Catalysing local ecosystems
While some of the most well-known platform and ecosystem companies are today’s corporate giants, we are increasingly witnessing a growth of smaller, entrepreneurial players that are leveraging the newly available technological opportunities not only to create wealth, but also to serve a social mission. Traipse Inc., headquartered in a small city in the Shenandoah Valley of Virginia, USA, is a case in point. Founded by a former urban planner and policy executive, it started as an ecosystem play focused on leveraging geo-location and creating interactive problem-solving puzzles that are particularly exciting for an interesting demographic.
An ecosystem to support historic downtown areas
Securing contracts with public authorities in smaller historical cities in the United States like Staunton, Abingdon, Winchester, and Suffolk, Va., helped Traipse to defray the costs of developing an app that allows people to take guided walks peppered with intellectual challenges. It provides a set of themed tours of a historic business district, stopping along the way to engage the user to learn interesting facts and complete riddles, brain-teasers, and other puzzles based on the surroundings. This “gamified” experience allows a demographic of curious, tech-savvy, riddle-loving tourists to explore and connect with a city. Pushing the “local” aspect, Traipse stops include local businesses, and to provide extra motivation, where Traipse App users are able to crack the code, they can be rewarded with a discount or free sample in a local store.
Traipse is the quintessential ecosystem play: A company creates a tool that allows a number of local players (and potentially other national players) to connect, and adds value in a new, fresh way to a final consumer. While reviving downtown areas is a true passion for Traipse, its financial support comes primarily from business improvement districts or chambers of commerce, which find the opportunity to support their region and attract an interesting demographic group, while increasing stickiness and using technology! Its model allows businesses in the district to offer discounts or samples as inducements to those who solve the riddles- and who tend to discover what local shops have to offer.
Cultivating local relationships
Traipse is keen to enter into new cities where it can cultivate relationships with local businesses and institutions. In Staunton, Va., for instance, Traipse worked with Mary Baldwin University to create an interactive game for its students; with the local Harry Potter festival, creating an App used by those visiting the city for the festival, and offering them a geo-located, Harry-Potter themed tour (designed by the Traipse team); and the Blackburn Inn- a boutique hotel offering its guests Traipse-designed tours.
While this paints an exciting picture, and shows the power of local synergies, it has not always been smooth sailing. “The biggest challenge”, Darren Smith, the founder and Chief Executive Officer said, “is to turn excitement into a stable contract. Excitement alone is not sufficient; you need to make sure that you get agreement from a number of different players, including- though clearly not limited to, the ultimate payers”. The challenge in this, as with other local ecosystems, is that exhilarating as they may be, growth is gradual, and requires a sponsor to help it scale up fast. “We haven’t had any major sponsor or supporter so we’ve been doing all the hard work of growing, building connections, and designing the games. Once we’re in an area, we have a strong positioning. It takes quite a while to grow. Local ecosystems do require a lot of local, hands-on work!”
Pivoting to MyLocalToken
One of the aspects that Traipse’s partners kept bringing up was the desire to be able to reward those who won Traipse tours with a “local currency”. Local “tokens” or vouchers which could be cashed in local businesses, had been around for a long while. The problem, of course, was that these were hard to manage, could not be “broken down” into smaller units, and, once used by a customer, would ultimately have to be given by the shop that received them in lieu of payment, to the local authority which issued them, in exchange for funds. The whole process was inefficient, costly to run, and inconvenient. So Traipse found itself increasingly asked if it could solve a related, but separate “problem”: Helping set up a mobile-phone driven, cost-effective local currency system which would encourage patronage of independent businesses, mitigate leakage of capital from local economies, and save local merchants on transaction costs. The company soon enough realized that their desire to reward Traipse users with real-world benefits that feed the virtuous cycle of the local economy could be integrated with such a product, already demanded by those local partners.
In addition to working on improving the app, preparing new content, and building relationships, Traipse embarked on a transformation process, drawing on recent blockchain technologies to offer a “local token”, which could be used by anyone in a city, buoyed by the cryptocurrency excitement. While Traipse was not immediately drawn to migrate into a differentecosystem manager who issues Initial Coin Offerings, the merits of finding a legally safe way to offer a token for the local economy across a swathe of needs became evident. Local authorities needed to facilitate a mobile telephony-based local token offering a solution at a fraction of the cost of payment systems, while allowing also a local authority to invest money which would only be used to support local economy development. Seizing the opportunity, Traipse branched out, used an existing cryptocurrency structure called OST (for “Open Simple Token” that provided wallet functionality and exchange, provided a “skin”, and crucially offered the local connections as an orchestrator of different micro-ecosystems, becoming “myLocalToken”, at the hub of a system that allowed for local payments, for local businesses that all adhered to some core principles.
Evolving as an ecosystem orchestrator
Traipse’s model remained one of an ecosystem orchestrator, but now the complementors and key partners changed. While it would be much easier for a local authority to do this, MyLocalToken/Traipse’s role is to orchestrate the links, specify the “how” of this local token, and make it happen. Using the wallet functionality of an established cryptocurrency player, OST, MyLocalToken aims to focus on the alignment of different key ecosystem participants. The company is exploring different applications for MyLocalToken, including a collaboration with Velocia (explored in one of our other digital platform and ecosystem case studies) to solve the mobility needs of a city.
For MyLocalToken/Traipse, ecosystem design is an ongoing process. It is driven by the needs of the final customer, and the excitement of the intermediate (and paying) customer. It shows that opportunities in ecosystems often require more or less distant jumps, and a re-definition of the value proposition and the nature of the links between the players that are connected. Increasingly the rich opportunities of linking private initiative, state-related actors, and local societies, positions entrepreneurs in a role of helping broker and implement these new links, not only to create financial benefit, but also to support policy and achieve local objectives including social engagement. In a world of fewer and bigger global behemoths, MyLocalToken/Traipse also showcases that significant funds or initial scale are not indispensable factors for success.
Like with other pioneering ecosystem businesses, MyLocalToken is a B2B2C play- a service primarily oriented to other businesses, but with a clear focus on what the final consumer will actually see as a benefit. They also show that in addition to having something that final customers want, companies that shape new ecosystems must also rely on open-minded partners, and be ready to pivot, or reframe to take advantage of a shifting set of opportunities.