Aqute Research Blog

Fora.tv: high-brow video done right

Fora.tv's wide range of videos regularly attract 50,000+ views - difficult to achieve even on YouTube, especially given the type of content and since Fora.tv most likely attracts a far higher quality audience than YouTube.

The quality of content on Fora.TV is high (reminiscent of Intelligence Squared and Monocle); accessibility is good including RSS and iTunes podcasts. The only real weakness is the low involvement in Fora.tv's community elements. Fora.tv's funding comes from a handful of key sponsors (for example, Pfizer and Chevron). The site also serves up advertising, but since these generally tend to be for the sponsors themselves, they are unlikely to be a separate source of revenue.

This type of website would do wonders for UK newspapers (alongside electoral fora?), but interestingly Fora.tv's commercial sponsors are companies trying to show that they are not "greedy evildoers" - Chevron and Pfizer. Their association with Fora.tv goes a good way towards this goal and should set an example for other companies trying to capture intellectual or moral high ground.

Freedom of Information made easy by mySociety

mySociety are many people's secret crush in the UK internet industry, mine included. Their current website-in-development, WhatDoTheyKnow, makes Freedom of Information requests easy. Perhaps too easy - I had to restrain myself from asking about various things that don't matter all that much to me, remembering that there is a poor civil servant at the other end who's going to have to find the information. However, I couldn't resist a couple of requests. How would government cope if WhatDoTheyKnow became popular? Sir Humphrey would be shocked.

Why should the BBC support UK startups?

The departure of Ashley Highfield was bound to reignite the argument over the role of the BBC online, and how unfair life is for everyone who doesn't have the BBC's budget. Techcrunch UK has written up its opinion (with well-timed promptness) on how the BBC should open up and support the UK startup community. In parts, Techcrunch UK is right:

• The BBC should open up its data.
• The BBC could do more (anyone in the internet industry should do more and do it quickly - that is the nature of the industry).
• The BBC should not be so obsessed with Silicon Valley (although, as Techcrunch UK says, that is a more general editorial issue).
• The BBC has made mistakes such as BBC jam and the stuttering launch of the iPlayer.

What I don't agree with is the belief of many people that the BBC should help anyone else - it may choose to, but there is no "should" about it. I understand the argument, and I know many people are frustrated by what they see as the BBC's almost Microsoftian entry into various verticals and their refusal to encourage/support small companies. I have never been convinced by any part of this argument:

• That the BBC should support anyone else. If the BBC is unfairly state-funded, cut its budget; don't give it the same money and ask it to spread the wealth (directly or indirectly). Particularly in light of my next point.
• That anyone else could do a better job. Really, where is the blindingly good execution among UK startups? There's not many great startups beyond these, many of which are irrelevant to the BBC - certainly not these ones. Where is the innovation and activity (a topic oft-debated by other people, which I don't intend to repeat - my point is that no one will take the BBC's baton and run with it faster)? I don't mean "a few" startups because there are a few startups in every sector from alpaca farming to tea retail (is that an unethical plug - God have mercy on my soul...). I mean the level of innovation that (a) you would expect in our industry and (b) would warrant beating of chests over the BBC's cruelty to startups. The argument that the BBC depriving potential startups of funds or publicity is the very reason that these startups don't exist, is not very credible. Startups need (and lack) funds from angels and venture capitalists, not from the BBC; and in any case there are precious few UK startups even at the stage where they have developed a great service, attracted a core user base and are now looking for funds to expand. Particularly in areas of relevance to the BBC e.g. not retail or gambling. Few startups have shown themselves capable of doing anything significantly better than the BBC's efforts, and that is not just a question of money or traffic (the startups that are succesful don't complain that the BBC got in their way).
• That there would be any public benefit. Don't assume that normal people (licence fee payers) want the BBC to fund startups - I very much doubt that. To most licence fee payers, the BBC is doing a good job online - the iPlayer works fine, the BBC news website is good, the BBC online sports coverage is excellent and the BBC's children's content is our only decent non-American offering. The most succesful UK startups that Techcrunch can come up with (and I can't think of any other ones of relevance) are hardly the pride and joy of Britain. Skype (the Scandinavian company bought by a US company), Bebo (the struggling social network bought by a US company) and Last.fm (the company that few normal people have heard of, which was bought by a US company). I shudder to think that the BBC may accidentally, or more likely on purpose, encourage UK versions of Digg.
• That the BBC is doing badly. Yes, given the BBC's budget we would all do better. Never mind that AOL and Yahoo and eBay and Microsoft and others with similar budgets around the world haven't. The BBC has made mistakes, clearly, but so has everyone from Google to Amazon - by all means try to avoid them, but also realise it comes with the territory. Isn't one of the reasons that Silicon Valley is more innovative than the UK their willingness to fail? In the UK, who has actually done a better job than the BBC in, say , news, sports, children's content and video on demand? Perhaps  a few companies have done similarly well, but none have shamed the BBC with their performance - and those would be companies such as Channel 4 and GMG, that hardly need anyone looking out for them.

The BBC's online strategy does have some problems but these are best solved by the BBC, not passed on to non-existent, supposedly more capable startups. And there are a million things the BBC could be doing (including, yes, opening up its data) but I would prefer that they focus on doing their own stuff well, and not on acting as mentors for startups.

UK online startups

Recently I was trawling lists of fast-growing UK internet startups for a client. Here are some startups with decent revenues that we don't hear about too often (and a couple that we do hear about, but you might not realise were British):

• Bango
• Betfair
• Buy.at (2006 revenues of £13m)
• Cashcade (2007 revenues of £8m)
• Cheapflights (2006 revenues of £12m)
• Digital Window (2007 revenues of £10m)
• dpreview
• Gamesys (2006 revenues of £17m)
• Holiday Rooms Direct (2006 revenues of £6m)
• HQuk (2007 revenues of £9m)
• King.com (2007 revenues of £13m)
• Kybotech (2007 revenues of £24m)
• Lovefilm (2006 revenues of £28m)
• Miniclip
• Net-a-porter (2007 revenues of £37m)
• The Best Of (2006 revenues of £4m)
• TheHut.com (2007 revenues of £6m)
• TotalPDA
• UK Digital Cameras (2006 revenues of £5m)
• WorldStores (2007 revenues of £6m)

Also of interest are OpenX and Phorm, although they have yet to prove themselves financially. Crunchbase has a list of startups with less solid foundations.

The UK's biggest untapped web opportunity: small business websites

The guidance for this blog is that is should cover topics that have not been covered elsewhere, or not with the same angle. Often I think of something to write, I assume that it hasn't been written up elsewhere because it is too obvious or just wrong, and then I sit on it for ages. This post is about something that I've been waiting for since about 2003, and I keep thinking I must have missed it somewhere.

Where can a small business go to get a website set up? Specifically, what does the UK offer that resembles Yahoo Merchant Solutions (US only)? I want a simple menu for choosing my theme, my colours, buying a domain, uploading product images, writing the text for my website right into the browser. For £9.99 or £19.99 a month (Yahoo US starts at about £4). And I want it from a big brand I can trust.

You can set up a store on (US company) eBay quite easily, but that is not what most small businesses want. Most of the small business website vendors that come up on a relevant Google search are small providers focused on semi-standard/semi-tailored websites, with fees of hundreds of pounds (good for them, but they are not addressing the gap in the market to which I am referring). If you look through the top Google results, you will find a range of vendors completely unsuitable to a normal business owner who wants a simple, quick website. And certainly none who, like Yahoo or even eBay, will have you trading online today.

Interestingly 1&1, the (German) biggest provider of this kind of service, is quite difficult to find through a search.

In the old days, Virgin used to offer small business website setup, and I think Yahoo UK did too for a while, but where are today's big-name providers? BT (I don't mean their bizarre Tradespace)? Yell (not something that costs £600, gives me a 1990s looking website and ties me to Yell ads)? Virgin, again? Lloyds TSB? Easy-something? Regional newspapers? If I had £1 million or so to target a business area online, easy small business website creation is probably where I would put it.

What Etsy can teach UK companies

Online crafts community Etsy has been growing in popularity, and is no doubt set for a successful future. I don't want to write in general about the wonders of Etsy, because a lot of that has been said already (through press and in blogs, both wise and moronic), but I do want to point out the relevance of Etsy to UK companies in various sectors. I am referring to adopting the principles of Etsy rather than suggesting the impractical, unwise and almost impossible idea of a UK company buying Etsy.

• CPG. Susan Mernit suggests that Etsy attracts "moms who want to run home based businesses". As such, it should be of interest to companies such as Procter & Gamble and Unilever, whose raison d'etre is these women. The thinking behind Etsy is similar to the thinking behind communities such as Mumsnet, which are currently the holy grail of online CPG marketing. Being Etsy-like would make CPG companies real enablers of the dreams of women who want to run home businesses, would create a tangible link between the brand and those women, would encourage loyalty and reliance on the CPG company - materially improving the lives of those women in a way that advertising promises but usually does not deliver. The Etsy structure could also provide a way to solve the problem many parents have of what to do with the toys and clothes that their babies grow out of so quickly.
• Retail. The suggestion that Martha Stewart (herself not a million miles away from being a CPG brand) should buy Etsy was not surprising but nonetheless interesting (the idea may have been little more than guesswork from Valleywag, but it turns out that Etsy and Martha Stewart do in fact find each other attractive). We don't have a Martha Stewart equivalent in the UK (Delia has never expanded beyond the kitchen), but there is some fit between the Etsy concept and retailers such as John Lewis, (US company) Whole Foods Market, Selfridges or Harvey Nichols. These retailers have all made some gesture towards the Etsy ethos offline, and hosting an Etsy-style service online could differentiate and greatly extend their commoditised or non-existent websites.
• Countryside publications. Susan also points to the appearance of Etsy at the US Country Living Women Entrepreneurs event. Indeed, I was first introduced to Etsy by Designer's Block, which is very much in the Country Life mould. Country Life (now owned by Time Warner) could well breathe life into its mediocre online listings section by giving local craftspeople a platform that actually helped them sell their products. The same goes for Archant Life, owner of titles such as Cotswold Life. There is potential for a a Country Living fair made up solely of Etsy-style merchants, particularly given current trends towards local, organic, ethical products.
• Local directories. One of the interesting things about Etsy is the impression it gives of being a local website, despite its US/international base. In part this is because Etsy promises/delivers what we believe "local" merchants will give us - things like personal attention, honesty and uniqueness of product. Etsy is not a million miles from Yell's People Behind The Numbers campaign, which tries to inject a personal element into the impersonal listings of a yellow pages directory. By the same token, municipal authorities could adopt the Etsy model to promote the likes of Savile Row, Islington Antiques Market or Borough Market (forgive the London-centricness).
• Regional newspapers. For the same reasons as local directories, regional newspapers have a natural affinity with Etsy principles. Online classified listings are an important area of investment for regional newspapers as their revenues decline. Regional newspapers are also debating which of the various available local and hyperlocal strategies will work best for them, and an Etsy model for local merchants fits in well with most of them. Also of interest to regional newspapers (and to local directories, especially given the dovetail with the similar Google print advertising initiative) is Etsy's plan to launch a cooperative advertising programme.
• Finance. The link between Etsy and the finance industry is not as clear cut (although Etsy founder Rob Kalin cites Muhammad Yunus's Banker to the Poor as inspiration), but it does give me a gratuitous opportunity to mention the popularity of online microlending to the point that Kiva has more money than it can lend. This desire for connecting with small craftsmen and merchants is similar to Etsy, so much so that eBay has invested in its own microfinance website, Microplace. Not that the borrowers need to come with the do-good appeal of living in a developing country: lending to peers in developed countries is also proving popular (in the UK, we have Zopa). And what could be closer to the Etsy ethos than Lloyds TSB's For The Journey ads?

"Doing an Etsy" is not easy - Etsy makes it look easier than it is, and a lot comes down to the details of execution. Nor is it easy to avoid straying into eBay territory, wherein lies tried and tested futility. But Etsy has proven that the concept is popular, and I have indicated above some of the ways in which Etsyness could help UK companies.

Online cities

Philipp has written about MyMiniCity, which is very clever.

In its current use as a blog visualisation tool, the technology is a bit wasted (and surely just asking to be gamed) ... although it would be a great way to present Nielsen NetRatings data. But this type of visualisation is a powerful one and could be one way for an ambitious media company to kick start local content in the UK (it could also be a big overcomplicated messy waste of money - you'd need to delve deeper into that). A build-your-own city service, with the right protection in place, could get people to "own" their local area. Personally, I would pay £5 to own my little space of an online world, as long as it was the definitive online world. Meanwhile, you can build cities at CityCreator.

P.S. The graphics are reminiscent of the Paginas Amarillas maps, which reminds me to post a link to this 3D Tokyo Map that I have meant to link to for a long time:

Twitter, Second Life etc are a bad idea

I would like to think, despite the best effort of IBM, that few people see Second Life as a wise investment of their marketing budgets any more, especially in the UK. However, every now and then the danger signs come up that a British company is going to use Digg or Twitter or whatever for some Amazingly Cool Marketing Initiative, which is crazy. Note the following:

• Remember that all these services are primarily popular with Silicon Valley. If that is your audience (say you are Cisco or Oracle), then the service may be useful to you. For most companies, however, that audience is not very relevant. Do you know anyone outside the IT industry who uses Reddit or StumbleUpon? No.
• These services have very small user bases. Nearly one million people use Twitter. That is almost negligible for a US website but guess how many people work in IT in California? Nearly a million. So how many "normal" people do you think use Twitter?
• Even if you argue that the whole world is your audience, the quality of traffic that you can generate from these audiences is pretty worthless (quantitatively so - these websites are very difficult to monetise). It is well known that you can game Digg, and even if you want to be part of that, why would the BBC, who invite you to Digg their every story:
  
  
  
  want to feature on a website whose top ten stories of the year have been been:
  
  
  
  Apart from the (admittedly petty) argument that they are using UK licence payers' money (when I see those links on the page, I am paying for the BBC's bandwidth in sending me that text) for a service that no one in the UK uses, they are using space on their pages to target a small audience with obviously little interest in mainstream news, and who (I am guessing) are not crazy about clicking on display ads anyway (assuming BBC World wide serves ads against those pages that Digg users would see).
• Pre-empting the BBC's objection to my argument brings me to the next point. These communities are not influencers - online influencers are a very difficult group to pin down, and when you find them they tend to be part of fairly normal communities, not out on the fringes. When was the last time anyone normal (i.e. not people who get paid to look at these things) did anything (that did not involved a dancing seal or laughing baby) as a result of Twitter or Digg or Second Life - or even to a slightly lesser extent Facebook or FriendFeed or MySpace?

If this were all theoretical, I wouldn't really care. If people in the US are having fun with a cool new toy, good for them. But the last thing I want to see is UK money being spent on such services: the BBC's use of Digg is close to futile; suggestions that museums should use Twitter or Second Life or that schools should use Twitter, are ill-advised; and I know consumer goods companies who would like to use StumbleUpon and Facebook to promote their products (don't). In one sense, this is a get-rich-quick philosophy, and like most such philosophies will not work - the real rewards come from putting a bit more effort into more mainstream online communities.

UK newspapers and vertical jobs websites

Trinity Mirror has bought The Career Engineer. For UK newspapers, vertically focused jobs websites like The Career Engineer are a better acquisition target than general jobs websites. The general jobs marketplace already features strong newspapers such as Reed Elsevier and Monster. UK newspaper companies certainly don't rank highly among jobs websites (according to Nielsen NetRatings):

• Daily Mail & General Trust's Jobsite is the highest ranked (7th) among jobs websites.
• Guardian Unlimited Jobs comes 8th.
• Fish4 (Newsquest, Trinity Mirror, Guardian Media Group) comes 10th.

Instead, newspapers are rightly focusing on vertical and local jobs websites (even when these are merely repackagings of national listings - as for example Newsquest and Trinity Mirror do for their local jobs websites through Fish4). For example, these are the local and vertical jobs websites owned by two of the UK's leading newspaper companies:

• Trinity Mirror: planetrecruit.com, jobsearch.co.uk, hotrecruit.com, jobsfinancial.com, thegraduate.co.uk, workthing.com, totallylegal.com, totallyfinancial.com, jobs-merseyside.co.uk, jobs-cheshire.co.uk, jobs-southeast.co.uk, jobsnortheast.co.uk, jobsnorthwest.co.uk, jobswestyorkshire.co.uk, jobswales.co.uk, jobsmidlands.com, jobs-ealing.co.uk, jobs-hounslow.co.uk, jobs-in-kingston.co.uk, jobs-in-richmond.co.uk, jobs-kingston.co.uk, jobs-southbucks.co.uk, jobs-staines.co.uk, jobs-uxbridge.co.uk, jobs-waltonandweybridge.co.uk, jobs-wembley.co.uk, jobs-westlondon.co.uk, jobs-woking.co.uk, publicjobswales.co.uk, publicjobs-northwest.co.uk, insidepublic.co.uk, gaapweb.com, secsinthecity.co.uk, scotcareers.co.uk.
• Daily Mail & General Trust: careersinlogistics.co.uk, cityjobs.com, conkers.net, emedcareers.co.uk, engineerboard.co.uk, euromoneyiijobs.com, inretail.co.uk, jobs.ertweekly.com, jobs.nhs.uk, jobsite.co.uk, justengineers.net, justrail.net, justutilities.net, justconstruction.net, defencejobs.com, just4aviation.net, justsalesandmarketing.net, just4graduates.net, just4executives.net, just4finance.net, justengineers.com.au, jobsinabox.net, justtechnicaljobs.net, legalprospects.co.uk, letjoknow.co.uk, londonjobs.co.uk, myaccountancyjobs.com, officerecruit.com, onlineinsurancejobs.co.uk, productionbase.co.uk, purelyit.co.uk, recruitconstruction.com, retailcareers.co.uk, scotrecruit.com, secrecruit.co.uk, seniorsalesjobs.co.uk, top-consultant.co.uk, topitconsultant.com

The local focus that newspapers are following is clearly a strategy that plays to their strengths. However, UK newspapers must think ahead about how they will counter the eventual threat of mass aggregators such as Indeed and SimplyHired. These aggregators have made little impact in the UK (SimplyHired does not have a UK website yet), although Indeed UK trebled in traffic during 2007 while websites such as Telegraph Jobs, Jobserve and Hays have fallen, so that they all now have similar traffic levels. However, in the US such aggregators have shown strong growth and in the UK, a similar model is working well for Oodle in classifieds. Not only does the aggregator model have clear benefits of scale, but the data can be sold/given to other websites to form the basis of new jobs websites (as Oodle does for classifieds).

Startups that succeed against the odds

I am always struck by startups that succeed when seemingly they shouldn't have done. It is easy and enjoyable to point to many of the startups that seem silly and are failing - and sometimes useful because you need to separate the hype from the genuine value. It is more perplexing to be cynical about startups such as Twitter - I would never have backed them, but they are certainly a success, even accepting that traffic (which Twitter has) is not the same as monetisation (which Twitter does not have). My favourite type of startups, however, are those that I would have expected to fail, but which have carved seemingly sustainable, revenue-generating businesses. For example:

• Etsy. In theory, Etsy should succeed, but you need to execute the idea really well, which obviously they have done, and be sufficiently different from eBay. Many similar startups have fallen by the wayside.
• eBid. Again, it has always been obvious that there was scope to capitalise on the many people (sellers) that are unhappy with eBay and PayPal. But to turn that into an international business, including your own version of PayPal, and not get crushed by eBay, takes excellent execution.
• Woot. I am not sure yet if this is a serious business, although Amazon seems to think so, and when it comes to online retail they should know.
• Webkinz. Not actually a startup, since it is a venture from 60-year old Canadian toy company Ganz. With hindsight, this idea seems obvious (and we had already discussed similar ideas with clients), but Ganz have been rewarded for their courage and commitment in actually implementing it.

On a related note, last year's Google Zeitgeist threw up one startup that apparently the whole world knew about, but nobody around me has heard of .... Badoo? They are based only six miles away from Aqute, we need to pay more attention to our own back yard.