The Chicken and Egg Problem with iBeacons

As long as beacons require an app, that you probably don't have, there's a fundamental chicken-and-egg problem.

— Benedict Evans (@BenedictEvans) January 12, 2015

Benedict Evans had a good tweet earlier today and expressed my biggest concern about iBeacons – it’s a chicken and egg game. In order to trigger a notification to a consumer about an iBeacon, they have to have the corresponding app installed. That’s a tremendous chicken and egg problem from multiple angles:

If an app exists for a location, many won’t have it downloaded

I shop at many different stores on a regular basis, but I rarely have their apps installed – Whole Foods is a great example. A user’s home screen is valuable real estate and they’re likely to only have a ~20 apps on the home screen. Each retailer isn’t just competing with other retailers, they’re competing with Instagram and Snapchat. I don’t see it happening. The real promise of beacons is around the form of discovery – show me what I didn’t know I didn’t know about. If I’m walking through SoHo and there is a sale or an interesting exhibit to check out, tell me about it. If I’m in a store I frequent, but didn’t know about the ability to explore it more in-depth without beacons, I likely will never know that I could. Yes, you could put “install my app” signs everywhere, but that doesn’t convert well. It’s too much friction.

Many locations don’t have or need an app

The even bigger problem is that most locations don’t need a native app. This isn’t a native app vs. web argument either, as most restaurants don’t need a website either – the info I need is available on Foursquare, yelp, and Google itself. We’re still talking at a “Store level”, but beacons are more interesting to me when it could be for specific items such as statues, parks, and more fine grained places. There should be beacons for hundreds of millions of physical objects, not just millions. There is no need for an app for each of those. So if an app is needed to trigger an iBeacon and most locations don’t have apps, then we’re still stuck in the same problem.

What about automatically letting anyone trigger iBeacons?

No way this happens. Your phone will constantly be buzzing and going off with spam from marketers. Even if Apple got drunk and let this happen, users would turn them off fast. This would taint and ruin the iBeacons opportunity. I don’t see iBeacons being triggered without an app or passbook installed, so we’re still stuck in the same position.

The SDK Solution?

One idea could be to put an SDK distributed into apps akin to what an ad network does. If you had coverage across thousands of apps, you’d likely reach a large enough population. In theory, this gives you coverage, but it isn’t clean. It would be odd to have Angry Birds push me iBeacon notifications about the museum. IT’s also likely to just be a way to spam people with coupon nearby offers akin to Airpush tactics. I don’t see Apple or even Google letting this go on – the SDK would get banned fast. So no dice on this option either.

Safari:Browsing the web::?????:Browsing the real world

BLE is the protocol to transfer real world information, the same way HTTP was for the digital world. My gut feels that there is going to be an aggregation play of sorts here – fone app will be how we interact with beacons and the like, in the same way a web browser was how we interacted with the web. The real question is incentive – you would need a lot of beacons to display or something enticing. Right now, a beacon browser is like a web browser with no webpages. There has to be a hook or something clever here. A few options on how the aggregation strategy works:

Yelp, Foursquare, or Google Maps – Enable Beacon notifications and make themselves the premiere beacon platform. They are widespread and the incentive to have the app downloaded already exists. It might get complicated and I don’t know that the product or interactions look like.

Raise a ton of funding, give every small business a beacon – Tough strategy and requires a lot of capital up front. With this option you can have a destination app and also offer a Twilio like developer platform. It’s a big vision, but there’s no guarantee that you’ll provide an ample more amount of utility than Yelp/Foursquare without beacons. This is similar to the concept I talked about here.

Create some novel type of wedge – What is the simple toy you could make that gets people comfortable with beacons and makes the app downloaded a huge success? It’s likely something very simple and potentially silly. The question is whether the novel hook can thematically connect to the bigger vision. Example – A beacon tag game would get users used to beacons, but transforming that game into a beacon browser isn’t a thematically logical next step.

Messaging apps – This might be the most natural place to put this. iBeacons are likely to focus on push notifications as the primary entry point. The apps that send the mosh push notifications are messaging apps. I also see the WeChat Official accounts model coming to the US, where you can message and receive updates from any business/location. The beacon interaction and notification can be sent from that account you’ve added. It could also allow you to have fine grained controls of suggestions and other notifications you’d like to see.

All of this may be for nought. There’s no proof right now that beacons are solving a problem that consumer want, but I tend to be optimistic. I’m optimistic because we just haven’t seen any developers identify the problem and the clever solution associated with it. It’s bound to happen and it’s a big opportunity.