Available on Apple's App Store LoKast: Powered by Nearverse

The Color of Proximity Internet

Posted on

When I wake up on March 24, my phone is buzzing at 6:30 a.m. I answer a call from a friend – “Did you see this new start-up Color? Their app is for instant proximity photo sharing – isn’t that just like LoKast? They just raised $41 million from Sequoia.” Opening up my inbox, I’m confronted by a barrage of e-mails – all linking to this article from TechCrunch. Over next few days I internalize – while having a chance to get a better sense on Color’s strategy, market approach, and technology, especially from Bill’s interview with ReadWriteWeb – and can’t help myself but think: “the world is catching up to this notion of proximity Internet FAST”. So it’s time to talk and set the record straight.

Let’s start by covering what’s proximity Internet. It’s about our vast physical world and the interactions / experiences / networks that we have inside of it. Looking over statistics – the physical world accounts for over 90% of our commerce and over 50% of our user time. The most technologically advanced tools to support these settings until recently, have been in-store broadcast systems, digital projectors, and business card scanners – admittedly mechanical and roughly 10-50 year old technologies (dinosaurs in the mobile Internet world, which really just started in 2007). And now using smartphones and tablets, we can dramatically enhance this environment, to move beyond the 5 senses, to create a new “proximity Internet” – one that’s contestably 10x larger than the Internet we’ve known to date, just given the above dimensions. Proximity Internet stands to break-down hurdles of discovery and “initial contact” in physical settings, create opportunities for group leadership and inclusion of commentary like that brought by Twitter but in a much more exclusive and relevant fashion, enhance our interactions through rich media and actionable follow-ups, create experiences that are dramatically more engaging (video games have been at the fore-front of this for years now admittedly), create significantly more physical and digital commerce… and change how we start socially networking experiences, and maintain and grow them over time. All while we physically spend time in our physical world.

And of course it’s driven by some very important and completely unique essentials. First, proximity Internet is real-time and synchronous (unlike the Internet which is 99% asynchronous) – it supports a world where we inherently use our 5 senses to synchronize and react to each other (imagine talking to someone, and them only hearing you / listening to you 5 minutes later). Second, proximity Internet needs to be highly contextual – it’s used to support behavior that’s a combination of both a) us already zeroing in to our context by going to a certain physical place and deciding what to do there and with whom, and b) us being real-time in those settings, so there’s no time to search. And three, proximity Internet needs to be highly “disposable” (a term we coined in March 2010 – see VentureBeat) or “elastic” (one that Color is pushing 1 year later) – as we move from one physical setting to the next, these settings change dramatically (think of your social network in a coffee shop vs. your office vs. a restaurant / nightclub on any given Friday), significantly more so than our digital settings (where you update the same 500 Twitter followers and 1,000 FaceBook friends).

So with that being said – what’s the right approach and who’s is more differentiated? Technology is critical (just like in the world of search engine battles circa 1998). At NearVerse, from the very first day of us conceiving this company, we’ve been focused on creating core differentiated tech for proximity Internet – a) content delivery technology that could support truly proximity-grade real-time communications, and b) location ID and proximity context technology that would spring well beyond the improving but still highly inaccurate location ID tech accessible to mobile devices, all by leveraging the variety of additional network paths and context inputs available in proximity scenarios (ie. short-range wireless, physical context) – we think this allows us to uniquely support the proximity Internet market. Interestingly enough, best I can tell from Color’s description of their core proximity tech (http://bit.ly/e0tmo1) is that it is in fact absolutely critical – but also within the platform of patents and technology that we’ve been building for the last few years, so don’t see it differentiating them in the long run. Another differentiated technology is Bump, who have also done something truly unique, synchronizing “intent” with “location” irrespective of the tech platform, and that I think continues to give them an edge in proximity transactions. But most importantly, the tech differentiation is first about leveraging superior wireless tech first, and not inferior physical inputs like sound or sight, in the long-term (which are almost impossible to assure to be synchronous or precise) – think of what our world would have been if we relied on sound instead of 3G to carry data, or earth image recognition instead of GPS and WiFi to pinpoint people instantly (although we admittedly still haven’t solved this in indoor situations). This is exactly why companies like Qualcomm, with a focus on bringing AllJoyn, FlashLinq, and WiFi Direct technology to market and a dedication to short-range wireless device-to-device connections, are absolutely critical for enabling proximity, both for faster speeds and better location ID / proximity context – like 3G / 4G is for mobile Internet. We are fortunate to have access to platforms like theirs as we build LoKast (see VentureBeat). Same with NFC – it’ll be critical to better enabling proximity transactions.

Proximity product is even more important. Looking back over the key essentials from above, on real-time and synchronous, Yobongo is a company that’s probably got that “rightest” so far for social networking, just because conversations are what we use and need 99% of the time to interact in proximity / real-time social settings. Bump on the other hand has proven that synchronizing people is absolutely critical to share “stuff” between two people as a result of a transaction – people are using their app to share LOTS of stuff (not as often per person as talking, but they have millions of users, so doing massive volume of contacts and photos). When we launched LoKast, to do instant media sharing with others immediately in proximity, it seemed like a great idea – but we learned that people want to first talk and then share media, when in real-time situations (and a lot of media sharing is transactional) – great lesson and central to our evolution. As far as Color, I think their focus on asynchronous photo sharing will remain niche – ie. sure I want to look at the photos of 20 randoms, that passed through a local coffee shop over the past 10 days, but I’ll do that for about 15-30 seconds and then get bored.

On proximity context, LoKast and Color are similarly oriented and I think those are the winning-est approaches (although also give credit to ShopKick which is squarely focused on this as well) – why proximity is so powerful is that we ALREADY DEEPLY care about that context, so putting a person digitally into that context is like doing a Google Search and being able to narrow the results to only 10 items that are 100% most relevant. However, to figure out the proximity context precisely most of the time (ie. person A wants to talk to person B, and then C, and then B again) is absurd, unless they are doing a transaction – we have to pretty much get into a person’s head (good luck). I think this focus on “perfectly predicted context” by Color and Yobongo will have them spend a lot of money and fall short. That’s why at the end, FourSquare’s and ShopKick’s approach to this are more on the right track (although they’ll need to continue to figure out better location ID and proximity tech) – you present the most relevant information in that physical setting and let the person choose. On “disposable social networking”, I think LoKast, Yobongo, Hashable, and Color are all focused on the right genre – that our physical / day-to-day networks are highly transient, and are inherently much much bigger than our “social networks” that we’ve come to know from the likes of Twitter, Facebook, and LinkedIn – it’s just a matter of harnessing them effectively for the consumer. LoKast’s, Yobongo’s, and Color’s ability to do that is inherent in how a consumer uses our apps – recording interactions with people in proximity (where most of our “transient” networking occurs) – I say let the best one win!

Last but not least is distribution – most important. Hotmail was a really cool product in webmail, but it’s claim to fame was “viral distribution”. Same with Groupon – the “impulse social deals” is a small portion of their current success in small business distribution acquisition. I’ll stay mum on the exact strategy as far as NearVerse and LoKast, but instead just posit some core rules of thumb. One is to limit any kind of horizontal marketing (ie. what’s the chance, that in any given physical space with 100 people, more than 5% of them are real-time (within 30 minutes) on Facebook (the most scaled product in market)) – seeing Color as #7 on the app store, actually is a competitive feel-good – know they are going to spend a lot of cycles on something that isn’t all that effective.. SCVNGR actually has an inverse distribution strategy as a company and merits a lot of attention – much more effective approach (even though you don’t see them nearly as high in the app store rankings). But the second is consumer education through “right first experience”, and “right second use” packaging – so consumer learns the app behavior and then can continue using the app and be an educator / viral spreader of the product. Bump definitely takes the cake on this to date – they have an incredible “second use” curve, and as I understand is mostly a viral marketing company. At NearVerse and with LoKast, we went out focusing on the Music industry in early 2010, for both of the reasons above, but have learned a lot and are now well positioned to nail these two key tenants much more effectively – more to come soon.

So with that being said, how do we feel about NearVerse and LoKast, and about the competition from upstarts like Color. Quick backdrop on my point of view – at my last gig, I helped build the 6th national wireless operator, LightSquared, from the ground up, raising $1.5 billion in the process essentially on the back of a mature product – wireless spectrum. Admittedly, NearVerse has taken a reasonable share of bumps and licks as we’ve come to market as a result – when I started I thought we needed millions and millions of dollars just to prove the value of our product, and that it would take off just because of the inherent value of our technology. But a year or two later, in 2011, we are a brand new company in our philosophical approach. The lean start-up approach is ingrained in every business action we take. Market product fit is our paramount focus, one right step at a time. And although we’ve remained 100% committed to the same mission since pretty much day 1 – to power the proximity Internet – we’ve pivoted (yes that word) quite a bit on exactly how we attack the market. My daily guide to this of late has been Built to Last, by James Collins and Jerry Porras, where they profess that the best companies can maintain their long term differentiated values, but quickly and continuously adapt in how they achieve them. At the end, we look at the competitive space and the market opportunity and see a more attractive timing to pursue proximity Internet now, than ever before – we are 3 years ahead of the market on proximity tech, 12 months on “disposable social networking”, and the future is prime for our upcoming product releases.

To sum up, when I first signed-up for Twitter, I added my slogan: “start small, dream big, finish intergalactic”. That’s been exactly the way I’ve lived my whole life, and the way we’ve built NearVerse pretty much since day 1 – even though we’ve only raised a bit over $1 million, and had to navigate to nail the “right” product market fit since we were early to the market, we’ve continued to think ahead to map out the future while taking one step at a time with our go-to-market – same story every day we wake up. So when I finally digested all the news about Color, about their tech, and about their money, over this past weekend, here’s where I finish up. “We’ve been dreaming and building proximity Internet for a few years more, and we are almost $40 million leaner – ‘gg’ Color on raising the money and launching your product, and I welcome you to the NearVerse.”


Boris Bogatin


This entry was posted in Uncategorized. Bookmark the permalink.

One Response to The Color of Proximity Internet

  1. Pingback: Lokast gives the LoDown - Fotolo.co - the blog

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

All LoKast Links