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Thread: Critical Mass

  1. #1
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    Nov 2005
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    11

    Default Critical Mass

    Hey!

    I was noticing that a lot of classified sites don't have critical mass to gain legitimacy.

    Critical mass is a crucial ingredient.

    Perhaps we should share ads on the back-end.

    Come up with some sort of peer to peer or centralized
    database that distributes ads to all sites.

    It's not as perfect idea, but it solves one problem...

    Craig's list makes 14 million a month, and they are only charging for job ads in a few large cities. How many here would be happy making 1 million a year?

    Some sort of distributed effort, with a cohesive stucture might be able to take on Craig's list.


    Take a domain like dot.com for the central site, let everyone do bill and keep on what they sell, we give away the rest. Give craig's list a run for their money... I was thinking of doing a city.dot.com page for the 250 cities I have data licensed for. If you open the ad page using the zipcode sort on a central zip in each city, we are just a couple hacks
    away from having a nice way to open a city-specific view of the database for your features.

    Free ads on craig's list are fine and all, but they suck in so many ways, we could still charge for the upgrades and the job ads, and commercial ads.. remember craig's list tends to frown on commercial stuff outside of jobs... Plenty of things to charge for.

    I think they need some competition. They are fine for prostitute ads, and other unsavory subjects, but someone needs to come in with good software, a globally searchable site, with critical mass.

    I have a partner working on a system to build customer e-commerce sites, so people that want more than an ad can have a whole store, but the merchandise also appears in a overall database, similar to how the ebay stores merchandise shows up in the ebay auction listings.

    It supports closing transactions, and will work through authorize.net.
    The general idea is to give more for less than you get at ebay, and provide hooks to push the merchandise into a larger catalog. It's not a software package, more of an involved service, complete with elves from india doing technical fulfillment.

    The system is being constructed inside of typo3, and will start to do public prototyping soon. Users can upload spreadsheets, they can build a basic site with self-service tools, and they can ask for custom work. It's canned like ebay, and not canned like ebay at the same time. They can point their own domain at it, and they can participate in a larger site at the same time.

    Does any of this make any sense? I know a couple of you out there are making good money, but how about the rest?

  2. #2
    Join Date
    Mar 2005
    Location
    Martinsburg, WV
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    19

    Default Great point - ever thought about franchising?

    You're exactly right about critical mass. I don't think anyone is going to want to place an ad on a site running 6 ads, because it's obviously not getting enough traffic to make it worth your while.

    My solution is to limit ads to a geographical area and work personally with local businesses. You can't just sit back and expect everyone to come to you; you're going to have to go to them.

    I think it would be a good idea for a few of us to go into a joint venture and develop a franchise for classifieds. I recently completed an MBA with an emphasis in Project Management and my graduate project was a business plan for a regionally-based online classified ads service. My professor was a real hard ass and my team initially thought I was crazy and we could never pull off this business plan and get an A for the course, but we did. Our professor for this class runs a small business incubator in the DC area, does Homeland Security contract stuff, has a Doctorate in Business Administration, and is a former COO of a multi-million dollar corporation before he struck off on his own. So, if I can convince this guy that this idea will make money then it will definitely make money (he ripped most of the other business plans to shreds for a multitude of reasons).

    The catch is you have to heavily market to the area where you're doing business to make this work, because that's what the competition has been doing. We have a free ad publication that gets delivered to your house for free whether you want it or not. When I bought my house it had an extra box outside for this thing which I promptly ripped up and threw away but they still keep on delivering it, week after week, throwing it in my driveway. THAT'S what you have to compete against - and their revenue is all generated from their advertising.

    I'm using phpAdsNew to serve up ads, and I plan to start selling ad space to business customers but until then am using advertisers from Commision Junction. I HATE Google's AdSense but stuck some AdSense blocks on my category templates as place holders and discovered I was actually advertising for numerous competitors. Not a smart thing to do. I like phpAdsNew because I can sell time slots to local businesses just like TV and radio stations do, and limit the number of times a visitor sees a particular ad.

    Didn't mean to get off on a tangent there, but since you were discussing how to generate profits I thought I'd throw in my two cents.

    As for the franchising idea, we could franchise a regional classified ads website to someone who would manage their ads, do their own marketing (under our guidance of course), sell subscriptions to businesses, etc. We as the franchisor would handle the admin side, graphics design, and technical issues. That would be a win-win for everybody involved.
    "As a man thinketh, so in his heart is he"

  3. #3
    Join Date
    Nov 2005
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    11

    Default

    Good response!

    And I'm glad to see an MBA... Because it would be good to hear a little more from the established book knowledge...

    I mean people like Craig's list are about as far away from MBA thinking as there is. Craig gave a buddy 25% stock because he thought he might become a tyrant some day, and some alternative votes need to be cast to counter his bender. He had no idea the stock could be sold... From the MBA point of view, Craig had no awareness, not even a dim glow of a light on. I love what Craig has done, but it's a hippy thing, it's for hippys. There are a lot of non-hippys using craigs list, and WE need to put a stop to that by giving them an alternative.

    But take your MBA, and then examine Craig's list. I want something in the middle.

    Craigs list is pulling in $14m per month off of $25 job listings in three cities. Or is it 5 cities? Doesn't matter... They don't charge in the other cities because they have few enough ads that if they did, the market would dry up.

    I think a plan where inividual listings are free, no prostitution ads, and inexpensive commercial ads. Use zip coding to sort to geographical areas, and take it from there... I agree 100% with all of your points, but I think you have to embrace the market pull that Craig's list has, and try to emulate it where it counts.

    But I tell you, marketing to a local area takes some magic. I was sort of thinking that the thing I could do is give away email accounts to give me a lot of email messages to put footers on, slap bumper-stickers on all the email going by... Local marketing should be done as well, in areas where there is someone that could do it. Adding this to an existing enterprise is an easy thing to do to get a stable partner that isn't doing stupid things like spamming or flushing money on silly things.

    I happen to know that many experienced and seasoned ISP's will be shutting their doors in the next 12 months if they don't find new revenue streams. Some of the better ones have a loyal following, and substantial good will in the community.

    I know someone went around and scooped up all of the city.coms, trading worthless stock for them. There was never an IPO, and visiting those city.com's have 5 year old content, and pull in at most $3000 per month each in banners and feature sales. If I had traded them austin.com, I would be suing them by now. I bet the holders of that stock are those same ISP's that are trying to find revenue streams. City.coms get a lot of attention, scoop some of those into the pile, and marketing to the
    city gets a whole lot easier.... unfortunitly we would have to add a lawyer to the list of partners, someone has to do the work to dissassemble the boulevards...

    But lacking the real city.com domains, I do have dot.com to work with.
    There aren't any good "localized" portal networks out there. yahoo and google have local groups, craig's list has local pages, ebay tries to localize big things like cars, but this is all half-assed, and no one local is actually beating the drums.

    In the late '80's I went around with a local politician, trying to start the company "localnet". This was before domain names were in wide use.
    The board of directors shaped into some heavy hitters, and I quit when they code-named the Internet "nerd-net" saying it would never sell, but it would give us a pile of modems to use to send junk fax with. Junk fax became illegal a year or two later, and the Internet was a BIG hit. Smoot Carl-Mitchel and John Quarterman(authors of The Matrix) were on the board, and they were the ones that insisted the Internet was a waste of time.... "Localnet" is still undone. I don't see anything out there that looks like it. There are parts of it drifting around, but it's not really there. (don't look at my austin.com, it's not there either)

    But if we were to develop the "localnet" concept, you could establish the local core of people needed to reach local critical mass. But you need a local partner that knows the community. Once you have community, classified ads are an important staple. Of course we don't call it localnet... have to call it Dot.com...

    Now before you get too local on me, let me tell you what's wrong with many of the existing local things.... Craig's list it too local, if I want a particular model and year of classic car to restore, I may have to search 20 different craig's list cities. With a global classified engine, and zip search, what could be better? The various local entities are disconnected from their neighbors. In the real world we have neighborhoods blending to become villages, blending to become cities, all the way up the line. It should be easy to have a heirarical AND linear grouping of things to dynamically create a site with a lot of reason to visit. Classifieds is just one part of it.

    Look at my austin.commerce maps on the dot.com page there... Imagine those dots being garage sales instead of hotels, with a mouseover displaying the ad title and thumbnail. Of course it can be houses for sale, or movie theaters, or whatever your local site needs. The map is just pulling up hits from a database search. The map could even "map" the local heirarchys. As the map zooms in and out, there are 5 levels of points to display, so when you zoom out you go from local points to regional points, and so on. Another upgrade to sell in the ads!

    But I'm not an MBA. I'm also not looking for an IPO, and I don't particularly want to go into debt with the vc sharks. I swam with the sharks, they ate my shorts.... a couple of times. It's like a chess match, where you don't know you are playing chess, till checkmate, then it's too late.

    I would rather grow organically if possible... but it could also be that I just need to find someone else to run the thing... I'm not a mba, I'm an engineer. Franchise fees, even modest ones, could easily pay for whatever programming we need done to get everything integrated. And we could probably barter some of that programming work
    for franchise fees. But charging franchise fees will require having a solid deliverable plan.

    We could also skip franchise fees and stick to revenue sharing, and just carefully review the local candidates, and give them specific responsibilities for their role. Give the local guys the lion's share of the money, but force a portion of it to be used for marketing.

    Typically a franchise does top-down marketing, but I'm not convinced the kind of marketing that buys works any more. There is a curve that each marketing innovation has followed, and I'm afraid the whole traditional marketing structure is out of kilter, and it knows it. My ex is in that industry, and the industry's big secret is they know their stuff doesn't work most of the time. They call themselves cheese monkeys. I think the next marketing innovation is the localnet. Narrowcasting instead of broadcasting.

    This brings you more than classifieds, you get the restaurants, malls, etc... the whole enchilada.

  4. #4
    Join Date
    Mar 2005
    Location
    Martinsburg, WV
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    19

    Default Sounds like we share some common ideas

    I started researching online classifieds because I couldn't easily sell big things on Ebay and our local classifieds were a pain to use. It's not uncommon to see lots of typos, and then you end up playing phone tag with people, waste time describing what it is you're selling, etc. I once went 40 minutes out of my way to look at a boat I had found in the local free classified publication that the owner swore up and down would fit me, my wife, and two kids, and discovered it only had two seats. If I had seen a picture first I wouldn't have wasted the trip.

    I also needed a project for my business capstone course, and I figured if I had a problem buying and selling things locally then other people must have the same problem as well. I didn't have any experience with classifieds, and my work experience has been pretty much confined to the military and government (I have a BS in Mechanical Engineering Technology). While brainstorming potential domain names I came up with the Shopper concept and bought the domain PanhandleShopper since I live in the eastern panhandle of WV (about 70 miles from DC). The economy here is growing by leaps and bounds and we're rapidly becoming another extension of Baltimore and Washington DC, so this is a good place to start pretty much any kind of business right now.

    I started shopping around for classifieds scripts, hated pretty much everything I saw except for the Geo scripts. The original templates aren't much to look at, but the Enterprise edition is really powerful if you take the time to figure it out.

    What's funny is there's a guy doing pretty much the same thing I thought of in the Michigan-Indiana area with a site called MichianaShopper.com. Which brings me back to your original point about critical mass: this guy in Indiana has a really nice looking website, and has been up and running for a while now, but he has hardly any ads. You should be able to make money hand over fist with a site like his - a good concept with a great look. I think the root problem is a lot of sites like his don't come right out and ask for their customers money. We shouldn't be embarrassed to ask for people's money, because our competition sure isn't shy about it.

    We also need to convince every business in the area they're missing out if they don't advertise with us, because most of us look things up on the Internet whenever we can but one thing you will have trouble finding is information on local businesses. Google is trying to tackle this problem with their Google local option but that requires merchants to have to go through an application process with no explanation of the benefits. I've been working on a sales letter that explains in laymen's terms why it's way more advantageous to advertise on the Internet, which I will mail out with a request for an in-person sales visit or sales call.

    I would be glad to talk about this over the phone if you're interested. Give me a call at 1-877-412-5107 if you like.

    -David
    "As a man thinketh, so in his heart is he"

  5. #5
    Join Date
    Nov 2005
    Posts
    11

    Default

    Hey, pm's don't work here... and I get nothing but reorder (fast busy) when I call you.

    Send me email at george at realtime.net. I have an aggressive anti-spam system, so you will have to reply to the message that comes back to you. The "bounce" will have instructions in it... However the instructions are in plain english, so most people can't follow them. With your MBA you might be able to...

  6. #6
    Join Date
    Jun 2005
    Posts
    14

    Default

    Just a suggestion, but you might want to look into joint venturing with some existing sites. If you have the money to spend on advertising, you'd probably do better partnering with a non-competitive site. George, from what you mentioned I'm guessing you live in Austin. Have you thought about working something out with a local radio station or television station? For obvious reasons, newspapers probably wouldn't work. But if you work out some kind of profit sharing agreement with a local TV station or radio station you might have a good partner on your hands. You'll probably need to run one of their banners, or set up some kind of special deal for radio listeners, whatever, but you'll probably get more of the eyes on your page that you want. Remember to make it worth their while, figure out how it would benefit them, but give it a shot. If they don't work out, narrow down to one or two categories to start and go after local markets. Maybe real estate. Most real estate agents will take exposure anywhere they can get it. Even 5 or 6 people Start with Austin homes for sale, eventually you'll be able to get into apartment rentals. Then you can add listings for used furniture. You get the idea. You're not going to out-craigslist craigslist right away, even if your site is 500% better looking, functioning, etc. I could mention some specific areas, but I'm hoping to make my mint off of those

    As for their price points, the charge for job listings is between $25-100 depending on the city. Since they've got their foothold in San Francisco, they charge more for those ads, I'm pretty sure $75-100. New York was around $50 last time I checked, and I think LA may be about the same. If I'm not mistaken, Chicago and DC are $25.

    And just a side note, before you knock the "erotic service" ads (which they don't charge for), did you know there's a site called erosads (or erosguide or eros something, I don't exactly spend a lot of time going there) that charges $100-300 to post an ad based on the city? If you have religious or deep moral beliefs that would conflict with you running those type of ads, please feel free to ignore the rest of my comments on that. If you're just trying to run a site that won't get thought of as seedy, keep reading. Did you know that Amazon and ebay sell sex toys? If you weren't looking for them you probably wouldn't. You can bury the section where people who aren't looking for it won't find it, but people do look for those ads, and they're prepared to spend money. I'm not looking to run a brothel site, but I have no problem having someone ready to spend money at one of my sites. It's all in the way you present things, and if it gets eyes on your page it may not be a bad thing. Do you think there's a chance that one of the people who went to craigslist looking for "erotic service" looked at other ads? Of course. Maybe they didn't find Pretty Woman but ended up looking at a part time job listing or apartment for rent, or any of the other ads. I'm sure you've gone to the grocery store. Maybe you went for vegetables and a steak. But you pass the bakery aisle and see cake and decide "well, I don't really need that cake, but it would be nice to have dessert". What you go in for isn't always what you come out with.

    I mentioned earlier that you should focus on one area to start with, but when it's time to branch out, just remember to look at your site from a visitor's perspective, not your own. That's probably why craigslist goes strong, with it's ugly pages, and horribly bad search method. They listen to their users and seem to implement changes according to their feedback. I'd be willing to bet that the naughty category came in to existence at someone's suggestion. And if people really didn't like it, I'm sure they'd get rid of it.

    I'm 100% with you that there needs to be an alternative, but don't get so blindsided by what's wrong that you can't see what's right

    For DIG, my background is in internet marketing. My most recent job was with a company that made $20 million in 2004 with almost 0 offline advertising (they went to industry conventions, and I consider that advertising). A good combination campaign is still the best way to go, but I'm assuming you're not planning to print your online ads up and start forcing them into mailboxes anytime soon. If your main business is online, so are most of your customers. If you've made contact online, and want to follow up with an offline call, card, or visit, that's one thing. But at first don't spend too much time or money trying to do anything but get people to your website. If people aren't online, you have to convince them to get online, then maybe show them how to use the site. Down the line you may have time for that, but you want people who know what a browser is, who know how to upload a picture, who won't say "what's PayPal?" or "I don't want to put my credit card number into a computer". If you really want to jump on new users, make some kind of arrangement with your local DSL or cable company where you give their new customers a coupon for a free listing, or $10 off or something.

  7. #7
    Join Date
    Jan 2006
    Posts
    11

    Default

    I live in a rural valley (pop 42,000) and am contemplating setting up an e-classified site. We are geographicaly isolated so selling locally is done tru classifieds in the papers and bulletin boards at a few groc stores.

    The few websites for the area are pretty dismal. My sons design websites and we figure that we could combine their talents with the GEO software to create a site.

    I know the community and am well known here , main town has college and pop of 8000. My plan is to offer low cost ads which will be in competition with the local papers and offer free space to schools, civic groups and non-profits to create traffic to the site. Lots of personal marketing to local businesses.

    I also plan to call people who have ads in the paper and offer a free ad for a month to fill up the site quickly and then do a bigpublicity campaign on the radio and at the college etc.


    Does this sound like I'm on the right track?

    I'd appreciate any feedback. Thanks

    Dixie

  8. #8
    Join Date
    Jan 2005
    Location
    Linden, TN
    Posts
    4,111

    Default

    Quote Originally Posted by dixie
    I live in a rural valley (pop 42,000) and am contemplating setting up an e-classified site. We are geographicaly isolated so selling locally is done tru classifieds in the papers and bulletin boards at a few groc stores.

    The few websites for the area are pretty dismal. My sons design websites and we figure that we could combine their talents with the GEO software to create a site.

    I know the community and am well known here , main town has college and pop of 8000. My plan is to offer low cost ads which will be in competition with the local papers and offer free space to schools, civic groups and non-profits to create traffic to the site. Lots of personal marketing to local businesses.

    I also plan to call people who have ads in the paper and offer a free ad for a month to fill up the site quickly and then do a bigpublicity campaign on the radio and at the college etc.


    Does this sound like I'm on the right track?

    I'd appreciate any feedback. Thanks

    Dixie
    Offer them FREE ADS.....

    Then pickup adpeeps and hit the local business for advertising at $500.00 a pop and up. If you have the people the local business will want to be there.

    Offer for addtional fees to send out a pizza coupon only for them. When 400 people order pizza they will know it was from you. Do this with a newsletter.

    Charge for Trades only.... If your a brick layer, or electrician... charge for this.... Offer them discounts with the more months they buy the cheaper. Wihtout the people they don't work. At same time take advantage of voting system for trades and call it feedback. Educate the trades people to have there clients fill it out. As it grows they will trust your site......

    EnJoY!

  9. #9
    Join Date
    Jan 2006
    Posts
    11

    Default

    Thanks for the ideas!

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