[Search-l] Old markets and methods vs. new

[Aerik Sylvan]

I know we beat this thread up pretty good, but I just read something on
"WebPro News" (not necessarily a definitive, high-profile source, I know)
that brought me back to it.  Here's the excerpt:

Big companies were reluctant a few years back to shift a significant amount
of their advertising budgets to search marketing. This reluctance made
conditions perfect for small businesses to take advantage of Google's
relevancy at bargain basement prices while Google built its reputation and
search share.

But big companies wised up, making competition for ad space even fiercer.
Those big budgets provided a big advantage in organic results, too. While
bootstrappy, budget-conscious companies tweaked and tested and gamed to get
better organic placement, large companies realized pretty fast it was easier
just to buy a site already ranking for relevant keywords.

Exactly the points I was trying to make, particularly with respect to dollar
generally spent on *marketing*.  Jason, you and Jimmy are kind of special
cases - you both have some celebrity that substitutes nicely for money.  But
Jason, I've read and re-read your input, and I've got to admit, you've got
some great points:


   - First to market is important because people don't tend to move out of
   their comfort zone
   - Execution of a good idea is very important - without good execution,
   the idea is worthless

Also, reading between the lines, we touched on the topic that competing with
a big business in the same space is a big project.  Absolutely. But I want
to try to talk about something slightly more abstract than that.  The big
search engines and other portals account for some large percentage of
internet traffic.  And most search results point to big, entrenched players
for search results.  They're the head of a long tail distribution.  But
there is a lot of stuff out there that people would find valuable if they
knew about it.  This brings up two topics, or perhaps two faces of the same
thing:  Better search will help people find resources that fit them better
personally.  This is the holy grail of personalized search, I suppose.  But
here's the other thing:  all those small resources out on the tail are
fighting the big guys for eyeballs. It's not just the ability of search to
find them (relevancy), but also something else, and that's that uphill
battle with the entrenched players I'm talking about.  So I think one
dynamic is that the algorithms for trying to improve your signal to noise
(relevancy) tend to squelch a lot of the small players.

So I think there are opportunities to influence the overall dynamic and
culture of the internet with community driven content, and also with open
content.  There's ton's of really interesting data locked away (del.ico.us's
bookmarks, for example, which are protected by their terms of use) that
could be harnessed to find relevant content with minimal squelch.  But I
think there are bigger things possible than that.  I loved reading Jer's
vision for Atlas.  There's a whole Data Portability movement growing that
dances to the same beat.

So, okay, Mahalo is going to share data and stuff, and that's cool.  And
everybody and their grandma is trying to figure out how to harness community
generated content to make a buck (and maybe change the world, but usually
"make a buck" comes first).  But Mahalo is still creating entrenched
players.  Digg, Fark, and Slashdot are all cool because they bubble cool new
things to the top.  I think that that mode of thinking is where there could
be some opportunity for interesting innovation (if it's well executed :-)).
I think shared information (a la Atlas, RDF data of all sorts) and cheap
storage and computing mean that pretty soon, a lot of data is going to be
available to a lot of people, and there will be some success stories in
using community created content, sharing it, analyzing it, and serving up
fresh new content and relevant information with algorithms that have a low
squelch factor.

But as Jason points out, it will have to be well done, and the guys who do
it first will have an edge...

Well... that's enough babbling for now...

Aerik


On Thu, May 29, 2008 at 7:56 PM, Jason Calacanis <jason at calacanis.com>
wrote:

> > a large number of people - If the company doesn't have to be big, you
> don't
> > need a lot of people.  I think Craigslist (for just one example), which
> is a
> > huge service, has a staff of 25?  And it started out smaller than that.
>
> Yes, that is a great example of a service that was built of a long
> time very slowly. Of course, when they started they didn't have
> competition to speak of.
>
> If you look at the search space Wikia, PowerSet, and Mahalo are coming
> into a space where there are MANY excellent search options. Google and
> Yahoo are doing AMAZING things in search... and they are working on
> thousands of significant improvements all the time.
>
> Search is a very mature space with a lot of revenue at stake... it's
> not classifieds in 1996.
>
> > Okay, sure... but if you don't need all that capital in the first
> place...
> > Actually, what you need that capital for is *marketing*.
>
> Not true actually.
>
> Google, YouTube, and Weblogs, Inc. spent exactly nothing on marketing.
> The best products on the web spread by work of mouth or some viral
> component (think syndication of videos in YouTube's case).
>
> Mahalo is spending exactly zero on marketing.
>
> Ask.com spent $100m on marketing last year and didn't change their
> share of search.
>
> > I think ideas are more important than you seem to - without ideas you've
> got
> > nada - but your point about execution is a good one.
>
> Most folks over emphasize the importance of ideas. It's human nature.  :-)
>
> >> In terms of specific ideas if you make a list of them I will tell you
> >> exactly how likely they are to work on a percentage basis.*
> > Hah!  I'm not sure if I'm supposed to take you seriously, or not!?
>
> Not kidding at all. Make a list and I will give you the exact
> percentage chance that it will work... but only to two decimal points.
> :-)
>
> > users.  Does it have to work this way? No.  Mahalo does the same thing -
> > reinforces the position of the incumbents.  Users would be better served
> by
> > an intelligent (whether computer powered, or human powered) system that
> is
> > constantly on the lookout for for the *best* resources, whether they be
> new
> > or old.
>
> If you're saying that it takes a long time to get people to switch you
> are absolutely correct. Incumbents have a huge advantage because
> people are lazy and they will not switch services EVEN IF the new
> service is better. There are people using AOL Mail at this very moment
> in fact.
>
> That is why it is so important to create a product that is 2-3x better
> than the incumbents... not 2-3% better. If you compare PowerSet's
> current offering it is--in most cases--no different than searching in
> Google with the "site:wikipedia.org" parameter. in fact, it's worse as
> often as it is better.
>
> Making something better than Google/Yahoo/MSN is a five to ten year
> project. Look forward to discussing it with you during that time.
>
> all the best, Jason
> ---------------------
> Jason McCabe Calacanis
> CEO, http://www.Mahalo.com
> Mobile: 310-456-4900
> My blog: http://www.calacanis.com
> AOL IM/Skype: jasoncalacanis
> My admin: admin at calacanis.com
>



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