i disagree with you, dave

this is a response to dave mcclure's post on check-ins and coupons vs. game mechanics.

first off, i don't think this type of stuff is well received in general because it's written by what looks like a lolcats text generator. but i'm the guy who uses lowercase all the time, so i can't really criticize (lowercase is cooler though, seriously).

point by point:

1) coupons

yeah coupons are cool, and they're more valuable than a badge or point. that's obvious. however, any LBS app deals with a chicken and egg problem. without users, you cannot attract retailer deals. and consider that these apps, with the check-in capability, require a gps-enabled device. how many penny-pinching people out there both own a high-end smartphone and also chase after coupons? coupons on a mobile device are cool, but the majority of people with gps devices are using expensive phones and expensive plans.  if anything, the game mechanics are a fun way to get users engaged and it makes sense that coupons would follow.

i like the way elon musk answered a particular question (9:00) about lowering gas prices and its potential negative effect on tesla:

"i don't think [the lowered gas prices] was a huge impact [on us]. most people aren't buying a $100,000 sports car to save money on gas."

even at that, coupons already exist in many apps.  loopt has coupons in the form of advertisements in its core product, and coupons also exist in foursquare.  unless groupon decides to focus exclusively on location-based coupon redemption, i don't know of an app that is growing faster than loopt or foursquare which offers location deals on mobile devices.

the business needs to benefit too.  they can't just give money away, that's not part of their business model.  you have to require users to check-in no matter what, so what's the problem with adding extra incentives?

2) user acquisition

twitter took 2 years to gain 1 million users.  that's a fair comparison because they started as a mobile company.  you cannot compare web startups to mobile startups; the cost of acquisition is enormously higher. on an iphone, you have to tell the user what your app is called, they need to type it into the app store, download it, open it, and register using a small keypad.  on the computer, they fill out a form and they're done.  facebook cannot be used as a comparison or benchmark, nor any other web startup.  there is only one exception that i know of here: bump.

3) funds required

didn't read much into this.  a lot of assumptions made, and random numbers.

some of the best things have been built because the founders were frugal and didn't have access to $500mm to acquire users.  i'd say most LBS apps are still ahead of their time considering the cost and reach of gps-enabled phones.