4 Keys to Launching a Location-based Service

Launching a location-based application can be a fickle process. We’ve seen a handful of location-based services rise and sag over the past month: The ambient location sharing app Highlight seems to have faded as fast as it exploded, and food rating app Oink shut down just six months after a celebrated launch where the app saw upwards of 100,000 downloads in two and a half weeks.

So what makes launching a location-based app so difficult? In addition to the run-of-the-mill issues that face consumer startups as a whole, location-based services are plagued by the fact that they’re inherently local products, meaning that success has to be geographically relevant. 10,000 users spread across the country are not nearly as valuable as 1,000 users in a single neighborhood. Web-based virality does not give a location-based service the same lift as with other products.

Adding to the geographic constraints, the use case for location-based services is far from ubiquitous. The mainstream user is exceedingly cautious when it comes to bringing offline activity – searching for friends, finding a restaurant, buying something nearby – online. Why do you think seven out of ten households still have a print copy of the Yellow Pages?

Unless you never want to leave New York or San Francisco, gaining traction requires real-world consumer education and obsessive evangelism. Much of the billions which Groupon has spent in marketing and SGA costs has gone towards educating merchants about deals, generally.

Here are a few key points in launching a location-based service:

1)   Know the market. As Jacob Kring, co-founder at Spontaneous Labs and director of product at Scripted put it: “when your ‘market’ is every consumer, you don’t have a market at all.” So pick a point, fortify the niche, and expand outwards.

And make sure your market and use case match. “There’s a nuance in what kind of crowd your initial trying to target,” said Glassmap CEO Geoffrey Woo in a recent interview. “The city use case is different from the campus use case, and so on.”

2)   Forget the early adopter. “Rather than finding the early tech adopters, we were very focused on finding people with local passions,” says Jason Karas, CEO of Trover, about the local discovery app’s launch strategy. “The tech influencers are not going to be able to provide the kind of content and membership in our community that will accrue value.”

3)   Seed your product. Karas and others are adamant about the importance of leveraging local influencers — bloggers, community leaders, social media voices — to build enthusiasm around a product. Karas says that this kind of seeding is critical not only in engaging local communities but in setting the right meme around which, the service is used.

4)   Build for the real world. Launching at South by Southwest is like building for Disneyworld; sure, it’s a great opportunity to see your product at scale but the use case is unnatural. This means identifying a real-world use case and building for it. Woo says Glassmap is focusing squarely on the campus use case but stresses that the location space will be won by whomever can crack the mainstream market. “The tech elite might be getting used to location data being ubiquitous,” says Woo about considering for issues like privacy. “But it’s your everyday mom and pops in the Midwest that is going to determine who will win.”

Steven Jacobs is an associate editor at Street Fight.

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