This is the second post in the series My thoughts on the Tech Scene in current times. find the first part here.
A year back when we were looking at the technology industry, Location was sort of new and everyone knew that there was gold somewhere but no one had actually figured out. Foursquare was starting to do well and Twitter had just introduced optional geo-tagging of tweets. Facebook was still to launch its location product and Google as is true for most products these days was lagging after a head start they had by acquiring Dodgeball. There ware numerous other companies like Gowalla and Mylocation which were also trying to take a share of the cake.
When I take a look back at the last year and a couple of years prior to that, it must be said that Google and then Twitter were best positioned to leverage the location cake. Google with its Dodgeball acquisition in 2005 had the biggest head start amongst them all but as is true for most small companies which Google acquires these days, they screwed up. By 2007, Dennis Crowley left Google after a frustrating experience and founded Foursquare. Incredible, how Google is able to not figure out the way inspite of acquiring the most promising startups along with their founders. Dodgeball, Aardvark, Jaiku, Picnik are just some examples of Google screwing up with their acquisitions in a big way. So, why does Google screw up? Is there something fundamentally wrong in the way they handle the startups? I am confused. Some days back, I was reading Paul Graham’s views on why Yahoo failed. He points out how Yahoo considered them to be a media company instead of a technology company. Does Google have a similar problem? Yes and No. Google knows that it is a technology company and works on some of the most amazing technology products like Google Wave (I still think Wave was awesome) and self driven cars. But, when their M&A team sees a nice startup which has some potential (but has crossed its technology development stage), it just can’t resist acquiring it. With the kind of money on offer and the money problems which are associated with a startup, no startup can easily deny a Google offer. The founders, who become employees of Google (with the exception of Andy Rubin who has done wonders with Android), just don’t seem to have the same zeal or maybe, Google has already been hit by the big company syndrome where innovation is more an exception than the rule. Google screwed up its location product (Google Latitude) and didn’t fail in trying to acquire Groupon. Location and deals is the killer combo is what I have come to know.
Another company which I thought had the right kind of mix to get locations going was Twitter. Twitter was supposed to be everything which a Groupon, Facebook mix can be. Twitter has to be the biggest real-time news feed system right now. The twitter social graph is much more publisher friendly than the Facebook social graph. You don’t know a person you follow but you won’t mind taking a look at a deal he is going for in your city. Groupon, Living Social and many other deal sites have leveraged twitter by Twitter failed to think how to go with location and deals. Twitter did work on @earlybird but not for long. What went wrong? We can only speculate and analyze.
So, who is winning location and deals? As of now, it might be Groupon, LivingSocial , SnapDeal and other small local players who are leading the deals space and Foursquare might have a lead in the location space but in the long run Facebook seems to have got it bang on here is a big chance that in the future, Facebook will have a lead in both. All Facebook would need is acquisition of some local deal sites and a couple of tweaks to their news feeds and there will never be a failed deal. You may say, it all looks very cozy for Facebook at this point in time but their customer service is still not tested. Facebook customer service will be the deal maker or breaker.
So, why do Google and Twitter fail? Can Groupon make it big all over the world? Does Facebook have it in them to succeed in location and deals? These are the three questions which will get answered this year. What I think and the reader might differ. Google fails because its customer service is still not up there and this is a problem with companies which have a lot of technology geeks working together. Technology people have not yet figured out and algorithm for deals and they never will. Just acquiring small companies won’t do the job for them. The culture of service has to get imbibed somewhere at the back of their minds. Or maybe, Google should just stop trying in the services domain and focus completely on technology products which solve the more complex problems like Traffic, Health etc. It is up to Google now.
Twitter is a different case altogether. A brilliant product and worth every penny which is being reported as their market worth. But, where is the business? The promoted tweets, the promoted accounts, the twitter bar in the iphone app. Is that all? There must be something better. Is it the analytics dashboard for premium users? There has to be something better. Deals are still a good idea in the real-time twitter ecosystem. Twitter has to take it more seriously and yes, they do need some real good people right at the top with a nice understanding of the system as well as great business acumen. Maybe, they already have someone?
The next year will see Deals and Location become even hotter and trust me there is a lot of money out there. Even the geeks will try to make money. The combination of location, real-time and deal works. Maybe, an app which polls your location (after having taken prior permission) and sends out deals in accordance to your likes and tweets. Now that is a business idea. Someone has to go for it.
Get in touch with me mitra[dot]arkid[at]gmail[dot]com.
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