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Judy's Book founder and CEO Andy Sack has written a good post about what is and isn't working at his startup. The online community enables users to post their own or read other people's reviews of restaurants, service providers and shops in their town. The idea is to leverage user generated content, draw a critical mass of authors and readers, then sell advertising to local merchants in a highly contextual environment.
Good idea. Tough to execute. Despite a slew of startups going after it (see chart below), the local advertising market remains elusive. Yet, the chase continues. Earlier this month, Yelp raised $10 million from Benchmark Capital and Smalltown said it raised $3 million from Formative Ventures.
Judy's Book has raised $10.5 million from Ignition Ventures, Mobius Venture Capital and others. Here is Sack's list of what has been difficult to do at Judy's Book since its launch two years ago:
Achieving critical mass in local
Attracting + keeping [users]
Getting money from local merchants
Search engine optimization
Here is his list of what's been easy:
Good PR
Offers & Discounts
Questions & Answers & Community
Status & Validation
Someone will crack the local advertising nut. And when they do, it will be lucrative. However, I'm not sure anyone really has an idea of what it's going to take. Here's a chart of some startups with a local advertising angle that raised capital in the fourth quarter of last year:
Tags: judys+book, yelp, local, vc, venture+capital.
Thanks to Andy for a candid take on the fortunes of Judy’s Book. It was refreshing to hear a real person talk about what’s been easy and hard to get done (and there were some surprises on both lists). There is a lot of money going into the local advertising market. It will be interesting to see who comes out ahead, but ultimately, the competition will benefit both consumers and merchants.
Kevin
MerchantCircle
We've recently started up ecolocal as an "extra" to our full time roles. It's all about living sustainably within your local area - local resources, events and things to do, plus the global discussions around the environment and what we can do in our own sphere of influence.
The code is there, the site is there, but we're rapidly establishing that there just isn't the time in the day to go out and try to get some of the local advertisers. As a consequence we're currently 100% self funded, which isn't a long term goal, but we have a great business plan with lots of ideas of revenue generation once the site achieves a reasonable amount of traffic (we've had days of 500 hits, but normally it's much lower, but for next to no paid publicity it's not doing badly due to search friendly code)