Thursday, November 26, 2009

Web 2.0 Start-ups Continue to Emerge in the Local Space

Excerpted from Jason Kincaid's 11/25/09 article

Last month we saw the
launch of TechCrunch50 winner RedBeacon, the startup that lets you book local service providers directly from the web. Today it's getting some strong competition from a new startup called Thumbtack, a local service booking engine that's looking to offer both a comprehensive directory of providers and a greater degree of trust than you can find elsewhere.

Featurewise, Thumbtack is a mix between RedBeacon, Yelp, and OpenTable. Like RedBeacon, it lets you sign onto the site and issue a request for a service, which service providers can then bid on. But Thumbtack also offers provider profiles, where these providers can list some of their specialties and price points. There's also a section where you can book a service directly from a profile page as you would on OpenTable, complete with an availability calendar.

One of the biggest issues with local services like Thumbtack is the chicken-and-the-egg problem. These sites generally launch with a relatively small number of services, which means that users can have a hard time finding what they need (and without users, providers have little incentive to join the site).

If a service provider is licensed they can post that in their profile, which Thumbtack will verify for free. Thumbtack is also giving providers a handful of premium verification options. Providers who successfully pass these checks are rewarded with badges on their profile pages, giving users more confidence in their service.

Thumbtack is offering its service nationwide beginning today, but as with RedBeacon their primary focus is the Bay Area, with plans to expand down the road.

Thumbtack is doing a lot of things right with its site - I particularly like the idea of having providers verified through background checks, which helps differentiate it from sites like Angie's List, Craigslist, and RedBeacon (which lets providers display their licenses but doesn't do background checks). That said, Thumbtack faces the same challenges that RedBeacon will have. For one, it's going to have to train users to turn to their computers rather than their yellow pages for these local services. And while 10,000 businesses is a good start, it's going to take a long time for the service to build up a robust community of users and reviews. The background checks are a nice touch, but they don't do much for helping users discern which providers offer a high quality service.

For another service that's taking a different approach to matching users with trustworthy service providers, check out
Workstir, which provides suggestions based on your social graph.

My Take

Jason is right on with his "chicken and egg" analogy. Networks need critical mass to get traction - and traction to achieve critical mass.

The name brand, free social & local sites (CraigsList, Facebook, MySpace) have driven this process by offering unique value and exciting their users. AngiesList, in a slightly different category, charges consumers to subscribe and seems to be spending quite a bit on advertising. It does not appear to be built on a social foundation, so not sure if it's truly "Web 2.0".

Sites that build their functionality around their members' social networks have the greatest chance of facilitating and leveraging genuine trust to drive commerce.

Monday, November 23, 2009

Social Media: Getting Down to Business

Excerpted from "Why Social Media Purists Won’t Last" by Jason Falls

Social media purists have laid down the law and, so, to participate in social media as a business, you must do things like, “participate in the conversation,” “engage your customers,” and “talk with us not to us.”

I’ve got news for you. In the world of business, all that talk will get you exactly nowhere. Conversations do not ring the cash register. Engagement does not sell more product. Talking with people just means you have to take time to listen which prevents you from spending valuable time selling more product.

I am trying to make a point all the social media evangelists out there need to grow up and face: If you don’t stop selling the fluff and start driving the bottom line, you’re going to have to go back to whatever you were doing in 2005.

I’m all for your principles. I’m a big fan of The Cluetrain’s “markets are conversations,” notion. But I can promise you a conversation never paid the damn electric bill.

Make your company blog drive search results to the keywords you want to win. Present calls to action that lead your Facebook fans to buy your product. Entice Twitter followers to subscribe to your e-mail newsletter where you can present similar calls to action for purchase.

Share your content, engage your audiences, talk your talkity talk all you want. But walk the walk, too. Move the needle. And not the UV meter on your virtual stereo, grasshopper. Move the one that makes the cha-ching sound.

My Take

Sure - businesses look to the bottom line. And if social media does not bring in revenue it will quickly be deemed a waste of time and money.

Social media is rapidly evolving. New approaches are yet to be developed that will generate measurable sales from SM relationships and online/offline word-of-mouth. Businesses that adapt will enjoy increased customer loyalty. And they will enjoy dividends as new technologies are introduced and as more purchases are influenced by social media.

The Web and Web-based commerce will only become more and more social. The social Web will impact B2B and B2C advertising by supporting trust and connectedness.

Friday, November 6, 2009

Consumers Open to Online Referrals - But Of Course...

Consumers More Willing To Share Brand Info On Social Networks Than Previously Thought

Excerpted from Laurie Sullivan 11/6/2009 article

...Nearly half of people who saw a brand's name on Twitter went to a search engine to look for the product, compared with 34% on any social network. That's according to a joint study released Thursday by Performics, the marketing arm of Publicis Groupe's VivaKi Nerve Center, and ROI Research, an analytics and technology firm.

Performics Marketing Senior Vice President Michael Kahn says. "Being in a social network is like going to someone's barbecue. People are talking about the experiences of their lives. The sharing experience that happens in the physical world also happens in the social."

Among survey respondents, 30% admitted to learning about a product, service or brand on a social network site. Twenty-seven percent say they remain receptive to receiving invitations for events, special offers or promotions from advertisers through the sites, and 25% admit to going directly to an online retailer or ecommerce site after learning about a product or service on Facebook, Twitter or another social site.

The study found that 44% of people have recommended a product on Twitter, and 39% have discussed a product on Twitter. Facebook skewed a bit higher. Forty-six percent of respondents say they would talk about or recommend a product on Facebook.

"Consumers are open to asking about brands, sharing information and taking action on information they get from social networks," Kahn says.

My Take

Social media is on a fast track to be the top source of local information. Because of its power to track and mine consumers' trust levels, social media will leave other forms of advertising in the dust.