Andy Sack’s Local Recommendations

I spoke last week with Judy’s Book CEO Andy Sack about the decision to shutter the site and his reflections on the entire experience. We had a free-ranging conversation that was very lively and illuminating. But since I was in my car during the call, I’m just going to reproduce the highest level bullets.

After making the point that local is fundamentally challenging Sack explained that he thinks it was a mistake for Judy’s Book to go national as soon as it did. He and his management team felt compelled do so, however, because of perceived competitive pressure from InsiderPages, which was launching nationally.

Sack added that if he had to do it over he’d:

• Launch in a single market and gain critical mass before going national
• Launch with a narrow content focus: one category or just a few rather than trying to be comprehensive immediately
• Try to get into the “deal flow” (think travel or OpenTable) of local ad spending
• Have a long time horizon and tempered expectations accordingly

Along the lines of the final bullet, we discussed the common venture capital desire to invest and “get out” in 3-5 years with a 5x to 10x return. Sack and I both concluded that this was unrealistic and indeed maybe fundamentally incompatible with what it takes to succeed in local.

Sack said that the revamped Judy’s Book, which became a deals and coupons site, didn’t really have a chance to prove itself but that his investors felt the best decision was to close the site down (a decision that Sack now supports). Similarly the InsiderPages board made the decision to sell that site to Citysearch/IAC. Backfence, for its part, was unable to raise another round after exhausting its funding.

There will be exceptions where local sites get traction early and pay off, accordingly, for their VC investors. However, these examples raise the question for entrepreneurs of whether VCs should be involved in local at all given what might be called their “impatience.”

Recall my joke/formulation about Craigslist, which Newmark recently agreed with:

If Craigslist had taken [VC] investor money in the beginning it probably wouldn’t be around today because it would have had to make different choices.

Sack told me that he was available (until his next gig) to help companies in the local space that were looking for the benefit of his experience and perspective. If you want to reach him you can do so through his blog.

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