A new company is making blips on the location-based services radar. New York-based Topguest is moving into the market with an idea to bridge location-based services with the travel industry. Working in “sneak-preview” mode — meaning it’s aching to make announcements but isn’t ready yet — the company is backed up by an experienced venture capitalist, Peter Thiel, the co-founder and ex-CEO of PayPal.
Topguest aims to connect the loyalty programs hotels and airlines have with various check-in services like Foursquare, Gowalla and Loopt. It’s going for a niche market and making a bet the travel industry will venture into the location space using its product.
Topguest actually started out focused on a different market in July 2009, when co-founder and CEO Geoff Lewis was working on a product called Udorse. Udorse’s idea was to have users take pictures, tag them with information — basically endorsements of products or locations — and be rewarded for them. Lewis says the service wasn’t really scalable, so the team decided to abandon that idea this spring and start building Topguest instead.
Topguest is taking advantage of the application programming interfaces, or APIs, of various services and building its product on top of that. Users are first asked to sign in with Topguest and sync all the check-in services they use. Then, when users check in using Gowalla or Foursquare at hotels that have a partnership with Topguest, they get points and rewards with the hotels’ loyalty programs. Topguest recently signed a partnership with Standard Hotels, Andre Balazs’ chain. One of the top rewards is a complimentary week’s stay at any of the Standard hotels, provided a customer checks in at all four hotels (located in California, Florida and New York) within one week.
The location services themselves are already coming out with loyalty programs and rewards, such as Starbucks slicing a dollar off the price of a beverage for the Foursquare “mayor” of a Starbucks coffee shop. Topguest could conceivably be elbowing the check-in companies out of the way, but Lewis doesn’t see Topguest as competition or a middle-man.
“If anything, we will boost the number of people checking in with those services. We are trying to build a stack of services for the travel industry to help hotels and airlines become location-smart and improve the way they communicate with their customers. Also, we are not looking at local businesses as many of the check-in companies are,” Lewis explains.
And Topguest shares an investor with Gowalla in Founders Fund. While not disclosing the amount of funding yet (“We will have many announcements, including funding, during the summer,” says Lewis), Topguest has Peter Thiel from Founders Fund as a board member.
Thiel was the cofounder and CEO of PayPal, the online-payments service purchased by eBay, and he is a Facebook board member, a company the fund has also invested in. Nicknamed the “don of the PayPal Mafia” in Silicon Valley, Thiel has invested in many start-ups either personally or through a VC fund, including Yelp, LinkedIn, Friendster, and Yammer. Lewis used to work for Thiel as the vice president of marketing at Clarium Capital, a hedge fund run by Thiel, and that earlier professional relationship must have played a role in Thiel’s decision to join Topguest’s board (Thiel is also on the board of Palantir Technologies, an analytics platform company that was co-founded by an ex-Clarium employee Joe Lonsdale.)
Being a small start-up (employing four people at the moment), Lewis is eager to start making a splash in the location-based services space. We’ll see how well the Topguest strategy pays off for this newcomer.
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