Waze: The Little App That Could

As of June 2013, Google acquired community-based traffic and navigation app, Waze, for $1.3 billion. Waze definitely made good on this deal, dwarfing the $67 million raised from several VC firms[1] prior to to the acquisition. But Google already dominates mobile navigation, so what made Waze such a compelling buy?

We Are Smarter Than Our Smartphones

Waze uses GPS points, sent from users running the app, to constantly update maps and driving conditions. Google essentially does this, too, so some questions surfaced about the value the acquisition could bring to Google because of this overlap. It’s important to note that these are both instances of passive data collection. And, there is really only so much that smartphones can collect without our input. What differentiates Waze is the active collection of data from its large user base, and, importantly, the ability to act on that data.

Waze users are able to report incidents like accidents, road closures, or construction alerts. User-initiated reports show up on the map in real time where other users can confirm them. This is integrated with other data, like slowdowns that might indicate a traffic jam, along with data specific to an individual user, such as a destination or most frequented routes. The end product is the best route, at the right time, for every user. Sure, Google Maps could tell me that traffic was slow on my usual route home, but it didn’t know why traffic was slow, and it didn’t give me an alternate route before I was stuck in the jam. The data was limited and wasn’t combined and tailored into a useful product for my commute.

Creation of a Fanboy

Waze integrated all available data to develop an unparalleled user experience, and the result was a user core of devout fanboys. They have been so successful that regular global “meet-ups” with their most active users have taken place since 2011. This gives Waze the opportunity to get face-to-face feedback and insight from their users, while further cementing their fan loyalty.

There is no question that Waze understood the value of not just data, but data used in the right way and in real time. Without well-integrated systems that allowed them to parse through and understand their data, they wouldn’t have understood their users, and could have never developed such a strong, thriving user community. This is what makes them so valuable to Google. They have been able to both understand and cater to their customer by integrating data smartly. They created a system whereby users saw a return (in the form of a better, more useful, and tailored app) by promoting Waze themselves.

To learn more about how a superior mobile integration strategy can increase your company’s value, take a look at “Seven Principles of Superior Mobile Integration Strategy.”