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| Palo Alto offices of Waze.com |
A few years ago
while on my way on foot from the Palo Alto City Hall to a local breakfast
hangout, I noticed a small, unassuming storefront office. People were working
inside but there was no name on the door. When I stopped in and asked about the
business (I’m always looking for customers!), I got an earful about traffic
apps and was offered a “gizmo” with a suction cup to hold my “new” i-Phone
upright in my car. Just think, I could
get rid of my GPS and just use my phone! The new service, Waze.com, was free,
and it derived traffic reports from users, like me.
Now fast forward
to 2012. That same humble start-up now has over 30-million users, in 35
counties. Waze.com remains in the same location, but it seems to have come of
age as a reliable, useful, and ubiquitous service. Major news outlets use
Waze.com-produced “virtual reports” as substitutes for traffic reporters in
helicopters. Indeed, Waze.com was recently mentioned in
the Apple CEO’s apology as a substitute for Apple’s own less-than-successful
mapping application.
What explains the
amazing growth of this upstart venture, initially funded (Series A & B
Rounds) at less than $50-million?
Crowdsourcing. Yes, crowdsourcing to passively collect traffic data from
millions of users who also share road reports on accidents, police traps, or
other hazards, helping to give all users in the area a ‘heads-up’ about what’s
to come.
Is Waze.com a
service? Most definitely! Some cite it
is a great example of how to deliver a massively scalable service that is high
value and low cost. “Our users spend an average on 440 minutes a month on the
app,” said Waze Communications Director Michal Habdank-Kolczoski. “That
reflects their high level of commitment
to using the service.“
How do users pay
for the service? They use their own cell phones run the Waze.com app while
driving, which passively allows Waze.com servers to track their speed on
various roads. Collectively, this provides a high level of confidence about
road conditions.
Crowdsourcing is
a hot new idea that is well represented on Google. A search on the term yielded
3.3 million results. Enterprising companies today use crowdsourcing to manage projects, sell illustrations and
stock photos, and even design footwear.
But is it the service delivery platform of the future or just a fad?
Waze.com has just
launched a program to sell ad space to businesses that you and I pass on the way to work and that targets ads only to the users who typically pass by
often. Sounds like a neat way to
monetize the service and stay in the game as concept of crowdsourced traffic
reporting continues to take hold.
