So the ‘Twitter for enterprise’ product Yammer won the TC50 contest. Having slammed Yammer, here is who I think should have won: GoodGuide. It’s a consumer play, but it is not Web 2.0 social media wisdom of the crowd. It uses hard core technology and research to deliver a service that is totally mainstream. It is also needed and in a hot area.
What criteria should we use to decide winners? Well this is about business, so my definition of a winner is a company that becomes very profitable for a long time. In other words, would I invest?
Profits will usually follow if you have these three characteristics:
- A valuable “must have” service
- Delivered to a very large number of users who have money to spend
- With rich customers (not necessarily the same as users in web ventures)
Parents a Key Audience
GoodGuide looks like it meets those three criteria pretty well. It looks a tad “trendy green” at first glance, but if you have young children you pay a lot of attention to what you put in and on those little bodies. As a parent, this is “mission critical”. There are lots of parents out there and they spend a lot of money on what they consider their top priority. GoodGuide is not just for parents, but I think that will be their initial traction.
GoodGuide is going after a totally mainstream market; this service does not rely on the satiated early adopter that everybody else in Web 2.0 has been chasing.
Being in a hot area – “trendy green” – will help in getting mainstream press. I assume they will be worrying a lot more about PR in Vanity Fair and People than the tech blogosphere. So when they are ready, they have a shot at being noticed.
As for rich customers, Consumer Packaged Goods (CPG) is the classic advertiser. They spend tons. GoodGuide is not dependent on advertising from financial services firms that are in a mess at the moment.
Database of Intentions
GoodGuide did not reveal specifics on their revenue model. That is not a concern. GoodGuide is naturally monetizable, as the service creates a database of intentions. They will need to be careful in the nuances of monetization and so should take their time to get this right. But unlike communication services – which do not have a native monetization model – anything that creates a database of intentions finds clients and revenues fairly easily.
As for longevity/sustainability/barriers, what GoodGuide has done takes real hard work. This is not a simple social media hack or a surface aggregation that you could do with a tool like Dapper. GoodGuide requires a fine balance of technology, research and domain expertise. If 10 wannabees set out to compete, they would take at least 6 months and probably a lot longer to get to a me too offering.
Finally, passion. These guys sounded like they had been working this for a while and were in it for the long haul. You need that to build a business when simple exits are less likely and businesses will need to manage through a slower growth in the global economy. You need that passion to be thinking a couple of moves ahead, so you have plenty of innovation to counter the inevitable copy cat attempts.
Number 2 Pick
My number two pick would have been TrueCar – and it has similar characteristics. In the end, GoodGuide looks a better bet for one simple reason. We buy a new car only every few years, whereas we buy the products that GoodGuide researches every day. Marketing a brand/service that consumers only need occasionally is tougher, although search engine marketing has certainly made it a lot easier than it used to be.
What do You Think?
Tell us in the Poll what you think. Who should have won? Yammer or GoodGuide or another startup? If you choose ‘other’, tell us in comments who you think should have won and why.
