These slides use concepts from my (Jeff Funk) course on Business Models at National University of Singapore to analyze the business model of Augmented Reality for travel. Augmented reality superimposes information on top of our sensory data. One way to do AR is to use a smart phone’s camera to view a world with information superimposed on the smart phone’s display. For travel, nearby places of interest can be provides along with ratings, reviews directions, public transport, and other information on them. This information can be obtained from Google Earth and other sources. The slides describe the value proposition, method of value capture, customers, scope of activities, and method of strategic control for two startups involved with AR and travel.

1. Augmented
Reality for
Travel:
A Business Model
National University of
Singapore
Ow Jie Yu
John Kevin
Chen Yen Yu
Yusuke Yamanaka

2. Outline
The
technology and
its value
proposition
Analyze
current
business
model of
two firms
Present a
novel
business
model
Technology
What is augmented
reality? What does it
offer? What kind of
devices are needed? How
does it look like?
All these questions will be
addressed in the first
section
Novel Business Model
We will present a new
business model – one that is
unique to this technology
and makes use of the
technology to its fullest.
Current Business Model
We will analyze two different
business models of two
different firms that currently
use this technology for travel-
based application.

3. 1
Technology

4. TechnologyAugmented
Reality
Add contextual
information to real
world view
Smartph
ones
Tablets
Wearable
s

5. “
It’s the real world – only better
- Jay Wright
Business-development Director of Qualcomm Inc.

8. Value Proposition of Augmented Reality
Intuitive Convenient Entertainmen
t

9. Value Proposition of
Augmented Reality
Intuitive
Users get an interactive
interface on their devices
and get contextual
information based on real
world view, providing a
“What You See Is What
You Get” UI that is user-
friendly
Entertainment
Augmented Reality is a
new and exciting
technology that excites
most users. Its game-like
and futuristic look add
entertainment value to
applications which utilizes
this technology
Convenient
There is no need to get
extra hardware for
existing devices. If your
device runs the latest
operating system, has
enough space, and
comes with a camera,
you are good to go

10. 2
Business Model Analysis

11. Business Model Analysis
buUuk
Augmented Reality
Travel Applications
GeoTravel

12. ?
What application
are we talking
about?
They are AR-based
travel application which
make use of the user’s
location and
surroundings and show
pins about places of
interests around the user
What they provide:
What they don’t provide (now):
Information on nearby
places of interests
Ratings & Reviews of such
places
Information of such places
Directions
Public Transport Guide
Insiders Discount and
Deals

15. Value Proposition - buUuk
buUuk
Notification Ratings &
Reviews
Distance
Based
Categories

16. Value Proposition of
buUuk
Ratings & Reviews
are embedded in the
location pins for easy
viewing by the users.
Users can see ratings,
reviews for a lot of
restaurants that are
nearby
Categories
are filters that users can use.
This is to differentiate
restaurants, shopping malls,
attractions, etc. through a
simple tap
Distance-Based
tracking enables users to
view pins that are located
within a fixed-radius from
their current position

17. How Does It Work?
App
GPS tracks the
user’s location. The
camera gathers real-
life footage of the
user’s surroundings
Data is stored in a
central database.
The pins are stored
as coordinates
taken from Google
Maps.
Ads are served from a
different ads
database where
almost all “free” apps
get their ads from

18. Value Capture – Advertisement
App

20. GeoTravel

22. Value Proposition - GeoTravel
GeoTravel
Multi-Lingual Car Locator
Travel
Information
Ad-Free

23. Value Proposition of
GeoTravel
Multi-Lingual
GeoTravel’s application is
available in more than 20
languages – providing a
great alternatives to
travellers who are not
multi-lingual
Car Locator
Forgot where you parked your
car? Don’t worry, GeoTravel
saves the day for you with its
car locator feature
Travel Information
GeoTravel takes data
from Wikipedia to give
information of places of
interest right from the
application

24. Value Capture – GeoTravel
GeoTravel
US$0
.99

25. Why old business model fail
New technologies often require new ways of
doing business. Sometimes, they are unique
to the new technology
Ads are usually stored in a separate database
from the app itself, hence the need to
download these ads involuntarily
Conventional advertisements can be a
distraction and annoy users throughout
using the application
Conventional
Data-Heavy Ads
Unappealing
To Users

26. Why old business model fail
GeoTravel, although does not provide adds,
does not have enough value proposition to
its users
When the growth of new users slows down,
GeoTravel’s Revenue Stream also slows
down
Usefulness
Stagnant Revenue
Stream

27. 3
Proposed Business Model

28. Proposed Business Model
Identify Users
And Their Needs
Define Value
Proposition
$
Unique Value
Capture
Aggressive Marketing
Strategy
Define Scope of
Activities
Effective Strategic
Control Methods

29. Users
Travel
Enthusiasts
Food
Enthusiasts
App Users (Direct) Businesses
Business
Owners
Deals and
Reviews Hub

30. Value Proposition
Insider
Deals
Ratings &
Reviews
Distance
Based
Categories
User Profile
Social
Media
Integration

31. Distance BasedInsider
Deals
Ratings &
Reviews
User
Profile
Categories
Social
Media
Integration
Value Proposition
Insider deals are
deals that can be
accessed through
our app
Users can read and
write reviews
directly within our
application
Users can have
profiles which store
their personal data
and preferences
Users can view
places of interest
within a radius from
their position
Users can filter
places of interest
based on category
(hotels, foods, etc.)
Users can post to their
favorite social media
account from our app

32. Value Capture
Offer App as a Free
Download
Collaboration with
Business Owners
Insider Deals via
Groupon

33. Why such methods?
Free
Does not obligate users to pay – some
want to “try first then decide”
Deals
Collaboration
Provides a platform for ads in a new
and sophisticated way – Companies
pay us to put such ads
Businesses can also reach out to
customers by attracting them with deals
(which also attracts users for our app)

35. Collaboration Strategy for Advertisements
Location-Based Advertising
Custom-Made Pin

36. Enables
businesses
to reach
nearby
potential
customers
Location-Based
Advertising
Target users
that are
nearby
based on
GPS
tracking
Custom made
pins
distinguish
ads from
regular pins
so that they
stand out
Custom-Made
Pins
Does not require
downloading
from external
database since
treated as if it
were a normal
pin

37. Without Advertisement With Advertisement

38. Insider Deals
Groupon
(or any company)
Collaboration
$
Retrieve Deals
Based On
Location
Pins with White Star
Icons Contains
Insider Deals Inside
Information on Pins

39. No Insider Deals Insider Deals at Starbucks

40. Ratings and Reviews
Ratings &
Reviews
Distance
Based
<<name>> Embedded in
Pins
Restaurants
Hotels
Tourist Attractions

41. User Profile
User
Ratings &
Reviews
Social
Media
Profiles
Preferences Bookmarks

42. Ratings & Reviews Social Media Profiles
Preferences Bookmarks
Users can read and
write reviews directly
from our app, which is
connected to
TripAdvisor (or any
other reviews hub)
Users can store their
social media
credentials in our app,
and hence can post to
such social media
directly from our app
Users can have their
own preferences, such
as a certain type of
cuisine, etc. Users are
able to store
preferences as filters
in our app
Users might have a
certain favorite place
or spot. These places
can be saved as
bookmarks for later
viewing by the user

43. Scenarios of Use - Tourists
Travelling in a
(foreign) place
A lot of options to
eat, but don't
know how to get
information on
such places
Takes out phone,
open our app, get
instant ratings and
reviews of places
nearby
Visiting a famous
landmark such as
the Merlion
Statue, Marina
Bay
Takes a lot of
pictures and want
to post on social
media (for
example,
Instagram)
No need to switch
out to Instagram
because it can be
done directly on
our app
Wants to shop but
short on budget
Opens our app
and see places
that have insider
deals
Gets instant
rebate that are
located nearby

44. Scenarios of ‘Use’ - Business
Want to reach out
to potential
nearby
customers
Conventional ads
might not target
potential
customers
Our app targets
customers that are
nearby, hence
easier to reach
out
Have limited-time
offers and
discounts
Want to target
new and existing
customers
Can reach out to
nearby customers
who might be
interested in the
deals

45. Network Effect
Business
Owners
Users
If have many
User
Friendly
Fast &
Responsive
Convenient

46. How to get initial
users?

47. Collaboration with Telcos
Telco
Companies
Tailored for
Tourists
Future Hopefully… Wi-Fi Everywhere
Mobile Data
Plans

48. Getting Lead Users
Free Phone
Rental
Application
Pre-Installed
Lead UsersHopefully… Happy Users
Happy Users might attract new users. To promote this, such users can
earn referral points which might give them exclusive deals

49. Future Direction
High
Interest
Hopefully…
more
users
Tourism
Boards
Integrated
Travel and
Entertainment
Games
Integrated
Attractions

52. Inbound
Logistics
- Data connectivity
- Information/data
sourcing
Operations
- Data management
- Mobile application
Management
- Augmentation
modelling, rendering
and display
- Overall system
architecture and
functionality
-Collaborations
Marketing
- Advertising and
promotions
- Collaborations
Outbound
Logistics
- Availability in
digital distribution
platforms
- Partner
distribution
channels
Value Chain
R&D
Intellectual Property

53. Summary & Conclusion (1)
Value
Proposition
Insider
Deals
Ratings &
Reviews
Distance
Based
Categories
User
Profile
Social Media
Integration Value Capture
Collaboration
for Deals
Innovative
Ads
Free
Download

54. Summary & Conclusion (2)
Pre-Installing our
Application
On Smartphones
for Tourists
Collaborate with
Telcos for
Tourist-Oriented
Data Plans
Referral Points for
Users who Manage to
Get Other Users
Work with
Tourism Board
To Provide
Entertainment
Value

55. “ Thanks!