My Predictions for 2007

Everyone (well not everyone) seems to have a forecast for 2007, as it pertains to everything – the new Internet (Web 2.0, if I may be so bold), technology, gaming, world peace, and politics. Well I’m going to join the masses and put my foot in my mouth. I’m writing this while in a rush, so my tone may sound a little hasty and rushed. Forgive me! Hey, now I haven an excuse when my predictions turn out to be crap. Here goes it:

MMOGs will take center stage: Games/destinations like Second Life and World of Warcraft will continue to evolve and develop even larger communities. MMOGs may even be attributed for redefining the new Internet in years to come. I firmly believe that these virtual worlds are just the beginning of what we’ll see online in years to come. I can only imagine what they’ll be celebrated for in 10, 15, 20 years. But my prediction is only for 2007.

Longhorn and Office 2007: Microsoft will be disappointed, as will consumers and businesses. Longhorn will be adopted by, who else, early adopters. Office 2007 too. Ultimately, the general business and consumer populations will not go wild over Longhorn as predicted by some, and as compared to Windows 98. I just don’t see it happening. MS has fallen short too many times and has been in the spotlight too often over the past couple of years. People will be wary. And frankly there’s just nothing really all that compelling about Longhorn and Office 2k7 to make it very desirable. Of course there are some nice GUI and UX changes, but I just don’t see that as being enough. Time will tell and in later 2007 I think we’ll see more momentum.

Google will take it on the chin: With the recent Orkut outage, the skeptism over Spreadsheets, Google’s arrogance, and with Yahoo! making interesting moves, I think Google is going to get bit by reality pretty fast in ’07. Something, I don’t know what, will hit them – perhaps a big lawsuit, perhaps competition, perhaps a failed product or acquisition of high profile will take Google of their high perch. Granted, they’ve got the cash, but in terms of general perception out there, I see a trend. I agree with Michael Arrington’s strong position on this as well. I’m not sure I’d go so far as to call it a tipping point though. I think their best days are yet to come.

Social Networking will shake out: I think we’ll start to see more of these vertically specific social networking services disappear. I don’t see social networking sites for sushi lovers taking off or being profitable businesses. I don’t get a lot of them. Yet they get funded. Call me traditional, but I think the hype will start to fade. Social networking will continue to appeal to very large audiences with less super-niche focus. I do think niche is good, but come on – some of these super-niche social networking services out there just make me giggle.

Widgets: Here they come. Watch out! They’ll start to make sense soon. I look forward to having better widgets than I currently have in DesktopX. I look forward to more practical uses.

First amendment (1/17/2007): See here.

Yahoo! steps back in the ring. MSN/Live still struggles: Yahoo! will come back into the limelight and really shake things up. MSN and Live will continue to struggle and stagnate.

Local Search: Local will continue to be all the rage in ’07, and a couple new players will take center stage (preferably Citysquares.com). Local search will change somewhat. Those with more editorial content and social elements will prove to have the strongest legs, especially those who are able to monetize their traffic. Merchants are going to be looking for more meaningful value prop than just eyeballs – an interesting reality check for those big boys out there. The current, larger players out there will continue to struggle selling to the local merchants. They just don’t get it.

Xbox kicks ass, PS3 stuck in the mud, Wii is just plain fun: Sony screwed up, big time. And the xbox is just a better product. The wii appeals to leisure gamers, less hardcore gamers, and is simply a lot of fun.

iPods get boring: Yep you heard me. Apple will do what they always do. Create a very cool, pop culture product but ultimately Jobs will get his head stuck up his ass and someone (Creative Zen?) will do it better and Apple will start to lose their grip on market share. People are tired of iPod already. Trust me on this.

RSS: Continues to be adopted by just about everyone and anyone. More and more content simply becomes syndicated. Someone will figure out a really cool way to make a lot of money with their syndication. Honestly? Keep your eyes on NY Times. Call me crazy! No really…

World Peace: Not a chance on Earth. Sorry folks. The religious wars are just beginning. You may start to here chatter about WWIII. Sorry to sound so dooms day, but really, the war with Muslim extremism has just begun. It won’t end for many years. The real opening salvo of our time was 9/11. But I believe that worse is yet to come – maybe not on our soil here in the US, but elsewhere for sure. Iraq will continue to worsen until a new US President is elected. While the new President, much like the current, will have a major agenda, the global conflict with Muslim extremism will take the spotlight.

Politics: I think we’re done with the major scandals for a few years. But I see things really heating up between Barack and Hillary. McCain and Romney will go at it too, but Mitt will be less relevant come primary season. Keep your eyes on John Edwards – he’ll do well in Iowa and gather more love from the ladies. He’ll be a contender. A new republican will show up too – no more neo-cons. This one will be a new kind of republican. He’ll do well but won’t go all the way. But he’ll inspire a new generation of republicans.

Sopranos: Will be the talk of the nation! It will be confusing, it will be strange, but it will be a total shock fans all over. I don’t think Tony will die. But I think something big is coming. I just hope it doens’t end like Seinfeld. I get the way Seinfeld ended, I really do, but I think David Chase has something real special for us.

Wikipedia: Out of hand

I had a bit of a run in with a Wikipedia editor this afternoon. This particular editor took it upon himself to remove some of the content I had posted on a Wikipedia entry. My entries were not scandalous, were not spam, or shameless self promotion, commercial in nature, or in any way shape or form invalid. If anything, my content contributed value to the article. Yet this editor took it upon himself to remove the content. When I asked the editor what the issue was, he only cited some ridiculously tawdry policy on the Wikipedia website. Even the referenced policy has been wikilawyered the point that it read like an obscure Massachusetts General Law regarding liquor sales the day after Christmas (but only if xmas is on a Sunday). The debate continues and now involves previous contributors and a couple administrators. I will confess that I made one mistake: in my defense of the content in question I used the word “gestapo” to describe the tactics and methods employed by the specific editor. That didn’t go over too well and I quickly apologized for my bad choice of words (and I meant it).

Wikipedia seems about as respectable as you can get when it comes to user generated web sites. People, any people, contribute content and that content is managed and modified by other users, through a sort of consensus with little oversight except to ensure quality, which is also determined by consensus. However, therein lies the problem. Who can assert that their content is better than someone else’s, and who substantiates him/her? And then him/her? And up the ladder it goes. This creates small content battles where one contributor suggests that his content is better than the next persons. But when you’re dealing with humans, who are self-proclaiming experts in a certain subject matter, you get disagreements. The only way to prove that one contributor is right is one of two ways:

  1. Someone comes up with supporting facts, to prove his/her own assertion, and thereby disprove someone else’s assertion.
  2. The community (typically a subset of the greater Wikipedia community) says so.
  3. An editor or administrator steps in and rules one way or the other (almost always creating a fight and what’s known as revert-wars)

Therein lies another problem. Revert wars? What?? I’m already hanging up the phone. Someone has to manage that process. Someone needs to take ownership of it, and perhaps more importantly, and dangerously, someone needs to keep watch over all of this. Naturally a large UG site like Wikipedia is subject to digital vandalism, spam, abuse, etc. Those things result in obvious user adoption problems – no user wants to return to a site where a) accuracy is an issue, and b) they might be subjecting themselves to unsafe digital experiences. So who manages all this? Well, there are editors and there are administrators. I only know so much about these roles, but I’m assuming there are different layers within those groups too. The more you do to improve an articles popularity, or accuracy, or what have you, the better an editor or admin you become. And from what I can tell, editors and admins have to even take Wikipedia tests, or somehow become qualified for the duties at hand.

There is an overwhelming amount of protocols that one must be aware of to participate on Wikipedia. There are rules, policies, guidelines, suggestions, etiquette, and much more. All of these things, combined with users, editors, and administrators is what I like to call beaurocracy. That’s what it is. A deeper look at this, such as my own bare-knuckled experience today, reveals a darker world – one of classes. Yes, there are classes in Wikipedia.

Basic contributors are clearly at the bottom of the totem pole. You can even be an anonymous user and still contribute content! Something I find absolutely absurd. Then you have the more savvy users, and editors, and administrators, and I’m sure there are other layers I’ve yet to see. All of these are classes of users. How you get to become an editor or administrator I do not know. But there are some sites that claim to have a list started. Take a look at that! That’s a bit frightening to me. That’s a list of editors and admins on Wikipedia that have really pissed some people off. There is one fella out there who had such a problem with a Wikipedia about himself, that he complained to the founder, Jimmy Wales and even created his own site to rant and rave about it all. I have to admit, I think he’s onto something.

Another thing that dawned on me during my experience today was some bad press I’ve read about Wikipedia. OK some of it might not be ‘bad’ but it’s not all that good. Any press I can think of as of late about Wikipedia has something to do with the tightening of restrictions that are starting to happen on the site, and the idea of the admins and editors getting a little, well, let’s avoid any German words. One article I enjoyed was in the NY Times in June.

I could go on and on about Wikipedia but the bottom line for me is that I just don’t like it all that much – I’ve tried and I’ve tried but I can’t buy-in. I can’t help but feel that when I use it to learn something, that I’m somehow being mislead, or miseducated. It’s sort of like watching Fox news (for me anyway) – I just feel like I’m getting only one skewed perspective, not fair and balanced. Wikipedia is like that for me. I use it, sure. I limit myself though – like I do with Fox news – I only watch Fox 25 at 10 when I just want the local headlines. I use Wikipedia only when I need to quickly get an understanding of a subject matter or a word that’s not in my vocabulary. Just the other day I used it to look up an acronym, “MSA.” I use the term a lot but I didn’t really have a good understanding of what it actually meant. Well, now I know. I didn’t rely on it and squeeze every last piece of information from it – I just got the gist of it. Ya know? Got my mind wrapped around it so I could a little more educated about the term for the next time I used it. If I was a student, for example, Wikipedia would be way too convenient, but also way too risky. It’s accuracy problems have been written about before, in one case by the very well respected journalist John Seigenthaler (the elder John, not the younger John on NBC Nightly News). Cases like this just make me more convinced that I should never really rely on Wikipedia for truly accurate information. I’m just glad I’m not an editor or an administrator because then I’d somehow feel I had a hand in it all – otherwise I’m just a mere contributor who doesn’t know any better!

All this brings me to a much bigger point, something I’ll have to think long and hard about before I spill it here in my blog. It’s this whole notion of User Generated content just being the swellest thing that’s shaking up the Internet. I might be overstating it, but some out there really think that Web 2.0 + User Generated content = radical changes and big $$$. I don’t see it. I think it’s a big flash in a bigger pan. I’m not a huge fan of user generated content. In some forums, yes, I’m a huge fan! But UG has it’s place on the Internet and I think it’s place has yet to really be defined and it will define itself. Just like it is on Wikipedia. Already, it’s becoming ever so slightly more editorial.

Anyway, more on UG and community at a later time. I’m going back upstairs to watch TV to get some real information

Local Merchants: Do they get it?

That’s really the billion dollar question isn’t it? Local search was recently labeled by a friend of mine as “The Holy Grail of the Internet.” I think that might be stretching it a bit, but for the sake of argument, let’s call it The Promised Land. After all, so many are trying to get there, yet no one can tell you what it’s like! OK, now I’m stretching it.

Surely it’s no secret amongst those ‘in the know’ that local search is a hot space. There’s been a lot of press about it over the past year or so (and certainly earlier). I can think of at least three major magazines that Yelp has been written up in over the past year or so, off the top of my head. This week they were in Red Herring. They’ve been very well funded. So have folks like Judy’s Book, and Insider Pages. As I understand it, the latter two are having some troubles. I don’t really understand any of them, but that’s not relevant right now.

Citysearch and Yellow Pages are the two biggest players in the directory advertising space. I can’t say I know their financials and I’m not going to tell you that they’re not performing well, but if memory serves me right and if my homework has been done well, Citysearch barely squeaked out a profit in ’05 for the first time, and even then, that’s after several years of huge losses. Yellow Pages is in a similar situation I believe, although not nearly as dramatic. But folks, please, correct me if I’m wrong! I want to be wrong about this.

So here’s the thing, what does Citysearch, Yelp, Judy’s Book, Insider Pages, Yellow Pages, Google Local, Yahoo! Local and lil’ old Citysquares have in common?

  1. All provide a consumer facing service, online.
  2. All need to build brand awareness.
  3. All need the participation of local merchants.
  4. All need to generate revenue from these local merchants.

So what about the local merchants? Everyone is so busy talking the talk, but no one seems to really be walking the walk. I mean, isn’t the real value proposition for any of these companies to provide relevant, local, accurate information for consumers seeking local goods and services? At the end of the day, isn’t that the objective? I’m sure everyone of these companies will claim, like us, to be doing just that. I beg to differ.

Who’s really providing value for the local merchant? Our customers, at Citysquares.com, expect a return on their investment. Remember that everyone? ROI? As a business owner, we’re focused on ROI. But so are our customers.

Before we launched our site in October of ’05 (sounds like a decade ago, but it was really just last year), we did our homework. We spoke to local merchants. (Don’t be impressed though, please.)

“What is it that you’d like out of this Ms. Merchant?”

“Well Ben, I’m glad to asked. I’d like an easy way to upload pictures of my store. I’d like to display my hours, a description of my business, my contact information. Oh, ya know what else Ben? I have a website. I’d like people to have the option of seeing more about us on our website. We don’t want you to supplant our website, just bring more traffic to it. But really Ben, the one thing I want, after all that stuff, is I want you to bring people in my door.”

“Well that’s a tall order Ms. Merchant, but if you give us a test drive, I can promise you that we’re going to do everything in our power to make you want to renew with us in 1 year.”

That’s where we are today. Renewals. And the question has come up: “So Ben, what have you done for me lately?”And we have statistics for them. We have facts and figures. Can we actually prove how much money we put back into their drawer? No, we can’t. [We are able to track a lot of things for them, but how many nickels and cents we put in their drawer isn’t one of them. (added 2006-12-16 @ 07:24) ]

We talk to local merchants all day long. If they didn’t believe in Citysquares and didn’t believe in our mission, our philosophy, I don’t think we’d be here doing this. If consumers weren’t using us, we definitely wouldn’t be here. As the super passionate founder of this wee lil’ bootstrapping startup, I’ve often wondered if I’m just a pie-eyed fool with his head to the clouds. Then I get a voice mail from a local customer who says, and I quote:

“This is Lisa with [Company] calling. And I’m calling to see if I can do some more advertising with you guys! I’m actually getting more referrals from Citysquares than I am from my Google ads. So, I wanted to talk to you about doing a little more…”

And folks, that ain’t no hype. That’s a happy customer. That’s a customer who bought in when we had less than 400 unique visitors per month, and now is investing more in Citysquares because it’s out-performing her Google AdWords campaign. Hey, not too shabby if I may say so myself. And we’re not even VC backed! That’s a customer that validates everything we’re doing. She validated every sleepless hour over the past month that the three of us have had.

With 300 customers in 14 months, we’re doing OK. We could be doing better. It’s hard work selling to local merchants. If we can get them to give us 5 minutes, we’ve almost always got a sale. But therein lies the quandary! Ah! The whole “how to sell to local merchants” question. Yes, I’m familiar with that debate. We have our ideas, we have our plans. We don’t profess to have the magic wand, but you just wait dear friends.

Now there’s the consumer side of things, right? That’s not so hard. Just demonstrate to the user that we have information for them, specifically the information they’re looking for at that moment. User generated content (like reviews) is just a value-add. It’s a bonus. Like the volume control on my steering wheel. Do I need it? No. Is it nice? Yes. Sometimes I don’t even use it. (Full disclosure: I do not have a volume control on my car steering wheel. Truth be told, I don’t have a car. My wife does though. It’s a Volkswagen Golf and it too does not have volume control on the steering wheel. But I’ve rented cars that do. Now you know.)

Here’s what it boils down to:

Merchants only get it, if we get it. Merchants know exactly what they want. They may not be using an Oracle order fulfillment systems, they may even be keeping their books in a leather bound ledger that’s 12 years old and covered in rubber bands and post-it notes. But if they have a ledger that’s 12 years old, I can guarantee you that this merchant knows more about his business than you know about yours. He’ll look up at you over his reading glasses and tell you you’re wasting your time, and that if you can’t bring him business, he doesn’t care what color your website is. He doesn’t care how many page views you have. He doesn’t care how many people read your newsletter. He’s concerned with one thing – feet in the door, young man.

The young, Internet savvy, Gen-X merchant running her clothing boutique around the corner is no different. She may disarm you with all her sweet smile and warm demeanor, but she knows more about her business than you do about yours. You have to assume that. She understands the Internet and she knows it has it’s place. She may even have a MySpace profile. Wow! She even has a website that she updates herself! Double wow! And beyond all that, she also has a Best of Citysearch plaque on her wall, from 1998. She’s got you pegged before you even open your mouth.

Does she get it? Yes. She’s waiting for you to get it.

I want to be clear about one thing – I’m not Lee Iaccoca. In fact, I’ve never even met the guy. I don’t have the answers. I don’t have the “sell to local merchants” magic wand. I do, however, understand small business. I grew up around them, in my family, and in the communities I’ve lived in. I ran one prior to Citysquares.

Local merchants are having a hard enough time making payroll, never mind getting more unique visitors to their website, or getting more people to post reviews on some web 2.0 website with a pink and bubbly brand. Local merchants are getting their asses beaten all across the nation by Wal-Mart. (I’ll stop myself right there)

I just had a conversation last night with a sports card shop in town. He was going to pay $50.00 per month for web hosting, for a 3 page website, and someone was going to charge him a lot of benjamins for a PayPal store. I had a good chat with the chap. I explained to him that the very same place he purchased his domain name for $8.00 (GoDaddy) can host his website for around $5.00 per month. (This was breaking news.) I went on to explain how they even provide a tool for him to build his own website. (He needed fresh air.) I also explained that for very little money he could use Yahoo! to build a customized storefront, with credit card services, online product galleries, and more. (The phone went dead.) But really, I’m not making this up (I promise I won’t make things up in this blog site). He was lifted to new heights of enlightenment! Then he signed up with Citysquares. He’s now a customer.

Is this the way to sell to local merchants? I mean, come on, from a practical business minded perspective, is this the way to sell? What’s the CPA? Well, that depends on who we’re trying to be, and who we’re trying to beat. I’ll let the future determine that. Feet on the street? Dial for dollars? Direct Mail? “If you build it, they will come?” Sales channels and partnerships? Look at the Google-Intuit deal. It’s brilliant. I don’t see it as the best idea to surface in this crazy space, but it’s a brilliant idea. I question why some people consider it to be such a big deal, but certainly it’s a good sales channel, and a back door one at that. I’m envious.

I don’t have the answers. But I do have one answer: Local merchants do get it.

If I haven’t done a good job of making this argument, please let me know. I’d like to type more, but I’m afraid I’ve already bored you, and it’s 8pm and I haven’t had lunch yet.

Jib Jab Nuckin Futs

JibJab is at it again. Who knew these guys would become what they are? Back in the day, they were just a creative service with some publicly available flash movies (at least that’s how I remember them). Since their big hit (This Land) a while back about the 2004 election, they’ve really hit the big time. They’re at it again with Nuckin Futs – a retrospective on the year 2006, which I will say, yes, was a little nuckin futs! Click play below:

Local and Hyper-Local

Local is, of course relative. But as it pertains to the Internet, local can really only mean one thing – what’s close to me. OK, OK, “close to me” is also relative, but still, all things pertaining ‘local’ herein refer to local Internet search and resources. Boston.com could be considered in the ‘local space’ as could the other countless local newspapers. Craigslist could also be considered considered local. There are some fine lines that distinguish a local site, from a non local site, and I have to say that one of the most critical defining characteristics is the site’s audience. I think that’s probably the simplest way to put it.

The Kelsey Group is perhaps the foremost expert in ‘local’. In fact, Citysquares’ business plan and investor presentations are jam packed with goodie-stats from Kelsey. Ultimately, they’ve got their fingers directly on the aorta of all this local-ness.

A few days ago I had the pleasure of meeting Peter Krasilovsky. As it turns out, Peter and I share a few contacts. Peter is sort of a guru of the local space (Today I referred to Peter as the ‘Peter Gammons’ of local). We had a very interesting dialogue about the players out there, who’s hurting, who’s doing well, and generally his take on Citysquares.com. His feedback was immensely valuable, but what struck me more was his generosity to donate his time to me. He was in no rush to get off the phone (even though my VOIP phone was acting up), and offered up his brain power anytime. Peter has a blog called The Local Onliner. He’s respected enough that The Kelsey Group pulls his blog feed into their site. (If that’s not a thumbs-up, I don’t know what is.) He doesn’t write about local startups often, if at all, but he just posted a little piece about Citysquares.com.

What strikes me about his brief assessment is his use of the term “hyper-local.” I definitely used the term on our call, and surely he saw it on Citysquares.com, but he didn’t put quotes around it. Maybe I’m reading into this too much, but this is a fairly contentious term, because hyper-local typically refers to news – news in your neighborhood, your ward, your precinct. News from your precinct is pretty darn local. Any more local and you’re hanging out at Bingo night with the local grapevine. But hyper-local is a term that Citysquares has embraced, not because it’s sticky, but because it’s what we are. Citysquares.com can be the embodiment of your precinct, your neighborhood, on the internet. LOCAL. HYPER-LOCAL.

One of the pioneers of hyper-local is Rob Curley, whose seemingly accidental fall into hyper-local was a very lucky fall indeed. There was a great article about Rob in Fast Company last month. The title of the article? “Hyper-Local Hero.” Nice huh?

Now I don’t know if Rob’s version of hyper-local is more authentic than Citysquares’ version, or the other way around, or if we’re both hyper-local in our distinct ways. But if Peter Krasilovsky can use the term “hyper local” and “Citysquares.com” in the sentence (without saying “Citysquares.com is NOT hyper local”) than I just received confirmation. It’s sort of like Peter Gammons saying that David Ortiz is a DH – it’s just not true until The Commissioner says so.

Look at Craigslist. There is a reality out there, that CL is hurting local papers. I don’t know what the facts and figures are, but if you’ve paid attention to the local newspaper space, something is killing ’em – that’s undeniable. Rob Curley seems to have a fix.

Know of any other hyper-local services out there in cyber-space?