paul callahan…mostly common sense

Two companies have emerged in the outdoor Wi-Fi mapping space, Mexens/Navizon and Skyhook Wireless.  I wrote about the Navizon product recently and felt it was important to dig into Skyhook as well.

Three substantial differences jump out between the two.  Unlike Mexens/Navizon which is providing a giveaway client, utilizing the freeware community to provide its mapping database, and has no current business deals, Skyhook is:

1. Selling a software ingredient.  Skyhook has provided a beta E911 plug-in for Skype’s client with some simple ingredient branding (see “Location brought to you by” in the figure), but they are mostly the mayonnaise on the meat in someone else’s sandwich.  In that case, if think you the mayonnaise tastes especially good, you might ask what brand it is — otherwise you’re mostly paying attention to the sandwich.  Deals with both TCS and uLocate seem to good examples of that business model.  Though they are hidden in someone else’s product, let’s hope Skyhook can establish a pricing structure that doesn’t drive them out of business.  Mayonnaise doesn’t usually cost that much and doesn’t usually get noticed.

   

2. Jump starting its own survey.  Let’s face it, at least half the value in these products is in the accuracy of the location database.  As a result, it looks like Skyhook has decided to own the process — ostensibly to control the quality of the data.  To get there, Skyhook hires people to drive around urban areas.  After the initial survey, Skyhook seems to imply that it also uses customer data — like Mexens/Navizon — to keep current.  From their listing if you’re looking for work:

Job Summary: Skyhook is looking for drivers that are familiar with the metro area to drive large sections of the city in order to passively gather wireless information. This is a full time position that is short/medium term. Drivers will be provided with a wi-fi scanning device and maps with specific target areas of the city. There are no stops, just driving and letting the device scan. Drivers should understand the following:

- This is difficult work and requires a systematic approach to achieve the objective
- Drivers must commit to 40 hours a week
- Drivers must have a license, a car in good working order, and insurance
- Some technological knowledge is helpful

3. Making some deals.  Skyhook has signed up uLocate where it appears that Skyhook is a component inside uLocate’s software inside Nextel phones.  Hmm…software inside software doesn’t provide much leverage.  Skyhook has also signed Telecommunications Service Corp (TCS) to help provide e911 services over VoIP devices (as yet unspecified), CyberAngel where it provides a theft recovery location function like Lo-Jack for laptops, and TeleAtlas where it presumably will integrate with another map database.  Most importantly, the company appears to be working with eBay/Skype, a relationship which obviously could lead to bigger things.

The biggest difference between the two companies — the number of deals in-place — Skyhook has snagged at least one big name, Mexens has none.   If Skyhook can figure out how to get paid a reasonable sum for its embedded software component and if the volumes are in the millions — a very big “if” — it can actually generate significant revenue.

If not, Skyhook could be relegated to the position Mexens/Navizon currently is in — hoping some big player will take them out for short money.  Remember, when you’re the most anxious to get an invitation to the dance, you rarely get asked.

Wi-Fi Planet ran a story in December on P2P Positioning Systems that caused me to take a closer look at Navizon, the product (formerly known as AlwaysOnGPS), and Mexens, the company formed to market the product.  Navizon is a weenie network with the potential of very big impact.

Most of you who know me for the curmudgeon that I am, may find this post somewhat alarming.  Don’t worry.  I haven’t lost my mind.  This company has the most interesting use of combined wireless technologies I have seen to date.  But it is not a product for the faint of heart.  In fact, it more like a project out of Popular Science magazine than a real product.  All that said, Navizon’s underpinnings are such that they could be morphed into a breakthrough system — if they end up in the right hands.

Navizon combines two elements:

1) mapping software that runs on a Pocket PC and;

2) a world-wide community database of maps provide by — guess who? — the users.

The system relies on an installed base of Navizon-equipped users who map the world as they walk around.  Every once in a while, Navizon’s happy wanderers synch up with its data base in the sky — and eventually Navizon has a map of the whole planet.

But wait a minute.  I thought GPS mapping systems already had every square foot of the planet mapped.  Why is this any better than GPS?  The company claims that by using a sea of gadgets equipped with GPS, GSM (GPRS), and Wi-Fi, its approach is more accurate and faster than GPS-alone.  To pull it off, the company suggests you borrow a friend’s GPS reader, attach it to your Pocket PC, run around for a while in your favorite places to do the initial mapping of Wi-Fi Access Points and cell towers, hand the GPS reader back to your friend, and carry on using only Wi-Fi or GPRS to find the nearest BestBuy or Starbucks.

What is cool

Tags and buddy tracker are both interesting features which are rapidly becoming table-stakes in the location market:

• Tags.  Navizon allows users to place tags of their favorite places on their maps — and like tags in the world of Web 2.0, they are shared with other Navizon users.  So I can mark Bartley’s Burger Cottage in Harvard Sq. as having the best burger I have ever eaten and all other Navizon users get to see that tag.  Users get to set their desired sensitivity to others’ tags to control the potential clutter.

• Buddy Tracker.  This is probably the coolest idea — and one that could interest heavy users of IM.  You and your friends can allow yourselves to be located by other members of your group.  Embedded in a low-cost, easy to use, hand held device marketed for teens, this application could be explosive.  Today, we are miles away from such a targeted device — especially one with the right GUI — but that could change.

What is not so cool

I know the software is free, but asking users to assemble their own combination of GSM/GPRS phone with or without Wi-Fi (which is is?), connect it for a little while to GPS, and drive around for the good of the community is asking a lot.

• Connecting GPS to your Pocket PC is not trivial.  For this, you must dig deep into the world of geekdom — especially if you are borrowing someone else’s GPS receiver.  Bluetooth dominates the world of GPS receivers.  This helps to some extent, but the implementation seems to be rife with conflicting com port problems.  In the event that you must use a non-Bluetooth receiver, you’re really skating on thin ice.  Good luck getting the right cable.

• Which Pocket PC, which phone?  Unfortunately, Navizon provides little in the way of help here.  The product makes no recommendations on what device works best (outside of casual user chat).  So, do I buy a GSM/GPRS phone using Pocket PC, or do I buy a Wi-Fi equipped Pocket PC.  Do I add Wi-Fi to a GSM/GPRS phone or do I look for a phone with both?  Or do I even need a phone?  Probably the answer to all of these questions is “yes,” a classic duck-under answer.  Instead, the company should provide a list of supported devices and step by step set up instructions for each.

Where is Navizon going?

Looking to get acquired.  Founders, Cyril Houri and Jim Parsons, are obviously trying to position Navizon to be acquired by AOL, Yahoo, Google, or Microsoft.  I give them an a even chance — 50% — of pulling it off if they:

1. Beef up current technoid support.  Tell me what to buy and support it.
2. Land some deals.   Unlike their competitor, Skyhook Wireless, Mexens/Navizon has no visible deals, either with service providers, or handset manufacturers.  Better get crackin’ boys.

Tough odds?  The next six months will tell.  No deals in that time frame will not bode well.

Even so, the company has been smart enough to keep it small and not raise a lot of money.  When you take that approach, you don’t need a big M&A price tag to end up being very very happy.