5 ms·

I worked at Matchcraft, which has the best tools out there for buying ads for local businesses and provides the software for a lot of Yellow Page/directory site

by sedachv 15y ago

I worked at Matchcraft, which has the best tools out there for buying ads for local businesses and provides the software for a lot of Yellow Page/directory sites. Most of their revenue comes from the directories, but originates from small, local businesses. I got to know the "local business" business and the players quite well, and this doesn't surprise me. We always tried to get the best conversion rates for the small businesses, but the sales tactics of some of the local listings companies are not in good faith and their customer churn rates reflect that. WRT reasons to not get into local, it's not that the big sites like Yelp and Groupon are sucking their small business customers dry, it's that they can't help it. The only way to reach these small businesses is with large sales forces. The process just can't scale. "Local" is an absolutely horrible business to be in and I doubt anyone will ever crack it (hasn't worked for the past 15 years...). If you want to sell software to shops and restaurants, sell to franchises. You might say OpenTable is an exception and cracked "local", but it's not - they effectively built their own franchise network of restaurants by giving away turnkey reservation system terminals to restaurants.

stevenj 15y ago
The only way to reach these small businesses is with large sales forces. The process just can't scale. "Local" is an absolutely horrible business to be in and I doubt anyone will ever crack it (hasn't worked for the past 15 years...). What about Craigslist? It seems to have scaled some local small business needs (e.g. jobs and housing). I think local is tough because there just isn't a big market for many of the things small businesses are trying to sell. But as we've seen, if you heavily discount them, that changes things.
- true_religion 15y ago
  Jobs and housing are different because people actively search for them. People need shelter, and need income. They need food too, but they don't necessary need to go to a restaurant---much less a particular one of many in the same flavor variety. If you're trying to sell something people don't have a stake in taking up, you need a sales team because they won't search for you.
  - sedachv 15y ago
    That's a good explanation. Note how craigslist works for apartments and jobs postings, but not events (nothing works for events, the other favorite "local" startup idea). The quintessential small business owner we had was the plumber. People need plumbers and search for them, but how do you get them into your directory? I don't know how well craigslist works for plumbers, and I don't think we ever considered craigslist as competition.

by sedachv 15y ago

stevenj 15y ago

The only way to reach these small businesses is with large sales forces. The process just can't scale. "Local" is an absolutely horrible business to be in and I doubt anyone will ever crack it (hasn't worked for the past 15 years...). What about Craigslist? It seems to have scaled some local small business needs (e.g. jobs and housing). I think local is tough because there just isn't a big market for many of the things small businesses are trying to sell. But as we've seen, if you heavily discount them, that changes things.

true_religion 15y ago
Jobs and housing are different because people actively search for them. People need shelter, and need income. They need food too, but they don't necessary need to go to a restaurant---much less a particular one of many in the same flavor variety. If you're trying to sell something people don't have a stake in taking up, you need a sales team because they won't search for you.
- sedachv 15y ago
  That's a good explanation. Note how craigslist works for apartments and jobs postings, but not events (nothing works for events, the other favorite "local" startup idea). The quintessential small business owner we had was the plumber. People need plumbers and search for them, but how do you get them into your directory? I don't know how well craigslist works for plumbers, and I don't think we ever considered craigslist as competition.