Darren Herman

I am about shoulders deep in the mobile space due to some cutting edge work we’re doing at work for some of our clients.  We’ve had some great success that has even landed our work on CNBC of all places.  Since 1998, we’ve been hearing “this is mobile’s breakout year.”  If I were to make a prediction, if the economy strengthens a bit, I’d say 2010 is going to be a big year for the mobile advertising industry.  Time and time again, I see mobile as part of our media plans and the subject of many of my after work cocktail conversations with both investors and corporate development types.

What I’m particularly excited about is the confluence of game theory and the mobile world.  To those who want a definition of game theory (taken off Wikipedia):

Game theory is a branch of applied mathematics that is used in the social sciences (most notably economics), biology, engineering, political science, international relations, computer science, and philosophy. Game theory attempts to mathematically capture behavior in strategic situations, in which an individual’s success in making choices depends on the choices of others. While initially developed to analyze competitions in which one individual does better at another’s expense (zero sum games), it has been expanded to treat a wide class of interactions, which are classified according to several criteria. Today, “game theory is a sort of umbrella or ‘unified field’ theory for the rational side of social science, where ’social’ is interpreted broadly, to include human as well as non-human players (computers, animals, plants)” (Aumann 1987).

When Dodgeball first emerged, it was well before it’s time.  However amazing the Dodgeball idea was, the adoption was limited by the device and consumer knowledge.  Later, my iPhone came and I installed Loopt, which is Apple’s half-assed attempt (so far, IMHO) to promote location based services and social networks which had similar DNA to Dodgeball.   Both of these apps had great vision, but never were realized (Dodgeball did have a loyal following pre-Google’s acquisition).

Last month, I was sitting with an investor and he asked me about FourSquare.  I didn’t know about it.  He told me to check out their website and within 24 hours, I was up and running and “playing.”  Naveen and Dennis (former founder of Dodgeball) are onto something.  What I love about FourSquare is adoption of Game Theory into this application.   The introduction of Game Theory creates a “sticky” nature which is competitive for players and keeps people coming back.  Whether you are trying to be competitive or not, it’s a great hook to this game.  Charlie O’Donnell wrote a great post summing up FourSquare.

FourSquare is interesting and I’m speculating some investment into the company in the near future.   I think that their application of Game Theory is solid and we’re going to see many more mobile folks apply this soon, if not already done so.  I’m sure there are plenty of people who have, just not on my radar screen.

FourSquare has real business implications.   Anytime you having a conversation with consumers both online and off, you have the ability to blur lines and route people around.   Business impact by applications like FourSquare are not to be underestimated and cannot be measured right now.  Right now, the early adopters are in adoption phase, but over time, as these apps penetrate the masses, ability to route large groups of people could be a common place.

Advertisers have always wrestled with tying online with offline.  The simple way to route online with offline is coupons and promotions, but you’d be shocked how many retailers are not setup to handle this both from an in-store infrastructure or a P&L standpoint.

Talking about routing groups applying Game Theory;  look at Gilte Group.  Every morning I receive an email with the day’s latest sales and if I’m not logged in by 12:15, chances are that I miss the top products.  There are a few me-too players similar to Gilt like Haute Look, but these types of services provide Game Theory to boost sales.  Not mobile, so I digress.

Anyway, lots of opportunity and I’m certainly watching it closely.  Anyone else?