How to stand out in developing social media apps

Competition is fierce in the social media app world, but revenues are slim. This is not a surprise considering the low barriers to entry to their development. And with so many people using Facebook, LinkedIn, Twitter and Foursquare to share where they are, what they are doing and how they are feeling, there is an abundance of social information available for free to build on top of.

The biggest challenge for entrepreneurs isn't how to develop their product, it is how to stand out in a world filled with hundreds of other similar apps in order to make money. That is the feedback I hear the most when talking with investors about the app development world.

They tell me that no one differentiates themselves. Everyone thinks that if you build a social media app that serves ads, money will come their way.

What makes these social media apps so similar? They all follow a common development approach. They take the vast amount of data that people put online and reorganize it in some way. Examples are apps that collect data from Facebook, Twitter and Foursquare to tell you where your friends are, or apps that use LinkedIn, Twitter and blogs to track what people are saying about a company.

It's definitely interesting stuff but most people aren't willing to pay for this kind of information. Why would they, when there are many free versions of these apps out there? I don't buy them because this kind of information is easy for me to collect, using one e-mail or one search.

As I have gone through social data available for app development, I have found that I can put the information into two categories.

The first category includes information that is backward-looking and tells you about something that has already happened.

Apps that tell you about your friends – in fact, most apps I've seen – are backward-facing: They tell you where your friends were last, but offer nothing about where they are going.

The second category is much more interesting, as it includes information that can be forward-looking.

In fact, some companies are working on apps that try to use social media information to be predictive. They take individual pieces of data which, by themselves, seem inane, but when added to other points of data, they offer insight and prediction.

For example, if one person tweets that he or she is at the Eaton Centre in downtown Toronto and has the sniffles, that is of no interest to anyone. But if hundreds of people at the Eaton Centre mention that they are feeling under the weather, I might decide not to go there today. That is information that I can't collect on my own but is of value to me.

Sickweather is an example of a company building something using second category data.

Sickweather mines Facebook and Twitter for population health information. It looks for keywords within the information, identifes which are relevant and then finds trends that can be used for prediction. With this information, it will build real-time maps of reported symptoms and predict the spread of disease.

The end result is information for which the company may be able to charge.

This is where I feel a company like Sickweather can stand out, in developing an app that is predictive, and harder to duplicate since it will include some proprietary data analysis and evaluation.

If you want your app to stand out and not face hundreds of me-too competitors, you'll need something proprietary in your processing; something more than just rearranging free data.

Special to The Globe and Mail

Brian Gordon is an entrepreneur in residence with the Centre for Brain Fitness at Baycrest in Toronto, Baycrest's commercial incubator responsible for commercializing technology and expertise to create social and economic benefit.