With Updated App, Path Hints at a Mature Business Model

By Mike Isaac.

SAN FRANCISCO, California - It's practically a Silicon Valley proverb: Build your user base, and the money will follow. The problem is that if you grow too big, too fast without a monetization plan, you'll end up taking round after round of money from venture capitalists just to keep up, without the means to make any of your own.

Path, the self-proclaimed 'personal' social network, has often looked like it was falling into this trap. As users are limited to 150 connections, traditional advertising has a more difficult time going viral on Path's network than, say, Facebook's or Twitter's. With a new version rolling out to users, however, the fast-growing startup may soon have more revenue on the horizon.

On Thursday, the company introduced Path version 2.1 of its iOS and Android apps. More importantly, Path announced it was opening up its application programming interface to the first major partner to integrate with the network: Nike.

Path's new version offers integration with the Nike+ service, so users can track their daily running routes and make them available for their friends to see and comment on. Path's team stressed that it's an added feature, not an advertising deal per se - and Path CEO Dave Morin says that his company has "no plans for advertising in the short term."

"If we're focused on happiness, traditional advertising goes against that experience," Morin told reporters at Thursday's press event.

In the long term, if or when Path does open itself up to integrating ads into users' streams, Morin says it would be some sort of content-based advertising, rather than the traditional display ads familiar to users of Google or Facebook.

Nike is currently the sole partner, as Path's API is still private. But as the API opens to more potential content partners, this expands the network's ability to provide both new services and more revenue-generating content.

Today, both features and revenue opportunities on Path are relatively limited. Among other services, users can share photos with one another and point to which music tracks they're listening to. Path only takes in very small amounts in revenues from these services: selling photo filters that work with the camera, plus a deal with iTunes which pays Path an undisclosed sum for each track a user posts.

If Path partnered with retailers, credit card companies or location-based deals apps, monitoring your daily activity could yield more advertising opportunities. Say you go for your daily run using the Nike+ feature. The app maps out your route that you take. Integration with a deal-based app could map out relevant shopping possibilities and available discounts on the route for your next run. Imagine planning out your run so that you'll end up at a shop offering a deal on Gatorade with purchase of a PowerBar.

Morin also expressed interest in mobile gaming, a lucrative source of revenues for companies like Facebook and Zynga.

"Obviously games are a big thing on the iPhone right now," Morin said. "Something like half of the iPhone users out there are mobile gamers. If we were to jump into games, it would be in a high-quality way."

Suppose Path were to partner up with Zynga, an obvious choice for mobile gaming. A potential deal could mirror the type that Zynga currently has with Facebook: Users purchase virtual goods through Path to use in Zynga games, while Zynga splits revenue 70/30 with Path.

These are all hypotheticals, of course; in the near future, Path's API will remain private to maintain "quality control." Meanwhile, the company will slowly expand its exclusive partnerships.

Path does have to tread lightly when it comes to sharing data with advertisers. The company is still fresh off a massive privacy scandal, in which Path was caught uploading users' mobile address book data to the company's servers. It has since apologized and deleted all of the collected data, but a slow, careful public relations path (so to speak) is most likely the company's best option.

Meanwhile, Morin and company are working to build up Path's feature set. The 2.1 update includes a music-matching feature that recognizes what tracks are playing in the surrounding environment. (Shazam, anyone?) And Path co-founder Dustin Mierau added a number of enhancements and filter updates to the app's camera feature, further encroaching on Instagram's turf.

Revenue from these services may be minor, too, but it still shows a steady advance toward monetization as well as growth. It's a more secure foundation for a more mature company - one that Path's team hopes users and partners continue to embrace as warmly as investors have.

Nike Fuel Band does it Live Up to the Hype?

It feels like the fitness tracking market couldn't possibly fit any more devices, but Nike is hoping to prove that that is not the case. The new Nike Fuel Band hopes to prove itself the best of the bunch for fitness tracking, and boasts some nice features that mean that it just might be. And if the pre-sale numbers are anything to go by, then this device should sell millions. (The Fuelband sold out in just 8 minutes. So does the device live up to it's prerelease hype? Read on to find out what the reviewers think.

The Nike Fuel Band is a small rubbery band that you wear on your wrist. On the top is a matrix of 100 LED's, which act as the display for the device. Most of the LEDs are light blue, but there is a band of colored ones along the top of the device, used for indicating how close you are to matching your daily goal.

While the device might look like it is rubber all the way through, at its core is a metal frame designed to be durable. This gives the device a nice feel. As said The Verge's Bryan Bishop: "the band feels more like a good watch than a gadget."

The Nike Fuel Band forgoes traditional metrics for burning calories and replaces it with its own: Nike Fuel. It is designed to be a unified measure of all your physical activity throughout the day. Most people seem to see this as an interesting, bold, and possibly brilliant idea, but one that athletes may not appreciate. As said The Verge's Bryan Bishop you're left with "a product that's probably not that interesting for hard-core athletes or the exercise-obsessed, no matter how many times LeBron James appears in the commercial."

Others felt that the metric actually does provide a real advantage to athletes. said Casey Chan of Gizmodo:

"It's a clever idea! As balancing the differences of various activities (sprint, jog, etc) can provide the token to improve overall fitness since you're gunning for the same goal, in this case, a Nikefuel benchmark. Nike believes that life is a sport, every human is an athlete and everything you do should be measured. I'm definitely interested in seeing how much Nikefuel I gain for surfing the internet."

But the Nike Fuel Band does have problems with anything not based on large arm motions. As said Mark Hatchman of PCMag.com, "Nike claims that any aerobic movement-dancing, walking, skipping rope, boxing-is tracked using the three-dimensional accelerometer and converted into its own arbitrary "fuel" metric. (It's doubtful, however, that the band can measure resistance, or activity where the wrist is stationary, such as a pushup or bicycle riding. With the FitBit, such activities must be manually entered.) It's water-resistant, but not waterproof, so don't try swimming."

The Verge's Bryan Bishop said :

"...the fact that the device keys off arm motion does lead to some activities being rewarded more heavily than others. 10 jumping jacks will get you 10 Fuel points, but 10 tough minutes on an elliptical - with consistent, steady hand motion - produced just 150 Fuel points. Riding a stationary bike, with hands locked to the steering grips, resulted in no Fuel earned whatsoever. Nike admits that the FuelBand also doesn't play nice with resistance-based activities like yoga or weight lifting, but to be fair this type of variance is going to be an issue with any wrist-mounted device."

The Fuel Band isn't cheap, at $149.99. And because of the limited release, there are Ebay auctions for the device that are ~$300.00. And the Fuel Band doesn't do many of the things that its competitors can do. Said Bryan Bishop again:

"The FuelBand doesn't monitor your sleeping patterns or serve as an alarm, two of the cooler functions of the Up bracelet, and it doesn't provide GPS functionality like a full-featured sports watch. At $149, there are also quite a few cheaper options out there on the market."

Right now, there is a web app and an iOS app, which the Fuel Band can sync to via bluetooth. The device can stay charged for 4 days, which is fairly long for a device like this.


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