Mister Beacon Episode #14
Opportunities in Proximity - Where Should Entrepreneurs Focus?August 30, 2016
Kevin Hunter, former COO of Gimbal / President of inMarket discusses where the opportunities are for entrepreneurs in the proximity ecosystem. We discuss audience aggregation, AR, Smart Cities, and the impact of Google's Eddystone on the opportunities to create value.
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Kevin Hunter 00:04
In markets, one of those Mobikwik, one of those there are other companies that are doing this audience aggregation to be able to put that to work because they know that brands will only buy if you have reach. And the only way to get reach is through this aggregation. And that's the data that's being built. And that's why I think proximity is starting to be a term that's being more comprehensive than just a beacon technology that first started kind of association. So I think the combination of some major things that are going on in the world from the machine learning and AI perspective, in conjunction with a lot of the location, proximity contexts, right? incorporate into a browser, we're gonna see some great things. So I think we're very beginning, I see a connection between anything that can give you context of that physical world and build out this experience that enhances it through AR, but I wouldn't advise my entrepreneurial friends to make those type of investments right now I go upstairs. If you're going to give access, you better have exclusivity, because otherwise somebody's going to come in and they're going to put their beak in there and then you're going to compete in those fees are going to be pushed down very quickly. And then what's left? Well, it's the media side.
You're listening to the Hitchhiker's Guide to the ecosystem with Steve Statler.
Steve Statler 01:18
Welcome to Episode 14 and The Hitchhiker's Guide to the Beacosystem. My name is Steve Statler of Statler Consulting. And we're doing this in partnership with our friends at Proxbook, don't get to check out the podcast version of this, you don't want to watch us then you can listen to us. But don't go because we've got a fantastic interview I am with Kevin Hunter. And Kevin is in a very unique position. He's actually led arguably two, three or four depending on on how you count it. Beacon enterprise it's so Kevin Welcome to The Hitchhiker's Guide. So just to kind of fill people in, you know, by my reckoning, it's three or four and beacon enterprises that you've led, the first one was, was fixed, which came out of Qualcomm labs. And that was just pure beacon play, and not really so much commercial players is actually helping to find lost kids. And then that morphed into Gimbal. When, when fix and the Gimbal context platform, which really had nothing to do with beacons had something to do with location, but nothing to do with beacons came together, then you were the chief operating officer of Gimbal, the company when it carved out of Qualcomm, and then you're kind of fourth one was in market where you were the president. So you've got a really interesting perspective. And I love our interviews with CEOs, but they've always got an agenda, they have to be disciplined about how they describe they've got a business and you are now kind of, you're in a transition. And I actually drove up to LA and love Venice. But it's a grueling drive. So I can understand why you have decided to spend a little bit more time here in in La Jolla. And so this is the perfect time for us to pick your brains. And so this episode is all really about where's the money, I want to I want to look into where the ecosystem is strategically, and give some guidance to people about where they should avoid and where they should maybe look at and get your perspective on what's happening.
Kevin Hunter 03:28
I've been looking forward to this conversation. This is great. I think you left out one piece though, right? The Qualcomm retail solutions, right? That's where you and I write offices next to each other. I had monitor envy. I had a very, very small monitor, you had the 24 inch, 27 inch, whatever it was Mac. And I was always trying to find a way for it to put one on my desk. And so I appreciate your help in that.
Steve Statler 03:52
Yes, well, I'm glad to help with that. And it made for some very entertaining conversations and some good brainstorming. So maybe, by way of kind of recapping on the last two stops that the Gimbal and the enmarket. Both of those companies sell beacons and both of them have networks. What's the difference? What was the difference from your perspective between Gimbal and in market as a newbie to the ecosystem? How would you help people untangle that?
Kevin Hunter 04:20
Well, I think we're just gonna back up just a little bit a little bit for Gimbal and inMarket, I think as you described, there's a whole bunch of time that happened before the forming of Gimbal, the company and even before, you know, some of the beacons made it out through the iBeacon standard and all that. So there's a lot of companies figuring out how to use this mobile device to be able to figure out a bridge the consumer with their physical locations. And as you pointed out location has been one of those components for a long time. But this new micro type technology, micro location technology, such as beacons came along. And so a lot of companies were trying to figure out how to use that right and they're trying to figure out what's the best use cases I remember writing hundreds and hundreds of use cases and Some were good, some were bad. But there are all different use cases within this technology could be. And obviously with the way the transition went with Gimbal at Qualcomm, Qualcomm labs right out into its own separate entity, we saw retail, we saw the brands, we saw the venues as a real opportunity to actually drive a lot of value. Now Gimbal was one of the first with a couple of others that are out there, but really did a foundational component of adding in this proximity layer, right, and the value that proximity can bring and help educate the market. So gimble, in the market, in general, has gone through some transformations, right. And it was a lot of education to begin with. And a lot of it started out with trying to help retailers and brands understand what this new technology is going to be what what was it gonna be like in the phones, right? How is it gonna be a user experience kind of be? What was the data that was coming? Right? That's what they're really starting to grasp onto now. And so what they can do with it long term, right? Where's the ROI against this type of investment. And so we've seen is that Gimbal first started out with putting a lot of beacons, right had very good beacons that they're putting into a lot of different venues in a lot of different people's hands. And they built a platform on top of comprehensive platform. And if you look at their tagline today, it's about that enterprise class solution, right. And I think that's really you got the Qualcomm foundation from engineering that really built into this enterprise class solution, really, a lot of SAS play, right. But then you have a kind of in the market, it also came from, in the same in the same space, but came from different perspective, As Todd mentioned in one of your video series, you know, they really came out of some, as a publisher, first, as an application developer, they had checkpoints, they had lists these great applications, and they still are great today. But they really understood the value of what the consumer wanted to feel, and how they wanted to experience location and proximity type engagements really putting that product in the right person at the right time, right moment, they were some of the first to see that because they had their own applications to be able to drive that kind of awareness.
Steve Statler 06:51
It's which was Gimbal.
Kevin Hunter 06:54
You're right. So it was more of building an ecosystem, getting an SDK and a whole bunch of different apps, right. And then basically, what that ecosystem flourish were in market came from, I have an app, I have an audience, and I want to actually create value for that audience. And I want to extract value for that audience as well and return that back out to the ecosystem. And so I think that's kind of where you see two different starting points into the same sphere, right of this ecosystem, right, and then figure out basically where the value is going forward. And you have what I believe is an enterprise type SAS model with goodwill. And you have what Todd's described, as well, as a media proximity media type play, right? For brands and advertisers, this three sided network, right, where you have venues and you have audiences, and you have brands that come together, and they they buy that new inventory creation that's happening. And I think that is a significant direction where the market is going.
Steve Statler 07:43
To me Gimbal, as is got a much broader focus. So what I see with Gimbal is you can use that platform for anything, stadiums, retail enterprise, anything, and whereas I see in market has been very, very focused, us specific set of venues, and maybe that's wrong, but I kind of associate them with with retail and Miles mainly. Whereas Gimbal's off doing all sorts of things.
Kevin Hunter 08:11
I think you're right, I think Gimbal built this platform to kind of figure out those hundreds of use cases, which one, we're going to pop up to the top, which ones are gonna be the value propositions, nobody really knew, right. And so we built this platform, when we were a gamble, to basically take advantage of those different opportunities out there. And the ones that rose up were the ones that you kind of focus in on you go after were in market really had a you know, a laser focus from the very beginning, they knew the value that was out there. I mean, if you think of the brothers that founded in market, they knew how to create value in this advertising space, they knew how to, you know, basically create that value for the consumer and for the brand. And so they took that knowledge, that experience and that success, and they drove with laser focus into actually creating the value for the company. And I think that's the difference is they went after brands and advertisers for this inventory component has been created, versus gambled trying to open up a plethora of use cases for the whole world to try.
Steve Statler 09:01
Really just a development platform and SDK. And I think, you know, if you look at what's Gimbels success can be measured in how many apps do we have using our SDK, which is, you know, I know that they have many 1000s of people that have downloaded the SDK, my guess is the enmarket have a lot smaller and improved people using their SDK, but it just so happens that their apps with millions of users, so really interesting approach Gimbal broad play in my mind, in market, more vertically focused and it's not that one's right and one's wrong. Blue things I wanted to ask you is just about some of the use cases that you've seen and that you like so what where are the pockets of success that have really made you think up then it doesn't necessarily need to be on Gimbal or inMarket's platform, but where are you seeing success in the beacon ecosystem?
Kevin Hunter 09:59
Love those warm, you know, feel good type of use cases. As you know, I'm involved with the San Diego Museum of Art. And the San Diego Museum of Art also incorporated beacons into the experience down there. And they have a wonderful app. And that app is beacon enabled. And I think that's one that really brings to life right of what's around you that incremental value of being in that setting, right in that exhibit and the information that you're probably not necessarily going to have, at least as for me, I wouldn't have unless I wanted to go seek it out, it's brought to me so I still love those feel good use cases. I know they're not retail or brand focus. But those those are the ones that I think are still valuable, because they they give consumers this incremental surprise and delight a value inside these environments that you wouldn't necessarily get if you didn't have a beacon type technology, I think one of the things that we kind of get focused in on is just one technology. We call it a beacon. But I think what I hear in the market these days is really a term called proximity, right, which is more comprehensive of other technologies that are incorporated into the overall experience. So beacons are one of those for sure. So is lat long positioning, so as GPS geofencing, right Wi Fi technologies, and so it's a stack of technologies that are incorporated into one term. And then when you look at it from a retailer's perspective, they're using these technologies to find the best way to understand and then communicate with them, and you just can't have one went out, they have to be incorporated together, because they have different value sets. And I know you've heard me talk about this before. There's the macro plus the micro on that, right. And so some of the GPS and geofencing technologies are very macro. And then as you continue to go closer and closer and closer, each one adds another layer of value. And I think that's the data that's being built. And that's why I think proximity is starting to be a term that's being more comprehensive than just a beacon technology that first started kind of association with it.
Steve Statler 11:47
So I know that so beacons and retail seem to go together. And of course, there's many other verticals. But if we just look at retail, from my perspective, the really successful beacon deployments have actually not been reached with the retailer's app, it's been, you know, Shopkick, who've done incredibly well, and it's their app and you look at in market, it's generally not the retailers app that's driving all the activity. Do you think should the retailers just be giving up on their apps? Is there a future for the retailer app?
Kevin Hunter 12:16
You know, that's is a wonderful question, because I think what you're you're pointing to is scale, audience scale, right? I think when we first started this endeavor on what beacons can do for retailers, it was really a one to one proposition, I have my my retail stores and I have my retail app. And they were trying to make a business case, to be able to make that work, right. And for the investment that was needed to actually put this technology in place and the experience to be driven right. And to grow that market, I think what we saw was, is that retailers only have a very small set of their shoppers that truly only have their app, right? So you need to find a way to reach and that's what you're starting to see audience aggregation from a proximity standpoint, how do I bring together an audience, leveraging apps they already have on their phone, right, and to be able to communicate with them and be able to drive through those channels that are already in place, right, versus trying to do this huge user acquisition type plan and strategy. And so I think this is where the next generation is going is that retailers are finally starting to realize that they need more than just their apps, they need something a little bit more comprehensive, and a marketing channel and an advertising channel media channel to be able to reach their consumers, especially when they're in the stores because their apps just aren't going to do it. Right. That's what I'm seeing out there is that retailers now are buying beacons putting them in. And they make it to their app later to incorporate the SDK, right. They're starting to leverage the audience aggregation that's happening from a lot of these different companies out there in markets, one of those Mobikwik he's one of those, there are other companies that are doing this audience aggregation, to be able to put that to work, because they know that brands will only buy if you have reach. And the only way to get reach is through this aggregation at the moment.
Steve Statler 13:52
So they're not necessarily giving up on their own apps. They're not giving up on veganizing their apps, they're just looking at it more broadly, they're building a beacon infrastructure, and their app is just one of many apps that may use it.
Kevin Hunter 14:05
I think what you'll see is, from a shopper marketer perspective, I think you'll see an enhanced experience, obviously with their own app, right that there is value for using getting users on that app that you're going to be able to provide. And that experience may be better than anything from the audience aggregation. However, you still need reach where you don't have it from the audience. So I think it's a it's kind of a two sided type plan. I need to bring in the audience to be able to bring track the brands as I invest in making my experience the best of my own app to try to get this user acquisition strategy going.
Steve Statler 14:37
So which is going to take longer, so that that makes sense to have a dual prong approach. So the other approach to this challenge of getting people to use your app is to not have an app at all and to use physical web Eddystone URL that approach what what's your, what's your view on that?
Kevin Hunter 14:56
But first, the browser is an app, right? I mean, the browser is so right after Big Apple does a whole bunch of things, right. And I think that's, that's a natural conduit for basically leveraging this type of proximity technologies out there. Because that is an app that we'll go to, that's an app that's going to provide us value that's gives us a path to a whole bunch of different areas, is it additional bridge to a lot of the other digital strategies that are being put in play by brands and advertisers today? So I'm excited to see where it goes, I think it's like in the very beginning of the first generations of what can be done there, I think, they're probably going to be some consumer knobs and levers that need to be put in place for control. Because I don't want to walk down the street or walk through the mall or walk through any environment, and I have a whole bunch of notifications going off. So I need to be able to kind of swap categories or select retailers or select venues that are very specific to me, that my guests through AI and machine learning a lot of that's going to populate up for me anyways. Right? Yeah. So I think the combination of some major things that are going on in the world, from the machine learning AI perspective, in conjunction with a lot of the location, proximity contacts, right and incorporate into a browser, we're gonna see some great things. So I think we're just at the very beginning.
Steve Statler 16:04
So you're looking forward to the challenge of I've got all these URLs that are being broadcast all over the place, and I'm going to have URL overload, but the way I look at it at the moment is there aren't enough, you know, I really want to I want that problem. And interviewed Scott Jensen from Google. And he really clearly sees Google's role as being the indexer of the Physical Web and having the smart people who can do the AI to figure out what's relevant to us. And in a way, I'm kind of frustrated by that, because I feel like Yeah, but we've got to survive the next year. And there just aren't very many physical web beacons that I see anywhere. There hasn't been the MLB deployment, Apple Store MLB were kind of the things that got iBeacon into people's consciousness, I don't see the iBeacon implementations that have broken through into the headlines. And do you think that's ever going to happen? Or do you think it's just we just have to be patient, but
Kevin Hunter 16:58
I think the MLB is a great example of where iBeacon did kind of pass through and wasn't the headlines. And I think MLB did a fantastic job with rolling out across all their venues. Right? And then having this experience built into at the ballpark. Fantastic, right? That is one of the better ones that has happened. I think that iBeacon, the first generation of iBeacon, the specification is basically Kickstarter, this market, I think Google's doing a good job of adding to it. Right, they built out a lot of things that appeared missing out of the spec, others were doing it on a proprietary fashion, right in the market. I mean, you had you know, Gimbals and squirrels and others in the world, bringing together a lot of their different proprietary technologies, right, and basically incorporating a lot of the feature sets that are now available in Eddystone. So I think from a market perspective, Eddystone was trying to drive where there were potentially some initial gaps.
Steve Statler 17:51
Interesting. Spectacular insight.
Kevin Hunter 17:55
Steve Statler 17:55
I think it might be a drone.
Kevin Hunter 17:59
So where were we were talking about some of the gaps that were being filled by? Yeah, the the specification.
Steve Statler 18:11
So let me interrupt you. You live in La Jolla, you've got the beautiful view of the beach, you're gonna have a few downsides. Exotic insects are one of them. So what do you think Apple are doing if they just kind of lost interest in this iBeacon thing, because we've got iBeacon. One, there's not even been an iBeacon 1.1.
Kevin Hunter 18:34
I do not want to basically predict if Apple has lost interest in it, my assumption is, is that they are doing a lot in overall space of you know, contextual awareness and proximity. And you can see in the news, they're doing a lot with VR AR especially right, and I think what you find is that there's a significant amount of value, especially with AR, basically having this micro type location technology. So my guess is you start to combined a lot of the things that are happening in the space and you put them into a package into a muddle, you have to make sure you're making the investments around them to make sure you get the most experience most value out of it for the consumer. So my guess is Apple's thinking about what what is next, right? They see what's going on, they definitely keep their eye open to what's happening in the market. And I think they're making investments on the adjacent side that are going to need to enhance some of the specifications.
Steve Statler 19:22
Well, that's an interesting point so that, from your perspective, they're looking at beacons, just as just being one spoke in a much broader set of things that drive and experience and so maybe they need to do some more on AR, and then they can worry about filling in some of the gaps that are left with the $1 the specification. So just clarify a little bit more. Do you see a connection between beacons and AR?
Kevin Hunter 19:48
Absolutely. I mean, I see a connection between anything that can give you context to that physical world and build out this experience that enhances it through AR and I think is either either location Shouldn't macro location type technologies or beacon type technologies, but nonetheless, their data signals their location and proximity data signals that will feed to the experience? And I think they're, I think they're critical, critical to the overall. Let me get into the venue, let me get into the specific area, and be able to actually bring up something that's relevancy.
Steve Statler 20:19
So if beacons are helping the the mobile app, figure out where am I, and what's the significance of these objects around me, then AR can be used to provide the overlay that can communicate that.
Kevin Hunter 20:31
I think, you know, if I back up just a little bit, and I was at the location Leadership Forum for the MMA back in was March. And they had one of the head guys from the MRC, the media radiance Council up on stage. And he made a comment about beacons. And he said, beacons are one of the most precise location data signals that are out there. And I think, because it's so precise, that is going to be used across this big chasm of different experiences. And I think h a r will be a big beneficiary of using this precise data signal to make sure that you get that most accurate type AR experience.
Steve Statler 21:05
Pretty cool. Plus places we could go, let's, let's just finish off on Google before we move on some of the other areas I want to get to where people should be going to and where should they be steering clear of terms of making money or not making money? But what about Google making money? Why are they investing all of this resource into Eddystone? Because it truly is comprehensive? I mean, it's way beyond iBeacon. I wonder, though, at least from my perspective, what what do you think their endgame is?
Kevin Hunter 21:39
Well, you know, there are so many possibilities for that end game, it's, I see it a couple of different ways is that first of all, is they've done a phenomenal job, they are search right there on the market, they, they have they own it, right. And so they own it on the digital on the web on mobile, why not own in the physical world as well. So you need some additional hints from the physical world to be able to actually make sure that search works extremely well in that space as well. And I think a lot of URLs and a lot of metadata associated with those URLs help feed in right to the search criteria, or the discovery capabilities of the physical world. So I think it continues to feed their current revenue streams, right of for how they're actually doing search and the the advertising associated with search associate or for that. I also think that if you look at it from an IoT perspective, I think it's a technology that can scale across many different initiatives that they have going on if you put this type of technology into devices that we have in our house, right. And it's consistent from a strategic standpoint, that can be utilized through Android, it can be utilized to the web, I think that gives us more connections, more relationships with the world around us.
Steve Statler 22:43
My take on that is if IoT is basically everything's connected, then it makes sense to have a sensing layer on top of that, so that you know what to do with all these connected things. And knowing where people are, what they're close to, that allows us to gadgets on and off.
Kevin Hunter 23:02
And I think discovery is one of the biggest components.
Steve Statler 23:04
Brings back to the first thing you talked about, which is search. And just at a very practical level, if I'm doing Google search, and it knows I'm in the grocery aisle, it can just do a better job of maybe figuring out what the heck I'm searching for. Right? And then back to the CFOs perspective, I don't know who the Google CFO is. But he's got to be looking at AdWords. I mean, they make a huge amount of their revenue from AdWords, on AdWords just going to be worth a lot more if you can say, target this AdWords for this location. Is that? I mean, do you think it's about AdWords? So it's obviously broader. There's a broader,
Kevin Hunter 23:39
I think the broader what you're talking about is the data. Yeah, it's the data that can be generated. With this type of technology.
Steve Statler 23:45
Will the retailers let them get the data, though?
Kevin Hunter 23:49
on what the relationships and partnerships are? Right? My understanding is, sometimes it could be a love hate relationship with Google. Yeah, I'm a retailer perspective. But I still think it's their necessity in the overall equation for how they actually want to reach consumers. So I think that they end up, you know, collaborating, working together on many different activities. So I think that, depending on the relationship depend on the retailer depend on the partnership, I think that there will be access to some of that data. I think there'll be some that will be definitely secure, right? transaction data, T log data, probably will not make it all the way back. Right. I think that's kind of the crown jewels are gonna hold that. But I think that there will be some bridge in between for which some data can be utilized with Google on that data.
Steve Statler 24:29
So generally speaking, what advice would you give to the CTO at a venue? Should they be going with some proprietary middleware from a beacon vendor? And who knows whether that beacon vendor is going to exist or who's going to own them in a year's time, right? Or should they be saying no, I want my solutions built on Eddystone. What what do you think the pros and cons better?
Kevin Hunter 24:54
I don't think it's black and white. Right? It depends on what they want to do with the technology inside their venue. Yeah, I do. I think Eddystone is definitely taking a lot of best of breed and kind of incorporated into the packet format and also the services around that. Yeah, I think that puts pressure on some of the players in the ecosystem as well. I mean, if we talk about, for example, beacons being commoditized, I think certain layers of the stack are being commoditized. By Eddystone, getting out there as well, I think that were publishers or retailers, were going to pay for something in the past, or at least had been asked to pay for something. It's kind of coming for free now from Google, right. So it's pushing them up the stack a little bit to create more value propositions for which they can build their businesses on, right. And I think that commoditization is something that is moving the market forward. But again, it goes back to your question is, should they choose Eddystone? over everything else in the market? It depends, right? It really depends. I think, Ediciones getting some traction, I think we're in the beginning. And we'll have to wait and see.
Steve Statler 25:54
All right, you talked about the stack and the pressure being applied by Eddystone onto the layers of the stack, let's drill into that and kind of starting from the ground up. And just tell me where you think the areas are that you would advise your entrepreneurial friends to avoid and where they should kind of consider that the opportunities are. So we've kind of got the chip business. And I mean, these guys, they make money, pretty much however, this goes I mean, assuming that beacons take off, so people will be getting in many companies.
Kevin Hunter 26:29
To make money, but very, very small margins, the cost of the chips are really inexpensive, right? And so the margins are very, very small. So you got to have a significant amount of volume to really make money in that business.
Steve Statler 26:40
So how much roughly does a chip cost?
Kevin Hunter 26:45
I, you know, from what I hear in the market, let's just say around a buck, right? Yeah. or less. Okay. And so I mean, they're for discrete, you know, BLE type chip.
Steve Statler 26:53
Yeah. And then you could buy a module. And that's maybe a little bit a little bit more, right.
Kevin Hunter 26:58
Because you'll have a different package of, you know, antenna, and so FCC serves and everything else with it, but from a silicon chip perspective, SOC. Okay, they're cheap,
Steve Statler 27:06
right. So we probably won't be advising our friends to get into the Bluetooth smart chip business hardware.
Kevin Hunter 27:11
It's hard anyways, right? And especially at the silicon level.
Steve Statler 27:14
So that brings us to the beacon business. So is there. So what what's your kind of forecast on people making money selling beacons.
Kevin Hunter 27:23
Just beacons, justbeacons? I think that some will went out some will be able to create good businesses on that. And they'll have scale the volumes that make it, you know, attractive for good returns. I think a lot will fall off, I think we've seen a lot fall off. I think we saw a lot of, you know, 3d printed beacons. Early on, I think you don't see as many of those anymore. I think you see some players that are definitely popping out of having quite a bit of Beacon inventory, a lot of beacons in the in the market right now.
Steve Statler 27:51
Who do you think some of the contenders so you don't need to be exhaustive. And we'll take sort of Gimbal as a given will be, but who are the who are the beacon vendors to watch.
Kevin Hunter 28:03
You have since URL, since it was out there, they're doing some great things.
Steve Statler 28:07
Kevin Hunter 28:08
China, you have Estimote they're doing some great things, you have Kontakt as well. And when I think of Beacon vendors, I think of you know, I know they're going AppStack, but that's the beacon vendors that I think about, you also see beacons being integrated more than infrastructure type components as well, you know, Wi Fi access points. And so you start to see that they're being put in venues. So they are a big beacon vendor.
Steve Statler 28:29
This is one of my favorites I can look at. And I agree, I think there are some of those beacon guys. pureplay. Guys, they're gonna get bought by some huge infrastructure provider, which is where the Wi Fi guy is coming up.
Kevin Hunter 28:40
That's, that's what I see as well. So once they've made their choices, right, then what happens to the rest of the beacon, you know, only vendors in the market, right? Yeah. Do they survive? Do they have to pivot to change their models? I don't know. But I wouldn't advise my entrepreneurial friends to make those type of investments right now and go up stack, right.
Steve Statler 28:56
And so we got past the beacon level level, maybe the next level up is the management layer of fleet management. You know, what, is there still a business there now that Google's got a dashboard? They've got the API's, is there still money to be made? And fleet management?
Kevin Hunter 29:13
Well, is Google charging for fleet management and those API's? No, they're not. Right.
Steve Statler 29:18
We're willing to give up your data and tell them where the beacons are?
Kevin Hunter 29:22
Well, in and I think a lot of people will say that's worth doing, right? Because I don't have to pay for it. Yeah. And I think that's one of the commoditization type layers that we were just talking, I think, unless you're an infrastructure player, and you're big, and as part of something larger, right. And you have those it relationships that are really or operations relationships that are doing that fleet management, you're kind of, you know, being commoditized out by like a Google air.
Steve Statler 29:45
So if I'm providing the software for a network operating centers that are already monitoring the Wi Fi access points, and I should be adding beacons to that and I think those guys are so that's fine. Is they are Yeah, so so there's there's value there, but no value for the new entrepreneur. So you know what's next we go up to the next level and to, to my mind that kind of middle where level which I call orchestration, which is kind of taking all the cacophony and chaos of be contributors and turning into something that people might be interested in figuring out what the x and y is, and doing the kind of content management and campaign management that brings sense to that. Do you think there's still a play there?
Kevin Hunter 30:28
Well, I separate those two layers a little bit. And the reason why I do that is because I think what you have is some, some individuals, some companies out there, where if you have enough scaling, you have enough ability to actually aggregate those data signals, you can then kind of be approximately DMP. Right? You don't necessarily have to have the campaign management solution. What's the DMP data management platform, right? Where you can basically sell off these signals to other inventory, other experiences other players in the in the ecosystem?
Steve Statler 30:55
And what would be some examples of CMP?
Kevin Hunter 31:00
Unicast. I think they're doing a great job. From a proximity standpoint, they're aggregating a lot of information around beacons and proximity data. They're looking at that, and they're helping provide that back to the market. Right, right. And they're obviously creating value when they do that. And I think that's kind of a DMP, in traditional sense, like a blue skies, a DMP, that's out there for you know, a lot of Oracle, they are part of Oracle. And so that's kind of the data management layer of that.
Steve Statler 31:23
So this is kind of where beacons and the advertising ecosystem start to collide. So normally DMP part of programmatic advertising, we got a chapter that on that in the in the book and actually one of the interviews that I'm looking forward to in the in the future is the the professor that wrote that chapter. So we won't spend too much on that. But it kind of also brings us into the network specs, which may be back to the beginning, where we started with the Gimbals.
Kevin Hunter 31:50
Different different definitions of networks that are out there. Right. So you can talk about it from my just a beacon network for which I sell access to yeah, my proximity media network, right, for which brands and advertisers can buy against. So yeah, let me separate out those two, because I think it's extremely important. Yeah. as a, as a player in the network access fees, that's what you're gonna get, right? You're gonna get network access fee Type value.
Steve Statler 32:18
Right? I would call that in the book, we call that the beacon access network. So I've got a beacon, use it for whatever you want. And it's basically pay to play to access that. And that's what Gimbal does.
Kevin Hunter 32:27
Yeah, that Gimbal definitely has that. That's one of the features that were there for their platform. And I think with that is that that's a tough model, because you're not necessarily the inventory, right? You're not necessarily delivering, you're just like measuring, right, you're not doing potentially the full attribution. So you're, I think you're leaving a lot of value on the table when you do that. And you have to have massive scale to generate enough data signals from that network to be, you know, kind of attractive to somebody who wants to kind of buy that if you have some exclusive type relationships, for example, like mobility in the malls. Those are pretty interesting. So those from a beacon access network, that can be very interesting to be able to actually leverage some of those exclusive relationships inside those mall properties or inside those venues. And I think that's the most interesting, interesting component of an access network, who can get the most exclusive location snatched up, right.
Steve Statler 33:20
So if I can lock up ballparks, if I can lock up, if I can walk up certain kinds of fast food, so there's maybe a vertical play in there, and then you then you're, then the value is in the kind of venue and you're not as worried you're saying I'm going to let other people build on top of what I'm doing. So there is a plan, I think for the beacon access there. You're right, it's got good against the scale.
Kevin Hunter 33:42
But I don't think that's that's not where all the value is, it's gonna be a percentage of the overall absolute value that's created. And I think that's what you're gonna get, you're gonna get a percentage. And if you have massive scale, that percentage can be very, very attractive. If you don't, right, then I think then it can be a little, little scary. I think the exclusivity is really the key component to network access, right beacon, beacon networks, if you're going to give access, you better have exclusivity, because otherwise somebody's going to come in, and they're going to put their beacon there, and then you're going to compete in those fees are going to be pushed down very quickly. And then what's left? Well as the media side, right, and the media size left. So the inventory inside of the publishers inside that audience, right? Do you have the reach? Do you have good applications? Do you have good media, good inventory for which brands and advertisers want to buy based on consumers that are using those applications that go to the store? So I think that's the next component, if you have a good audience, and you have a good audience is, you know, has applications for which the lifetime value is very high, or the engagements very high with those apps. That's very, very attractive to brands and advertisers, especially if it's in the right context of the environment, because they're going to get the most return the most engagement associate with that. I think that's where the value is, being, as you said, three or four different areas of this market. I've seen quite a few different sides of of what was happening. I think the real ad that's being created is in the media side, those were the big dollars are otherwise you're just a percentage of the overall network?
Steve Statler 35:06
Well, I think you're right, if you're looking certainly in the short to medium term, then you want to get as much value as possible. But if you're actually making a platform play, if you're essentially providing the operating system to the physical world, and you maybe don't want to go in there and be competing with all the people that you want to help people make money and sort of make it up in volume. So that brings me back to the question of smart cities. So another kind of approach. Look on the, on this networking thing. If I'm a man, should I be thinking about putting beacons in as part of the street infrastructure? And I think it's public in the public domain that Gimbal came out of Qualcomm, Qualcomm, Google working on the link, and why, which is one of my favorite examples of the beacon network, just because it's so cool. And it's like, super awesome. So that's in the book. But what's your view on that for smart cities? For mayors, should they be planning beacons as part of the infrastructure?
Kevin Hunter 36:09
I think you plan for a whole bunch of different proximity technologies, because you you don't know, right? You don't know which one is going to win out, you don't know how they're going to be used in conjunction as well, right. And I think beacons are one technology that's relatively inexpensive to put in, and can offer a tremendous amount of value to civic service type applications to other types of consumer based applications. I also think that if you from an industrial IoT standpoint, it's an easy way to actually help crowdsource other data that's happening inside of the environment as well. I mean, if you think about some of the things that Eddystone has put in, like the telemetry packet, where you can add additional sensor data, right, if you can put environmental type sensor information in that telemetry packet force that was designed to do, right, you could then use that crowd that's out there, maybe it's the browser, maybe it's other applications, but it helps reduce infrastructure costs for basically listening, right, and being able to actually understand what environmental characteristics are going on, it could be pollution, it could be a whole bunch of things. It could be foot traffic, and it could be a whole whole wide range of activities based on that data that can be used. And you could potentially use a lot less infrastructure to try to collect that data, because you can use basically, us right as consumers to help do that.
Steve Statler 37:19
So being smart about running a city is having data. And so this is a way of getting more data, and you can maybe track how your contractors are doing in terms of their their work and all sorts of stuff like that. Can you make money out of it? Is there is there a business for plumbers that want to make money from beacons in their smart cities?
Kevin Hunter 37:37
I mean, are you are you suggesting that they sell the data? I don't know. I don't know, either. I think one of the things that that's gonna be yet to be proven, is there going to be value that can be created from this proximity data from beacon technology? Right? Can they do something with it? Is there some way they can leverage that data and making the infrastructure more efficient? Right? So it could be cost savings in the future? So is it make money it's cost savings? Is it efficiency associate that I think that probably all the above. And I think that they'll use this technology to be able to drive that because a lot of cities can use the incremental revenue, they can use the incremental cost savings as well. I think when you combine that together and a good business plan, I think that cities are going to see the value in.
Steve Statler 38:18
Going back to link NYC, which is basically this ultra high speed Wi Fi and these kiosks going up and down the the boroughs of New York, you can debate as to whether that's going to generate revenue for the city, I have no idea whether they get a revenue share or not. But what is not debatable is they're getting a bunch of value for the citizens because they're getting Ultra speed, high speed Wi Fi for free. Yes, because those kiosks have advertising potential, they got digital screens, and beacons are just one of the things that is creating that value. That means citizens get free browsing through charging, have their phones be access to the internet. All right. Um, so. So what other areas have we forgotten? Where else should entrepreneurs be looking to make money?
Kevin Hunter 39:09
I think that we didn't put enough emphasis on the data side. Okay. I think data is the real currency that's being created by this proximity, like evolution. Yeah. I think that will that data is going to fuel a whole bunch of different business models going forward. And I think what we're seeing out there today is that we use that data to be able to do that right moment, right time engagement type opportunity for consumer, I think a lot of that's going to be fed back into predictive modeling, that's going to be able to use that data set to help understand when and how you can can get ahead and communicate with the consumer. And that can be through different digital inventory. I think, as Mark said in your last episode, is that you know, they're using that type of data to do a lot of predictive and their quantum receptivity products. I think that's very interesting to how the leverage that physical world data and then translate that in reverse Right to the digital side, I think we talked a lot about bridging the digital to physical world, I think that physical world component is now going to feed back into the digital side. And that data components can be very important to actually make sure that you understand your consumers, you understand the paths they take, right? understand those right moments, initially, the value is being created.
Steve Statler 40:17
So the data is the gold or one of the one of the gold nuggets in this stack. That's for sure. But I, the who owns it is the question. And I keep on thinking of an ugly divorce where like, there's multiple parents involved. And they all think that they own the kids, they all think that they own the data, the user thinks that they own the data, the venue thinks they own the data, the app thinks that they own the data, the beacon network thinks that they own the data. How do you solve that problem?
Kevin Hunter 40:45
Well, I didn't say it's not without a challenge. And there are definitely challenges that are out there that you need to kind of figure out, but I mean, let's start with who initially owns it, that you and I write, we are the consumers who are the ones generating it. And we're the initial owners of that. And I think when we sign up for services, you know, we then grant certain permissions of our ownership or our licensing of our data, to these services to these platforms. And I think you ever mentioned anything about privacy yet, I'm sure it's coming. But I think as as a consumer, I want to make sure that I can opt in, and I have transparency to what I'm opting into. And I want to make sure that I can change my mind after the fact. And so as the owner of my data, I think that I'm going to license it out to people who can create value for me. And at the end of the day, if I want to turn off those relationships, I just need the right to do that.
Steve Statler 41:34
All right. Very good. So on the privacy front, I I'm gonna save that for another episode, because then the answer a whole episode and its own its own right. Unless there's Do you want to give us like, a couple of soundbites on what you think the keys to privacy?
Kevin Hunter 41:50
Yeah, it's opt in, absolutely opt in, right, I want to choice, I want to choice upfront, I want to know what I'm opting into. And I'm human, I may change my mind. And I often do, and I want to be able to change it and opt out at the end of that. So I think those tenants, when done right, by the publishers done right, by the ecosystem, will will basically create the value the trusted value between this entire ecosystem and the consumer.
Steve Statler 42:17
Do you think the solution to that problem is just best practice and maybe some industry associations, getting people to do the right thing? But do you think there's an opportunity for a piece of infrastructure that allows me to go to one place, opt out of everything?
Kevin Hunter 42:32
Well, we haven't seen that on the web, right? So I'm not sure we're gonna see it on the on the proximity side. But we're really happy to have industry type groups being able to push that and like the Future of Privacy Forum, right. They've really been strong advocates to do this, right. And I think by following a lot of those guidelines, or tenants of their policies, I think, as an industry, we all benefit from doing that. And I think at the end of the day, is that No, buddy wants to lose a customer. Nobody wants to lose a user. And I think that they're trying to do the right things. And I think by trying to do the right things, is that they're going to be able to create that value, and it's going to be trusted.
Steve Statler 43:08
Very good. Well, Kevin Hunter, thanks so much for spending time with us. This has been a great masterclass in where's the money and where the money isn't. And I think that's going to be really useful for people.
Kevin Hunter 43:18
Thanks, Steve. appreciate being here
Steve Statler 43:40
How do you feel about this trip to Mars? Is that something that kind of excites you or?
Kevin Hunter 43:45
You know, get a little older, more wiser? It's, it sounds exciting. But I have a family right? And, and to take my, my family with me would have to it's a necessity, right, and I have to be along for the ride.
Steve Statler 44:04
Well, we won't talk about whether or not you can take your family with you, because I don't want you to back out until we hear what music you would take with you.
Kevin Hunter 44:10
Oh, that's it, I thought long and hard about what a playlist would look like, if I was going to Mars, right? And so first, you know, gotta gotta think of my daughter, right? And she loves Taylor Swift loves Taylor Swift. So I gotta, I gotta include Shake it Off, right? Because I'm sure on this mission to Mars, I'm gonna have to shake something off and kind of just refocus. Right, right. And it's your favorite song. So I'm going to remind me of it right. And I love them. Yeah. And then my son, right? You know, when Pharrell Williams plays happy? Yeah. Right? That kid just jumps around. And I'm sure that would be a little bit of jumping around and just be happy on the trip. Right? So all of these memories of them, right? Yeah, we'll actually bring that trip to something bearable. And then my wife, she loves the Hand Clap song by Fritz in the Tantrums. She loves that. So every time I clap my hands when we were running around about She cringes just knowing that I bring my wife so much joy with that song I have to add to play it bring along. Another one. Another one is one from my parents. Minds me of them reminds me of, you know, my childhood. It's Louis Armstrong. Right? What a Wonderful World because when you arrive there, that's your home. It's your world, right? You better appreciate it better think what a wonderful world cuz you gonna be there a long time. Right? Awesome. Me and my child and my parents can have grown up. And where did you grow up? Kansas City? Kansas City, so Midwest boy. So we're gonna add one more country song to the list, right? I'm gonna get this eclectic type of Playlist going on. Absolutely. So add in a little bit of Florida Georgia Line, right. This is How We Roll. Like there's summer times in the Midwest and a pickup truck. It's kind of what it's all about. So, look, that's my playlist.
Steve Statler 45:48
I love that music selection. If I lose mine, I may borrow yours.