Friday, August 6, 2004
Interview: Hunter Heaney, SmallPlanet
Hunter Heaney is Founder and CEO of SmallPlanet, a Los Angeles-based startup with an application in the location-based services market. I caught up with Hunter to learn more about the company's Bluetooth-based applications.
BK: What's smallplanet.net, and what is the idea behind your service and software?
HH: SmallPlanet is focused on developing and delivering location-based applications and services to mobile devices. We have been developing three main products that we are planning on rolling out sequentially: CrowdSurfer, DealSurfer and LineCutter.
CrowdSurfer basically allows users to realize the invisible connections that they may have to those around them. This happens in two ways:
1. Users store their own profiles on their phones, and with CrowdSurfer running in the background, they can choose to see or be seen by other users who may have similar interests, gone to the same school, worked at the same company or in the same industry, etc. This is accomplished by periodic "pinging" by Bluetooth signal typically in a 30-50 foot radius.
2. If another user is detected, users have the option of having the phone query the database at SmallPlanet.net via GPRS connection to discover if they have friends in common. If they are connected by up to 4 degrees contact relations, the profiles of those friends connecting them are displayed.
CrowdSurfer is the most advanced application of it's kind for a number of reasons: Firstly, users do not have to manually input their locations; the application runs in the background and automatically notifies you of "proximal identifications." Secondly, it combines both proximal user profile matching with mobile Friend of a Friend (mFOAF) capabilities. And thirdly, we have concentrated very hard on privacy issues and filtering options to give users the choices of who they see, who sees them, or what parts or versions of their profiles are visible depending on the social or business situation. For instance, users may select their business profile for networking at an industry conference, or one of their social profiles if they're out at a night club.
Here's a link to the CrowdSurfer demo: http://smallplanet.net/cs_demo.html
DealSurfer is a service we hope to test in a few malls and high foot traffic shopping areas this Fall, which basically allows stores to send out discount opportunities or coupons via Bluetooth to users who have decided to turn on their CrowdSurfer application. These "BlueSpots" are very inexpensive to install at the retailers and can reach users up to 100 meters away. Because of the consumer backlash we have seen (and been subjected to ourselves) against SMS text message ads and cell phone marketing calls (which in both cases, the user is PAYING to receive an unsolicited advertisement!), the main drivers of this application are that 1. the user has to turn the application on when they are willing to receive these messages, 2. The messages are free because they come to the mobile device via Bluetooth, and 3. we are only allowing retailers to send discount opportunities or coupons. In this way, everyone wins because more users will want to have the application running if they are shopping in a certain area, they know they are only getting discount offers rather than spam-like advertising, and the stores can tailor their deals based on consumer buying history and just generally increase foot traffic into their stores. Think of a group of four girls at a mall, one has the application running and is offered a special deal at a particular store, so they all head over.
Here's a link to the DealSurfer demo: http://smallplanet.net/ds_demo.html
LineCutter will be our third location-based (LBS) application and is still in the early development stages. The idea is, using Bluetooth or WiFi from your mobile device, you could walk into, say, a Starbucks, view the menu - delivered to your mobile screen - and place an order and pay for it without waiting in line or having to go to the register to complete the mCommerce transaction. Less frustrated customers, and even slightly quicker customer throughput times for the retailers can have very large revenue impact.
BK: Who is your target market, and what's your business model?
HH: Broadly defined, our market is 16-35 year olds, but the strategic demographic roll-out is being tailored, and somewhat determined by the cell carriers and phone manufactures. The US has been much slower to adopt and make affordable new mobile technologies, whereas in the UK, "toothing" and "bluejacking" crazes have actually become drivers for sales new mobile phones and PDA's that are Bluetooth enabled. People love the idea of free messaging, but nobody has stepped in to augment the service and make a business of it. For that reason we are right now deciding whether to launch in London first, and then roll the technologies out in specific cities in the US.
The business models differ slightly over the three applications.
We have decided against charging initial software download or ongoing monthly service fees for CrowdSurfer as the key for us here is growth and user acceptance. As you may be able to see in the demo, banner ads are integrated unobtrusively, and can be clicked on for more information such as the closest store location. Although many are struggling with how to advertise on mobile devices because preliminary data and anticipated retention, conversion rates, etc. are anticipated to be very much higher than on the web (and with the continued growth of Tivo and the like, many companies are looking to put millions into new, alternative advertising mediums) we feel that discreet advertisements that are only shown in conjunction with the user receiving a high value service (such as realizing that the attractive person across the room actually went to your high school) is a fair and acceptable solution.
DealSurfer's revenue model is an ongoing service fee for the retailers, and LineCutter is anticipated to be a small transactional fee based model.
BK: How many phones are now Bluetooth-enabled, and are you seeing any issues with Bluetooth interoperability between them?
HH: Nokia which represents 29.3% of the cellphone market currently has 61 phones in its lineup, 36% of those phones (22 phones) currently have Bluetooth. Seventy-five percent of the more advanced Nokia Midp 2.0 phones have Bluetooth.
As for the topic Bluetooth interoperability we haven't encountered any issues. However, as Bluetooth continues to evolve interoperability issue are inevitable, but should be restricted to older devices not supporting the latest new functions.
BK: Where are you in terms of funding, and are you looking for a venture round?
HH: We completed a small seed round in January and are now in various stages of conversations and meetings with the "usual suspects" on Sand Hill Road and the Bay area. The interest level and feedback has thus far been very positive.
BK: Who are the founders of the smallplanet, and what do they bring to the table?
HH: Here are the bios of the three core management team members:
Hunter Heaney, Founder & CEO
An honors graduate of University of Pennsylvania and Harvard Business School, Hunter worked in investment banking with Goldman Sachs in New York and Hong Kong, and Robertson Stephens in San Francisco. After several years in Corporate Finance and Mergers & Acquisitions, Hunter founded Los Angeles based MXG Media, Inc. in 1997, served as Chairman & CEO, and secured over $45 million in financing from Barry Dillerıs InterActiveCorp (formerly USAi) and Urban Outfitters. MXGıs pre-IPO valuation from lead underwriter JP Morgan was $300 million in 2001. Hunter has appeared on CNN and been featured in Forbes, The Wall Street Journal, and Inc. Magazine.
Ken Torimaru, Director of Mobile Technology
Ken has eight years experience in software and mobile application development spanning a wide breath of technologies. He developed a first-of-kind version of the Web camera that provided still images and MPEG1 video of beach locations in Southern California. Ken served as Technology Director for ClickZ , a publisher of Internet marketing newsletters. Since early 2001 Kenıs focus has been on independently developing mobile games and other other wireless platform software development. Ken been developing mobile applications on the Symbian based Nokia 9200 series phones and J2ME based applications before J2ME phones became available in the United States. Ken is a graduate of California State University, Northridge.
Shawn Goodin, Director of Web Technology
Shawn has seven years experience in building and managing web-based enterprise software for fortune 500 companies including Lockheed Martin, ChevronTexaco, ING, Siemens, Dollar General, Viacom, Bristol Myers Squibb, and Levi Strauss. Shawn was responsible for coordinating the efforts to define, develop and deploy Accruentıs (previously MyContracts) Enterprise Contract Management Suite (cmSuite), a web-based, enterprise class application that enables companies to manage their corporate contracts and negotiated agreements. Shawn is graduate of University of California, Los Angeles with a Masters of Information Technology from American Intercontinental University,