Notwithstanding, in January, 1997, the US Air Force launched the B-2 bomber, the most advanced military bomber in history. It is capable of penetrating deeply into Soviet airspace…combatting a threat which no longer exists.

I thought of that when Google bought Waze last week.

OK, so the analogy is a little stretched, but the point is that today Google is the world’s only mapping superpower.  No one is close and they’re pulling away.  Yet last week, they beat out several possible rivals to pull the trigger on a $1B acquisition for Waze, a company which, while very innovative, had assets that largely overlapping with Google’s existing capabilities. Google just added more firepower to win a war that everybody else seems to be afraid to fight.

Last week I explored why they bought Waze. I think it’s a blocking move, to keep others from getting Waze’s proprietary map data and team. That would have been a good starting point for a competitor.

Now I am thinking about how to beat that block; how the rest of the world might compete with Google Maps.

Option 1: Frontal Assault (aka The Dumb Way)

One way to compete with G-Maps is to just go at them, match them feature for feature,and take share from them. Continuing the tortured military analogy, this would be the equivalent of conventional war…head on, army against army on the field of battle (cue flags flying and drums rolling).

For my friends who do not live in America, let me tell you a secret: We Americans like this strategy. It’s dramatic. It makes great television. And we win. Always. Ask Saddam Hussein (next time you see him). But this seems to be the way most people think about going after Google Maps. And they lose. Always. It doesn’t matter if they are small start-ups or big companies. They lose. At best they build a version that looks kind of like Google, but not as good. You can make that list yourselves.

Option 2: Guerrilla Warfare

We Americans are less excited about the type of war we are fighting now against al-Qaeda in Afghanistan.  It goes on and on. It costs a lot of money. It is not good television; in fact we rarely report it except on page 26 in the paper. We’re not sure we are winning or will have made a difference once we’re gone. The fact is, these al-Qaeda guys are doing a pretty good job against the world’s only superpower.  (Note: I’m not talking here about the pros and cons of this war. It’s not my topic or expertise. I’m just making an illustration. Spare me the hate mail).

So the obvious question (to me at least) is: “What would al-Qaeda do if they were fighting Google for map dominance?” Asked another way, how would you change the game to even the odds against such a strong competitor?

Three Ways to Even the Odds

1. Fight with a Mission: I don’t begin to understand al-Qaeda’s mission for the world, but it seems they have one. You don’t strap a suicide belt on without having a mission for something bigger. Google has a mission: “To organize the world’s information and make it universally accessible and useful.” Location is one way to organizing and accessing that information. Google invests in maps, local search, navigation and now Waze because they are fulfilling that mission of organizing the world’s information. Everyone else is just building a mapping app. That’s it. No vision. No one is going to compete with Google unless they have a similar mission that drives their goals in location.
2. Neutralize their Strengths: al-Qaeda doesn’t launch waves of troops in neat rows at us. They take advantage of their strengths (mainly home-court advantage in Afghanistan)  to mitigate the US military superiority. Google Maps has a lot of strengths: great team, excellent distribution through the Google search, strong ad model, proprietary map data and so on. To compete, you need to neutralize at least some of those advantages. OSM is one possible game changer. Assuming it can overcome its issues (geocoding, license ambiguity and completeness), it shifts the competitive advantage from data ownership to services delivery. That neutralizes an advantage that Google has spent hundreds of millions of dollars building.  As a potential competitor to Google, do you start your own new map database or join to build out OSM? That’s the type of thinking it will take to match Google: how can you neutralize the seemingly invincible strengths that they have. Map data isn’t the only area: distribution, business model, partnerships…all have possible strategies. There’s room for a lot of creativity here, but today I don’t see people exercising that.
3. Pick Your Battleground: It’s no accident that al-Qaeda picks most of its fights up in the mountains  where they minimize their exposure, have access to safety across the border and have an intelligence advantage over the US. Google is really strong in the local search market. It is pretty hard to win there.  But there are other areas where they could be more easily challenged.  I think enterprise is one. Social search is another. Picking the right area to develop a beachhead is key to getting traction.

<painful experience>I have no illusions that it would be easy to carve out an place in on-line mapping against Google</painful experience>. They have an excellent team, lots of resources, vision and momentum. But that’s exactly why those who would compete (and I hope their are some out there) need to be a lot more creative than they now are.

It would be good for the industry and good for Google.

Notes:

• To the NSA: I do not know anyone in al-Qaeda. I do not send them e-mails or even Christmas cards. I sure don’t call them on my cell phone. I do not know if they have any intention to launch an on-line mapping platform or even if they like cartography. I love America. Please do not wire-tap my phone. And no drone strikes. Seriously.

• Note #1 above not withstanding, I do think the world would be a better place if al-Qaeda would lay down their arms and take up cartography.  Perhaps they could start hosting OSM mapping parties in the Hindu Kush.  Links here and here if interested.

If it is a blocking move (and I think that’s a good partial explanation. For more talking head stuff, see here), it begs the question of what precisely are they blocking…what do they want to tie up, away from competitors, that is worth that much money?

What they’re not blocking: The Waze app.

The Waze app has had a lot of success, with 47+M downloads and an undisclosed number of active users.  It has a lot of passion in the user base as seen in the comments about the deal. But I don’t think Google paid that much just to keep the app out of the hands of others like Facebook or Apple. It’s a good app but not a $1B app.  I think the app will do well and that the Google navigation user base will drive more adoption. I think there’s a nice tie in to Google’s ambitions with Google +. But Google could have built that on its own for a lot less.

The Real Target:  Independent Map Data

Google is killing it in the mapping world, arguably pulling away from the competition.  They are doing this significantly because they own and control their own map data. They can build great, interactive map features without having to worry about either paying the commercial map vendors or hassling with their terms and conditions. They can update the data at will and design highly interactive user experiences without worrying that they have to pay for all those map “transactions” that others have to pay. In the future, this independence will give them an increasing advantage to build better experiences. And significantly, they will also collect much more data than their rivals.

Google’s biggest risk in maps is that someone else copies that advantage.

Waze was doing that by using driver traces to build a map database of the road network.  Think of it as if every driver were an Etch-a-Sketch point, writing a trace on a blank sheet. Multiply that by millions of drivers, driving tens of millions of miles, give it time and you draw a road network. Add some hard work and you pull out things like turn restrictions, road categories, etc. It’s hard and fraught with issues (see excellent Mike Dobson piece), but according to people who should know, they were doing it.  And it was Waze’s property.

Buying that data set, plus the Waze team, would give a competitor not only a jump start into a mapping platform (the software that draws the maps, geocodes, routes, etc) but also to a proprietary map data base layer.  That’s something rare and hard to do. Apple has the platform but not the data (they use TomTom and others). Yahoo and Microsoft use Nokia. No one else, except Nokia and TomTom own their own data.

Google didn’t need that data.  They have their own. That’s not why they did this deal. But buying Waze makes sure that none of their competitors get a head start in covering that competitive advantage.

That’s what they were blocking.

Where does that leave the others?  Companies like Facebook, Amazon, Samsung, Microsoft, Apple and others who may want to own the mobile mapping data? Those options are another blog, but they look like this:

1. Play as aggressively as you can with the commercial map data providers
2. Buy one of the commercial map data providers
3. Start from scratch and build your own
4. Use OpenStreetMap. You won’t own it but you will get a map that’s may become the best in a short time.

What do you think?  Is that what Google was blocking?  What am I missing?

A week ago it was Facebook

Today it’s Google.

Would one of you guys just buy Waze and get it over with?  Here I am on Bloomberg West talking about the acquisition rumors that continue to float around about someone buying Waze at the currently hot acquisition price (pinkie to mouth here)… ONE BILLION DOLLARS!!!!!

I really have no idea if this is happening or if its all a big hype-fest.  The personal messages I get from industry folk run heavily in favor of the hype scenario, but that could be jealously. But the thing I think is an interesting question is “If they were going to be bought, what would they be bought for?”.  I think the answer is different for Apple and for Facebook and for Google.  And I personally don’t think that the much touted 47M users is really the answer.

I like the idea I try to lay out here for Google:  What if Google adds it to their navigation as a crowd sourced traffic app?  They could use Google Plus as the social network with “traffic” as a Circle where you don’t care who it is, only if they’re driving on your road.  It gets more people to sign in to Google Plus (which Google REALLY seems to want) and exploded the number of active users.  I kinda like the idea.

Worth $1B? I’m not sure. But I think it does answer the question of why Google, with all the map stuff they have, would want to buy Waze.

What do you think?

Not sure if it’s true this time, but even if it’s not, it does raise the question: Is Waze a billion dollar company?

The comparable most often used is Instagram.  Given that Facebook is the subject of the rumors this time, that’s in every article I’ve seem so far.  The parallels are obvious, small company with limited revenue but growing user base bought for a $1B.

I don’t think the parallel holds.  IF Waze is being bought for that amount (and I think it could happen), it is not for the same reasons that Facebook bought Instagram.  If Waze is worth  $1B, it is not for the 40+M users of their traffic app.  It would be for the underlying map data that they are building.

Facebook bought Instagram because they had a fast growing user base in a space (photography) that was near and dear to Facebook’s heart.  Neither of those factors justify that sort of money for Waze.  Even considering their 44M users (and I suspect that the active users are a fraction of that), that barely shows as a blip on Facebook’s 1.1B users. And Facebook hasn’t shown any interest in maps and location, much less navigation, much less traffic. I doubt they’d buy Waze to get a traffic app.

What’s really valuable at Waze is what most people don’t see:  the underlying map data that they are building as a result of all those GPS traces collected from their users. By compiling millions of these traces overlaid on publicly available map data, they have been building a crowd-sourced road map database. And worldwide map data is very hard to build, which is why there are so few of them.

If the rumor is true (and the price is in that ballpark), it would indicate that Facebook wants to complement their moves into local search (Facebook Nearby) with their own mapping platform and their own mapping data underneath that. Waze gives them both, at least at some starting level. Said another way, if the price really is in the $1B range, it’s not for the revenue, or the team, or the 44M users or even the quirky traffic app.  It would have to be for the map data.

I have noticed that Waze management has been describing their company much more as a mapping platform in recent interviews (for instance, here with Liz Gannes).  A year ago, it was all about the app.  Not so much recently.  They seem to have focused on the maps and the data.

From the outside, it is hard to know how good this data is. I suspect it is good in some areas and not so good in others.  However, Waze’s map methodology gets much better if you extend it from their 44M user base to Facebook’s.  You get 1.1B users and much better geographic coverage. That could possibly combine to bring the quality of that map up very quickly.

I have no inside knowledge as to whether the rumors are true.  But if they are true, I think that you go down a wrong path by thinking about Waze as a second Instagram acquisition.  They would be valued for the underlying data, not the app.

And if it is true, advanced congratulations to Waze!

Addendum:  Why OSM isn’t a better option is another whole discussion. I suspect it revolves around ownership and data rights.

A week ago, I joined the pantheon of geo-dignitaries who have talked with James Fee (the very active @cageyjames on Twitter) of Spatially Adjusted on Hangouts with James Fee. We talked about a bunch of topics:

•  WiFiSlam and Apple’s plans for them
• Persistent location and where its going
• The dreaded “Big Data” and what that means in location
• A little baseball
• Other geo stuff.

It’s kind of like sitting down for coffee or a beer with James and talking about stuff.  It’s an hour but hopefully reasonably entertaining.  Enjoy! Video is here.

If it all works as advertised, WiFiSlam gives “aisle-level” accuracy fast enough to let the consumer get relevant information before he or she moves on to another aisle. That’s the “2.5m in real-time” part and is a Holy Grail of sorts for indoor positioning because of its potential for retail targeting. They use ambient wireless signals from WiFi and Bluetooth which means that you don’t need to install a bunch of extra gear. This is not easy; a lot of companies have been banging away at this for a while.

So, why did Apple want this?  

The First Application will not be Maps

The WiFiSlam acquisition is being reported as Apple’s next step in advancing the Apple Maps product. That’s an obvious story line because of all the publicity on Apple Maps and the chance to dredge up Tim Cooks Map mea culpa yet again. I don’t think so.    

The Apple Maps team has fixed a lot of the early problems but I suspect that their resources will be best used on improving local search, not taking on the new challenge of indoor mapping. Indoor mapping involves a lot more than just location, including the integration of a complex and fragmented indoor map data base.  Although many article are making that jump, I doubt that’s Plan A. I think we’ll see it in Passport before we see it in Maps.

My Guess: Applications APIs and Passport

The real value of this technology on the Apple iOS platforms will be in offering an indoor location API to app developers  and combining it with a reminder service like Passport. That enables a rangle of applications developed for merchants and retailers that allow them to leverage their CRM data about their customers to either push offers to regular customers in store or just allow people to set reminders do get something when they are standing in front of it.  That may or may not require an indoor map but in any case, it pushes that issue out to the app developer where it can be addressed for the specific venue(s) rather than Apple’s Map team having to compile a wide ranging and ever-changing set of indoor maps.

That was the founder’s original plan and what attracted Don Dodge to the company as an investor according to an article in Venture Beat 6 months ago.  Of course, Apple can change from the founders’ intent but I don’t think they will.  There is too much potential in that.  By letting those apps save a location-tagged reminder in Passbook, you begin to get a proactive agent in the category of Google Now.

We’ll see in the next months I guess. Meanwhile, congratulations to co-founders Joseph Huang and Jessica Tsoong and their investors. And condolences to the many other indoor location companies that would have loved to get that exit.

It started last year at SXSW, with a lot of buzz around Highlight and Glancee.  Those companies didn’t have enough users or data on each user to make them really interesting (plus they sucked the battery dry).  Since then Google has jumped in (Google Now), Apple is kind of in (Location features in Passbook) and now maybe Facebook will launch something next year.  You could see Amazon in this space, maybe Yahoo! even.  The key will be to have really good information on the user (so that you can actually figure out what is interesting to that person) and really good database technology so you can correlate all that info into a relevant offer before the user moves on.

There is a big opportunity here for the bigger database guys to work with retailers, grocery chains, and anyone who has a lot of data to build this out.  SAP is working on Precision Retailing that is along those lines.   I think that spreads out the location business beyond the current titans and opens a door for retailers to connect directly with consumers, leveraging their valuable data, rather than funneling it through someone else’s app.

Mobile-Loco 2012 Intro Talk

But it’s one thing to be wise in retrospect, much harder to anticipate problems. That’s why it is worth re-reading (or reading for the first time) Mike’s comments on problems he anticipated for Apple when they announced Apple Maps at WWDC in June. They are dead on.

Second guessing is easy and not always appreciated.  Forecasting accurately is what separates the pundits.  Nice job, Mike