Tag Archives: Microsoft

The simple feature needed to take location-based services mainstream

Location-based services offer amazing future possibilities. Restaurants can offer just-in-time discounts to people nearby fill empty tables. Similarly, People can pick a restaurant where their friends are currently enjoying “Happy Hour”. Stores can offer targeted coupons to browsing customers based on their buying habits. Meanwhile, I can find a nearby store that has that hot Christmas gift in stock while I am shopping.

The success of companies like FourSquare demonstrates the potential of these possibilities. However, right now early adopters are the primary users of location-based services. Many mainstream consumers refuse to use them. Why? Because they do not trust location-based services (yet).

Why many still fear location-based services

What is the cause of this mistrust? Fear of losing control of offline privacy. Most of us now accept that information they post to the Internet could likely be publicly available (how much Generation Y cares about this vs. the Baby Boomer generation is an entirely different debate). However, very few want their offline activities (which stores they visit, where they are driving, etc.) to be readily available as well. minority-report-monitoring_280px-sqThis is an understandable fear as this information could be exploited for a variety of very bad purposes: from thieves breaking into your house while you are away to the scary advertising future depicted in the movie Minority Report.

This fear and mistrust will only increase as many new players enter the location-based services market. Some will only use your location services when you explicitly approve this; others will “store your approval” using your information without explicit notice (you can see this already in many location-based apps). Some will carefully protect it; others will have data breaches that disclose months of data on what you were doing, when, and where. Some will even sell your data to third parties (perhaps not initially, but when new sources of revenue are needed, after “notifying you of changes to their Terms of Service”). The consequences of these disclosures on privacy are enormous.

A simple way to address these fears

There are many ways to address these fears: industry (or legal) standards for use of location information, creation of registry of trusted location-based applications, etc. However, these means of protection are complicated (wherever there is complexity, there are many sources for unexpected outcomes). They also require consumers to trust location-based service providers to do the right thing, without error.

smartphone_switch_180pxHowever, there is a simple way to give back consumers assured control over when their smartphones are sharing location information with apps: the physical on/off switch. Give people an easy way, with the flick of a switch, to turn off sharing of location data with any applications. Let them check whether they are sharing or not with a simple, binary glance. Don’t make people navigate through multiple menus. Make it as simple as a light switch.

There is a well-known precedent for this: the silent/vibrate button. When mobile phone came out, people needed to make them silent when they went into meetings, movies and restaurants. Those mobile phones that made this simple were loved; those who didn’t were not. The love of the physical toggle switch reared its head again a few months ago when Apple removed the ability to lock iPad rotation with it’s physical switch (they restored the feature after much uproar in the next point-release).

This is NOT a placebo

I know, many of you are saying this is a simple placebo. Mobile phones already broadcast your location to your telecomm provider. However, the sharing and management of this location information is different than that used by location-based service application. It is not broadcast over the Internet (“Jim just check-in to…”); it is only attainable via search warrant or similar legal procedure. In addition, it is approximate (Verizon knows my location, plus or minus X meters; I do not positively confirm which store I am in); location-based app data is tagged with metadata that makes it much more exploitable.

Instead it will let location-based services “Cross the Chasm

Putting a location services on/off toggle switch into the next major release of smartphones will make it far less scary for mainstream consumers to adopt location-based service. Having this physically in smartphones will create infrastructure from which application developers and consumers will all benefit. The first mobile provider who does this will definitely gain an advantage, especially if it does so in partnership with an App Store-delivered application provider. Will it happen first on Android (due to its openness) or it will happen first on iOS (as part of Apple’s holistic user experience)? Or will Nokia’s sufficiently influence Microsoft to provide this (Finland is known for its strong privacy protection)?

The risk of NOT innovating

We are at that time of the year when many of us are working on next year’s strategic plans. A question that often arises is, “What is the risk of [doing something new]?” What is asked less often is, “What is the risk of not doing something new or distinctive?”

‘Innovation = life’ when you court early adopters

In newly emerging markets—be they as high-tech as augmented reality or as low-tech as fashion—the answer is obvious. Innovation is occurring all around you; those who so not innovate enough will be left behind. The challenge here is to stay ahead of everyone else (instead of copying the innovation of others).

Examples:

  • Facebook out-innovated MySpace, Friendster, and everyone else
  • Can you name three competitors of Amazon from the late 90s?
  • FourSquare crushed Gowalla (and is standing up to Facebook)

Innovation allows you to ‘cross the chasm’

When you are entering the tornado, (i.e., when demand takes off and the top leaders are established), the speed of change requires innovation to shift from creation to speeding and scaling execution. You need to be able to out-market, out-deliver and out-support the competition. If not you will find yourself as Chimp (or worse).

Examples:

  • AOL out-ran all other ISPs—including a buy-or-break challenge by Microsoft
  • McDonalds’ innovations in franchising has enable it to serve billions
  • Ford’s Model T made cars affordable for the masses

Innovation keeps leaders on top

When you are the leader, everyone is aiming to displace you. Innovation in marketing and promotion will keep demand for your product fresh. Innovation in partnerships and distribution will create barriers to block you competition. The challenge is ensuring your teams know they have to keep innovating once they have reached the top.

Examples:

  • Intel is still the worlds largest chip maker (in a world with Moore’s Law)
  • GE is the only original Dow Jones stock still independently trading
  • Nike has been the top provider of sporting equipment for decades

Innovation is the only way to disrupt the leader

The familiarity and market share of leaders gives them enormous advantages in terms of cost of sales, speed of sale, distribution, etc. If you are smaller, you cannot disrupt a market leader by being playing “me-too” (unless the leader makes a big mistake). You need to “change the market” by meeting needs your customers did not realise they had or delivering in ways established “leaders” cannot match.

Examples:

  • Salesforce is worth nearly 3x what Siebel was when it sold to Oracle
  • RedBull has wings
  • President Obama’s campaign managers used social media, mobile, and CRM software to raise more money than more-established opponents

Innovation is the only way to ensure life in the future

Clayton Christensen has written volumes on need the foster disruptive innovation to ensure your remain a leader in the future (see my notes below). If you do not invent the future, someone else will—moving your market to a place where they lead (and you do not). If you want to avoid this, you have two option (ones that need not be mutually exclusive): 1) create incubation teams to innovate the future or 2) acquire proven innovators (this can be expensive).

Examples:

  • Apple continuously invents the “next big thing”
  • Amazon is selling more books on Kindle than in print
  • IBM went from typewriters to computers to services (and acquisition of many business information infrastructure innovators)

So what is the risk of not innovating?: your entire future

Notes: This post draws on two of my favorite books, “The Innovator’s Dilemma” and “Crossing the Chasm.” If you like this post, I encourage you to read “iPad’s Climb Up the Disruptive Innovation Cycle” by Hutch Carpenter and “Social Networking Sites, Market Segmentation and the Innovation Cycle” by Digvijay Singh.