At the recent SIIA conference, "All About the Cloud," I had the opportunity to reflect on my first few months of exposure to the rabid Seattle startup scene. Below, in part 1 of a two-part post, I'm going to discuss two of the startup themes that have significant potential and that I believe will come into the public eye within a matter of months. In part 2, coming next week, I will address a startup theme that I believe has future potential, but that I think requires a refined business model. Why should you stick-around for two posts? I will conclude part 2 by revealing an interesting underlying driver to all three of these startup themes, a driver that I believe will have a dramatic influence on the direction of future business models and executive thought processes. Additionally, in part 2, I will highlight the business model concepts that make the ideas in part 1 successful (concepts that coincidentally are in the same areas as those requiring additional attention in the startup theme explored in part 2).
Quickly, some ground rules: First, several of the businesses I will discuss are still operating under the radar. While I did not speak with them under an NDA, I do want to protect their "secret sauce." As such, and because I want to maintain the integrity of my relationship with the Seattle startups that were gracious enough to speak with me, I'll refrain from naming names. I will, however, make sure the concept is clear. And, when these names do launch, you can be certain I will return to promote their names. Second, on the opposite side of the spectrum, I want to provide press for the businesses that already have a product, a beta, customers, or a website. Again, these founders took their time to speak with me and I want to thank them by helping to distribute their name. Third, and finally, not that this needs to be said (force of habit from my former industry), but I chose these businesses and themes because I legitimately believe they have unique, lasting, and market-changing qualities. I did not receive compensation, nor do I hold interest in these organizations.
Successful Startup Theme #1: Location-based Entertainment
Location-based entertainment is a rapidly growing startup theme because GPS attachment to mobile devices is approaching 100%. In addition, the population is becoming increasingly comfortable with quick (5-15 second) application use (haven't we all checked just one email or one text at a traffic light or in the grocery line?).
I am sure the comments to this post will read, "Well, obviously, location-based entertainment already exists; look at applications such as Foursquare.com ." Yes, Foursquare was the start, but what if, rather than simply being able to "check-in" with the masses once you arrive, a la Foursquare, you could create a more immersive experience by continuing to use your overall location? This creates the opportunity to have a different application experience for each unique user, based simply on changing your location. In this manner, what you experience when you open the application while sitting at a red traffic light is completely different from your experience when the application is opened in the grocery line. This capability is coming to market rapidly. Locql.com has a beta sign-up page, but, for the aforementioned reasons, I'll remain silent about those applications that have me the most excited.
Monetization opportunities vary by application. In some cases, location-based advertising is relevant; in other cases, pay-to-use is more appropriate. In either case, I have added this theme to my "Successful" list not only because it is exciting, but because I believe the theme will be monetizable upon release.
Successful Startup Theme #2: Digital Registration Organization
As consumers, we now own an increasing portfolio of products with decreasing reliability. Sad, but true. The second theme of startups addresses your "catalog" of ownership. When I break the product, did I buy the extended warranty? Is there a product recall? If I sold today, what is my product worth?
If you are even remotely close to my, umm, retentive personality, you too have a filing cabinet of receipts, user manuals, and warranties that is so incredibly disorganized it's not even useful when it is needed. This growing startup theme addresses only the products you own, pushes tailored announcements to you (rather than your having to proactively check recalls, etc.), and provides education and consumer awareness when you are ready to upgrade or sell.
Again, the monetization opportunities vary by application. In most cases, however, consumers receive a free subscription at the expense of retailers wishing to upsell products and warranties. In the very extended future, having anonymous insight into product ownership could provide a very lucrative market-research product. The monetization opportunity for theme #2 has a slightly longer ramp than theme #1, but it is still completely feasible and rational.
That concludes the first in this two-part series. Having just discussed two promising startup themes, in my second post I will discuss a theme that's promising, but that needs more drawing-board attention. I will also conclude the second post with an underlying business model factor that has inspired all three startup themes and how the keys of success for themes #1 and #2 can be applied to strengthen theme #3.