Swing-by-swing: Network Effects Drive Success for(e) this Golf App

Swing-by-swing (SBS) is a GPS enabled golf application (app) that gives players precise yardage estimates based on where they are standing on a given golf course. SBS also provides a digital scorecard so players can keep track of their scores, as well as other tools for tracking individual statistics over time, such as a player’s “handicap,” number of birdies, pars, etc.

Over the past 5 years, SBS has grown to be one of golf’s most popular apps with millions of downloads and a nearly perfect user rating (4.7 out of 5 stars). So, what has made this app so successful? The answer may be somewhat surprising: its ability to harness the power of direct network effects.

Although SBS creates value for its users in many ways, its most valuable (and popular) tool is its ability to estimate a player’s distance to the hole. Comparable yardage estimators – a separate hand-held device – typically sell for over $300, but SBS is a free app (“freemium” pricing model) and is just as accurate as these higher priced options. SBS combines satellite imaging with GPS capability to know exactly where the player is standing on the course; however, it requires previous users’ input to know where the hole is, as the satellite technology has not yet been developed to do this. That is to say, the application only works at a given golf course if a previous user has already “mapped” where the holes are on that course.

When the application first launched, it could provide little value to its users because few golf courses were mapped. But as soon as the first users mapped several courses, any user could benefit as long as they were playing at one of those courses. As more courses got mapped, more users downloaded the app. As more users downloaded the app, the pool of individuals mapping courses grew. This cycle continued and SBS’s growth snowballed as it reaped the benefits from these direct network effects.

SBS looked to strengthen its ability to scale, when it added a feature for friends to track each other’s statistics. Because a big part of golf’s appeal is its friendly competition, SBS was able to leverage the impact of direct network effects, again, by encouraging users to invite their friends to use the app. The more “friends” a user has on the app the more fun it was to use; the more fun it was to use, the more friends that would download the app.

Today, there are millions of SBS users and there are thousands of courses mapped on the app around the US.  SBS currently holds a dominant position in this market and is the clear incumbent; however, SBS should not become complacent with its leadership position.  There are many new golf apps that are attempting to tap into this market by offering nuanced value to golf enthusiasts.  While it would be difficult for a new entrant to compete head-to-head with SBS’s yardage estimator – based on its established network of users – if a new app developed a differentiated way to attract users or leverage indirect network effects to scale and capture more value from partners, it could undermine SBS’s growth potential.

SBS must continue to leverage the strong direct network effects it has established, while focusing on innovating its offerings to fend off new entrants that are nipping at its heels.

 

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Student comments on Swing-by-swing: Network Effects Drive Success for(e) this Golf App

  1. Interesting. I will definitely have to check out the SBS app. How is it different than the host of other Golf GPS apps? Do they also harness any network effects? Is the marginal SBS user valuable to the network only if they help in mapping a course? Or does the marginal user help refine previous mappings?

  2. Very interesting app! I love golf, so I’ll have to download it. I especially think creating network effects through friends and competition is a good way to help increase incentives for word of mouth.

    To a certain extent this manual user mapping reminds me of Google Maps beginnings and how the value of the platform continued to grow as more and more users downloaded the app since it improved the accuracy. I wonder how accurate the distance estimation is though. For example, since golf courses generally relocate the position of the hole on the green, is there any impact on the technology’s accuracy?

  3. I will definitely download this app. Thanks for the introduction. So the course hole is mapped through crowd sourcing? So what happens when management moves holes to different locations on the green?
    I like that it encourages friendly competition among friends. I would also think that it acts as a tool to humble brag about your accomplishments.
    I wonder though how important their yardage estimator is to their users. I for one am not that great of a golfer so if the app is off by 5 yards, I wouldn’t be too bothered by it. If a competitor can get their yardage estimator fairly accurate and focus on creating value through network effects, I think they could be taken over.

  4. This sounds like a cool app. I do actually see the potential for indirect network effects as well – the most immediate being very targeted advertisements, especially for the “free” users of the freemium model. Seems like an effective way to tailor advertising to a core group of golf enthusiasts. Further – the data collected on where golfers play most often is valuable to golf courses trying to attract users to their clubs – think of densely populated golf course areas like Hilton Head particularly. I think those vendors might fit the “merchants” bucket we’ve been using in class well and benefit from a critical mass of SBS users in addition to the users increasingly benefitting from the community itself.

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