Apple did offer to buy Waze, but Waze politely declined | Hacker News Reader

Apple did offer to buy Waze, but Waze politely declined

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61 pointsderpenxyne45 comments

I stopped using Waze after December of 2011. They have these powerups that they put all over the virtual road, and you hear a crunching noise as your phone character drives over and eats them. Well, in December they felt it was very important that you know that Waze was going to be dropping Santa hats as well, so they placed a popup blocking the entire screen, which (due to a bug I suppose) could not be dismissed. I nearly missed a flight because I was running late and badly needed directions to LAX, but instead Waze pnly wanted to give me news about Santa hats. Finally I pulled over and pulled up LAX on IOS maps.

Prior to that, I used it for probably a year and raved about it to everyone. But annoying things like this crept in and destroyed my enthusiasm. For example, there was an option to have Waze prioritize driving over powerups when computing routes -- who wants that!? And the brevity/frequency settings for the voiceover directions were wanting -- either hear a command three times before you have to turn, or hear a slightly shorter command three times, or get no audible direction.

What occurred to me in December was that these guys were spending a lot of time on gamification when there were core UI/UX issues which needed addressing. Fundamentally, you're taking someone who has to get somewhere (in a hurry, perhaps) and making them play a very lame game.

But they've raised ~$70M so they have a long time to get it right.

Edit: at this time I didn't know how to kill running apps on IOS. I had just gotten my iPhone a month earlier.

Not sure if this was the case back in 2011, but all of the features you mentioned regarding power-ups can be disabled in the settings pane. As to the voice directions, your experience seems very different to mine, maybe it's time to give it another chance.

I have the same issues with voice direction. It repeats the same instructions way to frequently, often without even a pause in between. For example, earlier today:

"Take exit for XXX. In 500 ft. stay to the right at XXX south. Stay to the right at XXX south".

Hah, over New Year's we were talking about Apple Maps and how chatty it was, thinking there should be a "bachelor mode" that just states all the directions when you start and then shuts up and displays the route on the map.

Hah, over New Year's we were talking about how we use Apple Maps when we don't want calls interrupted, since it's so much less chatty compared to the otherwise remarkably superior Navigon software.

In what world does a company with no monetization strategy turn down a $500M acquisition? Who do they think is going to pay more for them, Yahoo!?

"multiple sources have told us that the company was valued around $200 million in its last funding round, and current investors were aiming for a higher price, somewhere nearing $1 billion."

I read the article too... that doesn't answer the question of who they think is going to pay that price. Here's a hint: not Google, Microsoft, Yahoo!, Oracle, Apple, IBM, Nokia, or Facebook... Perhaps they're holding out for Samsung, but that's a bit of a stretch.

Why do they need to sell? Just because a company doesn't have a (public) monetization strategy doesn't mean it won't come with time. There are other options for successful startups than just selling the company.

It's going to be difficult to monetize when they are competing against Apple and Google offering free alternatives built into every device they sell.

I just started using it in order to get the warnings about speed traps, accidents, and road debris. I don't believe the stock android maps/navigation apps gives me any of those things...

Even IF waze is a little better, it's going to be hard to compete with google's alternative when it's pre-installed, most people won't bother trying waze unless it's 10x better...

They've monetized. I've seen advertisements on the splash screen in SF (for the local network news team, strangely), and Zipcar, Hess, Taco Bell, and Dunkin Donuts POI indicators on the map in and around the Boston area. Clicking on those POI pins opens up exclusive offers to those merchants for Waze users. I have no idea how successful that strategy is but it's a strategy none the less.

Yeah, that sounds like a winner. To quote Sorkin, "Gary’s Tuxedos, the Harvard Bartending Course. You’re just one small step away from bagging Snookies Cookies, I can feel it."

In a world where the next startup expect to exit like instagram ;) seems like 1B is now the new hot number :/

One of the reasons to be very wary of taking funding... you may be forced to turn down $500M because your investors aren't going to take a simple 2X multiple.

Very few investors are going to turn down a $500M exit, even if it is only at a 2X multiple.

Giving your investors the ability to torpedo a deal of that magnitude seems to be a failure in its own right. So if you do get funding make sure you're not handing over control over future exits.

What's good enough for the founders should be good enough for the investors.

A good set of 'drag along/tag along' clauses will take nicely care of that possible scenario.

I agree, it's unlikely investors would block a deal like this if the founders want it. At $20 per user I think it's a very reasonable valuation for a company at this stage, same type of valuation instagram and foursquare got. However I do buy the fact that the founders believe they can create more value and continue to grow.

perhaps you know more than me about the company, but from the outside, it seems like there are several customers segments who might pay for traffic data: (1) government agencies looking to maintain and invest in roads and local infrastructure like traffic lights; (2) billboard owners who want to offer audience figures to advertisers; (3) real estate developers who want more accurate data before deciding to invest in property; (4) real estate agents who want to offer traffic data to prospective retail and restaurant leasers; (5) shipping/delivery companies who need traffic patterns to determine optimal routes.

my understanding is google maps generates $1B+ from its APIs. perhaps the waze founders think they can approach similar revenue figures with traffic data. i haven't crunched the numbers to see if this is feasible, but my hunch is they declined the $500M acquisition with good reason and with a (potentially) sustainable revenue model in their hip pocket.

Waze is not going to beat Inrix at selling traffic data. People think that Waze is big because it is a consumer application that they have heard of, but Waze is not a serious player in the B2B traffic data market.

i don't know enough about how inrix generates and maintains its traffic data, but perhaps waze could compete because its data is user-generated (and should be cheaper) ... enabling it to offer data at lower prices to less demanding customers, and therefore reaching out to new customer segments.

at the very least, waze need not beat inrix to remain independent but merely capture a portion of the traffic data market.

is it incomprehensible that waze couldn't be worth more than $500M? let's do a quick calc.

inrix is a private company. we can't use its multiples as a benchmark. let's use garmin and tomtom instead for argument's sake. garmin has a PE ratio of about 15, tomtom's is about 20.

if we assume waze gets a similar multiple, it needs about $25M - $33M in earnings. assuming 25% net margins, it needs about $100M - $132M in annual revenue. if the net margins are more like 33%, waze only needs $75M - $99M in annual sales. waze could need even less if it attracts a higher multiple (assuming it offers a disruptive model).

i know too little about the traffic market to say if $100M in revenue for a new entrant is feasible.

but i'm sure it's not impossible, merely a calculated risk on the part of waze's founders to continue acquiring users and implement the revenue model.

The established market collects data from Android phones, commercial vehicle tracking, some municipal systems, and mobile phone providers. A couple ten million casual end users is two orders of magnitude less than the billions of points Inrix aggregates. They're also almost certainly already covered by either aggregate Android OS or cellular tower data. How valuable is a patchy 2% of the industry standard?

Apple fails at social-interaction. They have no feedback loops, no community involvement. Compare to google where the community-feedback loop is almost a part of the product culture.

Waze has social integration (facebook), realtime community reporting (speed), realtime community hazard reports (object on road), community map editing (tweak routes, add roads).

I can't believe that Apple is so good at making "beautiful" things but so bad at community engagement (gamecenter, ping, maps, *.mac, etc).

Quibble: Apple has been collecting realtime traffic data from Apple Maps users since year one or two of iOS.

That was when Apple Maps was actually Google Maps and using different data.

Correct, the tiles were from Google and Google got first cut of the route information. But Apple was the one collecting vectors, and there's no reason to think they were ever signing those over to Google.

I'm sure that even if they weren't explicitly sharing the traffic information with Google then Google was capable of (roughly) inferring the data based on API calls anyway. While there would certainly be some noise there between new tile fetches, you should be able to map out routes and speeds with a high (though not exact) level of confidence, particularly in cases where you're probably the one originally laying out the suggested route.

Apple's DNA is wired to produce singular, curated experiences. That's damn-near antithetical to writing software that's explicitly inclusive of other input and needs to cater to the broadest audiences possible, to hit the network effect.

Nintendo is much the same way.

And there's no shortage of examples of artists who turn out phenomenal works but are notoriously difficult to work with and dismissive of criticism or collaborative efforts.

But Apple also has superb customer support and Google fails at this. As for Apple maps, the option to provide feedback is built-in.

> While Waze has an impressive user base (20 million at last count and said to be nearing 30 million), the company has still not found a way to adequately monetize its product, or build a scalable business model to profit from.

How many more times do we get to watch this story play out?

It's been a successful strategy for many companies, however perilous it might be.

Which ones? (I'm not ready to call Twitter a success.)

Twitter is so embedded in the worlds culture, I'm hard pressed to believe they won't succeed

Given how embedded they are, it's troubling that they still haven't figured out how to make money off of it.

Can you give me a few examples where this story has not played out with a successful company at the end of it?

Interesting. This doesn't seem like a good fit for me: Apple really just needs better data, yet the accuracy is even worse for Waze than Apple's maps. Plus, most of their product would probably never make it into iOS -- I can't see Apple letting users report police locations, messaging other cars or collecting items.

(Side note: just last month, Apple was reportedly in talks with FourSquare: http://online.wsj.com/article/SB1000142412788732490720457818...)

I have had wonderful accuracy with Waze. In fact, the one instance where I had an issue (was told to turn left on a no left turn), I reported it (a well exposed feature in the app) and it was fixed by the next time I drove by. I think that's the real win with Waze as far as mapping goes (the realtime traffic awareness is the number one feature over all): it's crowd sourced so problems can be reported and will be fixed by community map editors (similar to the Wikipedia model).

Not that it would have made Apple Maps much better; Waze was always getting me lost and sending me down sidestreets to end up at the dead-end residential street behind the shopping center I intended to visit. To their credit, TomTom does this as well sometimes, but in general it's a much better nav app (granted it's like $40 vs. Waze at $0).

I used Waze for awhile. The problem I have with it is that it's just not as accurate as the alternatives. Not only would it get streets wrong, but sometimes lead me in the wrong direction.

I got tired of this and switched over to Google maps (ios version). It's much better.

I preferred Google Maps once I returned home for the holidays. Waze seems to specialize in traffic data and rerouting, something which doesn't seem to work all too well in rural areas.

While out in California, on the other hand, Waze managed to find a new route into the city which saves me 20 minutes over Google Maps anytime I head that way.

Ayup. Nothing else does rerouting as well as Waze.

Waze doesn't re-route for me at all, because my route is already the most efficient :D

I love waze and I participate in reporting. I'm normally not the type of person who would give out my location data readily, but the benefits of waze is really nice.

I used to love Waze, because of the clever rerouting and the UI was pretty slick for a free GPS app.

I'm thinking of switching to Google Maps though because their search is quite frankly _better._ Which doesn't make sense to me, because my understanding is that Waze just aggregates search results from several major sources. {Bing, Google, Yahoo, etc.}

Around the holidays: Waze routed me to a store [first result] that had closed and relocated [a few miles down the road].

Google Maps showed the same results, but they were ranked differently: the closed or relocated store was annotated as such, and was ranked at the bottom of the list.

I've also had Waze fail to take some addresses as input, for e.g: when the house number has a WEST and SOUTH portion, that other apps can understand with no problems.

I almost got lost because of that glitch.

I've just had too many problems with the Waze search to continue using it. Which is a real shame, because I love the app itself.

One of the nice things about Waze is being able to switch the search engine it uses for locating things. I've used that several times when it's default search couldn't quite find what I was looking for.

Even using that feature [e.g: to select Google] it doesn't seem to return the same result set that Google's own application does.

I'm not sure if this is an issue with Waze itself, or possibly some limitations built in to Google's 3rd-party API.

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Unrelated to that: I've also noticed that Waze is starting to display some advertisements, which really bugs me in a GPS app. If this is how they intend to monetize it, I really don't want to support it. I would gladly pay quite handsomely for the service to get rid of adverts.

(I don't even like the idea of billboards to be honest: IMO any distraction from the road that doesn't directly pertain to navigation is borderline unethical.)

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