Tuesday, 26 May 2009
Blog moving
This blog has now moved to Andy Cockburn's personal blog called Enjoy the Journey. Please come and join me there!
Tuesday, 30 December 2008
Will Social Purchasing hit a brick wall in 2009?
It's commonly anticipated that the travel industry is in for a tough time next year. The consolidation of airlines is already well underway, the number of job cuts announced is now well over 100,000, routes have been slashed and several European carriers are barely clinging to life 1. Travel operators are cutting capacity next year, in some resorts by over 25%2. Add all of this to the weak pound and it looks like UK outbound tourism is going to be hit hard. Yet not all areas of travel will be equally affected. Is it possible that some areas could survive unscathed or possible even flourish? Could Social Purchasing be one of these areas?
Social Purchasing is a term recently adopted in the Internet world by sites that focus on helping groups of friends to spend their time and money together. These sites, such as Wigadoo.com in the UK or Paypal's Paypettes in France, make it easier to organise a group of friends when the organiser needs everyone needs to pitch in to make a plan happen. In doing this, Social Purchasing is focusing on groups of friends spending money on travel and leisure. The logical assumption would be that since social purchasing is all about people spending money and because people are spending less, that social purchasing will suffer. This is one take on it, but it may be too simplistic.
It is likely that some areas of travel will flourish and it it is likely that Social Purchasing will be among them. There are three principle reasons why social purchasing sites should do well in these difficult times.
1. It's about friends not money.
People like to see their friends in good times and bad (especially in bad!). People will always be reluctant to cut down on spending quality time with their friends just because times have got tougher. It may be that the organiser isn't so frivolous in their plans as that they cater for the least well off of the group, but groups of friends will still want to get together. Catching up with friends down the pub is a great way to keep friendships alive but it takes going away together or doing something special to build on those friendships and to create new memories to reflect back on. Whether it be a week skiing, a weekend in a cottage or a night out at a concert, groups of friends will want to carry on having fun together. In fact, they'll want to do it more than ever in these tough times.
2. Things are cheaper in groups.
When money is tight, people head for discounts ... and few discounts are as good as group discounts. You can get great group discounts on anything from theatre tickets -where you can often get up to 50% off if there are 10 or more of you - or ski chalets where the price can similarly be halved. During recent research for a ski trip later this year, I compared a chalet for 12 to a hotel for 2 in Chamonix in France and was taken aback by the difference in price per person. It's close to impossible to get a hotel room for under €100 each a night for a couple, yet the chalets were all working out at less than €200 each for a week. Needless to say, we're now off in a group!
3. No one wants to take on board the risk of not being paid back.
The new sites that facilitate Social Purchasing such as Wigadoo.com or PayPal Paypettes mean that no one person has to take on the financial burden of the group and risk not being paid back. The thought of putting £3,000 on a credit card to book a ski chalet may now send would-be organisers into a panic, what with everyone being more financially cautious at the moment. The arrival of these sites means that no one person need ever put themselves in that situation. These sites could play a role in keeping the sales of groups activities alive during these tough times.
We will need to wait and see how events unfold, but given the activity that is being seen on Wigadoo.com over the last few months, there seems little reason for the Social Purchasing sites to panic just yet.
Wednesday, 5 November 2008
Wikis as a way to organise groups
Just came across this great video about the benefits of co-ordinating groups of friends through Wikis. It's a great example of using the internet for efficient information sharing to co-ordinate a group.
They certainly are a more efficient way of storing information. I still have questions about version control (e.g. the organiser lays out one plan and somone attending changes it because they don't like the sound of it)and the need to get the whole group to buy into it to make it effective.
They certainly are a more efficient way of storing information. I still have questions about version control (e.g. the organiser lays out one plan and somone attending changes it because they don't like the sound of it)and the need to get the whole group to buy into it to make it effective.
Tuesday, 2 September 2008
Social Purchasing
We, at Wigadoo believe we've come across a great thing ... a huge untapped market. It's worth $140B and no one has yet worked out how to crack it, until now.
The market we're talking about the Social Purchasing space. Each year over $140B is spent by groups of friends doing activities that they organise and pay for in advance ... whether it be cinema trips, concerts, stag and hen trips or holidays abroad. And despite this, organising a group of friends when money is involved remains incredibly difficult.
We believe that if you can solve the group co-ordination problem, then there's a way to make the whole Social Purchasing space work a lot more effectively. And we also believe that the online retailers will appreciate the facilitation to the extent that they'll pay for the service to make it easier for groups of people to buy from them.
We see Social Purchasing as sitting between two Internet giants. On the one side you've got online travel and leisure retailers who became successful in the first wave of the Internet and now represent one of the biggest areas of online spend. On the other side you have social networks who have successfully brought friend networks online, making the Internet an accepted means of communication between friends.
In between these giants is space for someone to help groups of friends co-ordinate themselves in order to prepare for a Social Purchase from an online retailer (where a Social Purchase is any purchase in which a number of friends are coming together to book something).
Neither the online retailers nor social networks will be able to stretch so far as to do this well. The user doesn't want companies selling to them in and amongst their friends (and they want to maintain their independence up until the point of purchase). Users will therefore probably resist online retailers trying to help them co-ordinate their friends. Social Networks will also struggle to monetise users in such an obvious way. What's more, they're more likely to let others, like Wigadoo, innovate on their platforms than do it themselves.
We, at Wigadoo, are very excited by this space. We're sure it'll be becoming a much more talked about topic in the near future.
The market we're talking about the Social Purchasing space. Each year over $140B is spent by groups of friends doing activities that they organise and pay for in advance ... whether it be cinema trips, concerts, stag and hen trips or holidays abroad. And despite this, organising a group of friends when money is involved remains incredibly difficult.
We believe that if you can solve the group co-ordination problem, then there's a way to make the whole Social Purchasing space work a lot more effectively. And we also believe that the online retailers will appreciate the facilitation to the extent that they'll pay for the service to make it easier for groups of people to buy from them.
We see Social Purchasing as sitting between two Internet giants. On the one side you've got online travel and leisure retailers who became successful in the first wave of the Internet and now represent one of the biggest areas of online spend. On the other side you have social networks who have successfully brought friend networks online, making the Internet an accepted means of communication between friends.
In between these giants is space for someone to help groups of friends co-ordinate themselves in order to prepare for a Social Purchase from an online retailer (where a Social Purchase is any purchase in which a number of friends are coming together to book something).
Neither the online retailers nor social networks will be able to stretch so far as to do this well. The user doesn't want companies selling to them in and amongst their friends (and they want to maintain their independence up until the point of purchase). Users will therefore probably resist online retailers trying to help them co-ordinate their friends. Social Networks will also struggle to monetise users in such an obvious way. What's more, they're more likely to let others, like Wigadoo, innovate on their platforms than do it themselves.
We, at Wigadoo, are very excited by this space. We're sure it'll be becoming a much more talked about topic in the near future.
Thursday, 28 August 2008
Web Meets World
There's a great interview here with Brad Burnham of Union Square Ventures (an East Coast VC). Here he picks up that one of the major things that Venture Capitalists will be focusing on in the next few years is "Web Meets World". In this he means sites that have a real impact on people's daily lives and result in real world experiences. Union Square Ventures have invested in Meetup which is a great example of this. As is Wigadoo. It will be interesting to see what else comes out of the woodwork that impacts the way that friends interact in the real world. If you believe Brad, it could be interesting times.
Friday, 22 August 2008
The Internet rarely changes behaviour
I thought that it might be useful to share one of the main learnings we've had from Wigadoo in the last couple of months.
The main learning is that whilst the Internet is brilliant for making life easier, it is unlikely to change existing behaviour. This may sounds obvious, but let me put it out there in context.
So we think we've got a pretty good product that nails a very real consumer pain. We thought if we got it out there that people would see it, think "Wow, that's a great idea. I'm going to try it to see how well it works. What shall I organise for my friends today?". What actually happened was that people saw it and said "Wow, that's a great idea. I'd like to try it but I'm not organising anything at the moment so I'll wait until I do organise something." Of course, this is no good for us. The chance of them remembering Wigadoo when they next organise something are very slim.
So, we're addressing this in two ways. The first is to try to inspire people to do things. We're putting great content in front of people and saying "Hey, why don't you do this with your friends?". This will work to an extent but it is still too dependent on a change of behaviour. Imagine, a week on Saturday I was planning on having a quiet day, now you want me to organise to go to the football with my friends. Some people may go for it but the majority opt for their existing plans. It's the course of least resistance.
The second way we're trying to get people is where they don't have to change their behaviour ... and this is where I believe Wigadoo is likely to fly. It's about catching people when they're doing something anyway. This is about successfully marketing to people searching for content or tools to help them. A great example is people looking for help in organising a stag or hen (bachelor or bachelorette) party or weekend. We've now set up landing pages that do this (Organise a stag party, Organise a hen night) and they're starting to work well. Even better than this is tying up with travel players, so finding people who are browsing content on travel portals and then helping them organise their group before they book from the travel portal. We're in discussion with a number of major travel players at the moment and this looks like it should be a great channel for us.
The key learning for us has been that you need to think about all changes to behaviour that you're asking of your users. Although we thought our product was about facilitating existing behaviour within friendship groups, we didn't consider the behaviour changes we were asking of people in our marketing. Hopefully, we're now doing that better. Let us know what you think!
The main learning is that whilst the Internet is brilliant for making life easier, it is unlikely to change existing behaviour. This may sounds obvious, but let me put it out there in context.
So we think we've got a pretty good product that nails a very real consumer pain. We thought if we got it out there that people would see it, think "Wow, that's a great idea. I'm going to try it to see how well it works. What shall I organise for my friends today?". What actually happened was that people saw it and said "Wow, that's a great idea. I'd like to try it but I'm not organising anything at the moment so I'll wait until I do organise something." Of course, this is no good for us. The chance of them remembering Wigadoo when they next organise something are very slim.
So, we're addressing this in two ways. The first is to try to inspire people to do things. We're putting great content in front of people and saying "Hey, why don't you do this with your friends?". This will work to an extent but it is still too dependent on a change of behaviour. Imagine, a week on Saturday I was planning on having a quiet day, now you want me to organise to go to the football with my friends. Some people may go for it but the majority opt for their existing plans. It's the course of least resistance.
The second way we're trying to get people is where they don't have to change their behaviour ... and this is where I believe Wigadoo is likely to fly. It's about catching people when they're doing something anyway. This is about successfully marketing to people searching for content or tools to help them. A great example is people looking for help in organising a stag or hen (bachelor or bachelorette) party or weekend. We've now set up landing pages that do this (Organise a stag party, Organise a hen night) and they're starting to work well. Even better than this is tying up with travel players, so finding people who are browsing content on travel portals and then helping them organise their group before they book from the travel portal. We're in discussion with a number of major travel players at the moment and this looks like it should be a great channel for us.
The key learning for us has been that you need to think about all changes to behaviour that you're asking of your users. Although we thought our product was about facilitating existing behaviour within friendship groups, we didn't consider the behaviour changes we were asking of people in our marketing. Hopefully, we're now doing that better. Let us know what you think!
Monday, 9 June 2008
The Social Organisation Space
It's interesting to look at what's out there in terms of sites that look to facilitate helping existing groups of friends organising themselves. Having been keeping my ear to the ground in this space for the last year or so, this is how I read it.
I think it is useful to think about these sites in terms of both how useful they are to the groups and how innovative they are.
The least socially useful sites and the least innovative are those that are in the bottom left and are the sites that sell content with group facilitation. I see these as sites that are looking to sell content and the group facilitation is just a means to make it easier to sell that content. This is not a criticism. It is just that they are unlikely to revolutionise the social organisation space by coming at it from this angle.
Companies in this category include web businesses that are genuine content sites and look to extend helpful services to facilitate the sale (such as Iglu - which is a great site for ski holidays). It also includes companies that come at it from more of a "groups angle" but by tying the user to content tend to always come at it from a salesy perspective. I see I'm In and GroupAbout as being like this.
Slightly more socially useful are the Online Invitation Sites. The archetypal site in this category has to be Evite. Evite is both a success and a failure. It apparently has 15M users and 425,000 invites are apparently sent from it each month (see press release) and yet it really does feel like it's failed to live up to its potential. For years the blogerati have been complaining about how it has failed to keep pace with the times. That is perhaps why there are so many sites that have recently entered this space, each with their own take on what Evite has been doing wrong. My view is that all will struggle vs. the Social Networks. One of the only socially useful apps to have gained momentum within Facebook is Facebook Events and it was dwarfing the number of invites being sent out on Evite. Facebook sends 66 million invites annually compared to 16 million sent by Evite according to Kent Schoen (June 10 2008). There are still big battles going on in this space, but it must inevitably fall to ease of use and Facebook Events has a strong lead (even though it has major limitations given all invitees have to be members of the network).
Why have I only put this as mid-level on the socially useful? Simply because the pain it is addressing is not great. This is effectively text sharing and the auto-collation of responses. It's about collecting "Yes"s, "No"s and "Maybe"s? Yes, this saves inboxes from being flooded and the need to open Excel and record replies ... but it's simple stuff. Also, interestingly, the fact that Evite didn't take off in an event greater way (after all it has been around since '98) might suggests that for invitees the hassle of clicking on a link is greater than the perceived benefit. Or it may that they just haven't kept pace with the times, if you believe the blogs. (For blog entries on this, see "Why I hate evite"or "The truth about Evite" or just google "I hate Evite" and pick one of the many there.)
There are some of these sites that are taking this to the next level and making Online Travel Planning genuinely easier. These include Triphub and Triporama. These sites tend to offer a more open group blog functionality and in offering a shared space can make it easier to co-ordinate the group in whichever way is necessary. Again, it's not rocket science but it is useful.
In the middle on both social usefulness and innovation are polling tools. These include Doodle, Circle Up and When Is Good. The primary use of these sites is to find dates that people are free but they can also be used to survey your friends for any question. Circle Up in particular is going all out to claim the social surveying space. Similar to the online invitation sites, this is just text sharing and the auto-collation of responses, but the flexibility of these sites mean that they can be used however the user pleases, and this means that they are more innovative and arguably more useful. One drawback about these sites is that the only way that they can monetise is through advertising and there's a major question about how happy users are forwarding adverts to their friends.
Yet more useful than this are social decision making sites like Skimbit. Skimbit goes backwards in the process and helps you skim the bits of sites that you want to share with friends before you then ask them to vote and comment on the research. You can imagine checking out four or five chalets in a ski resort and then letting your friends choose which one to go with.
Online invitation sites that include ticket sales are also taking off. There are two of these that seem to dominate the space: Eventbrite in the US and Amiando in Europe. Although there are other sites, including Eventwax and Eventsbot. When these initially came out, they seemed like a potential way to help with fund transfers between friends when they were organising events together. All of these companies seem to be moving away from this space to "online event registration" sites. One of the major challenges that these companies faced in the social events space was that they always talked about selling tickets, looking to serve the organisers of large parties. Here the % commissions charged (due in large part to the financial platforms that they sit on e.g. paypal in the case of Amiando) necessitated a % charge and that sits poorly with party organisers. It sits far worse with someone organising a small event for a group of close friends. It is for this reason that I hear Amiando is now looking to focus more on conferences than small-scale social organisers ... effectively leaving that space open.
More innovative - but arguably less useful - are sites like Billmonk and Buxfer who aim to aid personal financial management the management of inter-friend debts. Sites you might refer to as for group money management. They're good at what they do, at aiding that nightmare that you often get at the end of a group trip where 10 people have paid for different bits and you need to figure out who owes who what.
There are other really innovative sites out there that are more fun than genuinely socially useful. Stikk is a great example of this. It's basically trying to get friends to challenge each other and it acts as the tool to manage the challenge. I've had friends using this to challenge each other to stay fit. For ten weeks, they each had to exercise at least four times a week. If one of them didn't, the other person got $50 from them. They went for the ten weeks and at the end of it one of them was $100 out of pocket but both were much fitter. Is the site really necessary to do this? Perhaps not, but it's all good fun!
The final category, is where I have a vested interest (as CEO of the company). It's where Wigadoo falls and is the Social Group Co-ordination space. Wigadoo is looking to target the pain of getting a group together where money is involved. If you want to book a ski chalet or even a bunch of theatre ticket it requires one member of the friend group to act as organiser. Before they can book whatever it is, they need two things: meaningful commitment and (preferably) cash. Wigadoo gets a group of friends to sign up to a plan, giving the organiser meaningful commitment when their friends sign up and transferring the cash (if the event gets enough support) before the event needs to be booked.
The space will inevitably continue to evolve. Lets hope those sites that are out to the left are shoved aside and new players come in with cool, useful and innovative sites that really facilitate helping people enjoy their friendships in the real world. I suspect that there will be two or three winners in this space, that will focus on different pains and make a real difference.
It should be interesting times ahead.
I think it is useful to think about these sites in terms of both how useful they are to the groups and how innovative they are.
The least socially useful sites and the least innovative are those that are in the bottom left and are the sites that sell content with group facilitation. I see these as sites that are looking to sell content and the group facilitation is just a means to make it easier to sell that content. This is not a criticism. It is just that they are unlikely to revolutionise the social organisation space by coming at it from this angle.
Companies in this category include web businesses that are genuine content sites and look to extend helpful services to facilitate the sale (such as Iglu - which is a great site for ski holidays). It also includes companies that come at it from more of a "groups angle" but by tying the user to content tend to always come at it from a salesy perspective. I see I'm In and GroupAbout as being like this.
Slightly more socially useful are the Online Invitation Sites. The archetypal site in this category has to be Evite. Evite is both a success and a failure. It apparently has 15M users and 425,000 invites are apparently sent from it each month (see press release) and yet it really does feel like it's failed to live up to its potential. For years the blogerati have been complaining about how it has failed to keep pace with the times. That is perhaps why there are so many sites that have recently entered this space, each with their own take on what Evite has been doing wrong. My view is that all will struggle vs. the Social Networks. One of the only socially useful apps to have gained momentum within Facebook is Facebook Events and it was dwarfing the number of invites being sent out on Evite. Facebook sends 66 million invites annually compared to 16 million sent by Evite according to Kent Schoen (June 10 2008). There are still big battles going on in this space, but it must inevitably fall to ease of use and Facebook Events has a strong lead (even though it has major limitations given all invitees have to be members of the network).
Why have I only put this as mid-level on the socially useful? Simply because the pain it is addressing is not great. This is effectively text sharing and the auto-collation of responses. It's about collecting "Yes"s, "No"s and "Maybe"s? Yes, this saves inboxes from being flooded and the need to open Excel and record replies ... but it's simple stuff. Also, interestingly, the fact that Evite didn't take off in an event greater way (after all it has been around since '98) might suggests that for invitees the hassle of clicking on a link is greater than the perceived benefit. Or it may that they just haven't kept pace with the times, if you believe the blogs. (For blog entries on this, see "Why I hate evite"or "The truth about Evite" or just google "I hate Evite" and pick one of the many there.)
There are some of these sites that are taking this to the next level and making Online Travel Planning genuinely easier. These include Triphub and Triporama. These sites tend to offer a more open group blog functionality and in offering a shared space can make it easier to co-ordinate the group in whichever way is necessary. Again, it's not rocket science but it is useful.
In the middle on both social usefulness and innovation are polling tools. These include Doodle, Circle Up and When Is Good. The primary use of these sites is to find dates that people are free but they can also be used to survey your friends for any question. Circle Up in particular is going all out to claim the social surveying space. Similar to the online invitation sites, this is just text sharing and the auto-collation of responses, but the flexibility of these sites mean that they can be used however the user pleases, and this means that they are more innovative and arguably more useful. One drawback about these sites is that the only way that they can monetise is through advertising and there's a major question about how happy users are forwarding adverts to their friends.
Yet more useful than this are social decision making sites like Skimbit. Skimbit goes backwards in the process and helps you skim the bits of sites that you want to share with friends before you then ask them to vote and comment on the research. You can imagine checking out four or five chalets in a ski resort and then letting your friends choose which one to go with.
Online invitation sites that include ticket sales are also taking off. There are two of these that seem to dominate the space: Eventbrite in the US and Amiando in Europe. Although there are other sites, including Eventwax and Eventsbot. When these initially came out, they seemed like a potential way to help with fund transfers between friends when they were organising events together. All of these companies seem to be moving away from this space to "online event registration" sites. One of the major challenges that these companies faced in the social events space was that they always talked about selling tickets, looking to serve the organisers of large parties. Here the % commissions charged (due in large part to the financial platforms that they sit on e.g. paypal in the case of Amiando) necessitated a % charge and that sits poorly with party organisers. It sits far worse with someone organising a small event for a group of close friends. It is for this reason that I hear Amiando is now looking to focus more on conferences than small-scale social organisers ... effectively leaving that space open.
More innovative - but arguably less useful - are sites like Billmonk and Buxfer who aim to aid personal financial management the management of inter-friend debts. Sites you might refer to as for group money management. They're good at what they do, at aiding that nightmare that you often get at the end of a group trip where 10 people have paid for different bits and you need to figure out who owes who what.
There are other really innovative sites out there that are more fun than genuinely socially useful. Stikk is a great example of this. It's basically trying to get friends to challenge each other and it acts as the tool to manage the challenge. I've had friends using this to challenge each other to stay fit. For ten weeks, they each had to exercise at least four times a week. If one of them didn't, the other person got $50 from them. They went for the ten weeks and at the end of it one of them was $100 out of pocket but both were much fitter. Is the site really necessary to do this? Perhaps not, but it's all good fun!
The final category, is where I have a vested interest (as CEO of the company). It's where Wigadoo falls and is the Social Group Co-ordination space. Wigadoo is looking to target the pain of getting a group together where money is involved. If you want to book a ski chalet or even a bunch of theatre ticket it requires one member of the friend group to act as organiser. Before they can book whatever it is, they need two things: meaningful commitment and (preferably) cash. Wigadoo gets a group of friends to sign up to a plan, giving the organiser meaningful commitment when their friends sign up and transferring the cash (if the event gets enough support) before the event needs to be booked.
The space will inevitably continue to evolve. Lets hope those sites that are out to the left are shoved aside and new players come in with cool, useful and innovative sites that really facilitate helping people enjoy their friendships in the real world. I suspect that there will be two or three winners in this space, that will focus on different pains and make a real difference.
It should be interesting times ahead.
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