When RedBeacon won the TechCrunch50 as the “OpentTable for service businesses,” I lauded the site’s elegant design and theory but “dissed” what appeared to be naiveté on the part of the model (and some of the folks who were celebrating it).
Here’s what I said at the time:
As a general matter local businesses are time starved, confused about online advertising and generally overwhelmed by pitches for their marketing dollars. Getting them to show up and participate at RedBeacon is going to be an enormous challenge. Let me repeat that: an enormous challenge.
If the founders have a five to seven year time horizon they might be prepared for the very long, slow climb up the mountain that is local. Alternatively they might be secretly thinking they’re a useful platform and will be acquired by a yellow pages publisher or other traditional media company if they can prove value and gain some momentum. Perhaps; it’s more likely than succeeding as a stand alone company.
Somewhat less challenging than getting local businesses to self-serve and participate in RedBeacon is building consumer awareness. Yet that too will be tough, with search engines and so many other sources of local business information online. The booking part is novel and differentiates RedBeacon from many local destination sites. But the third party appointment vendors (e.g., Bookfresh) will enable sites like Yelp to add booking and appointments quite easily. Yelp has 25 million uniques and a consumer brand. Tough to match.
Yet without brand awareness and usage among consumers, those local businesses that are more savvy and motivated will not show up because they’re not likely to get much response. And without a critical mass of local business participation the value won’t be there for consumers either. It’s a classic chicken and egg problem. The fact that RedBeacon won — again, I have nothing against the site or its founders — also reflects to me the disconnect between the bubble world of startups and their funders and the real world.
Good luck to RedBeacon and congratulations. I hope that they prove my skepticism wrong.
Yesterday the company held a WebEx to cite progress and announce a partnership with (parenting) group creation platform BigTent. They said this was merely the first of a number of partnerships.
RedBeacon appears to be starting to prove me wrong because they seem to have been smart about some enhancements and changes to the site, most notably the integration of Facebook. In effect it appears that RedBeacon is shifting somewhat to become a social platform and hub that manages recommendations for service providers across a range of sites.
The following are a few illustrative slides from the presentation:
Big Tent integration:
They say they’ve had little difficulty signing up service providers:
RedBeacon is also now facilitating greater communication (still no phone) between the SMB and the prospect:
The slides go on like this: problem, lesson, solution . . .There appear to be a range of tweaks and changes that make the site more consumer and SMB friendly and they appear to be very thoughtful changes. But perhaps the smartest of all is the social media integration:
RedBeacon is still in a crowded segment but it’s now not simply a destination site with a Chicken and Egg problem; it’s a social media platform that can extend reach through deals like BigTent and Facebook. Very smart.