collectedthinkery

What next for Local Services?

Wed, 28 Jul 2010 14:43:00 -0400

Over the past year, I have become increasingly interested in the local services flash sale (often referred to as group buying) space. What was effectively the “internet-izing” of the long established coupon industry has rapidly become the hottest area of the internet now, driven by its tangible revenue streams and extraordinary margins.

I started building Gilt’s play in the space, Gilt City, with Kevin in September last year, and have been blown away by the growth it has shown since launch. I have also observed a massive crowding of a space that a year ago was almost empty - the launch of 22 competitors in New York alone, countless vertically-focused plays and a $1.35B valuation. Just last week, SecondMarket reported that in Q2, options and shares in Groupon were generating the most buy-side interest among investors in illiquid assets.

And then this past week, something really interesting happened. Yelp started to offer daily deals, through the businesses it already manages listings for. I have no idea why it took them so long to get into the space, but I am glad that they now have. In many ways, Yelp has the ultimate offering, coupling deals with quality content and reviews, enabling would be deal-purchasers to learn more about the business before committing to the purchase. Their recent opentable integration pushes the utility even further - at Yelp, you can find a restaurant, secure a deal and book a table all on the same page. Couple this with their already-established local sales team and its existing network of users (33M at the last count) and Yelp has the potential to be a category killer.

But yet there are some serious challenges to the Yelp model. Yelp needs a high volume of deals to keep users returning, which means deals that can live on the site over time. This will push their vendors towards more evergreen deals - “2 for 1 drinks between 5 and 7pm” - rather than the true one-time-only value that Groupon and Gilt City offer. These types of deal will rarely represent the same value as something available for a short time in the flash format, and Yelp will need to be careful that offers don’t quickly become second-rate and stale.

I have always felt that offering contextual relevance was the key to long term success in this business - the ability to put offers in front of users that have the ultimate relevance to their demographic profile, their location or the interests and needs. Yelp has this in droves - a user searching for “Restaurants in Murray Hill” is absolutely going to want to see special offers at restaurants in that neighborhood.

There is one other player that specializes in this highly tuned form of contextual relevance too, and that’s Google. Google has been tinkering around with its local offering for some time now, and local deals could be the answer. Google could (should) be aggregating deals from the multitude of players across the US and feeding them into relevant search results - it could even project them on to maps. Pushing the thinking down the Adsense route, Google could even develop a self-service platform to enable any small business to upload their best offers, to be displayed where most relevant right across the Google network. I think that Google poses a considerable threat to not just Yelp but the market in general.

So what does all this mean for Gilt City? I do think there are truly defensible positions in this market, and Gilt City is rapidly cornering one. Gilt City offers high end products and services from vendors who care about their reputation. It offers unique experiences that are crafted just for Gilt, and pushes them to an audience that has been tuned to expect this type of quality by the core Gilt business. It’s our own form of ‘contextual relevance’.

For everyone else? Find your own form of unique ‘contextual relevance’ and command your niche as quickly as possible.

It is going to be fascinating to see how the market shakes out, but I predict an unsophisticated, middle-of-the-road, giant and a select few focused players staunchly defending their corner.

With great power comes great responsibility.

Wed, 28 Jul 2010 13:23:46 -0400

With great power comes great responsibility.

The pitfalls of user reviews

Wed, 28 Jul 2010 10:54:00 -0400

I love people that invest time doing stuff like this. Amazing.

“If Orson Welles had made a movie about talking ponies, this is the movie he would have made”

“I can take off my shoes if I want to. I’m sheriff of this...

Mon, 26 Jul 2010 18:55:39 -0400

“I can take off my shoes if I want to. I’m sheriff of this coffee shop on foursquare.”

Lots of music on the blog at the moment, but this track is well...

Mon, 26 Jul 2010 18:02:00 -0400

Lots of music on the blog at the moment, but this track is well worth it. Dry The River are a great new band from the UK who pulled in a lot of new fans at Glastonbury earlier in the month.

They have also made their way onto the excellent watchlistentell channel on youtube, although god knows why youtube don’t enable direct video embedding.

Either way, great track, spooky vocals and some genuine quality from the UK.

Great Smashing Pumpkins cover from Passion Pit today. Such a...

Fri, 23 Jul 2010 11:48:14 -0400

Great Smashing Pumpkins cover from Passion Pit today. Such a beautiful song, this guys were amazing back in the day.

Nice find Tyler.

So apparently Phish have been dropping sick covers all over...

Fri, 16 Jul 2010 11:26:00 -0400

So apparently Phish have been dropping sick covers all over their most recent US tour, including Lennon, the Band and even Rage Against The Machine.

Takes a big band to cover a song from arguably the greatest album of all time though, Neutral Milk Hotel, but I guess Phish is a pretty big band.

Really pleased to say that Volkswagen have expanded the Fun...

Thu, 15 Jul 2010 15:40:04 -0400

Really pleased to say that Volkswagen have expanded the Fun Theory program that they started with the bottomless garbage bins and continued with the slide not stairs.

They created a website where anyone can submit an idea for how to get the public to engage in responsible behavior by making an activity more fun. Some great ideas have been posted there already.

And Volkswagen themselves have created their third project, this time with a bottle bank in Stockholm.

This is such a genuine and well-intentioned program, and while it might not lead me directly to buying a new car, it has certainly built the respect that I have for the brand and the stance that it is taking to make the world a tiny bit better.

Make anything fun and people will do it more.

Old Spice, man, who would have thought it? They are just killing...

Wed, 14 Jul 2010 13:46:00 -0400

Old Spice, man, who would have thought it? They are just killing it with their latest campaign, which also happens to be doing wonders for demonstrating the power of the Youtube channel concept.

So many great ads (who writes this guy’s lines?!), and now real-time video replies to incoming messages and requests from fans. The video above is the best yet, a marriage proposal from the Old Spice man to one fan’s girlfriend.

Its inspirational.

Apple and the next category killer

Wed, 14 Jul 2010 13:23:00 -0400

Despite a range of technical challenges, sales of the iPhone 4 are already through the roof (1.7MM and counting) and Apple appears to have triumphed again. I bought the phone last week, and aside from the frighteningly real issue around left-handed usage, I am very impressed with the new features and functionality.

That said, I am much more interested in what comes next. I believe that right now, Apple has an opportunity to really dominate the mobile space. The driver would be a lower spec, carrier-ambivalent, version of the iPhone. Its a strategy that Apple have employed before (see the iPod Nano), and 2011 might be the time to try it again.

My recent upgrade cost $440 all in, including a $200 upgrade fee that AT&T were not prepared to waive. Even without that fee, the cheapest iPhone 4 comes in at over $200, and comes strapped to a contract starting at $59.99 per month. This is a price point that puts this product out of reach for many of the 300MM Americans that do not own one already. Perhaps more importantly, the sheer technical sophistication of the iPhone is way beyond the needs of most of these non-owners too.

So what features should the pared-down iPhone retain - voice and web and text, clearly, as well as seamless video and music. A single camera, with a 2MP lens, would be sufficient, as would a staple selection of the best apps pre-installed. And it wouldn’t hurt to throw in a couple of proprietary features, like Face Time, that only work iPhone-to-iPhone - if anyone can make network effects work with a hardware device its Apple.

The two most critical elements for me are form and accessibility. What this iPhone looks like, and how it feels, will be critical to its success. It needs to be smaller, lighter and designed with a broader audience in mind (the iPhone 4 is almost oppressively geeky). In the past, Apple have crossed the geek-barrier by using color, although I am not sure that would translate to the phone.

The second key feature is multi-carrier accessibility. AT&T can’t provide decent service in New York City, yet alone across the rest of the country, and its critical that customers for any pared-down phone have the ability to choose the carrier that best covers the area they live in.

The final question for me is price. Can Apple build a killer phone with a total outlay for a new customer of less than $50? It could well mean carrier subsidies, and these are harder to command if there is no associated exclusivity.

Lots of open questions for sure, but if Apple get the product right, I believe they could command over 50% of the US handset market by 2013.

Bribed my way on to the Faster Times today. Its like having two...

Wed, 14 Jul 2010 12:34:00 -0400

Bribed my way on to the Faster Times today. Its like having two friends from different walks of life suddenly become mates in their own right.

And it has comments, which could be pretty devastating.

Now this is an inspired application. The app opens up your...

Tue, 13 Jul 2010 14:20:20 -0400

Now this is an inspired application. The app opens up your camera when you start texting, displaying the street in front of you, so you can stop walking into people as you are SMs-ing down the street.

Available for Android now, coming to iPhone soon I hope.

Never say no to Panda Cheese.

Tue, 13 Jul 2010 12:52:47 -0400

Never say no to Panda Cheese.

Great cover this morning from Frightened Rabbit, the Scottish...

Fri, 09 Jul 2010 09:38:00 -0400

Great cover this morning from Frightened Rabbit, the Scottish two piece of the moment.

Fresh off of Jimmy Fallon and already making some great choices of bands to cover, in this case the mighty Lemonheads.

Social networks and privacy

Thu, 08 Jul 2010 15:03:00 -0400

I have been thinking a lot about my declining usage of Facebook recently, and what might be driving it. The answer lies in two core issues that just did not cross my mind when I signed up 4 years ago. Social networks are about sharing, and about connections.

As I think about the concept of friends, its a group that can be broken into two parts - close and distant. Close friends are the people you have known for years, that you grew up with, went to school with, or that you have become close to through work. Distant friends are acquaintances that you have connected with at some point in life, and make some effort to stay in contact with. For most people, there is some migration between the groups over time, but broadly they stay the consistent.

The explosion of online social media has presented each of us with a wealth of options for staying connected to both of these groups. The challenge is that the type of information I want to share with one group, is not information I necessarily want to share with the other. My list of facebook friends incorporates members of both groups, which is why I find it hard to figure out what to post there. In part because of this, I have resorted to posting pretty much nothing over the last year.

For a good number of my Facebook “friends”, I see communications that I imagine were really designed for members of the close group, but that end up being broadcast to both. The result is that I just don’t care about 80% of what appears in my friend feed. And when you consider that Facebook is essentially a public forum, the issue is exacerbated further.

Personally, I would rather use more private forms of communication to stay in touch with the first group - phone, text or ideally face to face conversation. All of these are social media channels in their own right, although more personal and typically offline.

And so we get to the second serious challenge of online social media, persistancy. Conversations that are built online do not die. They are archived, and are searchable, for as long as the network on which you started them decides to maintain them. Google your name 10 years from now, and there is every chance that your Facebook posts will appear as part of the results. Scroll back on your Facebook wall today, and see what you wrote in the early days after joining - are these things that you want attached to your name in the public eye?

To me, this is why the current privacy debate around social network data is so critical. We need to be able to trust the social networks that we engage with to be the guardians of our privacy. Most of us were not raised in an environment that required us to consider the consequences of our interactions with friends - conversations, over the phone or in person, were private in all channels other than the eyes of those we shared them with. This is just no longer the reality, and a slow and thorough re-education process is going to be required.

In the meantime, we should all put a lot of thought into what we do and do not post across the social media spectrum.

Really lovely work coming out of Australia this week. Target...

Wed, 07 Jul 2010 17:02:15 -0400

Really lovely work coming out of Australia this week. Target have long since nailed great advertising in the US, now it seems as though their influence is spreading.

What’s smart here is the ‘everything’ - just like Target, the ad is not about one particular product, or even one brand, its about a collection of consistently reliable things all under a single roof, for you and everyone around you.

I am sure there are a ton of rules for creating powerful, relevant advertising material, but presenting concepts that are entirely consistent with who you are as a brand has to be the most important.

This is a cracker of a Friday cover. My Morning Jacket taking on...

Fri, 02 Jul 2010 23:02:04 -0400

This is a cracker of a Friday cover. My Morning Jacket taking on Rocket Man, by Elton John.

Happy 4th of July.

Indeed.

Tue, 29 Jun 2010 10:23:46 -0400

Indeed.

The Prom Date (via OrbitDirtyShorts) Orbit clearly investing...

Wed, 23 Jun 2010 09:12:17 -0400

The Prom Date (via OrbitDirtyShorts)

Orbit clearly investing heavily here, and it comes across really well. That said, I share Tyler’s view that what works well once can become tired pretty quickly.

This is the Techno Jeep. Best thing about Youtube? Democratizing...

Wed, 23 Jun 2010 00:36:56 -0400

This is the Techno Jeep.

Best thing about Youtube? Democratizing production has taken innovation and creativity in content to an entirely different level. TV execs take note.