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Hi-tech hitchhiking startup - Arvind Narayanan's journal [entries|archive|friends|userinfo]

Hi-tech hitchhiking startup [Sep. 10th, 2008|01:03 pm]
Arvind Narayanan
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Five months ago, I predicted that hi-tech hitchhiking would be coming soon. "Avego," the first of such services launched yesterday by a company called Mapflow.

While the idea will almost certainly catch on at some point, whether or not this particular avatar will succeed remains to be seen. I'd say two things are crucial if they are to beat the critical mass problem: having a low burn rate, and doing phased rollouts.

Currently, the penetration of GPS capable phones is simply not enough to let this service take off. Worse, changing public perception takes years. I wonder if Mapflow has entered the market too early. At the least, they will need to ensure that they can keep the service around for 3-5 years to see this come to fruition. They are not a startup, so they aren't going to go bankrupt, but since they probably don't have an unlimited budget to sink on their Avego product, they'd still need to keep a low burn rate.

Secondly, location based services benefit greatly from phased city-by-city rollouts, with focused advertising campaigns to build critical userbases in each city until the process can sustain itself on a global level. Studying propagation in social networks is part of my current research project, so I'm pretty confident about my opinion. Mapflow seems to be doing the opposite, launching "worldwide."

I'm still hopeful, though. Let's wait and see.
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Comments:
From: sosventures
2008-09-13 02:59 am (UTC)

saw your post and thought I'd respond!

Great comments!

I agree, it's a real hard problem to solve.

(I'm one of the founders behind Avego).

I think you'll see over the next 6 months that we have other parts of our strategy that help it get critical mass though other means... not that we'll have critical mass worldwide, far from it, but what you'll see is that certain areas will be "turned on" through other means.

I know what you mean in terms of being 3-5 years early... I actually wanted to do this back in 1998 but the technology was too expensive/impractical back then... I only began doing this full time about 3 years ago... and now the Avego team has about 15 people on it, which isn't a small engineering/product marketing team, as you can imagine, but we're keeping the burn rate as low as we can through other applications of the same technology.

regardless, it certainly is early days... it will be many years, as you point out, before this will really be a profitable business, so we recognize we are going to be spending a lot of money for a long time, and that's a potentially painful situation to be in.

We're confident of one thing: we're going to need a lot of help to succeed! Thanks for the good wishes.
Best,
Sean
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[User Picture]From: arvindn
2008-09-13 04:12 am (UTC)

Re: saw your post and thought I'd respond!

1998 - I'm very impressed, Sean!

I have a few suggestions that may be useful to you. Do you want me to post them here/email you/something else?
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