Venture Capitalist (Gray haired 50 year old ex banker): Why should we give 50 million bucks in funding to your startup with no customers and not a line of code written?
Hey Bro (From Khayelitsha…in Hoodie): “SoLoMo!”
According to Hootsuite, SoLoMo is the combination of three of the biggest trends among consumers: using social media (So); location-based relevance in both search intent and the use of the internet to find local products and services (Lo); and mobile adoption in which consumers tend to prefer to access apps and the internet through smartphones rather than desktops or tablets (Mo). More concisely, SoLoMo (social, local and mobile) is the convergence of collaborative, location-based and on-the-go technologies. The term is primarily used in marketing.
SoLoMo applications allows advertisers to push notifications to potential customers who are geographically nearby. Examples of SoLoMo applications include Foursquare, AroundMe and Yelp. Many of these services incorporate some aspects of gamification to encourage member retention. SoLoMo principles are increasingly being incorporated into search engine queries to deliver location-based results to users.
Techopedia explains SoLoMo
To understand SoLoMo, it is really necessary to understand several developments that brought it about. The first is that SoLoMo arose as a result of the popularity of smartphones and tablets that integrate geo-location technology. The GPS technology integrated into these devices provides more accurate geo results than the "IP mapping" approach necessary for home or office PCs. Also, big search engines are recognising that there is a large - and virtually untapped - market in local search. That's because there are a lot more "mom and pop" operations out there than firms with a national or international scope. When search engines started incorporating more and more local results in search engine results, they proved the size of the local market on the Internet.
Finally, in order for search results to have accurate local results, they need accurate information about local businesses. Good local search results just aren't possible unless what "local" actually means is made clear. This has proved to be problematic for browser-based search requests. But as an increasing number of searches are being driven by apps, this problem has disappeared simply because most apps have a larger arsenal of tools that allow them to determine exactly where the user is.
SoLoMo is steadily gaining momentum. This intersection of social media, local merchants using location-aware technology for advertising and mobile device usage offers opportunities to retailers, marketers and consumers—and all have something to gain from this new trend.
According to market research firm, Nielsen, over half of the U.S. population (50.4 percent) currently owns a smart device. In addition, well over half the population (70 percent) use social media regularly. Add to these items the fact that all mobile devices incorporate some aspect of geo-location, and all signs indicate that SoLoMo expansion is primed to take off. With the developing world often leapfrogging the West in technology initiatives, this trend should gain traction rapidly in Africa with our far higher penetration of mobile devices.
Originating in the Hyperlocal movement that came into vogue a few years ago, SoLoMo has had to wait for the right technology to evolve and for mobile usage to reach critical mass. Increasingly, venues such as suburban malls, airports, city centres and other urban shopping areas—essentially, wherever a mobile consumer goes—will be hotwired with retail incentives and deals that compel shoppers to do what they do best: consume.
It's not surprising that the mobile sector is expanding by leaps and bounds. Innovations such as 4G (ultra-broadband Internet access), retail/user-based applications, mobile payments, increased security and mobile devices that function more like powerful desktops will change - are already changing - how we live in a consumer world.
With SoLoMo, retail deals, coupons and consumer events as well as shopping and dining opportunities are broadcast to a mobile user from a specific retailer based on that user's geographic proximity, brand/retailer allegiance and shopping/check-in history. The possibilities are vast. They range from coupons for a soft drink at a nearby supermarket (or spaza!) and building supplies at your local hardware store, to a clothing sale alert at Edgars.
It's gradually becoming apparent that having a smartphone tethered to one's body is driving incremental sales and creating engagement, between opinionated shoppers themselves and retailers. A number of new user applications aim to take advantage of the opportunities.
For example, the ShopKick application grants user points, rewards and offers to drive foot traffic into select stores. Banjo, Kibits and Kismet are apps that incorporate geographic targeting to connect users; Kibits in particular to form groups, and Kismet to connect users through events and invitations.
Wallit takes social interaction one step further by providing a virtual wall for time - and location-sensitive reviews. The application, Highlight, serves all groups - users, retailers and marketers - by helping one learn more about people in the vicinity. Finally, Sonar sorts and prioritises publicly available personal data for making social connections.
SoLoMo and Privacy
Of course, the most glaring concern with SoLoMo revolves around issues of privacy. Currently, the U.S. Congress is considering twenty-six different bills that address wireless privacy issues, and state-level restrictions on how user data can be exploited are being considered as well.
The South African version is POPI and is well on track to becoming legislated in the near future.
In addition, the apprehension that consumers have regarding the security of their 16-digit card number and mobile payments is being addressed - by US governmental oversight committees, federal agencies and the big-name players. Eventually, once regulations are in place, retailers and banks will be required to meet compliancy standards. While the key barrier to mobile payments is security, expectations are high that the banking, retail and governmental concerns and consumers' needs will be met by the evolving technology.
To that end, encryption and user-based restrictions represent necessary forms of management, in addition to the controls offered by individual applications. Striking the right balance between easy access, location awareness and online transactions with robust security represents the golden ring security experts and app developers are reaching for. Achieving that balance can lead to the success, or failure, of many of these SoLoMo-based initiatives.
Another concern is adequate editorial control over user-based reviews and preferences. How much data have you slogged through trying to find the best information on a product or merchant? Often, the amount of details users must comb through to find relevant information on a store, product or restaurant can be staggering.
If SoLoMo is about providing information on demand, wherever a shopper might be, then retailers have a multi-pronged tool for gaining more customers at little cost. Currently, most retail-based services offer free platforms for attracting those users. For example, Foursquare, the daddy of all SoLoMo services, offers an easy and powerful way to extend a merchant's marketing effort, and it attracts large amounts of shoppers due to the high number of well-known companies offering exclusive deals.
For consumers, mobile commerce can be viewed as either a ball and chain or a shopper's paradise. Again, those privacy concerns about having your location pinpointed and broadcast disturbs some smartphone adherents. On the other hand, SoLoMo offers versatile applications, money saving deals, accessibility and a spectrum of benefits including highly targeted, context-rich communications, all under the user's control.
Used with the permission of http://thenetwork.cisco.com/.
Of course, for every fan of new technology, there is generally an equal and opposite opinion on the matter. Next week we’ll consider an equally convincing argument as to why SoLoMo is not going anywhere!
In a topical Mashable article (2013), a certain cynicism appears regarding SoLoMo. If you've ever wondered who to blame for a particular tech buzzword, there's a decent chance the culprit will either be a startup founder or a venture capitalist. Fred Wilson is usually listed as the father of the amorphous phrase "native advertising," Tim O'Reilly takes credit for the catch-all "Web 2.0" and John Doerr is said to be the one who coined the ubiquitous acronym "SoLoMo."
At least for SoLoMo, however, it was somewhat of a group effort. Doerr, a partner at the influential VC firm Kleiner Perkins, was working on a presentation in the dining room of his Bay Area home in mid-2010, along with two other partners at the firm: Bing Gordon, the former CEO of Electronic Arts, and Chi-Hua Chien, a former venture advisor at Accel Partners who helped drive that firm's early investment in Facebook.
Earlier that year, the trio wrote a guest post on how Apple's recent release of the first-generation iPad would help spur a shift to "interactive, connected applications" and kick off an era of "proactive" technology that works "seamlessly, unobtrusively, and comfortably in the spaces between us, between you and me and others."
Doerr started referring to this shift as the "third wave." The first wave was all about PCs; the second wave was all about the Internet. The third wave, as he saw it, was about the combined opportunities of mobile platforms like iOS, social networks like Facebook and local commerce, which at that time was embodied by the rapid growth of Groupon. Each of these three platforms had existed for at least a couple years before 2010, but as Chien told Mashable, it wasn't until 2010 or even 2011 that they really started to mature and complement one another.
Facebook started out as a static directory for engaging with friends, but then it launched Open Graph in 2010, which let users carry their social identity across the web. Apple launched its App Store in 2008 and Google launched its version in 2010, which made it easier and more enticing for smartphone users to do more of their Internet activities on the go. This gave rise to a new era of consumers constantly being online and connected to one another, which presented an opportunity for merchants to personalise offers based on the customer's location and their connections.
While working on the presentation in Doerr's dining room that day, he, Chien and Gordon decided to come up with a phrase to encapsulate these three big trends. "We thought what we should really do is try to put an inclusive concept around these three megatrends that seem to be driving a lot of new value, and point out that it is at the integration of these three megatrends that a lot of products and services are being created," Chien says.
Gordon, whom Chien refers to as the "poet laureate of Kleiner Perkins," is often brought in for brainstorming sessions like this one. The trio toyed with a few ideas for a catchy term, before Doerr settled on SoLoMo. "There were a few that we kicked around, but SoLoMo was the obvious one," Chien says. "I'm sure we also looked at MoSoLo, but it didn't sound so good.”
For the partners at Kleiner, the goal of coining the term SoLoMo was largely to declare an area of interest for future investments, according to Chien. However, within a few months, the term started to pop up in lectures and articles debating how marketers and startups should best capitalise on the changing habits of consumers.
Some, like Forrester analyst Jenny Wise, have taken issue with the buzzword and argue that it creates a "limited view" of how companies should be catering to tech-savvy consumers.
"It’s not 'social,' it’s person. It's not 'location,' it's the entire context," she says, noting that it's important to factor in why someone is where they are and what they want to accomplish there, rather than just focusing on a single piece of data like location. "It's not 'mobile,' it's just device-agnostic — whichever device they have near them when they want to find out what they want to find out."
Some companies have managed to tie together these three forces into effective products. Wise offers the example of Nike, whose Nike Plus running app has social, location and mobile components that all reinforce each other. Nevertheless, she believes this kind of success doesn't come from working backward from the assumption that you have to unite all three. "If the customer calls for all those components to be there, then it's good to include them," she says. "But that isn't the place to start."
For better or worse, SoLoMo doesn't appear to be going away. In fact, there's a chance the buzzword might actually get even longer in the not-too-distant future.
Chien speculates that the rise of wearable computing like Google Glass could give rise to a "fourth leg" in addition to social, local and mobile, which consists of apps and services that can anticipate the user's need based on all the data these new gadgets will be able to collect. "These wearable computing devices will have full context and know where you are, what's around you, the temperature, the sound around, how fast you're moving, so much contextual information," he says, "that what they can start to do is provide products and services to you, proactively." This might end up being coined SoLoMoPro, but he didn't like it. For now, it seems, we're still living in a SoLoMo world.
Ingenious apps, advanced social media and more powerful mobile devices are poised to transform every aspect of commerce in our daily lives - how we shop, how merchants sell and how advertisers market goods. Be prepared simply to ride the wave!