IMO, you need to do 2 things to be successful with this app:
1. Integrate with major IM services, AIM, Jabber etc, and have your own "Say Hi service" in there for LBS chat.
2. Put something around the app, as in make it do more than just chat. Explore making it a dating app, so that you can chat/"quick date"/"lunch date" people around you that are signed up with your service. Companies like match.com etc have just stopped innovating in this space and you may be able to get traction.
I haven't done the research to see who else is doing this but it seems like for your app these two things look like an obvious steps.
1. Integrate with major IM services, AIM, Jabber etc, and have your own "Say Hi service" in there for LBS chat.
2. Put something around the app, as in make it do more than just chat. Explore making it a dating app, so that you can chat/"quick date"/"lunch date" people around you that are signed up with your service. Companies like match.com etc have just stopped innovating in this space and you may be able to get traction.
I haven't done the research to see who else is doing this but it seems like for your app these two things look like an obvious steps.