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Waze is changing more than urban traffic

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In 2009, an executive from a young mobile navigation startup appeared at the annual DEMO Fall conference in Santa Clara, California and talked in glowing terms about how her company was going to change real time traffic reporting for decades to come. Today, that same executive appeared on the same stage at DEMO again, but this time she and her firm were about $1 billion richer.

In a classic Silicon Valley success story, Di-Ann Eisnor of Waze appeared today at DEMO barely five months after being acquired by Google for a reported $1.2 billion. If she seemed a little stunned at what had happened to her in merely four years, it was understandable. There weren’t many in the tech industry who viewed Waze as the yellow brick road to instant success. As Eisnor put it today, “We were never the cool kid of Silicon Valley.”

What they were was a remarkably effective model for how to create a valuable service by leveraging the power of a smartphone user community who cared deeply about one simple daily task: getting to work on traffic-choked freeways as easily as possible.

Using crowdsourced data from drivers, Waze built a user community of 50 million customers to map out every road in large cities and provide up-to-the-minute updates on traffic bottlenecks and the best routes at any given time. “Our vision was always the same,” recalled Eisnor. “It was people working together every day to outsmart traffic.”

Waze’s ultimate success was the culmination of a pattern well-known by other companies who have attempted to become game-changers in the technology world today. Start company. Get funding. Come close to failure. Recover. Cash out.

The signature moment for Waze, as Eisnor told the conference, came in 2011 when a major freeway in Los Angeles had to be completely closed over a long weekend for construction. Known as “Carmageddon,” the closure threatened to snarl traffic in America’s second largest city for days. “We knew that LA was interesting because you had lots of people with smartphones and terrible traffic,” said Eisnor.

In a stroke of good fortune, Waze was invited by the ABC-TV affiliate in Los Angeles to spend four days in the station’s studio reporting on traffic conditions live using user generated data. As Eisnor described it, the “four days of free publicity” gave Waze a huge springboard for their business and a number of TV stations now use their traffic data today.

Waze’s success was due in large part because they built their corporate management culture on several important principles. These included making sure that no one ever withheld their opinion and that no meeting could end without a decision being made. “There was yelling,” said Eisnor. “But the respect was always strong.”

The mobile navigation app has also shown potential for important uses beyond simply tracking traffic congestion. During Hurricane Sandy last year, Waze provided support to local authorities in New Jersey by issuing a push alert calling for critical information regarding gas stations without fuel. The company received information from 10,000 users that gave the state a “roadmap” for where to send their fuel trucks during the crisis.

Not long after Waze’s inaugural appearance at DEMO in 2009, Eisnor and her colleagues met with some of the bigger players at the time in the mapping space, all of whom scoffed at what they were trying to build. She was not deterred. “There’s a DNA in entrepreneurs that allows them to do the impossible,” said Eisnor. And now she’s part of one of the biggest technology companies in the world.

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