Location, location, location is back in vogue, but not just for real estate junkies. The smartphone has ushered in a new economy. I turn on my smartphone and I expect magic to happen and the world around me to come alive with reviews, information, and offers. I expect to consume.
The leverage created by the mobile phone and your location has generated an amazing pace of innovation around apps and platforms, a new gold rush, if you will. Location is not just about big American cities like New York and San Francisco. It’s global and it’s for every town, small and large. The entry price is low, the tools are available to everyone, and there are no geographical boundaries. As you will see over the course of this series, the venture capitalists are excited, the entrepreneurs are excited, and the media thinks we are in a bubble. Time will declare the victors.
In this series, we will undoubtedly look at daily deals, advertising, and the check-in. However, mobile location has the potential to go so much farther by turning regular consumer behavior into a new transaction economy.
The revenue potential of mobile location is a gold rush that looks thin at the surface based on today’s revenue attempts around coupons and advertising, but the valuations should remain high as investors sense the big revenue opportunities lie ahead. Professional investors love the opportunity of big returns and scalable businesses and they will not be scared off from early losses and disappointments.
“We love the fact that some of these revenue models are not yet clear to us because that creates opportunity. If it was clear to us, the large incumbents would be there competing. Start-ups have the benefit of maximum flexibility and maximum creativity,” says Jon Callaghan, Founder & Managing Partner, True Ventures
The revenues and margins disrupted in old businesses will eventually find their way down the food chain to this generation of winners.
“No one is calling 411 anymore, so you’re not paying $3 to call up to get a phone number. Instead, you’re getting that in about 3 seconds on your smartphone,” David Tisch, Investor & Managing Director, TechStars NYC, tells Fast Company.
Today, OpenTable.com (Nasdaq: OPEN) is a multi billion dollar public company focused on restaurant reservations, but location brings the software to life. The power of location allows Opentable to suggest nearby restaurants, and offers available inventory. The same goes for the incredibly-fast-growing Uber, the mobile application that sends a cab directly to you with the push of a button on your iPhone. These companies are leveraging mobile location to monetize routine tasks that took much more time and energy just a few years ago.
Featured in this episode:
Jeff Clavier, Founder & Managing Partner, SoftTechVC
Jon Callaghan, Founder & Managing Partner, True Ventures
Eghosa Omoigui, Founder & Managing Partner, EchoVC
David Tisch, Investor & Managing Director, TechStars NYC
Marissa Campise, Vice President, Venrock
Tony Conrad, CEO& Co-Founder of About.me & Partner, True Ventures