centered on expanding Gowalla’s user-base through additional value and lowered barriers to engagement.
“There’s a group of 100 million smartphone users who aren’t interested in checking-in or letting their friends know where they are right now,” says Williams about the decision to replace check-ins with stories. “But [mainstream users] could drive a lot of benefit form a location-aware social service and particularly if that benefit could be given to them as a passive consumer type user.”
Gowalla appears to be taking a safer, lower-yield approach to customer acquisition. By making sharing an optional feature, the company is in effect discounting their service. Even for Gowalla, which is not geared towards what Williams calls, “presence and persistence data” – i.e. where I am now and where I go every day – the user-generated content will be far less substantive.
The reality for Gowalla is that they have massively demoted the social element of their service for something closer to a traditional publishing model. Through editorial partnerships with Disney, National Geographic, and a handful of universities, the company will offer curated travel content in an attempt to become a “social Lonely Planet,” says Williams.
Williams would not comment on the specifics of the agreements, but hinted at a monetization roadmap that may lead to a paywall on the service down the road: “Everything we’re launching with is free to the user, but premium-guide content is definitely something which we expect to play around with in the future and we’ll see how big the market is for that, but definitely something we’ll play around with.”
A paywall would effectively wedge the social and city guide components even further apart, leaving the application with two independent services. And since sharing — whether through a check-in or a story — is not a prerequisite for attaining value, mainstream consumers will have no incentive to generate recommendations, snap photos, or add highlights, outside of the basic desire to share with friends.
Even the publishing industry is moving towards a more symmetrical model — companies are encouraging readers to interact with the content through comment sections, retweet buttons and a host of other tools. With Guides, Gowalla has created a valuable product; but in allowing users to access the content passively, the value generated for the company will remain limited.
Top executives from Foursquare, SCVNGR and goby will be debating the evolving utility of the check-in at the Street Fight Summit next month in New York. Click here to reserve your ticket today and be part of the conversation.