Dash Navigation: New Twist on an Old Tech Story

Kevin Maney writes: Dash Navigation has always had a couple of key things right. The first is the simple idea that car navigation systems should be always connected to the Internet, not just a GPS satellite. It's one thing to know where you're heading and get directions to that place. It's another when you need to, for instance, search for the nearest bar that serves Belgian beer and get guided to it.

The other very cool thing Dash has pursued is the idea of using data from networked, moving cars to chart real-time traffic situations -- a system that could know right that minute if a highway is deadlocked or if cars are moving at 70 MPH.

But instead of just creating the service that could make all that work, it also built a proprietary gadget -- that it tried to sell for $400-plus. That's just too hard for a start-up to carry off. Dash found itself competing with much bigger companies like Garmin on the GPS side, and with smart phones like the iPhone that increasingly have GPS plus a network connection.

So this week Dash gave up on the hardware, cutting two-thirds of its staff and focusing only on the service. Dash will apparently try to offer its service on cell phones -- or maybe on other companies' GPS systems for cars.

I've seen this kind of story play out before. Early this decade, Good Technology built both a hardware gadget and an e-mail service -- both essentially to compete with RIM's BlackBerry. Before long, Good gave up on the gadget and focused on making the service available on smart phones. It's pretty tough for a start-up to break into the gadget business -- and even harder to pair a gadget with a service and try to do both well.