Max Gladwell

The upcoming Geo-Loco conference has one question for attendees: Is Location a Business or Feature?

We’ll be attending the first annual Geo-Loco conference in San Francisco on July 21st of this month. The event will focus on the intersection of marketing and location-based services (LBS) such as Foursquare and Gowalla. Organizers of the event describe geolocation as “the next big thing in advertising, social media, and discovery,” and we couldn’t agree more. This is the new frontier, and it is evolving at warp speed.

The question posed by the organizers is a common refrain when it comes to new and emerging technologies. The excitement and newness can be blinding, so it’s essential to delineate between features, benefits, products, and full-on businesses. We should keep in mind, however, that these can be dynamic states that change over time.

We initially asked the same question of social networking. Indeed, in 2007, Sergey Brin dismissed Facebook as a feature not a product. At the time, he may have been right. Today, Facebook is doing more than just proving it’s a business. It is challenging Google’s dominance. By the same token, Facebook is a helluva lot more than a social network.

As we consider this fundamental question, it ought to be viewed through the lens of creating and sustaining meaningful value—not to mention doing so from a defensible position. If a feature does that, then it’s quite likely a product and quite possibly a business.

When it comes to the LBS or geolocation space, the bulk of the hype has been focused on geo-social apps like MyTown, Loopt, Brightkite, and the aforementioned. Each takes a slightly different approach. Some emphasize social as a utility to stay in touch with friends on the fly while others employ game mechanics to encourage adoption and frequency. Each service is essentially a list of features and benefits that (hopefully) constitute a compelling product that can be leveraged into a business. One of the key differentiators (and a way to address the feature-business question) is the respective feature hierarchy of each. All of the geo-social services include location as a feature, but where does it fall in the hierarchy? If it’s the #1 feature, then it’s likely that a business needs to be built around that feature (just as Facebook was built around social networking). On the other hand, if the #1 feature is a game or publishing platform that happens to be geo-enabled, then location may be a necessary element, but it’s not the entire business.

At the opposite end of the LBS spectrum is SimpleGeo. The company provides backbone technology for location-based services i.e. the picks and shovels for the geolocation gold rush. The product here is data and data infrastructure. Location is a universally shared quality or feature of that data. In the hierarchy of features, then, location is #1 for SimpleGeo. Which means that the business is almost entirely based on location. It’s a clear case of location as a business.

Another way to approach this question is in terms of benefits. The value of a product is essentially the sum of its benefits, which can be tangible and intangible, utilitarian and emotional. If a location-based service was to quantify that value, what percentage would be derived from location? The answer is certain to help in determining location’s spot in the feature hierarchy and whether or not its in the business of location.

The simple answer to the question is that location is definitely a feature, possibly a product, and potentially a business. It all depends on how you use it and where it falls in the hierarchy.

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