A heart-stopping moment for an entrepreneur: waking up to realize someone beat you to the punch in releasing a similar product that you’ve been working so tediously and tirelessly to build for months. As one entrepreneur here in Boston described in a guest post on BostInno just last week, “It’s going to feel like you’re swallowing barbed wire for a few days.”
This is exactly what happened to NYC-based entrepreneur Boris Bogatin when Color hit the app store in March, alongside an announcement that it had raised a whopping $41 million in financing. This financing was led, no less, by Sequoia Capital, one of the most respected venture capital firms in the world (investors in Apple, Google, YouTube, AdMob, PayPal, Tumblr, and Boston’s own KAYAK and HubSpot).
The Backdrop
The founders of Color, Bogatin and several other entrepreneurs are cornering what pundits describe as the proximity sharing space. This is whereby you, in essence, can create an instant social network based on your geolocation. From events to the office to the classroom, instantly and effortlessly connecting people who are physically near one another is a powerful idea.
“The transformative thing is that proximity sharing can truly affect and influence human behavior,” Bogatin explained to us in an interview last week.
Since Color’s launch, and while undoubtedly a bigger vision and all that capital promises more to come in the future, the app seems to have left users unmoved, with few finding a reason to come back and use it. This has certainly been the case in our experience trying to use the app here in the tech and college Hubs of Boston and Cambridge.
But what if the app offered more relevance – that is, a stronger connection between my media, the people I care about, and the physical world around me?
How LoKast Plans to Win
Enter LoKast, Bogatin’s app that launched today for iPhone (Android coming soon). Their tagline: “Physical life, digitally connected.”
Compared to Color, the product embraces more media types (conversation, video, music, links, photos) and more user control (read: groups and privacy controls). These work to create heightened relevance for users — one of two factors Bogatin firmly believes are key to his app’s success as a mainstream play and which current proximity sharing apps lack. The second factor: an incredibly calculated and refined go to market strategy.
Bogatin’s theory is that proximity sharing apps like Color and group chat clients like yobongo take a “horizontal approach” that offers little relevance to its users, and thus less virality. “You can’t create something that people randomly contribute to if they don’t get any benefit from it,” remarked Bogatin. “Colors success has really been when you’re there with others and they too are using it actively together.”
Bogatin strikes you as no short of one sharp entrepreneur, balancing deep technical knowledge with a keen understanding of sociology and consumer behavior. He went on to explain,
The one big reason why proximity is viral is because we choose our context very specifically. We organize with calendars and then go to specific clubs, specific offices, specific bars. This is our physical network.”
This physical network is where Bogatin’s go to market strategy comes into play. He is focusing on releasing and growing the app in Boston, New York City and Philadelphia.
“These are three hyper-physical markets we know well,” remarked Bogatin. “We’re looking for an inside-out marketing strategy within these cities, and is core to our thesis and success for the next six to twelves months.”
The idea of inside-out marketing is to not target just anyone, but to target specific people. In LoKast’s case, Bogatin and his team plan to not just target influencers in these three target cities, but physical influencers.
“Whether that’s someone holding a tweetup every week or a church community, we’re focusing on people who can help be ambassadors and drive viral growth because they are active in discrete physical spaces,” explained Bogatin. “The biggest key to success is getting user density. And achieving that distribution density takes a very specific approach.”
LoKast’s Evolution
Bogatin began building the technology behind LoKast two years ago. This robust tech allows people on separate devices and even separate networks to broadcast video, music, text, and photos instantly and quickly with others around you (yes, no matter if you are on WiFi or 4G and regardless of your device type).
He had limited capital at the time, but actually launched a slimmed version of the app back in March 2010 at SXSW – arguably a bit too early. While Bogatin told us they received good buy-in at SXSW, the pick up on the user side was not as pervasive as they had hoped moving forward. Bogatin cites the apps product features and interface as well as poor marketing as contributing reasons.
Regardless, the first release of the app enjoyed two hundred thousand downloads with several thousand current active users. And this latest release is sure to delight current active users of the app with its more streamlined and natural interface. “Our initial app release was a good showcase, but it didn’t have the effort on the product side. The new app is cleaned up — a loved version,” Bogatin said.
You can check out this video for a quick demo of how powerful a play this is:
Bogatin and his team, five in number, raised institutional money in 2009 from MBVC in Pennsylvania. Since then they raised an extension round, and are now formally raising a new round to help LoKast reach the distribution density he cites as being so critical to its success.
