It's been nine months since Andrew Mason, the founder and former CEO of Groupon, first launched Detour, an iOS app that offered a collection of walking tours throughout San Francisco. Now he's relaunching it as a packaged tour guide of San Francisco, with a new technology engine that changes the guides as users move around. He's also revealing more details around plans to monetize his latest project.
Detour 2.0 is a "multi-part documentary" of San Francisco, as Mason is calling it, that is downloadable as a $25 walking tour guide. It bundles 10 different walks, some of which offer historical perspective on a neighborhood or tourist attraction and each is narrated by well-known journalists and local activists. Previously, walks were offered as individual walking tours for $5 or $10, and each user had to pay for a walking tour in order to experience it as a group. Now, up to four people can simultaneously join a user's walking tour. The new Detour app also includes a new "touring engine" that dynamically changes the routes in each tour, based on elements like weather or the business hours of a stop on the tour.
Detour guides will be available in Los Angeles, Chicago, and New York in the coming year.
Detour is certainly a different route to take (terrible pun intended) from Groupon, with the exception, perhaps, of the emphasis on locality. And Mason's monetization strategy for now is equally as divergent. Whereas Groupon makes money by charging merchants a hefty fee for group vouchers sold through email marketing, Mason has said he plans to make money by selling the Detour's tour guides directly to consumers and turning the app into what he calls a full-fledged travel company. And, he claims, that won't necessarily include advertising.
"I've always gravitated towards businesses where customers value something and buy that directly, and I'd vastly prefer to do that rather than advertising," says Mason. "In a city like San Francisco you have 18 million tourists visiting the city every year, and about five percent will go on a walking tour. If five percent do walking tours through Detour, that's still more than enough of a business to be able to scale and make money."
"We would love to be able to offer bundled physical goods, like food and tickets, but the current model makes it impossible," Mason says
The company, which is based in San Francisco, has also considered selling physical goods — things like meals at restaurants or wine tastings — as part of its walking tours, but is holding off for now.
"We would love to be able to offer bundled physical goods, like food and tickets, in the price of Detours, but the current model makes it impossible because of the margins," Mason says, referring to Apple's 30 percent revenue share of all goods sold through iOS apps. (Mason also points out that he's funding Detour himself while the app gets off the ground.)
And, looking even further into the future, there may someday be a toolkit for users to create their own walking tours for Detour.
For now, though, Detour is focused on growing its user base beyond its "thousands" of beta testers, expanding into new cities, and readying an Android app for a launch sometime in the new year. "That will be a big area for us, because a lot of people travel with Android phones," Mason says.