Silicon Valley based Insider Pages, one of the many user review sites that have sprung up in the last couple of years, has reportedly laid off 2/3 of their total staff recently. The news is coming from companies that are interviewing former Insider Pages employees.
The company, which is funded by Sequoia, Softbank and idealab, seems to be unable to keep up with the growth of competitor Yelp (and others) in this crowded space. Both Alexa and Google Trends suggest Yelp is the only company with any traction right now. Other companies doing something similar include Judy’s Book, Zipingo and Riffs.
I wrote about the increasing amount of bad news we are seeing from Internet companies yesterday. This trend will probably accelerate this year, and I think it is a sign of the overall health of the industry. A little bad news keeps the market sane.
Fred Wilson is saying that when we write about bad news we are celebrating it, and that it isn’t healthy. I don’t think that’s the case. We are chronicling the ups and downs of Internet startups, and I think people can learn just as much, if not more, by studying the failures as well as the successes. I also opened up a thread in the Forums to discuss whether or not the TechCrunch DeadPool is a bad idea. Let me know what you think.
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I could never understand the point of sites like Insider Pages. With so many different social networks available, and good directories, it seems like marrying the two doesn’t make sense.
Let me guess. No business model? Over-funded? Too many employees in the first place? Wasted money on things they didn’t really need? Looking at the site, I say they needed maybe $50k to get started (assuming no-one wants to work for free for a while, bootstrap it, like Web companies with actual business models might do).
But, I’m sure their funding is somewhere in the MILLIONS. Afterall, a widget can get $20M, with a valuation of 80 (regardless of the fact there are no profits, and no discernible profits for the future!).
I suppose this is yet another “company” hoping to sell.
In terms of community social reviews - Yelp had the most successful model, which put a focus on the community interactions (pictures, “i like” features), and build around it the local biz reviews. The site design reflected the warm and cozy attitude, and was to young people (who are probably the most contributing sector to ucg).
Insider Pages took a more “directory” style, cloning traditional YP with the added value of community. That apparently didn’t made the necessary impact to represent a “new social biz reviews” domain, where the community has the control, and what counts are the community’s internal dynamics.
Judy’s Book is somewhere in between, focusing originally on parents and 30+ sector. They made lots of changes to the site (and their newsletter) in a considerably short time, and seems they try and quickly introduce new features based on what their users request. It’s a good way to try and keep with the competition, but we’ll see how it affects the service’s overall value.
Riffs and Zipingo are still newcomers which need to find more sustainable models for user contribution. Users will rate biz and write reviews, but for a relatively high value in return. Most of the sites offered coupons and giveaways to top reviewers.
However, it seems that Yelp has managed to come with the best model for Karma - “You review, the community loves you back”.
In none of the other sites you could really feel “loved” as in yelp. Maybe that’s a thing to remember…
look i think this is a valuable service to the industry. like so many other trends or trendlets you rarely see them until they start happening. i think discussions like this give people pause (good and bad) and the ability to sidestep a wave before it breaks. this is a tough business on both sides. you need to have a thick skin. is the term “deadpool” crass? sure it is. as Denis Leary once said, “i wanted to be the 1st baseman for the Boston Red Sox. Life sucks, get a helmet.”
The faster you or someone provide info without all the cotton candy, we can move closer to real, workable and sustainable business models.
Deadpool is a good idea, keep it goin’.
Mikee says “This trend will probably accelerate this year, and I think it is a sign of the overall health of the industry. A little bad news keeps the market sane.”
Call this a little bad news? Daily reports of companies going pop signals an underlying trend. Many more are just treading water.
An example of healthy industry (in the slide business) is http://woomp.com who are a 2 man team and have created a popular slide sharing service for next to nothing.
An example of an unhealthy industry 30 Million+ invested into slide type copycats who are wanabe slidetubers.
My question is WHY DOES MIKEE not talk about the little guys for once?
Mike,thanks for keeping it man.everybody wants these stories. I love to see companies fail. Makes me feel good about not starting one Everybody straight man.
Th
Thanks
MediaVidea has a detailed story on Web 2.0 slowdown.
http://mediavidea.blogspot.com.....aders.html
Of course VCs get annoyed when people start pointing out how they’ve injected too much money into an inherently weak sector. Wilson has been through this before, and knows that “irrational exuberance” is the only way to profit. If enough people had actually questioned the long-term viability of Geocities, would it have had the exit it did?
Who says Insider Pages failed? Sounds like they’re getting a little more disciplined and trimming the edges.
The only review site that has really thrown in the towell on reviews is Judy’s Book which recently announced it’s killing it’s city editor program and shifting focus almost completely to deals: http://blog.judysbook.com/city.....r_pro.html
And Yelp is crap.
There is a strong reason why you will see many review sites fail.
Show me a PR10 reviews site
The Dead Pool is a cynical, bad idea which turns us all into spectators, critics, and second-guessers - as did F***edCompany.com. Every company was wrongly criticized, individual people wrongly vilified through hearsay and silliness.
The core idea of InsiderPages - to cover every vertical in every local area - may have been flawed from the start.
In the name of scalability a lot of these startups are incredibly audacious in scope, and as a result they hire too many and burn too much in the pursuit of unrealistic goals. By contrast, something like Craigslist just did its thing, and got a little bit lucky.
Scaling back overspending and overreaching is not really “failure” as opposed to “excessive optimism” from the beginning, and being “ill-conceived” from the start.
Andy Beard - you won’t find ANY site with a PR10 other than Google. Google only allows their own sites to have a PR10 … just an FYI.
User-generated “review” sites are complete garbage as businesses. First, unless each business has a large enough sample size of reviews, any reviews are worthless. I’d say unless there are at least 100 reviews, it has no accuracy. The only review sites which are helpful have hundreds if not thousands of reviews — say, for a digital camera, etc. There is nothing to stop competitors from writing bad reviews of others and what’s worse, sites like Yelp have nothing more than a small core of “professional review” writers contributing to the site. Now THAT is community!
Second, do you really think the average person or many people fo rthat matter, care about what some Joe Schmoe thinks about the caesar salad at a particular restaurant. Food and entertainment are highly personal things and reviews are not particularly helpful. You can’t quantify ‘taste’.
Insider Pages, Yelp, yada yada yada… these are nothing more than sites built around TINY communities (usually near San Fran or Palo Alto) of people who sit in front of the screen all day getting their egos massaged and getting their “love” fix from their fellow uber users. Spare us.
please keep deadpool. it allows these guys with their pie in the sky valuations to come back down to earth for a second. come on, you can’t take $10MM of someone else’s money, then run your company into the ground, lose all their money, and ask us (or Mike) to go easy on you. That’s the way of the real world.
Yes, I agree about the “bad news”…seems like a shakeout of sorts. Hope it does not escalate…..If it does though, can’t say we did not see the warning signs.
I think keeping the dead pool is a good idea. TC does not act like f*cked company did where it was a bit of a circus. I feel like I get the opportunity to see how ideas went wrong or trends in the industry with thoughtful analysis on the end of any company.
As is noted about ‘the end’ is also a new beginning for many people. Not such a bad thing either.
Finally, NY Times is PR10. There are others and not just google. Granted, they’re not review sites.
‘yelp’ is a relatively generic term and is not useful in Google Trends analysis. Simply look here: http://www.google.com/webhp?complete=1&hl=en - with terms like ‘yelp gnome’ and ‘yelp linux’ the trends #s are thrown off.
IP is completely dead. The investors are trying to sell the company for less than $10 MM and their is nobody willing to buy IP.
keep the deadpool, michael. you’re not celebrating anybody’s failures. some of your commentors do, but only because it’s therapeutic.
This is an example of why it’s foolish to start a site like another site that already exists. The internet’s a big place with lots of underserved nooks and crannies. A little homework, patience, etc. can go a long way in surviving.
Keep the deadpool. People need to see the carnage to understand that internet business seems easy when you hear of two guys starting a million dollar company out of their garage but it isn’t.
Fred Wilson is just nervous. He doesn’t want to see one of his companies deadpooled. F’ um. What isn’t healthy is the sh*t that many VC’s invest in. Keep up the good work. The deadpool is fun to read.
Hey Mike, don’t forget about RateItAll when talking about the uh, oversaturated review marketplace. We’re not funded, but we get many times the traffic of sites like Riffs and Judy’s Book. We’re profitable, understaffed, and run out of my apartment.
Copy after copy after copy…its obvious some will die if they don’t come up with better and new ideas.
I am all for a deadpool. Just don’t let it deteriorate into something like http://www.f$%kedcompany.com. That just got stupid.
as an ex-nyer i am embarassed that a west coast outfit (techcrunch) has the deadpool and an eastcoast outfit (flatiron) is acting like the bedwetter. now thats a cultural shift.
Michael,
You seem like a decent fellow, so why contribute to making the Web an (even more) ignorant and rude place to visit?
Please consider just covering the news here on the main site, whatever that news may be.
#12 makes some good points.
I haven’t read a good response yet regarding why a separate site should exist, and in fact a tone of envy and resentment seems to lurk behind most of the posts. People always try to hide emotional reactions behind ostensibly logical reasoning, so as not to appear “weak.”
I doubt that most people could withstand the sort of scrutiny often seen here and elsewhere on the Web. Imagine if strangers documented and endlessly rehashed your every failure. How about the mistakes you make at work? After all, your employer is investing money in you to return a profit. How about your failures at home as a parent or spouse?
#21 seems to imply that there should only be one site of any one kind on the Web, and the remainder should be part of the “carnage.” Would she like the same filter applied to her own website?
Do people think words don’t hurt others? Wars start over words. Every negative thing you write affects another person, who in turn takes their anger out on someone else–in traffic, at the grocery store, on the spouse, kids, dog, whatever.
Wow… looks like all the 2dotOOOHHH failures are starting to take out their angst against Michael. As they say… if you can’t stand the heat, stay out of the kitchen
I just hope techcrunch does not rename itself f**ckedweb20company.com. Kaplan also started blogging about web1.0 with the best intentions before all that was left for him was to record the failures, chapter 11s and layoffs.
when is doubt, turn to Willie S. for explanation, from “Julius Ceasar”:
Blood and destruction shall be so in use
And dreadful objects so familiar
That mothers shall but smile when they behold
Their infants quarter’d with the hands of war;
All pity choked with custom of fell deeds:
And Caesar’s spirit, ranging for revenge,
With Ate by his side come hot from hell,
Shall in these confines with a monarch’s voice
Cry ‘Havoc,’ and let slip the dogs of war;
That this foul deed shall smell above the earth
With carrion men, groaning for burial.”
Citysearch was the first to enter. Everyone else followed much later. It took Citysearch almost 6 or 7 years to get to a break-even point. Others will be successful too. I am just not sure how long it will take this time around and how the margins will look.
#14 “User-generated “review” sites are complete garbage as businesses.” - what about CNET and TripAdvisor?
Dr. Oogle:
As I said before, if there are a critical mass (decide what this # is, but it certainly isn’t 3 or 4) of reviews on a product or service, there may be some value. However, you won’t get this locally. Just look at those sites (Yelp’s, IP, etc) for yourself. It all really about statistics really. If the sample size isn’t large enough, the results are almost never reliable.
As for niche plays like travel, I don’t care what someone thinks of a hotel — unless of course 75 people all reviewed the same hotel and ranked it. That is useful — but again, NOT local play like the Yelp’s.
The other “business model” problem with UR (user review) sites is the double-edged sword of reviewing local businesses. You will inherently get many bad reviews with the good (if you even get people to participate in the first place). Good luck selling ad space to local advertisers when your site contains reviews they disagree with. It won’t happen. Then all you’re left with is 15¢ CPMs for “get the latest ringtones”…. and not far from the Dead Pool after that.
I am going to agree with WTL. When joe public is writing a review, you need a certain number of reviews before a concensus is reached. How else would you know how well qualified a certain person is at evaluating a restaurant, hotel, or whatever? Now if you want a professional, you buy a book like ZAGAT. A ZAGAT reviewer has eaten at thousands of good restaurants, therefore making suitable comparisons. Some blind reviewer (who probably WORKS at the place they are reviewing) giving a review, can you honestly say that person is without an agenda?
Personally, I think Yelp is drawing dead. The amount of money it will take to make this website mainstream in 25 or so cities, you could not recoup that on a CPM basis. There are viable ways to make that website useful, but I’m not sharing them.
One thing people fail to mention (much) about these sites is the actual audience that writes these reviews. A lot of the reviews at Yelp at by 20/30 year olds and the reviews are more like stories than actual reviews. It is almost a competition to see who has the ‘coolest story’ to tell.
I stopped respecting Yelp when I read that they started paying users hourly to write reviews. Imagine the field day TC would have if Digg did that. So… Judy’s Book is out, IP is out, Yelp! has to pay its users, what’s left?
I guess in the end other people’s opinions and information just aren’t that interesting.
The dead pool is a great idea, as long as the content is focused on showing why companies fail. There are so much more to learn in a failed business than a successful one.
To the companies that failed: No need to take this PERSONALLY!!!!! It takes a lot of guts to start something. Even if you failed at the end, you learnt a valuable lesson! I know so many people who went bankrupt before they make their millions. They told me that their failure was the key to their final success!!!!
I would rather fail then never try!! Many people play it safe and just sit around waiting to see other’s failures. This kind of life is not worth living and will be full of regrets!
What always amazes me is when you hear about a site laying off a fraction of their employees. How many employees does a relatively small site need.
I run an entire network of site on a shoestring under our flagship site : http://teachtopia.com name that includesthe podcasts http://lawithkids.com and http://childrensbookradio.com
Besides plugging my work…what I am trying to say ..is that sites don’t always need huge staffs … What matters is good content.
Well, a little bad news always makes everyone else work a little harder. I don’t think anyone celebrates someone else’s ill-fortunes.
The local space is crowded and bound for some heartbreak, here at MerchantCircle, we’re counting on being the most value positioned company for businesses and not consumers. There’s a lot of reputation management needed for businesses and we’re here to simplify the process.
Here’s to hoping everyone lands on their feet!
MerchantCircle? pls. you guys are so far behind. What a joke. MC is now aggregating user reviews. Guess you guys couldn’t find a way to do it yourself so now you are scraping other peoples content?
Watch for MC in the deadpool soon, the review sites are going to sue the heck out of them for ‘aggregating’ content.
I am with WTL when he says: “Good luck selling ad space to local advertisers when your site contains reviews they disagree with. It won’t happen.”
Exactly. I know of a moving company which is doing quite well out of Yelp in San Francisco. I put them there with a glowing review five months ago. The problem –as they know– is that once their competitors see Yelp, they will start flaming them, and there go their calls. Even one less-than-ecstatic review (perhaps from someone who has unrealistic expectations) will massively and immediately reduce their response.
And what happens when unpaid Yelp reviews makes a company so popular that they can’t handle the business? How are you going to sell them an ad? You’ve just killed your prospective client! This has already happened with several hairdressers in San Francisco
I also agree that yelp is for hip, young people. Those people will move on once the bridge and tunnel crowd gets there (if they ever do).
And how deluded is the person who thinks that Zagat is written by professional diners who have eaten at many good restaurants? That may have been the case 10 years ago, but now Zagat reviews are written by people who have never eaten anything except pizza in Peoria. Those reviews are then edited/”polished” by profesional copywriters at Zagat HQ in New York. Zagat is finished as a reliable dining guide for major metropolitan areas. (That doesn’t mean they can’t make money. They’ve still got a few years left in corporate gift sales).
Bobby D, what a hater…. We don’t even try to compete with review sites as a consumer destination. We aggregate reviews for business owners - someone has to with all the flak that’s being spread all over the web. Do you think Mom and Pop in Pocatello, ID know that there’s a Yelp? A CitySearch? An InsiderPages? Their business reputation is their livelihood.
And having a pre-built web page for Mom and Pop who can’t afford to build their own website sounded pretty good for 75,000 business owners who have signed up with MerchantCircle in just over 7 months.
We actually won a Top 3 Award NEXT to Yelp, as Newcomer of the Year and a Top 100 Private Company by AO Media out of a pool of more than 1000! It’s been an exciting 7 months.
Rxforbiz, first off your Yelp example doesn’t make much sense. Having more business than you can handle as a result of Yelp is the best thing that could happen FOR Yelp. What you don’t understand is how small businesses often work. Word of mouth in terms of promotional channels is huge. Plus there are many communities, organizations, etc even within the same field that are meant for sharing and comparing notes on best practices. Positive word of mouth from one business will generate new business for Yelp for anyone who wants to get in on “it” asap via advertising.
As for Zagat, when you walk into a bookstore in any major metropolitan area what guide do you see? I’m pretty sure zagat might be even more entrenched than it was 10 years ago as the definitive guide to metro restaurants. When you think about it, hasn’t zagat been doing the whole user review thing for years? Maybe you think the currently the _overall_ quality of user generated reviews is poor. In that case all user review based companies suffer.
I like Merchant Circle! There are some things I don’t like about it which have to do with it not being 100% free…but what kind of world would it be if everything was? What would be the motivation?
Merchant Circle has allowed me to gain a little bit more notoriety and power inside of google especially. I believe the wisest decision for any of these websites, something of which none of them do (as far as I know) is to create numerous lead capture pages with different domains. MerchantCircle already has some google power but for them, I see it as if they made every listing that is already listed, presented in different ways across different domains, they would be more valuable to their customers they represent, and furthermore, more findable for consumers who use their services which the listed businesses represent.
I would actually spend money in such a case, but I don’t find it an overall value to spend money to list myself in numerous towns/cities. Perhaps some way for a company to list themselves around the United States with a great sum of money to confirm that they are worth such a listing.
These are all things to think about.