Restaurant tips app takes on Foursquare and Yelp!
Russian start-up AlterGeo uses preferences on social networks to help consumers pick a restaurant. The developers claim their app is more personalized than rival services Foursquare and Yelp! June 5, 2013
The fad for marking your presence at favorite restaurants, clubs and galleries for your friends on social networks is big, and getting bigger. Alter-Geo capitalises on people’s desire to preen in front of one another.
The company’s latest app, Gvidi, which means “guide” in Esperanto, selects the best places to suit the user’s tastes and tells each user personally where to go. About 500 places offer discounts to users of the network.
The story behind Gvidi begins some 10 years ago, when Alexander Dolgin, a professor at Moscow’s Higher School of Economics, studied the problem of how to quickly choose which cultural sites to see.
To get tips on what’s on around town, users were asked to answer 100 questions. The replies were analyzed and the person was then offered books to read, or films and plays to go see.
Russian start-up AlterGeo followed the same pattern, with the difference that the user answers questions over a period of time and not on paper but by marking the places visited on a map. Then the app analyzes which places someone visits most frequently and offers recommendations on similar places to visit.
Over a number of years, AlterGeo created the biggest cross-platform geo-social network in Russia and the CIS.
The idea for the company began with Denis Alaev, a student at the Moscow Aviation Institute, who noticed that Wi-Fi was better than GPS for indicating someone’s location. His further research and a dissertation on the topic provided the basis for setting up the company.
In 2008, Alaev teamed up with friends Anton Baranchuk, Sergei Kurlovich and Alexandre Dorjiev to create Wi2Geo (“wireless to geography”).
Both of his friends hail from Irkutsk, where they first met. Anton Baranchuk had previously tried several of his own start-ups, including AnyChart, an international company and a world leader in visualising data and business graphics (among its clients are Microsoft, Oracle, AT&T, 3M, Ford, Volkswagen, Halliburton, Lockheed Martin, Reuters, Juniper and others).
He currently combines his work at AnyChart with working on Gvidi.
Alexandre Dorjiev studied at the Moscow Institute of Physics and Technology, majoring in “Systems Analysis and Management” and “Applied Mathematics and Physics” (specializing in “Modelling of Technological Processes”).
He started hosting work while still a student and later set up his own hosting company. Dorzhiyev recalls that, when he came up with the idea, smartphones had not yet arrived and phones could only locate objects on the map with the help of GPS. He had to tout the advantages at various conferences until he found the first investor.
The initial capital for AddVenture was $50,000. In the summer of 2008, the new type of navigation hit the market. Along with navigation, there appeared AlterGeo, which soon began integrating with social networks.
By that time, the money had run out and another venture fund, Kite Ventures, came to the rescue. It forked over $1 million.
Two years later, in June 2011, a group of investors, including the venture funds Intel Capital and Almaz Capital Partners, and American businesswoman Esther Dyson, acquired a blocking stake in AlterGeo (slightly over 25 percent) for $10 million.
The company became a Skolkovo resident in September last year.
After securing the financing coming, the developers decided to create an entertainment application. “We decided to offer a separate service addressing a specific problem: finding the right emporium for every individual.
We thought it would be wrong and superfluous to add new functions to the already versatile AlterGeo. Because the service would obviously work as a mobile app, ideally it should give a clear answer to one specific task,” says Alexandre Dorjiev, co-founder of Gvidi.
So far, Gvidi has not produced a return on the investment, but the developers say it is too soon to judge the results. At this stage, the challenge is to identify the parameters that guide people’s choices and perfect the hardware. Although 1 million people use the service, it has yet to turn a profit.
Gvidi has won awards at numerous contests, including the runner-up in Food Startups, the winner of Apps4All in the Best Offer Using Google Services on other Platforms, the international Tactrick Android Developer Cup for Best Idea, and was named the Best Russian Startup among European companies.
East-West Digital News, an industry newsletter focusing on tech start-ups in Russia, says that within two months the project will secure the necessary funding “which basically means that Tacktrick will now finance the Gvidi app for Android.”
The company is preparing versions for foreign markets and is set to develop applications. Gvidi’s main rival for check-ins internationally is thought to be market leader Foursquare. Gvidi argues, however, that while Foursquare registers only check-ins, Gvidi uses assessments of restaurants and the sites visited by the user.
Another major rival is Yelp! Gvidi hopes that its app’s ability to read off interests via Facebook, Twitter and Foursquare will give it an edge over Yelp!, which bases its recommendations only on Facebook.
Vyacheslav Solodky, CEO of the venture fund Life.SREDA, believes that Gvidi should compete with services that offer reservations in restaurants.
“It looks as if, with technology and a team, the project managers are trying to monetize the technology… by using it for more focused sub-projects, such as reservation of restaurant tables,” says Solodky.
In the United States, restaurant reservation services (such as OpenTable) have soared in popularity with clients and investors. Several projects in Russia are trying to occupy this niche.
“The question for Gvidi is whether it will become the leading service in a still-to-be-developed niche,” says Solodky. If this service takes off in Russia, “not just the first, but the second and third players on the market will get investors,” he says.
Gvidi is an intelligent personal guide to cafes, bars and restaurants nearby. This mobile service provides the opportunity of "intellectual" search and selection of food locations on the basis of people's tastes. Gvidi chooses the best cafes, bars and restaurants to match the users' individual preferences, offers precise personalized recommendations on where to go, and enables instantaneous table booking.
Unique selling point:
Gvidi’s intelligent personalized recommendation engine is based on a mathematical model of collaborative filtering created in result of sophisticated scientific researches. The system examines huge volumes of open data about each user and his/her friends (check-ins, habits, interests, and so on) across a number of sources including but not limited to social networks Facebook, Twitter and VKontakte.
Start date: November 7, 2012
Gvidi (started in 2012) is developed by AlterGeo, the company founded in 2008 and funded by AddVenture (2008), Kite Ventures (in 2009), Intel Capital, Almaz Capital Partners and Esther Dyson (in 2011).
Gvidi has already been launched as a free iOS app in Russia, Ukraine, Belarus, Kazakhstan, Moldova, Uzbekistan and Tajikistan, and is expected to be brought to other markets in the near future. Nowadays, the developers are engaged in the further improvement of their sophisticated collaborative filtering mechanism and table booking system, providing Gvidi with the enhanced capability to process user data across the widest possible range of relevant websites (social networks), and creating versions for other key mobile platforms.
Communications Director: Andrey Khachaturov, firstname.lastname@example.org, +7 950 191 91 55