Highlight Could Be Worth Billions. Lots of Billions.
The tech crowd’s rapturous bear hug with Highlight shows no signs of tempering, yet little has been written about the app’s massive revenue potential.
Let’s talk money. If Highlight attracts sufficient users and fends off acquisitions, they stand to become an extraordinarily valuable company.
If you don’t want to read anything else, here’s the bottom line: when Lady Gaga, Starbucks, The Travel Channel, and Kraft will all pay you, you’re in a good position.
Drive Foot Traffic to Stores
Highlight currently shows people with whom you’re connected and are nearby. Replace “people” with “businesses” and you can see a long river of money that flows from an enormous ocean of money.
Let’s say you Like Starbucks on Facebook. When you’re near a Starbucks, Highlight tells you that if you swing by in the next 20 minutes, you get $2 off any drink. This concept has been discussed ad nauseam for years; Highlight might finally pull it off.
Or how about you follow Project Runway on Twitter. Highlight tells you when you’re near a designer’s store who was featured on the show.
On the back end, hidden from users, is a simple, self-serve advertising interface that lets Starbucks, Project Runway, and those clothing designers pay Highlight for placements.
Brand Communications
For businesses that don’t have physical venues, Highlight can offer location-appropriate messaging. I imagine this product being similar to Promoted Tweets, where a short message is delivered to specific users. If done with an auction model similar to that of Google AdWords, this could be a serious money geyser.
Politicians in swing states would compete to have their messages delivered to people based on their locations, Facebook Likes, and demographics. TV networks could encourage tune-in to their target audiences just a few minutes before showtime, while movie studios could announce opening nights. Meanwhile, Kraft could remind parents to pick up Oreos when they’re about to drive past a Walmart.
Translation: money on money on money.
Networking
Highlight currently allows free communication between users with overlapping interests. But what if I want to meet someone nearby with whom I have no direct connection? Highlight could build a premium browsing and communication service similar to that of LinkedIn’s InMail. The difference is that unlike InMail, Highlight would let you find the person you’ve been trying to reach while you’re both at the same conference, cocktail party, or otherwise.
I imagine this product working by showing when someone from a certain company is nearby, but hiding their name and picture. You only pay if the person responds to your message.
Of course, anyone can opt-out of this program. However, there’s a way of keeping people opted-in to the service by using a revenue sharing program similar to that of Google AdSense. Once someone qualifies for the program, the user pays, say, $1 to message, the recipient receives $.25 for responding, and and Highlight keeps the rest. That’s some scalable revenue.
Pipe all that juicy real time location data and technology into other apps. Wouldn’t it be handy to have your nearby friends and location automatically tagged in Instagram photos and Facebook posts? Or, when searching for a restaurant on foursquare or Yelp, wouldn’t it be great to have real time guidance from your network.
Mass Connecting
Translating real-world actions into online connections is difficult. If I speak at a conference, I’d love everyone in the audience to follow me on Twitter and Tumblr, connect with me on LinkedIn, Like DVWLR on Facebook, add DVWLR to Circles on Google+, and subscribe to DVWLR’s RSS feed. Good luck getting 500 people to do all of that.
Unless it was super-duper easy. Like, “tap once, connect everywhere.”
A paid Highlight “Broadcast To Connect” that includes one-tap connecting to different social networks would be invaluable to anyone who does things in the real world while maintaining an online life (that’s a lot of people). Bands, crafters, professors, pundits, hack day engineers, fashionable folks at clubs… the use cases are countless for people who take action in the real world and hope it translates into a stronger online following.
This “Broadcast To Connect” feature would appeal to countless brands. Oreo would pay for them in Walmart stores, Travel Channel would pay for them at every restaurant featured on No Reservations, Gaga would broadcast her newest platform at her concerts, and Chris Brogan would broadcast to everyone within a 300 mile radius of him.
This need not be real-time. You could open your app back at home and see a message like, “Since you were near Lady Gaga tonight, do you want to follow her on Twitter?”
Klout correctly argues that who you are online is becoming increasingly valuable. Highlight’s Broadcast system would be an investment that paid dividends.
Let’s Be Clear Here
These ideas step on some pretty big toes: Facebook, foursquare, Google, Twitter, Instagram, and LinkedIn, to name a few. They’re not going to passively watch Highlight reach into their pockets and scoop out handfuls of cash. The question is how far Highlight can get before they face real competition, or face an acquisition offer so sweet they can’t turn it down.
As always, keep in mind I work for foursquare and I certainly don’t represent the views of the company.
