LocaModa: Outfitter for “The Web Outside”
It takes cajones to say your company is going to be “the Google of” anything, whether it’s the “the Google of personal finance” or “the Google of lunch trucks.” But that’s the phrasing used by Stephen Randall, CEO of Somerville startup LocaModa, which he says is on its way to becoming “the Google of the out-of-home Internet.”
By out-of-home, Randall means the growing number of Web-connected, big-screen displays in public locations such as bars, cafes, airports, hotel lobbies, and store windows. LocaModa’s first software product, Wiffiti (pronounced why-feety), grabbed the attention of the digerati last year by turning such screens into electronic graffiti boards where cell-phone users can post missives via SMS text message; if you’re an ice-cream addict like some of us here at Xconomy, you may have noticed the Wiffiti screen at Toscanini’s in Central Square, Cambridge.
But Wiffiti is just the beginning. With the help of $6 million in Series A venture funding, officially announced September 19, Randall says LocaModa is positioning itself as the infrastructure provider for a whole network of public displays as small as jukeboxes or as large as Times Square JumboTrons. The overarching idea is to engage consumers with content or activities that can be monetized by tapping into the $7 billion market for out-of-home advertising. Hence the comparison to Google, which is, after all, not really a search company at its core, but a service that matches advertisers with search-engine users who are, by definition, already motivated to investigate some subject or product. “Wiffiti is just one application that runs on a platform that’s really designed to enable out-of-home signage to connect consumers and the Web in a measurable way,” Randall says.
A founder of Symbian, the London-based maker of operating systems and applications for mobile phones, Randall is a veteran of the platform-building process. He says the company’s first job will be to create more applications to demonstrate the power of the LocaModa network. “We had to do this at Symbian as well,” he says. “You can’t just design a platform and say ‘Here, use it.’ You’ve got to show what it can do.”
LocaModa will use some of its capital influx to put about a dozen new software developers on that effort. Already, the company is working with customers to create applications such as interactive games for big screens in shopping malls and trivia contests to entertain people waiting in line at fast-food restaurants and sitting in a cinema waiting for their film to start. Like Wiffiti, many of these installations will be accessible via SMS. But “we don’t really care whether there is an SMS message, or an MMS or a telephone interactive voice response system or even a Bluetooth connection sending the message,” says Randall. “Any kind of interactivity is supported.”
Eventually, says Randall, the company would ultimately like to cultivate a community of developers who could profit by contributing their own applications for LocaModa screens. “Imagine you walk into a bar and instead of a traditional jukebox you have a screen on the wall that plays music,” he says. “It’s playing Madonna and it has a playlist that looks something like iTunes and also thumbnails of other applications like pinball or tank or a trivia game. If the person selects the game of tank, that would be served up with advertising and that revenue is shared between ourselves, the developer, and the bar. All of these applications create measurable opportunities for commerce that didn’t exist before.”
Because screens running LocaModa’s software are connected to the Web, they can also become conduits between people who are out and about and those sitting at home with their PCs. By going to the “Explore” section of Wiffiti’s website, for example, users can see what’s on any Wiffiti screen at any given moment—and send messages to those screens. “Imagine a future where most bars have a LocaModa screen, and before you go out for a drink, you type ‘bars’ into Google Maps,” says Randall. The LocaModa-equipped bars show up on the map with special icons, “and on the map you can see the activity in each bar—what songs are being played, who is playing games, who is posting messages—and based on that, you say, ‘I’m going to that bar because it’s hopping tonight.’ That’s how people interact on the traditional Web, and we believe that’s how people will interact on the Web Outside. Bars that don’t have those screens will be invisible to their customers.”
LocaModa’s funding round comes from three sources, including Dace Ventures, a new Boston-based venture fund led by former CMGI president David Andonian and former Pod Venture partner Jonathan Chait; the IT division of Chennai, India-based conglomerate Mahindra & Mahindra; and PresidioSTX, the U.S. strategic investing division of Sumitomo Corporation of Japan. “The interest we’ve had from our international investors is that there are countries like India and Japan where the pervasiveness of the phone is far greater than that of the PC,” says Randall. “So we can bring [consumers in those countries] the opportunity to interact with richer, Web-based content outside, as opposed to content just on the phone.”
Of course, there is always the danger that Google itself may want to be the Google of the out-of-home Internet. The Web giant has launched forays into radio and print advertising and is rumored to be considering how to sell targeted ads in outdoor environments; in fact, in 2005 the company filed a patent application for an “electronic billboard-based distributed advertising network for performing intelligent allocation of advertising space; a plurality of displays geographically distributed throughout an area, such as, a shopping area, a city, a region, a state” (quoted by ZDNet’s Donna Bogatin).
But Randall believes LocaModa has time to make its mark. “Google or Yahoo right now can reach hundreds of million of consumers immediately in their marketplaces, and we are just taking the first baby steps, so the reality is [out-of-home advertising] doesn’t really move the needle for them yet,” he says. “I think they’re aware of it, but it’s not going to be regarded as the next potential hunting ground for the big Web companies until there is more evidence of hundreds of millions of measurable consumers. That’s why it’s interesting for us to be putting down these foundations today.”