Thoughts on Centzy from the First ER Accelerator Demo Day #ERA1

(Note: This was supposed to be my thoughts on all the startups presenting , but I got lazy so it's only my thoughts on Centzy, the first company to present. What can I say, there are advantages to going first.)

Last Friday was the first ever Entrepreneurs Roundtable Demo Day, and I had the honor of watching a bunch of great startups demo and meeting a lot of fantastic folk from across the NY tech ecosystem. Anything in quotes is from the description of the company in the event program or something they said during their presentation.  This post includes exactly zero outside research.

1. Centzy


Overview: Centzy's is described in the event program as "a comparison shopping engine for local service."  That's a lot of buzzwords, so I prefer the way they describe themselves on their web page: "Find prices and ratings for every service in your neighborhood."  Centzy focuses on services costing <$100, or what they call "everyday services."

Apparently, only 25% of local services businesses post their prices online, and other local services such as Yelp, Google Place, etc. only post cost by crowd-sourced category (e.g. $, $$, $$$, etc.), if at all.  The consumer is left to the subjective, vague judgment of the crowd, or to making phone call after phone call to do any sort of price comparison.

Strengths:

• This is obviously a huge market. I don't remember the latest quote for the size of the local services market but I think it's approximately $7 gazillion.  And there are, you know, a couple of small companies targeting this space.
• I'm sure someone else is trying to collect local price data, but it's a big enough market for multiple startups to exit at good prices, and none of the big players seem to have this feature.
• They are explicitly targeting women as their primary users. I can't stress how unusual and insightful this is. All the data shows that women overindex on practically every measure of social and digital media, yet the predominantly male founders tend to consciously or unconsciously target men (Whitney Hess has a lot of good thoughts about this, although the golden paragraph is buried in the middle of this post).
• If my memory serves me they have a strong team, and the CEO gets bonus points for being a UPenn alum and for having degrees in Computer Science and Business :-)

Weaknesses/Concerns:

• What is their cost per business for acquiring - and maintaining - accurate price data?
• What are their user acquisition costs?
• Centzy claims that you can make an appointment right from your app, but it wasn't clear how they do this or if it was implemented yet.  They could get a cut of each sale if they could integrate with the businesses, but that will be a challenge that could require a huge sales force and some technological challenges. SeamlessWeb had to go through this with restaurants, but restaurants at least have screen-based POS systems. Services-based local businesses tend to have a simple credit-card swipe machine, or worse yet could be cash only.
• Combining the previous points, can they get enough lifetime gross margin from each local business to overcome the acquisition/maintenance costs?

Conclusion: Like but need to dig into the execution.

Knod.es: A Tool to Find the Most Relevant Person in Your Network to Talk to About Anything

This story about using Knod.es is pretty awesome. Knod.es (and SnapGoods) was co-founded by a friend and classmate of mine from Brown, so I'd heard about it, but I never really got it until I read this post. These use cases blew my mind.  It's exactly what you wish you could do with your social network but couldn't if you were a mere mortal without a million Twitter followers. I will follow up w/ some of my own use cases once I get an invite code.

Personalization and Online-to-Offline, Not "Mobile, Local, Social"

The technology buzzwords of the day are “social, mobile, local“, but personalization and online-offline better describe the broader trends.

Personalization

Personalization technology can be roughly fit into a few groups - targeting, collaborative filtering, social, and customization of creative, although in the real world these are often integrated and inseparable. If the internet started with the contextual and broad-based targeting of the offline world, and then moved to backlink-based search, personalization has long been taking market share from search as the mechanism to drive the online world from advertising to content to commerce (although search itself is becoming ever more personalized than more or less deterministic PageRank-style algorithms). The shift was enabled by the vast and accelerating rate of data online services collect about their users, but it only succeeds because of entrepreneurs who can figure out how to turn this data into information and then to action.

In ad-tech this has taken the form of behavioral, demographic, psychographic, and semantic targeting, in rough chronological order. My recommendation to premium publishers is to create halo and valence data to integrate into ad targeting ASAP to monetize the incremental value of their own brands vs. lower quality sites, and I think this represents an interesting void for ad-tech startups to fill. Collaborative filtering is invading the ad-tech world, with AdKeeper recently telling PaidContent that “The way to understand the ‘good’ ads from the ‘bad’ ones is to let consumers actually come out and tell us what they are.” Social ad-targeting is on everyone’s radar but cultural barriers remain as illustrated by LinkedIn’s misstep with social ads in August. Opt-in social recommendations have been far more successful, primarily in the form of Facebook likes and Twitter mentions, but this is not quite advertising. Personalization of creative is taking ad-tech beyond the question of what product to advertise where and to whom, but also what that ad should look like as the where and to whom vary. Companies such as SundaySky and EyeView customize video creative on the fly on a per-user basis, while Dapper and Tumri do the same for display. 

In content personalization has primarily taken the form of collaborative filtering by companies such as Netflix, Taboola, Outbrain, Sailthru, and nRelate, with some recommendations from the social graph although this again raises privacy issues.

Online commerce is increasingly personalized, with Amazon leading the way in applying collaborative filtering to suggest purchases, and practically every e-commerce site of any scale following in their footsteps. FourSquare is lead the way towards location-based analytics for brick and mortar merchants, while niche sites like BirchBox and Fitocracy can offer incredibly rich data to such mammoth industries as beauty and fitness, respectively.

Online-to-Offline

I have long postulated that online-to-offline is a basic axiom of media, whose appearance in digital media and the mobile web are the natural evolution of these technologies rather than a paradigm shift. Every form of mediated human communication, from the printing press through the telephone to the various incarnations of the internet (Web 1.0, Web 2.0, mobile Web) has been about facilitating and optimizing real world results, rather than some sort of masturbatory self-referential information exchange (jokes about internet pornography aside). As technology matures it ceases to be technology per se but rather becomes just another tool to enable the satisfaction of our eternal human needs: food (Yelp, Menupages, Zagat), shelter (AirBNB, HomeAway, HotelTonight), transportation and navigation (ZipCar, GetAround, Garmin), in-person social interaction (Meetup, Evite, Paperless Post), work (LinkedIn, TheLadders.com, Indeed.com), sex and intimacy (JDate, HowAboutWe, PlentyofFish) and finance (Mint, BankSimple, LearnVest), sports (RunKeeper, Fitocracy, DailyBurn), entertainment (Netflix, Hulu, CollegeHumor), etc. Email and sms are no more intermediated than letters and telegrams, and the technology of previous generations such as airplanes, ATMs, and microwaves were no less wondrous or disruptive when they were launched than the internet, smartphones, and tablets. This concept is neatly summed up by the Alan Kay quote that “Technology is anything invented after you were born. Everything else is just stuff.” It is true that the pace of disruption has accelerated, but I don't believe this represents a discontinuous break with the past.

The long-term trend in the world of digital media products or services – be they apps, software, hardware, etc. – is therefore not determined by feature sets or tech specs but by utility as a tool for solving a real-world problem, defined as effectiveness in creating real-world results with the least real-world effort. The digital media companies that succeed in transforming their “technology” into everyday “stuff” will be those that heed the above. Apple is the pinnacle of this transformation, but there is room for plenty more companies to get this (if they can).

Mobile, rather than distancing people from the real world, makes them more effective in dealing with it. Mobile has taken the utility of media to its natural conclusion, by bringing the media (“online”) to the physical location in which its consumption is most effective ( “offline,” aka “the real world”). Printed guide books and handwritten travel directions are perhaps the original forms of mobile media, but required far more effort while producing far inferior results. Their replacement by digital mobile media was therefore inevitable.

September 2011 New York Tech Meetup #NYTM

20110906 Sept NYTM Notes.doc Download this file

This is an experiment to see what posterous does w/ my raw notes from the New York Tech Meetup. Will edit and repost later.

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