Rising Above the Noise in a Crowded Market

It may be a slight understatement to suggest that mobile technology is on the verge of significant growth. Obscene might be a better adjective to describe the sector’s forecast.

According to a 2010 study by global telecommunications research firm Analysys Mason, the number of smartphones in use is expected to increase by 32 percent annually for the next four years to a total of 1.7 billion devices by 2014.

That growth, of course, will continue the proliferation of mobile media companies and Location Based Service vendors like WHERE, a Boston-based startup that created a mobile application to help its users with local-discovery in their hometowns or travel destinations. The company already has more than 4 million users and its WHERE Ads platform can tap in to an audience of over 50 million.

OpenView sat down with WHERE VP of Marketing Dan Gilmartin to talk about his own company’s growth, the evolution and challenges of the LBS market, and what to expect from location-based technology in the coming years.

 

Tell us about WHERE.

WHERE is a location media company that has developed recommendation and mobile advertising services using location-based technology. Our mobile application is what we are most well-known for. WHERE helps people connect with great places nearby.

WHERE Ads is a hyper-local search and display ad network that works with brands, businesses, and publishers to deliver relevant advertisements based on a consumers location. We have partnerships with more than 250 other mobile applications and deliver mobile campaigns with both large brands and local merchants to an audience reach of over 50 million. In November of 2010, WHERE Ads handled over 2 billion hyper local ad requests.

How did you determine what your segment or niche was in the LBS space?

For the past four years we have focused on local search and recommendations. The product has certainly changed and is much different from where we were. The key, however, was a consistent focus on the huge market opportunity that we knew local/mobile would create. It took a little longer to materialize than we had hoped for, but as a company we created a cost structure that allowed us to persist as the market caught up.

Our evolution as a media company was also pretty simple. With a great consumer experience for local, we knew that we had to build a monetization engine that would allow us to maximize yield. As noted above, WHERE Ads provides us with a nice revenue stream and also extends our reach from a consumer perspective, which allows us to sell more hyper-locally targeted campaigns to companies large and small.

What are the primary challenges associated with being a startup in the LBS space today?

The space is getting crowded, so we have to make sure our product is always cutting edge. You can’t play it safe in this space and the risk takers are the ones who profit. A cutting edge product is only the beginning. You need to have a product that work — one with seamless technology that’s easy for users.

Speaking on the application front, there are hundreds of thousands of apps out there. If your app isn’t the best, users have no problem replacing yours with another one. Also, the barriers to entry are essentially non-existent. Years ago, you needed to have a relationship with a carrier to get access to location. Now, with the iPhone and Android platforms, access to location is simple.

What are some tips for overcoming those challenges?

We have two core mantras at WHERE: Fail fast and Scale Fast. It’s a cliché to say that challenges are really opportunities if addressed properly, but it’s true. You have to face challenges head-on and take chances. Knowing that failure is a possibility allows you and your team to try different things. Sometimes ideas stick, sometimes they don’t. You’ve got to remember to remain humble and keep pressing at your goals, even if they take you down different paths.

What differentiates you from other LBS (like Bizzy, Yelp, and Whrrl) that make recommendations?

WHERE has built a relevancy engine that is second to none. It powers the recommendations in the consumer application as well as the targeting of ads in WHERE Ads. From a consumer engagement perspective, I know of no other application that uses multiple filtering or algorithmic approaches to deliver local recommendations in the way we do. We employ collaborative filtering, dimension reduction, and the recently-launched social layer to help users determine great places to go.

At the same time, we put a lot of effort against something we call the PlaceGraph — a global mapping of places and how they are related. We use it to match local lifestyles of users and predict places they will like. Here is a blog post on the PlaceGraph.

What is WHERE’s public stance on the pre check-in space?

We are more interested in helping people discover where to go, as opposed to publishing their whereabouts once they get there. The notion of pre check-in means that we are helping people figure out where to go.

In the latest release of WHERE we have further improved our recommendation engine by including social filtering. Next, we will add offers and deals to the mix, adding even more value to the equation. From a business model perspective, there is a lot more we can do as we become the definitive source for users to figure out where they want to go. Upon check-in, we think the game is over. You have already made the decision where to go and are already at your destination.

What are 3 lessons you’ve learned in launching WHERE?

First, plan for success. It sounds like a no-brainer, but when you test a bunch of ideas and one takes off, make sure you have a plan to capitalize.

Second, anticipate that markets may developer slower than you believe they will. Be patient.

Third, teams win. We have one of the best teams in the business and that’s why we are winning.

Lastly, any marketing advice for entrepreneurs when they’re launching a young company?

Don’t underestimate the value that a few great co-marketing partners can provide. It’s a very saturated market, look for some allies that can help you rise above the noise.

As the mobile media market continues to explode, there’s little doubt that WHERE will see new competition sprout up. But, as Gilmartin pointed out, the company’s top-notch product and market savvy has already distanced itself from that quickly crowding market.

That’s a lesson that startups in almost any sector can absorb. Even if your product is unique and you’re creating a new market, competition is bound to emerge to claim a piece of your pie. The key to fending off that competition is to make sure the product is second-to-none, you market it intelligently, assemble a top notch team to support it, and remain flexible and agile as market conditions change.

For Gilmartin and WHERE, the company’s ability to do that thus far could pay big dividends in a market that’s only begun to scratch the surface of its potential.