Small Business Labs

Google Wallet Shows the Future of Mobile Payments

Google Wallet is a software product designed to replace the physical credit cards most of us carry around and use to pay for things.  It's a version 1.0 product, which means it's limited and not that useful - at least yet. 

But Google Wallet shows us the future of mobile payments - and that future is just a couple of years away.

Currently Google Wallet, which requires a special NFC chip, is only supported by 1 phone (Sprint's Nexus S) and 1 credit card (Citibank MasterCard).  So if you don't have both, you're out of luck. 

But this will quickly change as more phones and credit cards add Google Wallet support.  Helping this to happen is Google's partners. 

MasterCard is leading the charge on the merchant side.  They've installed over 150,000 Google Wallet enabled payment terminals across the U.S.  The picture shows Google Wallet in action with a MasterCard payments terminal. 

You can also safely assume most new Motorola smartphones will support Google Wallet (for those living in a cave, Google is in the process of acquiring Motorola).  We also expect other phone companies and Google Wallet competitors to add NFC support (click here for a description of NFC and mobile payments). 

Google Wallet opens up lots of interesting possibilities for retailers.  It quickly will become the place consumers store digital coupons and loyalty cards.  It will also enable location-based services of all kinds and be the system used to deliver the growing arrays of "daily deals." 

It's another step on the path to a world where the smartphone is our "remote control for life."

It's time for small businesses to start to better understand and plan for the world of mobile payments.  Yes, it will still be a couple of years before it's common for consumers have NFC/Google Wallet enabled phones.  But 2012 will see a lot of early adopters - Gen Yers and techies in particular - buy phones with these capabilities. 

McDonald's Very Cool Interactive Billboard

McDonald's created a billboard in Stockholm, Sweden with a Pong-like game called Pick n' Play that allowed people passing by to play using their smartphones.  Players who did well at the game won coupons for free food at a nearby McDonald's store.

JWT Intelligence has a nice description and a short video showing people playing the game.

This is an example of so many trends - and the convergence of so many trends - it's hard to list them all.  They include mobile computing, gamification, cloud computing, digital coupons, location based services, etc., etc. etc.

Fun application. 

Yahoo CEO on Local Content

Interesting interview with Yahoo CEO Carol Bartz in the Wall Street Journal (registration required).  For those not familiar with Bartz, she is famous for being outspoken and for her use of "colorful metaphors." 

She is also known as a tough, demanding and skilled manager who did an impressive job as CEO at Autodesk prior to talking over Yahoo.

The piece of the interview that most caught my eye was her response to a question on what Yahoo customers are looking for.  From the WSJ article:

WSJ: What kinds of content do Yahoo users want to see more of?

Ms. Bartz: They want to see more local content – things within a five to 10 mile radius that people want to know what's going on, like coupons and restaurants. People love to know other people's opinions, the whole idea of polling, commenting and rating. That is part of how we operate now online.

WSJ: It sounds like you'd love to have a user-recommendation site like Yelp, a location-sharing app like Foursquare and a local-coupon site like Groupon. Would they fit into Yahoo?

Ms. Bartz: The concept of what they do, sure. They're local, they're rating, they're user voted-on...

Yet another example of the growing role of the local web and new localism.

The Street as a Digital Platform

The Street as a Platform is an interesting essay from the Digital Sound blog.  It covers the growing trend towards augmented reality, which is a digital layer of data that is being added to a growing number of physical locations. 

The article describes this as:

"We can’t see how the street is immersed in a twitching, pulsing cloud of data. This is over and above the well-established electromagnetic radiation, crackles of static, radio waves conveying radio and television broadcasts in digital and analogue forms, police voice traffic.  This is a new kind of data, collective and individual, aggregated and discrete, open and closed, constantly logging impossibly detailed patterns of behaviour. The behaviour of the street."

The post is quite long with many examples of how digital technology is being added and used in urban environments.  Lots of the examples fall into the category of location-based services, where location data and mobile computing are combined to provide location specific information and services.

As this article shows, urban environments are using digital technology to get smarter.  For more on this topic, see IBM's Smarter Planet blog.  It has a lot of interesting articles on smart cities. 

What is Foursquare & Why is it Getting So Much Hype?

Foursquare is the leader in a new generation of "find a friend" applications.  According to their website, Foursquare "is a cross between a friend-finder, a social city-guide and a game that rewards you for doing interesting things."

To use Foursquare you simply tell the application where you are and comment in some form.  This is called a "check-in."  Foursquare targets mobile phone users and the vast majority of check-ins are done using smartphones. 

Below is an example "check-in" that I grabbed off the Foursquare feed:

Graham W. in London, United Kingdom:

wrote a tip @ Thai Aubergine: Try the chef's special Salmon. It was awesome.

As you can see, a "check-in" is very Twitter like but focused on location.  Check-ins can contain any information, but I chose this one to illustrate Foursquare's growing use as a local review and recommendation site.

 

Foursquare rewards usage by awarding badges and points to active users.  For example, people who check-in the most at locations are declared Foursquare Mayors for that location (they get a mayor's badge).  The game play features are designed to encourage use.

 

The Foursquare business model is not yet fully fleshed out, but it is clear that lead generation and advertising are going to play major roles.  Businesses are already starting to use Foursquare check-ins and related information to reward people who frequent their location. 

 

Hubspot has a good post on adding Foursquare to your marketing mix and the Foursquare website has examples of how small businesses are using their service.  Small business use so far mostly consists of loyalty programs based on Foursquare status.  For example, some retailers reward mayors and/or multiple visitors with free goods or discounts. 

 

Foursquare is getting a lot of hype for several reasons.  First, it sits at the intersection of a number of interesting technology trends: location-awareness, mobile computing, social media, social commerce, the real-time web and social games.  This is an exciting mix for the geeks that hype these things.

 

Foursquare is also easy to understand, is fun to use and has the potential to add value to both consumers and businesses.  It also benefits from the "shiny new object" syndrome - the tech field has a non-stop need for new things to talk about. 

 

Foursquare is not without competitors, big and small.  Twitter is adding support for location data, Google plays in this space, Yelp has added competitive features and a number of start-ups are targeting this area.  So while Foursquare is the flavor of the day, long term success is not guaranteed. 

 

As a consumer, I like Foursquare.  But the vast majority of small businesses do not need to worry about Foursquare for now.  Just be aware and be ready if and when it does become important to your customers. 

 

But if your customers are serious techies - a bar targeting 20 somethings in the SOMA area of San Francisco, for example - then it is well worth investigating. 

 

***Update:  Good overview presentation on Foursquare for businesses from We Are Social***

The Economist and NY Times on Mobility

The Economist has a special section on mobility and the new nomadism.  The section is 14 pages long, and covers a wide range of topics related to cell phones and mobile computing and how they are impacting business and society.  Excellent coverage on how the new mobility is changing work locations and office environments.  Lots of discussions of working at "third places" like coffee shops, and the increase in working from home. 

If the Economist article is not enough reading for you, the NY Times Magazine has an 8 page article called Can the Cell Phone Help End Global Poverty.  Great quote on the growth of cell phones:

"...it took about 20 years for the first billion mobile phones to sell worldwide. The second billion sold in four years, and the third billion sold in two. Eighty percent of the world’s population now lives within range of a cellular network, which is double the level in 2000."

One of the major points of the article is cell phones are fundamentally changing the economies of many developing countries.  From the article:

"Today, there are more than 3.3 billion mobile-phone subscriptions worldwide, which means that there are at least three billion people who don’t own cellphones, the bulk of them to be found in Africa and Asia. Even the smallest improvements in efficiency, amplified across those additional three billion people, could reshape the global economy in ways that we are just beginning to understand."

The growing impact of mobility, cell phones and mobile computing are hard to overestimate.

Location Based Services Round Up

Lots of news around location based services:

1.  Yahoo announced a new location based services product called Fire Eagle.  From their website:

"Fire Eagle is a new service designed to make it safe and easy to build and use location-aware applications and services. It's a place where users can store and manage information about their current location that trusted apps and sites can update or access."

Basically, users input their location and that triggers location services.  The advantage of this is approach is it provides strong user privacy controls.  For more on this see Giga Om or the ReadWriteWeb post. 

2.  BBC on the Rise and Rise of GPS Mobile: article covering GPS and location based services.  Says that Nokia alone will ship 35 million GPS equiped cell phones in 2008. 

3.  Gartner says mobile commerce is starting to take off.

4.  Gartner also says location based services will grow 170% in 2008.

5.  Gartner also says (busy folks) that mobile phone sales were 1.15 billion in 2007.

Articles on the Growth of Location Based Services

The World Mobile Congress recently took place and Business Week and the Financial Times each have several articles on mobile computing and location based services.  Business Week has a special section on the Congress, and the Financial Times has several articles.  Both report that location based services are expected to grow substantially in coming years.  Key quote from the Financial Times:

"Analysts at Gartner expect location to become a mainstream mobile application within two to five years. They see the market growing from 16m users in 2007, to 43.2m in 2008 and 300m by 2011.  Revenues from location services are similarly ex-pected to grow from $485.1m in 2007 to $8bn in 2011."

Location based services are going to become mainstream over the next 2-3 years.  Customers are increasingly going to be equiped with full mobile Internet access and tools for quickly finding detailed information on local providers of goods and services.  This will obviously have a big impact on many small businesses.

The Connection Between Mobile and Cloud Computing

Last week I spent a day at a large corporation's internal mobile marketing workshop.  At the workshop one of the topics was the future of mobile marketing and mobile commerce.  We spent a lot of time talking about mobile computing form factors, new display technologies, software standards, advertising formats and more powerful mobile chipsets.  We also talked a lot about the iPhone and its impact on mobile computing.

We didn't talk much about cloud computing, but thinking about the day we should have.  I agree that the iPhone fundamentally changed cell phone design for the better.  But I also think the fixed cost data plan, although expensive, is a key reason for the iPhone success.  Combined with the iPhone's very nice mobile browser and UI, the fixed cost data plan allows users full cloud access for zero marginal cost.  This is a major reason why iPhone users use the Internet so much. 

The NY Times also points to cloud access as one reason why Amazon's Kindle may be the first successful digital, portable electronic reader.  Key quote:

"books and other content can be loaded wirelessly, from just about anywhere in the United States, using the high-speed EVDO network from Sprint.

This may turn out to be a red-letter day in the history of convenience — our age’s equivalent of that magical moment FedEx introduced next-day delivery and people asked, “How was life possible before this?”"

Going forward other cell phone and mobile device makers will copy and even enhance many of Apple's design innovations.  This will definitely improve mobile computing.  But as the cloud gets more powerful, network bandwidth expands, and data access gets cheaper, the mobile form factor will be increasingly focused on UI and ease of use.  Local storage and processor power will become increasingly less important because data and computations will reside elsewhere. 

Apple's new Air seems to anticipate this world.  It is a mobile device that assumes your data and information are accessible through the cloud.  Making that assumption allowed Apple to create a really thin notebook and a really cool user experience. 

These are two self-reinforcing trends.  The better the cloud the better the mobile computing experience - and vice versa.  Google, Apple and Amazon seem to see this, and all are designing products for a combined mobile/cloud world.

Small businesses need to keep up with both mobile and cloud computing.  Important in their own right, together they will drive the adoption of location based services. 

The Consumer Electronics Show - Mobile Devices and Location Services

The annual Consumer Electronics Show (CES) was in Las Vegas last week.  I spent a couple of days there talking to companies and visiting exhibits.  We believe mobile computing and location services are going to have a huge impact on small business, so one of my primary goals was to see what was new in these areas.  Two things struck me:

1.  Automotive navigation systems are rapidly moving from just providing maps and directions to also providing deep local content -  Lots of innovation in the automotive navigation space, with most of the innovation around adding location based services.  Navi systems are increasingly providing detailed information on local businesses as well as directions. 

The device making the most waves is the Dash, which is expected to ship in Q1 of this year and is already in beta.  It provides 2 way Interenet access and a wide range of location information and content.  It also provides updates on the speeds of other Dash equipped cars giving a much more accurate view of traffic conditions (at least in areas where there are enough Dash equipped cars).

Automotive Design Line magazine has a nice article on this trend, and we cover in it more detail in our Future of Small Business technology forecast report.  The growing impact of cars as mobile computing devices is way underestimated in my opinion. 

2.  Mobile computing was a major focus of this show - While a lot of press went to giant TV's and systems for getting video and Internet access connected to the living room TV, mobile computing was a clear major show focus.  Lots of new cell phones, notebooks, sub notebooks and new hand held and mobile computing devices.  Again, Internet access and location based services were the main driver. 

Too much in this area to cover in this blog.  If you are interested in details on CES and mobile devices take a look at CNET, Engadget or Gizmodo. 

The bottom line is local, location based services are going to rapidly become mainstream over the next 2 years.  Customers are increasingly going to be equiped with full mobile Internet access and tools for quickly finding detailed information on local providers of goods and services.  This trend is being driven both by the mobile device companies and by Google and Yahoo who are rapidly improving their local search capabilities.  For more on local search in 2008, take a look at Local SEO's 2008 Local Search predictions.