Where Check-in Services Fail
Check-in services like Foursquare and Gowalla have grown significantly in the last year. In March 2010, Foursquare hit 500K users and in the last few weeks they had surpassed 5M users.
Building off this momentum, other services have entered the check-in fray like WeReward (pays you to check into places), GetGlue (Entertainment), Miso (TV), Philo (TV) and of course even Facebook entered the LBS mix with Facebook Places.
Device aspects like integrated GPS, larger screens, improved OS, and better connectivity began to reach critical mass over the last two years – making LBS technically more feasible. But it was arguably the gaming aspects of the LBS offerings that provided early motivation – enough to finally jump-start a category. Gaming does well in the mobile environment naturally because it fills voids created by boredom. Besting a friend to become mayor of your favorite restaurant or capturing badges provided just the right level of gaming to fill small amounts of time and boredom.
But the game aspects lose their allure and one quickly moves onto other things to fill these snippets of time. It is overly obvious, but check-ins remain relevant when they remain relevant. They must add context. The value captured must outsize the cost of checking-in. This seemingly insignificant cost can be large because it involves a discrete period of time between real or virtual activities like ordering food, talking with someone else, moving quickly to another activity, or performing a sundry list of other activities on the mobile device.
I’ll post a Foursquare check-in to a web service like Facebook or Twitter when it adds context to what I am saying. I’ve also found Foursquare especially well positioned at helping me find a place to eat when I am in a foreign city because all of the businesses populated in the list are based on my current location so they stay relevant to me even as I continue to move (say en-route to a hotel). If Yelp is failing me, I turn to Foursquare. I’ve also found the comments left by users for a given restaurant helpful in deciding what to order. Today I left a restaurant and went elsewhere because while waiting to be seated I turned to Foursquare for suggestions on what I might order and one of the reviews read as follows, “worst service ever. waiting 35 min and our food has yet to arrive.” The value I derive outweighs the search costs.
I’m not convinced hyper-local check-ins are meaningful. As I already mentioned, the value of the game aspects dissipates quickly. However, specials/discounts can provide sufficient catalyst. Last month I used my first Foursquare discount code ($10 off). I happened to see that a discount was available and while I was skeptical it would actutally work in practice with the cashier, it did infact work flawlessly. It consequently provided motivation to do at least a cursory check of Foursquare when I am shopping. Just last week, I saw a nearby discount that nearly altered my behavior – driving me towards the store offering the discount and away from my original destination. This is clearly the ultimate reward for retailers.
I’ve noticed recently that many discounts or offers are not necessarily exclusive to the service (ie Foursquare) and may not even require a special promotion code. In otherwords, retailers are simply using these check-in services as yet another platform from which to broadcalast a deal that was promoted elsewhere. In this way, these check-in services will become new feeds.
In the instances outlined above location is a key (if not THE key) element of providing context and value sufficient to overcome cost. This mix of context and value provide an offsetting benefit sufficient for these services to realize mass market appeal.
Check-in services applied to a world where location is not relevant will have a more difficult time finding traction. The value proposition has to be more clearly defined. Again, in the beginning gaming aspects will provide sufficient motivation, but (mass) users quickly move beyond collecting badges/stamps/etc. When gaming is gone, where is the relevancy?
For content-related check-in services discovery is key and I haven’t yet seen this sufficiently delivered. Actively as opposed to passively participating today requires altruistic inclinations beyond gaming (I check into what I am watching to help you out). The algorithms driving discovery aren’t sufficient yet. Moreover, content discovery today happens more naturally than a check-in service can replicate. Recommendations often come through adjacent conversations (“that reminds me of XXX, do you watch XXX”).
Most check-in services fail to fully realize the extend of the cost incurred by the user. Many of these services will remain niche until there is sufficient value to offset these costs. Where location is removed, relevancy becomes more difficult to deliver. Many of the early entrants – at least at this point – seem like yet more examples of businesses taking winning models and applying them to adjacent markets in hopes that the same rules apply. But I think I different recipe will be required. To succeed these services must move quickly beyond gaming and altruism and provide value that offsets the cost.