Advice from Geospatial Startups

By Adena Schutzberg

Startups A Directions Magazine reader had a terrific idea to follow up on a podcast we did a few months back on "Lessons Learned from Brave Geo Entrepreneurs." That podcast reviewed several articles by those who tried a geo-related business and failed, and then shared what they'd learned.

The reader suggested we look for lessons learned from existing geo startups and other young companies. I invited 12 relatively new players in our space to share, via e-mail a few "lessons learned" from their first years. Four replied and I share their advice here. If you'd like to offer up some advice from your geospatial company's startup experience, please send it via e-mail and we'll collect material for a follow up.

Brian Flood is president of Arc2Earth, the company behind Arc2Earth, an extension for ArcGIS that helps you publish your data online directly from your desktop.
Be nimble - Technology changes quickly and as a small startup you have the ability change directions rapidly. This is one of your greatest strengths so make sure to take advantage of it while you can. The larger companies will always monitor what is working in the marketplace and eventually add it to their products; there is nothing you can do about it. You can however keep adding new functionality to your product as quickly as possible.

Also, don't be afraid to ax what you thought would be "the next big feature." Spending time and money, time being the big issue, on something that may be useful to a subset of your users will cost you in the end. Put the code down, leave open the potential to come back to it, and move on.

Grow your sales channel as soon as possible. While there were mitigating circumstances, I wish we had setup our resellers a lot earlier.

And finally, always get it in writing.

Alistair Goodman is CEO of 1020 Placecast, the leading advertising solution to target highly sought-after audiences using location-based information across the Web, mobile, Wi-Fi networks and email.

Lesson 1: Seek out different ways to monetize
The good news for start-ups in the location-based space is that our emerging industry is now squarely on the agenda of a number of larger companies. Google's Latitude and Gears Location API, Yahoo! FireEagle, Firefox's Geode plugin, Microsoft's Windows 7 and over 1,000 Apple iPhone apps are all using the GPS on the handset, and the carriers are all pursuing location-based advertising. There are a lot of large companies looking to understand more about how to compete in the geo-space. One of the hallmarks of this stage in any industry is experimentation with revenue models, which translates to opportunities for small companies. In the case of Placecast, the company has had success licensing the core technology in the areas of data management and ad serving to larger companies, in addition to getting traction with a small direct sales effort. Taken together, both these initiatives are yielding insights about the emerging marketplace, validation of our concept, deeper relationships with strategic partners and traction.

Lesson 2: Marketing as a service
Many of the businesses getting traction in the geo-space are focusing on advertising and marketing models. At Placecast, we've had consistent success by thinking of advertising offerings as a service to consumers (rather than an intrusion), and bringing local relevance to what we deliver. Not only is this of value to consumers, but it also performs better in the case of advertising and marketing metrics. For example, Placecast is able to customize the messaging or creative in an ad unit with location information, on the fly, and across any connected device. A consumer sees a message or advertisement with the address and phone number or map to the nearest local retail location, or could even get reminders on their mobile device when they are near stores featuring products they care about which are on sale. By establishing location-relevance, everyone wins: the consumer gets something useful, the marketer gets better performance, and the geo-provider earns revenue

Paul Bissett is founder and CEO of WeoGeo, a company that provides an innovative file management and exchange service built for the spatial data industry that allows users to rapidly store, search, and transform their professional mapping, GIS, and CAD files.

1) Never lose focus.
2) Persevere, Persevere, Persevere.
3) Work hard, and then take it up a notch.
4) Its not over until its over.

Chris Watson is VP Marketing and Business Development for TerraGo Technologies, a company focused on improving the productivity and effectiveness of non-GIS experts who depend on geospatial information.
As an emerging software organization within the mature GIS market, TerraGo has learned several key lessons during the past four years. However, these lessons aren’t unique to our industry, or to the software business. They are lessons that are important to any size organization and should be constantly revisited as an organization grows and matures.
  1. Understand the problem your potential customers are trying to solve, and clearly articulate how your solution solves that problem better than anyone else. Clear messaging is absolutely critical to the success of any organization, no matter how big or small, young or old. But it is often the most overlooking component in start-up companies who have experienced quick success with the early adopter community. This can give an organization a false sense of value, and cause a company to tout technology for technology's sake instead of touting clear value. To grow beyond a one hit wonder, companies must clearly understand the business problems that their customers are trying to solve, and through customer-centric marketing practices, communicate how their solution solves these problems in the best possible way.
  2. Focus: As a young company, it is tempting to chase after every piece of business that comes your way. Most start-ups have limited resources (capital and people), so companies should evaluate each opportunity and understand how it can advance the vision and strategy of the company. If the opportunity is going to distract the business from its core expertise or cause a major shift in direction, it may be better left alone. Companies should focus on what they do best in the early days and cautiously take on new opportunities based on solid research and due diligence.
  3. Establish strong, complimentary partnerships: As a start-up, credibility and market awareness are two of the most challenging issues to overcome. By aligning your organization with those who are already established in the industry with mature customer bases and product lines and larger marketing budgets, smaller organizations can be exposed to opportunities that wouldn't come their way if they were going at it alone. Determine which companies in your industry would be most likely to see incremental value in a partnership and aggressively pursue those partnerships in the early stages. If the relationship is based on both parties being able to bring additional value to the customers, the partnership and the organizations will flourish.

Published Friday, May 22nd, 2009

Written by Adena Schutzberg

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