SXSWrapup (Part 3): The Location Story

Ok, back to where we left off with our SXSW coverage. As we discussed in our earlier “killer app” conversation, the real focus of this year’s SXSW was getting previous years’ breakouts to iterate and ramp up to a place where they’re positioned to make a killing in 2011. Well, that certainly describes the situation facing location-based social networks (LBSs), and category leaders like foursquare and Gowalla had plenty to say about the matter at this year’s conference.

For starters, both Dennis Crowley (co-founder of foursquare) and Josh Williams (founder of Gowalla) think their core features are… well, kinda boring. In their respective panels, each described “location” and “check-ins” as inherently uninteresting. And they’re right. The fact that you are at a venue is horribly uninteresting without some additional context about what’s happening there, who you’re with, or why you’re really there. Locations become relevant and significant to the consumer only when they’re combined with the emotions, memories, and experiences associated with that place. This sentiment was summed up nicely by Crowley: “It’s good that we have a large places database; it’s better that we have an interesting places database.” But even with that additional context, that single data point still isn’t as interesting as a collection of your check-ins over time. In other words, when the context around your location is aggregated and archived over the long run, your check-ins start to tell a story. And speakers across SXSW agreed that for LBSs to grow beyond the geeks and reach the masses, they must make these stories more compelling. To paraphrase Williams, it’s the challenge of making a check-in at Starbucks as exciting as a check-in at the Golden Gate Bridge. Boy, we’ve got some work to do.

Fortunately, the key players have plenty of ideas about how to make this work. Gowalla seems to be planning a service that will help their users easily compile a virtual scrapbook of their memories after going on vacation. If you check in at your home airport, a different airport, then your home airport again, Gowalla might automatically bundle all of your check-ins, updates, and photos that occurred between your departure and return, providing you with a turnkey way to share these memories on sites like Facebook. (Uh, Disney Vacation Club team? This is where you should be paying attention.) Storytelling is even more important for brands that aren’t logically tied to a place, since the only way these brands can interact in the location space is by being a lens that focuses on what’s relevant to their consumers in physical locations. For instance, Crowley gave a hypothetical example in which Pampers could help new parents find playgrounds and parks in their immediate vicinities.

Aside from the hypotheticals, each day seems to bring a new service that is using location to provide enormous utility for consumers. Cabulous is an app (and mobile website) that provides users with a real-time map of available cabs near their current location. As shown in the image at the top of this post, all they need to do is tap on the cab that’s nearest, and the driver will be hailed and provided with the user’s location. There’s also the “Don’t Eat At” app, which foursquare users can add-on if they want to be immediately notified when they’ve checked-in to a restaurant that’s at risk of being shut down for repeated health violations. The more you know… can be a little gross.

So, the stories are coming along, the utility is there, and the base of users is tiptoeing towards critical mass. LBS growth has nowhere to go but up, as long as there’s not a gigantic elephant in the room that could possibly derail their adoption, right? Oh, wait, we almost forgot: the process of checking-in still kinda sucks. Fortunately, everyone in the LBS space is well aware of the problem. Gowalla’s Williams describes check-ins as a band-aid that’s been necessary to get past initial privacy concerns and to generate enough data the make these services relevant. (With foursquare touting half a billion check-ins in the past year, we’d say that’s working.) But even with check-ins being a pain in the butt, users have been trained to understand that check-ins contribute to something useful in the long run, even if there’s not an immediate reward. And if they haven’t understood that before, they understand it now, thanks to the new foursquare interface that we covered pre-SXSW. In addition to helping you explore new places that coincide with your check-in history, check-ins are now accompanied by information like “you haven’t been here in ten months,” or “you just checked in with Kiki – that’s the first time you saw him since you checked-in together at Dark Lord Day,” and other tidbits of information that help you construct your own stories of exploration.

So, if the check-in is only a temporary solution, what’s next? It’s hard to say, but there are some telling signs. The American Express partnership we discussed pre-SXSW is certainly interesting, as it makes this process completely seamless for both consumers and participating marketers. (By the way, if you missed this morning’s update, we’ve got some interesting new information about that partnership.) It’s also becoming increasingly clear that many phones in the next year or two will include NFC capabilities, which could significantly simplify the check-in process. For instance, if foursquare provided venues with “tap here” stickers that included embedded NFC tags, users could check-in just by tapping their phone against that sticker when entering. And if it gets that much simpler to become part of the story of location, we think this space is bound to get a whole lot more interesting.