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University of Amsterdam – Business Studies International Entrepreneurship March – 2010 dr. Tsvi Vinig “Ubiquity First, Revenue Later” A descriptive case study on the entrepreneurial venue Layar B. V.

Bendert Katier Studentnumber: 5927752 Bendert. [email protected] com http://twitter. com/BendertKatier 2 “Ubiquity First, Revenue Later” A descriptive casestudy in the entrepreneurial venue Layar B.

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V. Bendert Katier – 5927552 University of Amsterdam – Business Studies International Entrepreneurship March – 2010 dr. Tsvi Vinig 3 Table of ContentsIntroduction ..

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… 4   Background …..

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…. 6 Let’s do something and it must be mobile ….

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6   Layar was born from many ideas, passion and ambition….

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…. 7 Expending and growing .

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9   From ‘gradual oll out’ strategy to open platform strategy….

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…………………… 9   Business model …………………………………………………………………………………………………………………….. 10   Competitors …………………………………………………………………………………………………………………………… 11   Future developments ………………………………………………………………………………………………………….. 11 Analysis of Layar’s development cycle and it’s current position ………………. 3 Analysis of entrepreneurial actions ………………………………………………………………………. 13   Analysis of strategic actions ……………………………………………………………………………………. 14 New insights and entrepreneurial lessons learned…………………………………….. 16 Entrepreneurial insights …………………………………………………………………………………………. 16   Strategic insights………………………………………………………………………………………………………. 6   Discussion………………………………………………………………………………………………………………….. 17 References ………………………………………………………………………………………………………… 18   Exhibits ……………………………………………………………………………………………………………… 21 4 Introduction In the past augmented reality was a rather looked down on hobby of computer geeks and science fiction fans, however it’s now becoming a widespread phenomenon. Applications for handheld devices, like he iPhone, and Android-­? based phones and computers with a webcam overlay circumstantial geographic and directional information onto these devices in an interactive fashion. Big technology companies such as Intel, Apple and HTC are developing mobile-­? phone software and services for the use of augmented reality services, and big retail companies use it for their marketing campaigns. Also multiple start-­? ups are developing interesting applications that allow anyone to create tags for the real world. These days, anyone with a mobile device or a computer can tag physical structures and sites around the globe with informatory text, or ultimedia content found on various other more ‘traditional’ web pages. One could for example point their phone at Dam Square Amsterdam, and see information pulled up from Wikipedia, photos taken there by users from Flickr, news related items or just find out what friends said about the place on Facebook. All with their handheld camera, in real time, instantly. An entrepreneurial venue that provides such a service is Amsterdam-­? based Layar. The three founders created an application that places a layer over the image shown from the digital camera on a mobile device, and called it an augmented reality browser (see exhibit 1). By moving the amera around, the user can for example see in real time what houses are for sale, which bars and shops are popular, available jobs, healthcare providers and where the closest ATM’s are located. Having recently scored $3. 4M in funding and a global distribution agreement with a major handset manufacturer (Wauters, 2009a), the future for Layar seems to be a bright one. However things wouldn’t be as they are today without the choices that this entrepreneurial team made, setting the firm on a distinct ‘path’ among many possible. By identifying and analyzing historical events and critical decision points taken by these entrepreneurs during the evelopment of Layar, it’s possible to identify this distinct development path, its business model and the business strategy leading to the success of this venture. 5 To do so this case study will follow a descriptive approach containing detailed information about the group of entrepreneurs and their company Layar, including the accounts of the subjects themselves. The study will further make use of the venture’s web site, company documents, industry web sites and other relevant web-­? sources. First a description of the founders will be given, including their backgrounds and how they came together. This section is followed by how they came p with the service, describing the path and decisions they took to create a unique value adding service for its end-­? users. The third section will take a business viewpoint, with a description of the company’s strategy, its business model, its major competitors and possible future developments. The next chapter will analyze and describe some of these critical events by using relevant entrepreneurial literature. Also in this chapter a causal relationship will try to be established between critical events and the decisions taken by the entrepreneurs. The report will conclude with a reflection that contains new insights and entrepreneurial essons learned. 6 Background It al started in early 2007 when Maarten Lens-­? FitzGerald and Raimo van der Klein met each other at a conference, knowing each other only via Twiter. Raimo had already worked in sales and marketing at Nokia and for KPN as an Innovation Manager in mobile consumer social networks and presence messaging, where he had developed a clear picture of the converging mobile industry, the market forces and how the mobile ecosystem is built up. Maarten on the other hand started his career being an Internet professional, helping national and international companies take their first steps online. He continued his career atRapid Sugar, helping companies with their permission based email strategy and campaign concepts. Between the both of them they decided, “let’s do something and it must be mobile”. The idea turned into Mobile Monday (MoMo) Amsterdam, the youngest chapter of the global MoMo movement: a channel for the mobile industry to present best practices and new technology. Here Claire Boonstra also decided to become part of the team, she proved to be an essential part with her experiences from being part of the KPN-­? team that launched i-­? mode into Europe. Having also worked in brand development for Unilever and in strategy & media in cross media & obile for Talpa, she sees herself as being ‘born mobile’. In their free evenings and without being paid, they pushed MoMo Amsterdam further, becoming the most active of all chapters. “All done purely out of passion”, according to the founders. Having gathered a versatile group of individuals, all with prior experience in mobile and communication markets and having affinity with media and marketing they decided to do “something” together. After a brainstorm session early 2008 they decided to join up and start a business, which is focused on the mobile market and its future. “Loaded with passion we started SPRXMobile, we wanted to create our wn playground” (C. Boonstra personal communication, February 25, 2010). Let’s do something and it must be mobile 7 “SPRXMobile was born out of a necessity”, answered Raimo when asked in an interview why they founded SPRXMobile, in May 2008 (Broek, 2008). “Companies kept asking us for advice on where they should go with their mobile strategies, but since we didn’t have a commercial platform we couldn’t send them an invoice”. In the same interview Claire said of SPRXMobile’s activities, “We want to help companies go mobile by creating strategy, develop concepts and through sharing of our knowledge in workshops, events, think-­? tanks etc. ”Layar was born from many ideas, passion and ambition Calling themselves ‘mobile service architects’, the team sees mobile devices as vehicles to maintain the relationship between companies and consumers. They perceive mobile gadgets as being more suitable for a pull rather than a push-­? based marketing approach (SPRXMobile, 2010). SPRXMobile places the end-­? user in the centre rather than at the end of their services. It’s this end-­? user that decides when the situation arrives that the service of a company is needed, “being there at the right moment, time, place and situation is crucial for success” (SPRXMobile, 2010). And it’s here thatSPRXMobile creates its value; by using their experiences, specific knowledge and networks, they make the correct decisions in a complex mobile ecosystem about when and what mobile services are relevant in the context of the end-­? user. Hereby not just taking the behavior in the virtual space into account, but also the behavior in the physical space (SPRXMobile, 2010). In the reminder of 2008 next to the development of successful concepts, the team also had a set-­? back, as one of the founders, Maarten, found out he had cancer. Blogging about his journey he becomes ‘Patient 2. 0’ and after six months of chemotherapy and recovery his latestCT scans are clean (Lens-­? FitzGerald, 2010). Having SPRXMobile moved to the Science Park Amsterdam, in October 2008 the G1 sees it release in the United States by T-­? mobile (Biggs, 2008). This mobile device by HTC runs Android, which is an open source operating system based on Linux, first developed by Google (Encyclopedia Britannica, 2010). Other important features include GPS, a camera, high speed Internet and most 8 importantly the G1 is world’s first phone that had a compass, a crucial property for the development of Layar. In January 2009 SPRXMobile got invited by T-­? Mobile to organize the launch of Android in the Netherlands.At this launch a company called Mobilizy talked about their product Wikitude, one of the first functional augmented reality browsers for Smartphones, being able tag physical structures with digital content (Mobilizy, 2010). ING, a multinational financial firm, was interested in doing a project with SPRXMobile, so together with Mobilizy they created ING ATM Finder, an application that shows where the nearest ATMs are situated (exhibit 2). SPRXMobile sees commercial use in developing a multi-­? layer commercial augmented reality browser, however Mobilizy is not willing to cooperate (C. Boonstra personal communication, February 25, 2010).Having to find necessary financial resources, Claire, who recently gave birth to a baby boy, talked with potential (Angel) investors, presenting five ideas including Layar. Claire had to pick one and it became Layar. That year five Dutch parties express their interest in having their own ‘layer’ in Layar and were willing to spend marketing budget to have a layer developed (C. Boonstra personal communication, February 25, 2010). On June 16th , 2010 the Layar application got launched in the Netherland with it’s 5 first layers. It included a real estate agency, a bank who wanted to show ATMs, a temp agency who wanted to show local jobs and a

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