There's a lot of blogversations going on about how "Local is Hard" since the news broke that Judy's Book is shutting down. Here, here and here are good reads. Read the comments. <Update 10/30/07 8AM>There's also a lot of conversation about how big the opportunity of "local" is:
Once of the themes often discussed in local is its fragmentation. That's partly a function of all the competitors and would-be competitors, the numerous local markets, and all the small businesses that represent the bulk of local advertisers. Unlike national search, no dominant local player has yet emerged – or perhaps it's more accurate to say no fully "trusted" local site has emerged.</End Update>
Here's my short list of qualities that the killer local app will have.
- It'll be bootstrapped. There's too many "Ideas" for local that every company that raises money tries too many things. As a result, every site out there is a really cluttered and complicated "what the hell is this site for" site. Bootstrapping will force the founders to focus on what's important. Helping people find the best local stuff and helping people share what the best is.
- It'll have a traffic acquisition strategy that involves buying traffic cheap and recovering the spend based on contextually targeted advertising (adsense) served on the site. Not just launching the site and hoping people will use it.
- It will provide immediate personal impact. Using the application will deliver immediate value to the user. Joshua Porter calls this the Delicious Lesson.
- The application will be as simple as craigslist is to use. Information can be discovered quickly. Information can be contributed quickly. It's be as unstylish as sites like Craigslist and PlentyOfFish too.
- It will be designed for online viral growth like hotmail, evite, facebook, Kazaa, myspace, icq, aim and skype. In other words, the simple act of using the application will inform other people of its existence and it's compelling value.
- The network effect will kick in quickly and geographically dense pockets of users will radius outward. This means the app actually has to have a network effect. And the network effect must be obvious for non technical users. In other words, there has to be a very selfish reason to tell your closest friends about it. Very selfish. (And a very selfish reason for them to start using it. See the Del.icio.us lesson above.) But, at some critical inflection point, a critical mass of "people who know each other will use it" that the reason for a new person to start using it will be so obvious.
- It will move from predominant use by internet marketing experts to small business owners/sales professionals within several months. It'll reach a critical mass of small business owners very quickly. Think what Constant Contact achieved but with no cost for use and no barrier to trial.
- It'll then catch the long tail of search traffic for local searches. As the aforementioned groups use it, they will create a huge long tail of local content that will be indexed by the major search engines. For example, when you want to find a biopharmaceutical automation controls engineer in Boston MA, you'll search at google and be sent to a page on this 'KIller Local App' that will answer your question. Like the YellowPages is now for searches for common professions, this will cover everything else. There's actually a Vietnamese Pizza Place around the corner from me.
- At this point, it'll jump the chasm and regular "consumers" will begin
to use it to both find local services and products, as well as
contribute back suggestions to the community. It'll become a defacto standard for finding out what your real live 'people that live close to you' friends suggest: People will actually go there instead of google. An even bigger accomplishment, it'll replace email for getting recommendations from friends for that next restaurant, doctor, mechanic, payroll provider, accountant, new hire, new job, etc, etc. When you want to know the best a new town has to offer, you'll visit the "best of worcester" page instead of being relegated to a newspaper's once a year poll.
- Within a few short months, it will have more user generated information about local businesses than any other website, kind of like wikipedia has for encyclopedia entries. Google will reward it with lots of traffic, like it does wikipedia. One of the large local media companies (YP, Newspaper) or major search engine/internet companies will buy a piece of the business.
That's my prediction.
I think it's right around the corner, btw.