Such popular location-based services as Foursquare and Gowalla invite people to "check in" at locations using their mobile phones, let their friends know where they are, and collect rewards from businesses in the process. But these apps don't do enough to get people interacting with each other, according to the creators of new location-based services that aim to be much more social—and at least as lucrative.
Though the first-generation services encourage you to connect with friends, you often still end up interacting with the service as an individual, little affected by others' actions, says Dave Bisceglia, cofounder and CEO of The Tap Lab, which plans to show its iPhone game, TapCity, next week at South by Southwest Interactive. SXSW, as it's known, is the annual conference in Austin, Texas, at which Twitter first found an appreciative audience. TapCity will be one of several location-based services launching there this year.
Bisceglia and cofounder and CTO Ralph Shao wanted to design a location-based mobile game that puts users in touch with other people. "We wanted compelling narrative and real multiplayer competition," Bisceglia says. In particular, he says, they wanted to avoid the question that often plagues Foursquare: "What's the point?"
Bisceglia and Shao moved away from location-based marketing and plunged into designing a "pure" game. TapCity's users are assigned an "epic mission" when they start the game: to build a fantasy empire overlaid on real-world locations. Players can buy game-world versions of the real-world locations they visit; that gives them control over these places in the game and lets them build virtual fortified buildings on the TapCity map. By using virtual weapons—such as slingshots and wrecking balls for attack, or guard dogs and force fields for defense—they can try to take over others' locations or defend their own. Shao and Bisceglia intend this to be an intensely social game, in which players recruit friends to join them on incursions into new territory, or to protect locations that are under attack. Combat proceeds slowly, to give time for friends to arrive and join in; the game's algorithms weigh the resources each player commits to battle to determine who wins in the end.
TapCity's business model is unusual among location-based services. The company hopes to make money by selling virtual goods, such as clothes and weapons for avatars—an approach used to great success by Zynga, which makes social games that are popular on Facebook. Eventually, Bisceglia says, the company may try to make deals with businesses that reward players with in-game advantages if they visit a store or try a new product. But there are no current plans to enlist local retailers to offer players discounts or to try out any of the similar schemes that are the bread and butter of most location-based services.
Another company, called Hurricane Party, grounds its location-based service much more in the real world. However, its CEO and cofounder, René Pinnell, also complains that "social media is so antisocial these days," and says he wants to facilitate real social interactions between friends. Hurricane Party is an iPhone app to help friends get together spontaneously, and it aims for that goal more directly than Foursquare, which can produce get-togethers as a by-product of checking in. Pinnell says that his service focuses on showing users events that are happening in their area within the next 24 hours. It sorts them to show events the user has already committed to attending, events the users' friends are attending, and events that are open to the public. Users can choose to find a party or start a party, Pinnell says.
The app is full of features that help people communicate with each other and arrange to get together. Though it's optimized for people to communicate through the app, it also makes it easy for people to send text messages to other friends who may not use the service themselves.
Pinnell does hope to support Hurricane Party through deals with retailers, but he believes the app's angle will encourage deals that benefit users and retailers equally. For example, Hurricane Party worked with one Austin hot dog shop, Frank, to design an offer that would encourage groups to come in for breakfast—commonly a slow time. The shop offered a special pairing of specialty coffee and bacon to groups that hosted breakfast get-togethers there.
There's still a long way to go before location-based services spread beyond the SXSW set and into the mainstream. The services available today "are interesting games," says Julie Ask, a vice president and principal analyst at Forrester Research who studies consumer mobile activities. However, she points out that only about one percent of U.S. adults are regular users of such services.
What's more, businesses often have a difficult time figuring out how to interact with location-based services. Large companies are likely to want to control the end-user experience, Ask says, and may not want to trust a third party with their customers. Smaller businesses may be overwhelmed by the variety of services available and the level of hype in the market. And they may not want to play host to a bunch of people playing games at their locations. "There need to be tangible financial results for the business at the end of the day," Ask says.
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