You.Have.Mail Wherever.You.Are

More than 4 billion people in the world lack mailing addresses. A new geo-location platform is poised to change that by envisioning a universal addressing system, functional in any language, that refers to locations more precisely than street addresses can.

The printed copy of the Google Maps satellite view of the area I had managed to download bore little resemblance to the reality on the ground. The dust-covered, pothole-filled street on the outskirts of Ulaanbaatar housed an eclectic agglomeration of summarily built shanties, small shops, and traditional Mongolian felt tents (called gers), some of them erected just a few months before. Because houses lacked numbered addresses, the only way to find the family I was looking for was to reference the printed map and attempt to identify the house with the right shape and roof color within the neighborhood.

That is why geo-location and postal delivery within the Mongolian capital city of 1.5 million inhabitants is a formidable logistical challenge. More than 60% of the population[1] lives in ger districts like the one I was visiting, which are sprawling residential areas without access to basic public services like water, sewage systems, and central heating. There are few named streets, so people usually describe locations using the nearest landmark or provide a cellphone number on envelopes to ensure delivery.

Outside the capital, the problem of delivery is compounded by Mongolia’s vast size and low population density: some 1.3 million people inhabit its more than 600,000 square miles. Moreover, about a quarter of the population is nomadic and lacks permanent addresses.[2]

In response to this challenge, Mongol Post, the country’s largest mail provider, licensed in June 2016 a new geo-referencing system from the British technology company what3words. The startup devised a method to divide the surface of the earth into a grid of 57 trillion 3mx3m squares. Each square has a unique three-word address that can be communicated quickly, easily, and with no ambiguity. The company uses a geocoder to turn geographic coordinates into these three-word addresses and vice-versa. For example, the approximate location of Professor Toffel’s lectern in our Aldrich classroom is hero.chemistry.popped.[3]

The business model of what3words currently revolves around licensing the three-word addresses to companies that require precise geographic information systems. While Mongol Post is the first to use the system for government mail delivery, organizations such as the United Nations, courier companies, and mapping firms like Esri already use the system.[4] The goal of the founders is to revolutionize the worldwide geolocating and postal delivery service, which has remained unchained since the 18th century.[5]

Operationally, what3words has adopted a two-tiered approach to facilitate expansion through a “freemium” basic package and a paid subscription. Combined, these two options can lead to growth through networks effects: the more customers sign on to the platform, the more valuable the w3w service becomes. To achieve this synergy-inducing scale, the company has prioritized expanding its free mapping product to more than 170 countries.[6] The number of paying customers are expected to increase as the mapping system becomes more efficient and allows businesses to use it as platform that is seamlessly integrated with the client companies’ existing systems. Moreover, the service is available in multiple languages to ensure adoption across multiple geographies.

My recommendation for the company is to consider targeting more specific uses for its geo-location services. For the 75% of the earth’s population (approximately 4 billion people) that have no address for mailing purposes, the lack of a physical address also translates into enormous difficulties to open a bank account, register for municipal services, or be reached in an emergency.[7] With minimal incremental costs, what3words can develop paid partnerships with companies targeting other such services, including firms seeking to increase financial inclusion for the unbanked, municipal utility providers, or emergency response and crisis management organizations. The market size is enormous and so are the opportunities to diversify income streams. Aiming to radically change the lives of billions of people would precipitate a true digital transformation of an antiquated postal system that has so far been unable to match the needs of a growing world population.

End.of.Essay

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[1] Carlos Barria, Inside Mongolia’s Ger District, Reuters, August 2013. Available at http://blogs.reuters.com/photographers-blog/2013/08/07/inside-mongolias-ger-district/

[2] Joon Ian Wong, Mongolia is Changing All Its Addresses to Three-Word Phrases, Quartz, June 2016. Available at http://qz.com/705273/mongolia-is-changing-all-its-addresses-to-three-word-phrases/

[3] For more geographic adventures, you can use the website https://map.what3words.com/

[4] Natasha Lomas, What3words Gets $3.5M Led by Intel Capital To Simplify Location Sharing, TechCrunch, November 2015. Available at https://techcrunch.com/2015/11/03/what3words-series-a/

[5] National Postal Museum. Available at http://postalmuseum.si.edu/exhibits/current/binding-the-nation/starting-the-system/colonies-and-the-mail.html

[6] Natasha Lomas, What3words Gets $3.5M Led by Intel Capital To Simplify Location Sharing, TechCrunch, November 2015. Available at https://techcrunch.com/2015/11/03/what3words-series-a/

[7] Joon Ian Wong, Mongolia is Changing All Its Addresses to Three-Word Phrases, Quartz, June 2016. Available at http://qz.com/705273/mongolia-is-changing-all-its-addresses-to-three-word-phrases/

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2 thoughts on “You.Have.Mail Wherever.You.Are

  1. This is a fascinating concept and promises so much social value! My two main concerns are about adoption and validation/recognition of addresses. On adoption, to sign up for w3w, individuals need access to GPS systems to locate their homes – a technology that most slum dwellers in Mongolia or India probably do not have access to. Businesses that would find this technology valuable could go around and sign people up, but would then likely be unwilling to pay for the service since they are the ones creating its value. Then, there’s the problem of mobility. In India at least, much of the unaddressed population is also highly mobile. Workers will come into the city during winter months to find jobs, and return to villages to farm in the spring and summer. How will w3w not only acquire these individuals but keep their records updated? The second issue is that for 3-word addresses to be useful, they will need to be legally recognized by the government. [1] In the absence of legal recognition, there is significant scope for fraud or misuse of information, e.g., providing incorrect information to avoid payment for services.

    [1] http://www.smithsonianmag.com/smart-news/mongolia-adopts-address-system-that-uses-three-word-names-180959439/

  2. This is a very interesting technology, and I certainly understand its validity in the situation in Mongolia. However, if people do not have smartphones, how will they be able to look up the 3 word location and get directions there? In addition, in developed countries that already have addresses it can add another level of specificity to locations, but I imagine the uptake will be much lower because it does not seem necessary in most circumstances. Could it partner with any major map apps? These 3 word addresses exist but if no one knows about them then how will it be used? I think they will need a major marketing effort in order to make people aware of this technology and if an app like Google Maps gave people a notification that it existed it would certainly be a step in the right direction.

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