Five major problems that location-based social applications need to solve

On March 22, 2012, at this year's SXSW interactive conference, no friend found that the application became a clear winner. Well-known technology blogger Robert Scoble said that Highlight seemed to be the most popular application, and about 5% of SXSW attendees used Highlight. However, it has become an industry consensus that all these services performed below expectations.

Why didn’t these apps succeed? As a field, where should the focus of “friend discovery” be placed? Here are some of the views expressed by Philip Cortes, co-founder of friend discovery service Meeteor:

1) Lack of single player mode

What benefits will the first user of your service gain from using it? If you haven’t solved this problem, it will be very difficult to overcome the tricky “network effects” in this space.

Foursquare solves this problem by awarding badges and "landlord" titles. Even if you're the only person using Foursquare in Chicago, you'll still get rewards for checking in. And you can post the badges to your Twitter and Wall. Plus, checking in before your friends every time you go to a restaurant shows that you're using the service, and using Foursquare can become a topic of conversation and a starter for lighthearted conversation. I can't tell you how many times I've used this trick.

LinkedIn overcame this problem by becoming the first online resume database.

2) Not capturing intent

Two years ago, we launched the first version of Meeteor.com. The goal of Meeteor was to randomly connect students with interesting new people based on their calendar availability and social overlap (the same type of algorithm is used by Glancee and Highlight today). The feedback from users was consistent: "This is great, but when I wake up on Monday morning, I don't have any urgent urge to randomly meet people around me - just because we have the same interests." Then users would say some of the ways they imagined using Meeteor.com: "Why don't you sell it to schools and let them use it to assign roommates" or "Why don't I tell you clearly what I'm looking for?"

Social overlap between users can be a lubricant for meeting friends, but it does not in itself force two strangers to meet. To connect two people, they need to have the same needs or desires. For example, two people want to date or two people can help each other. Another example of overlap is that two people can help each other in their careers. The fact that I have two mutual friends with the guy next to me and we both like surfing is not enough to motivate me to take the initiative to talk to a complete stranger. We need to better understand the needs of users and meet their needs.

3) Transparent privacy settings

Early adopters may be willing to try anything, but if an app is to gain popularity after being discovered by a friend, it must give users excellent control over their privacy.

4) Choose a vertical

Do you want to connect people as a dating service? Or do you want to connect people as a career? Capturing intent helps answer this question, but it’s very hard to achieve mass adoption if you want to be “all things to all people.” People have a hard time figuring out how to best use your service, and without a clear use case, they’ll forget about your app.

5) Mimic offline behavior

How exactly do people usually do this, and can you do it better? Thinking about it in this way, an interesting approach is to help two people who are already chatting, by giving them topics to talk about. (For example, I'm at SXSW, sitting at a coffee table, and I want to start a conversation with the guy next to me. Dear iPhone, please help me think of some good topics.) Knowing that we have two friends in common can be very useful and will definitely make me enjoy the conversation more.

If you are an app or web service that wants to win the competition, you don't have to solve all 5 problems at the beginning. For example, you can find a good single-player mode first, which buys you enough time to explore deeper value propositions. Some people think that Foursquare has only now added the value layer that makes its service sustainable (i.e. Radar + Exploresquare).

But for any service to cross the chasm and achieve Twitter-like mass adoption, addressing the five issues outlined above is likely to be a necessity.