DASH Navigation: Right Turn Ahead
DASH Navigation announced that it is getting out of the device business and laying off a bunch of staff, although it is still looking to make a run at it as an application and service provider. There is a good summary of what went down on GPS Business News, even if I don’t agree with all the points.
I believe that there is, and still will be, some enormous value created by what they were trying to do… creating a real time connection between mobile location aware devices and location centric information with Navigation capabilities at the center. When someone recognizes this sort of opportunity and takes huge risks to try to make it happen, you can’t help but root for them to succeed and to show the way for the rest of the bigger and slower guys to follow.
As I had mentioned in previous posts, while it is still early times for their APIs, both in terms of adoption and functionality, they still seem to be many years ahead in taking the learning from the successes of the likes of the FaceBook and iPhone application development initiatives and the potential power they can yield. And their mere presence seems to have at least poked folks like TomTom into action with similar initiatives.
Chalk their “failure” up to the usual suspects, take your pick:
- The MVNO model doesn’t work in the United States certainly not for voice products and not for data with any stand alone consumer product that I’ve seen (if someone knows of one please do let me know).
- Being in the consumer electronics hardware business is tough for everyone, even tougher if you’re new to it and don’t do your own manufacturing.
- Its not a great time to be selling an expensive, luxury product to consumers
- How difficult it is to get retail distribution for new unproven products , no matter how innovative
The good side of this, is that it gets them out of a business that they probably should have never been in the first place, you can probably blame that one on management feeling the need to put $70 million to use, when building an application platform would have only costs a tiny fraction of that amount.
I wonder what the success rate is for tech companies chasing the dream of high margin, monthly recurring consumer revenue? It can’t be good , but I guess those one in a million runaway winners like AOL keep people coming back to try and try again to find that service that tips the scale just enough. By the way if anyone has any tips on how to cancel my friggin AOL service, I am all ears… I’ve been trying to do so for five years now!
The fall back plan for DASH could of course be the equally popular Silicon Valley model of giving it away for free to get enough people hooked and then making money from the advertising model… which doesn’t seem out of the question. Although I think they’d have to stop thinking of themselves as a in vehicle navigation company and instead think of building a more broad LBS platform to include phones as well. Either way, folks like Microsoft SYNC and Garmin should at least be taking a good sniff around.
