RedBeacon: Tough Slogging Ahead

In a quick Twitter post I described RedBeacon as ServiceMagic meets LocalPrice meets Bookfresh or Booking Angel:

Picture 81

And you could substitute other company names for the ones above; there’s nothing truly novel here as far as I can tell. Admittedly I haven’t spoken to anyone at the company but the challenges of executing on this type of model — though it works in theory for both advertisers and consumers — are considerable and fairly well documented:

  • Must build consumer awareness and traffic
  • Sell to SMBs

When you’re bootstrapping both sides of the local equation it’s extremely difficult.

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20 Responses to “RedBeacon: Tough Slogging Ahead”

  1. RedBeacon: Tough Slogging Ahead « High Business News Says:

    [...] though it works in theory for both advertisers and consumers — are considerable and fairly wellSource: Screenwerk RSS Feed Leave a Comment No Comments Yet so far Leave a comment RSS feed for comments on this post. [...]

  2. Malcolm Lewis Says:

    Good luck getting a contractor to show up on a specific date and time ;)

  3. Rich Rosen Says:

    The Redbeacon team is impressive (all x-Google) but the stated strategy of “without any phone calls” seems off target given this market. HelpHive in Seattle seemed to start with a similar strategy and deeply hid the merchant’s phone number. They’ve since uncovered the number to appear in the listing. Perhaps the lesson is that you can’t route leads to a SMB without a phone call. My experience with FastCall411, and prior, confirms that merchants want phone calls. I also second Malcolm – availability is key is this market. Getting the merchant to answer the call and show up for the appointment are the second and third biggest challenges in mobile local. (The listing data is the first challenge)

  4. Dean McEvoy Says:

    Yes I second Richard. Good team who can build great software, but showed lack of expereince in local by saying” we are allowing 2 weeks for the service providers to sign up before we launch to the consumer”. I thought Yext .com was the most interesting local play at Techcrunch. It simply records the call to a merchant and runs voice recognition software over the call to identify keywords which helps identify what is and isnt a relevant. Overcomes problem with telemarketers calling metered numbers and the merchant having to pay for it still.

    The key to scalable local is bringing business to merchants through the phone. This was nice.

  5. TC50: Local Search Site RedBeacon Takes Top Honors | Internet Marketing Australia | Online Marketing Courses | Internet Marketing Training Says:

    [...] award. Congrats to RedBeacon, which gets $50K in seed money and a whole lot of recognition. Now the hard part [...]

  6. TC50: Local Search Site RedBeacon Takes Top Honors | Quảng bá website - Dịch vụ SEO trên Google, Bing Says:

    [...] award. Congrats to RedBeacon, which gets $50K in seed money and a whole lot of recognition. Now the hard part begins. Tin tức Quảng bá [...]

  7. TC50: Local Search Site RedBeacon Takes Top Honors | Media News: Internet Marketing & Online Advertisng Says:

    [...] award. Congrats to RedBeacon, which gets $50K in seed money and a whole lot of recognition. Now the hard part [...]

  8. Indextree's Internet Marketing Blog» TC50: Local Search Site RedBeacon Takes Top Honors Says:

    [...] award. Congrats to RedBeacon, which gets $50K in seed money and a whole lot of recognition. Now the hard part [...]

  9. Malcolm Lewis Says:

    I wish these guys luck but I’m surprised they won TC50 given the other companies that presented. Not sure I see much innovation — isn’t this ServiceMagic with a slightly different business model (% txn) and broader scope? And like others, I don’t see this working for any meaningful job (cater my party, paint my house, fix my water heater) unless the phone is involved. Both the service provider and the consumer will want to verbally nail down the details.

    I think the bigger problem in local, at least from a consumer perspective, is not HOW to engage a local business (the phone works just fine for that), but WHO to engage with. Someone you are confidant will show up on time and do a good job without breaking the budget.

  10. Greg Sterling Says:

    Good comments all. I’ve folded some of this back into my SEL piece this morning on RedBeacon: http://searchengineland.com/a-services-open-table-redbeacon-wins-tc50s-top-prize-25895

  11. RedBeacon - TechCrunch 50 Goes Loco…I Mean Local | Local SEO Guide Says:

    [...] models that are out there confusing the SMBs and consumers already.  Some of local yokels over at the blog of Mr. G.E. Sterling seem to [...]

  12. Todd Leiser Says:

    I also watched the RedBeacon TechCrunch 50 video as well as the other “local” focused start-ups and it seems like deja vu all over again. Red Beacon probably has a chance with the technically sophisticated SOHO businesses and part-time businesses (stay-at-home Moms/Dads, real estate agents – who can do something else in between appointments etc). I believe this is the same group that initially supported Adwords back in the day.

    Hitting the mainstream small business will be the mountain climbing struggle you described without some sort of feet-on-the street catalyst and even then, those of us who have toiled for years in local know all too well the challenges. I hope RedBeacon has some local subject matter experts on their advisory board.

    My advice would be to initially steer away from the ServiceMagic direction and look to reach those local businesses that are “under the radar” or “out of the minimum spend budget” of most other traditional lead gen advertising vehicles.

    Would be interesting to see a mashup of RedBeacon & Yext!

  13. RedBeacon e le sfide del local business | GliAffidabili Says:

    [...] execution. Il focus sul local business pone infatti tutta una serie di criticità ben documentate nel post di Greg Sterling tipiche di questo mercato su cui anche noi de GiAffidabili ci confrontiamo [...]

  14. TC50: Local Search Site RedBeacon Takes Top Honors | Seo Services, LLC - Indiana based search engine optimization consultant Says:

    [...] award. Congrats to RedBeacon, which gets K in seed money and a whole lot of recognition. Now the hard part [...]

  15. Rob Shields Says:

    You are right, Greg. The execution of this model will be tough because so little separates RedBeacon’s model from ServiceMagic. ServiceMagic enjoys a 10 year head start, the backing of IAC, strong profits, growing brand recognition, and has begun to excel at SEO.

    There’s no questioning the horsepower of RedBeacon’s team, though. Google backgrounds aside, they have one heck of a collective resume. So I expect that they will execute with substantial velocity and competence. I would also expect that they will succeed in raising institutional funding and that this will provide them greater latitude and a longer runway to execute. My guess would be that once they’ve received funding and have launched the product, there will be a substantial shift in their model/strategy.

    The service is not live yet, so it is difficult to get a sense for exactly how it will work in practice. But clearly a central aspect of their proposition is that the consumer will receive quotes from several providers within some period or hours/days. This may be tough to pull off when consumer are providing only a free form description of what they need, e.g. ‘I need a home security system for my house. See the attached picture’ With so little structure to the request, I would imagine providers will have a tough time offering quick/concrete quotes.

    ServiceMagic once heavily marketed this aspect of their service, but no longer does. I suspect that this is because the consumer does not really receive immediate quotes from providers, but instead, receives calls from the 3-4 providers selected by ServiceMagic. The provider often want to pitch the consumer and gather information before the consumer receives any quote. So ServiceMagic doesn’t offer any faster way to receive quotes than if the user simply picked up the phone and called providers directly. It’ll be interesting to see how RedBeacon addresses this.

  16. Greg Sterling Says:

    No question they’re talented and smart.

  17. Eric Says:

    No doubt the redbeacon team has all the accolades, but watching them answering the question of chicken and egg problem, you wonder how much they understand the local provider business.

    http://www.questbid.com is another stealthy company that goes beyond everything what redbeacon does, they actually automatically send the consumer request to local providers via PHONE! The provider then has the chance to talk to consumer. Note the phone call is automatically placed by using local cost VOIP.

    As every provider has a listing in yellow page, the chicken and egg problem is solved elegantly.

    I tried a demo and was very impressed.

  18. Janni Says:

    @Rob Shields The whole home security system thing is definitely a downer when people don’t know what exactly their looking for. AngiesList is definitely one of the biggest competitors in this niche though and the quicker RB get to a similar point the better they will do.

  19. Allison Hemming Says:

    It’s a good idea but I think that there will be some problems about the schedule of the service. User reviews could help to get feedback on the transaction. All in all great original idea!

  20. Google Backgrounds | Web Page Backgrounds Says:

    [...] RedBeacon: Tough Slogging Ahead – In a quick Twitter post I described RedBeacon as ServiceMagic meets LocalPrice meets Bookfresh or Booking Angel: And you could substitute other company names for the ones above; there’s nothing truly novel here as far as I can tell. … Share and Enjoy: [...]

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