Reference no: EM133022718

LINING UP FOR FREE APPS

In this digital age of free information, it can be a chore to convince consumers, especially young ones, to purchase some products. After all, for every Web app or program that isn't already distributed freely, there are about a dozen other ways to obtain it through easy but extralegal means. Nevertheless, information and the ways in which it is transmitted will become no more restrained in five years than they are now. Rather than react with higher prices and stringent policies, entrepreneurs must adapt and find ways to integrate the free flow of information into their moneymaking schemes.

For instance, in 2006 Eric Alder and Julien Chabbott graduated from college with an idea for a smartphone app that would provide regular updates on the wait times of lines around town. The app was to be driven by social media with individual users providing the app with the estimated length of the lines they were standing in. But the pair of young entrepreneurs faced a quandary. Without accurate line times built in, nobody would use the app. And if nobody used the app, there wouldn't be enough reliable data to formulate accurate line times.

In order to get the app off the ground, Alder and Chabbott first distributed Line Snob for free on the iPhone marketplace. Then the pair rewarded users who reported wait times with points that could be redeemed for coupons. And rather than rely solely on word of mouth, Line Snob ingratiated itself with popular venues that uploaded data on their own lines and posted fliers about the app around their queues. Once Chabbott and Alder established their user base, they began making money by charging companies a monthly fee for using the app. Line Snob is especially popular in Las Vegas, where hotels use it to announce which buffet or club lines are the shortest. The app remains free for regular users, and the company hopes to unveil soon a new feature that can predict line waits before they occur.

Questions:

1. What key entrepreneurial characteristics seemed to drive Alder and Chabbott?

2. What's the major challenge for Line Snob going forward?