Venture Capital Funding for Local Search #ILM09
VCs from Canaan Partners (Warren Lee), Trinity Ventures (Patricia Nakache) & Comcast Ventures (Michael Yang):
Patricia Nakache:
no one has cracked local impulse purchases – mentions Groupon
Warren Lee:
Skeptical that growth will happen as fast as Kelsey predicts because access to venture capital is not as easy. Venture capital is going to contract by 20-30% and fragmented nature of local with big capital requirements makes it harder to fund. (sounds like a lot of VCs will be getting into SEO next year)
Michael Yang:
It is not for the faint of heart on the VC side to spelunk in the local space (truedat)
Patricia Nakache:
Making shopping fun has a lot of opportunity. A more curated, better matching experience than Craigslist is needed. See care.com
Warren Lee:
Video. Oh yeah and did I mention video?
Michael Yang:
Stay away from search and ad networks. Video. Leadgen & email are still interesting. Commerce is more interesting than directory/media in local. You need to be >1MM uniques/mnth to be interesting. SEOd directories are a dime a dozen.
Warren Lee:
Invested in Associated Content at 1MM uniques/mnth. Need 10MM uniques/mnth to get attention of brand advertisers. Need to break top 100 mark on Comscore to get attention of ad agencies.
Michael Yang:
slightly backpedaling on his “not interested in SEO plays” but likes Associated Content/Demand Media because they have systems v. 2-3 people start ups which don’t. IMO AC & DM started with no systems but used SEO to justify building them.
Warren Lee:
Shared risk models with contributors helps you scale up because the upfront costs are lower. Content on the web has a remarkably long shelf-life which makes the biz model more scalable/sustainable.
Michael Yang:
Streetview technologies that allow users to have a virtual experience with the merchant before they go there are interesting
Patricia Kanache:
There’s an opportunity for the companies that owns customer relationships to be the advocates for the SMBs to help them figure out the right mix and manage their reputations
Warren Lee:
There are too many options out there for SMBs. A large group of startups out there that haven’t been consolidated yet. Over the next couple of years we’re going to see a lot of start-ups fail.
Nice cheery ending to the panel.