Warning: This post is not for the faint-hearted. Continue reading at your own risk.
2020. Somewhere in Bangalore – “Lets build a local search application, one with a difference …”
For god sake, please don’t do that – no matter whatever your differentiators are. Not even if you created something better than the PageRank algorithm to rank local listings based on user queries. Not even if you have cracked the formula to “understand” tweety user reviews and not even if a VC firm were ready to cut you a 7 million dollar check*. I am not trying to play the devil’s advocate here; there are some solid reasons to justify –
- There is no real problem that today’s local search platforms solve: Proponents of the concept of vertical search engines might kill me for writing this. But believe me or not, in the world we live in, the answer to everything good or bad starts with Google. Majority of online users continue to Google for local information. Vertical portals are busy optimizing their site for search engines, so that they could appear at the top or at least on the first page for most of the user queries. All of them vie for your attention and try to trick you to their respective sites. What’s the point? There was a problem of finding local information, but Google has solved it (yes, the same text search engine you use for searching porn). 60-80% of the traffic for all local search sites comes through search engines (primarily Google). Majority of these users come to such destination portals for a need based query. They are not in a mood to explore your site. Infact, too lazy to even remember your domain name. So, even if your site had the best “tomato throwing application”, no one cares to try it out. The point is that local search companies today solve only one problem – SEO. Is that the next big thing you want to work on?
- There is no eye for detail: I have lost several heated debates with my friends on this topic. Burrp started out as a review platform for local listings. The reviews, because of strict quality checks, were excellent in standard and started getting a lot of mentions in the blogosphere. Taking cues from this, several other local search platforms introduced the ability to put comments (or reviews?) against listings. Can these comments compete with Burrp reviews? Ask this question to the tech and content team at Burrp and you’ll hear great reasons on why they couldn’t. But, who cares? Actually no one. Whether you had an organized representation of rich, high quality meta data or a simple paragraph of text for name-address-phone, it does not matter. Whether you had a manicured and grammatically correct review or a tweety one liner comment, it does not matter. I am sorry to say this, but when it comes to Indian local search, richness in information is useless – it doesn’t bring you enough loyal (returning) users.
- Show me the money, honey: Did you say, ad revenues? Oh, lemme tell you – its a lot – enough to buy refills for your coffee machine and executive bond papers for your printer; and, if you got lucky with the traffic last month then you could afford weekend pizzas and beers for your team. Stop! No matter how hard Google and other ad networks have tried to serve “contextual ads” on your site, clickability is extremely low. It continues to be the silly impression game and unless your traffic is putting the likes of Yelp to shame, forget about it. Did I hear “a solution for small and medium businesses”? What does the “solution” do? Well, “it increases the visibility of a business”. Oh, I see. You know what – it is not the business that needs a solution; rather it is your business model which actually needs one. Efforts to sell such online solutions to local businesses go in vain. And rightly so, because there is no accountability matrix. Transactions is all a business cares about. If your platform doesn’t guarantee that, then its useless for them. Sounds like a conventional lead selling model? Yes, it is. Selling leads generated via their online and voice platforms is the primary source of revenue for several “successful” local search players. Do you want to be one of those? Nothing wrong, but, scaling such businesses is a nightmare – it means building a huge workforce, 1000’s of people as feet-on-street collecting data and several hundreds in your sales force. Ready for the “challenge”?
- Small market, multi-faceted competition: To an end user, local search portals, classifieds and yellow pages directory listing services – are all the same. A sane mind would disagree but try doing a few Google searches in some of the popular categories – eating out, movers and packers, property rentals, doctors and hospitals, banking and insurance services etc, you’ll find classifieds competing with local listings. No one’s complaining, because as I said earlier, name-address-phone is all that matters end of the day. Moreover, after a surge in the number of Groupon clones, group buying platforms, which drastically reduce the cost of availing local services, seem to be challenging the very utility of plain vanilla listings. Such is this local search domain, that competition might come from the unlikeliest of places. If your platform doesn’t offer enough value to the end user and businesses, be ready to die a silent death.
Does this mean that there aren’t any opportunities in the Indian local search space?
Was Google the first search engine? Didn’t most of us switch to Gmail? I simply meant “no more me too’s in the local search space“. Innovation would be the key. Local search has to go beyond plain information (no matter how rich/decorated your info is) – no one searches for local listings without a need. Does it not make sense to fulfill this need? I know you are ready with a lot of questions and apprehensions w.r.t the term fulfillment. But that is where the challenges and opportunities are – Can you let me look at the menu and place an order for home delivery? Can you book an appointment with that dentist this weekend? Can you send that courier guy to my home and pick up the consignment? … And yes, there is life beyond metros. People avail local services in tier 2/3 cities as well. Needless to say, the entire landscape is fragmented. Acquiring data and keeping it updated is a huge challenge for all these companies. Am I talking about a local listing GDS? Maybe … Focus on the “real problems”, there are many.
Who am I to give you all this gyan?
I have been in the Indian local search space for almost 5 years now. First with an IIT-Delhi incubated startup called Onyomo in 2006 and then at burrp for the last 4 years. While Onyomo was fully focused on local listings from different categories, burrp has been more of a review/recommendations platform centered around local listings – a desi version of Yelp in the US. Though most of my work revolved around technology and product, yet my inquisitiveness and passion for the domain made me a significant contributor to shaping these products the way you see them today. Besides working on these two products, I have significantly tracked the growth, product and people at competitors in this space – Justdial, Asklaila, Sulekha, Getit, Metromela, Yahoo Local, Google Local etc.
I have made an unbiased attempt to demystify some facts and myths. Would love to hear your thoughts. Coming back soon with another boring post. Thanks for reading.
* There is something with this number – $7 million. This amount has been the most frequently raised sum by a lot of companies in the Indian online space. I am trying hard to crack the underlying formula. Will share once done.
Note: This article has been cross posted by the Pluggdin team here – http://www.pluggd.in/local-search-space-in-india-challenges-and-myths-297/ … thanks guys, its humbling.