For most startups just getting off the ground, cash on hand is extremely limited, to be reserved for only the most essential expenses. But that doesn’t mean these fledgling companies don’t have an abundance of talent. TheSwop, a new site making its debut today at TechCrunch50, is looking to help these startups and other growing companies trade ‘favors’ to each other, in whatever fields they specialize in. These can run the gamut from advertising and business planning to graphic design and development, or resources like office space.
Because exchanging goods and services this way can be a tricky business — you wouldn’t want to swap time with one of your extremely talented developers for work by a shoddy designer — TheSwop features one-on-one videos of each of its subscribers so that you can see the “whites of their eyes” before you consider a deal. Each subscriber also has a transaction history, as well as reviews left by other members. Another key feature, given the nature of many of these services: the site offers a map of each of its possible service providers, with paid subscribers (who are likely more trustworthy than free users) highlighted with larger markers.
Using the site is simple: you run a search for whatever you’re looking for, and then use the site’s virtual currency (called “favor points”) to trade for that. You can also perform transactions with cash if you’d like — the site doesn’t force you to use its platform, so you can take things offline to finalize the deal.
Roelof Botha: I don’t like it. Money was invented for a reason, we’ve seen people try to use beans etc. and it doesn’t work. I wouldn’t invest.
Marc Andreessen: Why limit it to startups? How do you ensure currency keeps its value?
A: If you’re a large company you’d probably use a larger barter exchange model. When you enter the site you get a certain number of points, you can buy more, but we won’t just flood the system with points.
Tony Hsieh: How do you make money, or at the end of the day do they owe lots of favors?
A: We’re freemium. Everyone can use for free, but you can pay to every larger map markers, other premium features.
Paul Graham: Why don’t you just let people buy favor points.
A: We’re considering that.
Andreessen: One thing barter companies in dot com era discovered is that there is a role for price discrimination — there are certain things that aren’t otherwise going to be available on the market, or would be charged for differently.
A: These would be the types of services that every startup needs.
Video:
Outside Coverage:
TC50: Startups can trade favors at TheSwop.com VentureBeat.
TechCrunch50: TheSwop provides Exchange Facilities for Food and Service for Startups Trends Updates.
TheSwop – It’s Socialism, Localized #tc50 Techgeist.
theswop.com Webdev2.0.
Snore.
I don’t see this working very well. Their going to run into similar problems Peerflix.com had when they first launched.
Peerflix is retail, TheSwop is B2B – not following your comparison here.
And – although not our model – retail bartering sites have enjoyed a very good few months with the tough economy – search Google news.
This site is clearly not ready for production …
Visit
http://theswop....orm-advertising
and get the following
user warning: Mixing of GROUP columns (MIN(),MAX(),COUNT(),…) with no GROUP columns is illegal if there is no GROUP BY clause query: SELECT SUM(field_rating_field_rating) as rating_count, COUNT(ctof.nid) as total_vote, ctof.field_to_field_uid as company_uid FROM content_type_overlay_form ctof INNER JOIN node n ON n.uid = ctof.field_to_field_uid WHERE n.nid = 81 AND n.uid = ctof.field_to_field_uid in /root/theswop.com/sites/all/modules/cms/cms_search/cms_search.module on line 581.
G – fixed
Wait, what does this have to do with Sony Ericsson?
/s
thank you for the info,great stuff!
I was in south america once, and this guy from the UK talked to me for an hour about how much bartering was the next biggest thing. Is bartering that common in the UK?
Tough to say. Not that much analysis done – at least that I can find.
A slightly impenetrable study was conducted a while ago – try this – http://www.thef...nies-a016637454
More UK than US? Don’t know. The concept behind TheSwop.com was not a nationality thing – more that it is pretty tough getting a new idea off the ground when you are bootstrapping it yourself. Particularly in this economy – which is a global issue.
A good idea to try to keep more start-ups alive for longer by bartering their skills in return for service they need? It’s worth a shot IMHO
Great way to bootstrap a company using that site.
http://www.trendslate.com
1) Money was invented for not having to swap
2) Start-ups normally don’t have excess of workforce.
3) “Settled” companies do have excess of workforce during recessions.
1. All start-ups barter. We are all cheap and and want good deals. TheSwop.com does not replace money but it uses favor points to track the money-value of the favors you are doing. By using a virtual currency you can trade favors with a group rather than 1-2-1.
2. An “excess”. Sure, none of us spend money unless we think it is a good idea. Getting the balance right is tough though – and easily leads to having too much of one skill and not enough of another. Every week is different. It would be an amazing, and unlikely company that fully utilizes all of its in-house resource capacity for every hour of the week.
3. Pink slips and P45s – inefficiency does not last for long. There are alot of people unemployed after this economic collapse that need help, advice and a network to get back on their feet.
Swap is good for products you wouldn’t normally want to spend money on.
It will be interesting to see how many people will trust working for favor points. You are trying to bypass currency by trading, but that is exactly what favor points end up being, with the difference that these are not backed up and thus untrustworthy.
You are even thinking about providing the option to buy favor points… which seems ridiculous given the core concept of the website.
Unless I’m missing something all I can see is an ebay for startups?
Good luck though… interesting because we’re working on a similar concept, yet implemented in a totally different manner.
Ebay is an auction. TheSwop is not.
The key is supporting start-ups – not the age-old debate over virtual currencies.
Drop me an email at jonathan@theswop.com – interested to discuss and see if we have synergies.
swop assumes that both parties have equal abilities to give services, goods etc. to other end. Is this rality in the real world?
There are two parts to the TheSwop value proposition:: price discrimination and services exchange.
Price discrimination: suppliers now have a segmented market of start-ups and growth phase companies and can easily offer significant discounts of their services. Plus suppliers can form partnerships so they can sell packaged services. This is all good news for start-ups as they can now find those service providers that are happy to offer lower rates.
Services exchange: this will be attractive to some companies, but not all. If your start-up has no spare time to offer services, or you simply don’t like the idea of bartering then you can use TheSwop to get good deals (see para above) without using the favor points concept.
However, using favor points is attractive to many companies – we had very positive feedback from many of the start-ups at Techcrunch50 telling us exactly this. Their feedback had these themes:
a. We do have some spare time to lend out our resource and like the idea
b. We do not have spare resource, however, the idea of being able to redirect some of our resource to pay for suppliers is great.
c. Don’t like bartering, but a marketplace of suppliers offering discounts to start-ups is a cool idea
d. Might be better to direct TheSwop at a particular set of suppliers – marketing, PR and design for example
e. Particularly useful as we are based in cities / states / countries where suppliers do not generally offer price discrimination or products suitable for start-ups requirements
f. Like the networking aspect – and a nice way to bring together local entrepreneur / start-up networks into bigger networks to get purchasing power
g. Consider using cash rather than favor points – so a start-up can get paid for their time and then use that money as they wish to buy other services
h. Being global is very useful. We are always needing to find expert Ruby developers and it is tough in LA as Ruby is really popular – could you help find guys in London?
The problem with this model is that start-ups need FOCUS to succeed. If you start to trade “favors” where you then need to focus on someone else’s startup, which is, in most practical purposes, a fluid amorphous entity, you lose focus on your own enterprise or do a shoody job on the other company’s needs.
I agree that focus is critical. You have total control over how much of your start-ups time you barter -so sell lots of time or a little bit depending on your needs.
Not having enough money or running out of money or not bothering to pay for marketing, PR, design, legal and office space is a major killer / slowdown impact for start-ups.
This is very reminiscent of an idea pitched on Ampolo.com a few years back. The Ampolo concept was geared towards community bartering. http://www.ampo...o.com/?s=barter
There are a number of retail bartering sites out there (swopping CDs and stuff). In-fact many have had a surge of popularity recently with the downturn.
TheSwop is focused on B2B – not window washing and piano lessons.
Hey TheSwop
Wish you guys luck!
Barter and swapping is the way to go for any new business or start up.
Watched the video and saw the question by Roelof Botha: “I don’t like it. Money was invented for a reason”. This coming from a guy that sat on the Google board of directors that was aquired for 1.65 billion in an all stock transaction.
http://www.tech...quired-youtube/
WTF?
I’ve always hated that BS money was invented for a reason comment…no shit! The problem people run into is they don’t have any extra coin or they want to maximise the value of something they have. It can be a skill or service.
You guys will have to walk outside the start up arena. The niche is too narrow and you’ll just get people trading spam links. Trust me…the world doesn’t need another colon cleanser link on the web.
Here’s to you.
John
Thanks John.
In our case it would have been easier if Techcrunch had allowed start-ups to launch into a full alpha before the conference as very tricky to prove or disprove a business model – especially when it is based on the network effect – when you have been live for 1 minute before you stand-up on stage.
I agree with Roelof that Paypal killed off all of the virtual currencies (I knew one of the senior guys at Beenz and I think Flooz was the US version) and as such virtual currencies as a start-up idea are very tricky to pull off.
What I think he missed was that the “favor point” on TheSwop is purely a way of counting hours a start-up has put into the system so they can reclaim that value. It is not Beenz 2!
In retrospect for the conference we should have not gone into this area in such depth – and focused the panel on the concept of a site designed to help get start-ups good deals with suppliers by bringing together networks.
I do push back on his point that barter is dead though.
Every, and I mean EVERY start-up I have worked on or known does barter type deals whenever they can to get office space, design, marketing, etc. etc.
I hope that as TheSwop grows (and thanks to everyone who has signed up – the response has been great) we will find the right model for enabling swopping exchanges for start-up and service providers.
Is the idea 100% there yet? No, of course not. We launched two days ago and I really value everyone’s thoughts, comments and help as we build the community up.
Will barter be part of the model as the business grows – yes. Are we trying to launch a Paypal killing virtual currency – absolutely not!
Sorry. It was the You Tube board of directors before the acquisition.
My bad.
http://www.link.../in/roelofbotha
Many startups in need of marketing approach my company and offer to pay for our go to market solutions by way of equity, since they are short of cash. People who were offering loan syndication, website development and legal services during the last dotcom boom of the late ‘nineties tell me this is not a new trend. TheSwop might have to find some way of linking favor points to equity!