This Wednesday, we had
RJ Friedlander over for a talk. He talked a bit about his background, his company, and it's business model. The focus was on the later stages of a startup's evolution, when you have a product out in the market, you have sales and the startup is maturing.
The talk was interesting, and RJ was free with a lot of figures and information. Quite refreshing. RJ said that it was quite unusual for him to give a talk like this, as he didn't believe in 'networking', since a
minute spent networking meant a minute not spent on the product. Yeah, it was that kind of a session !!
RJ is the founder/CEO of
ReviewPro, a co. that specializes in providing hotels a service that lets them analyse the reviews they get on various sites. It works in a
SaaS model, and one of the interesting things about the pricing adopted is that the prices are kept really low. The hotel finds itself getting more value for money, and sometimes recommends it to another.
Another thing that RJ was felt rather strongly on was the need to focus most of your resources, that being money, attention and manpower, to the product, and not too much on marketing the product.
Build it and they will come.
Both these things make sense given that ReviewPro caters to hotels, primarily in Europe. This is a
long tail, B2B market. So you don't need to spend massive amounts of money on promoting the brand, SEO, advertising campaigns and the like. Targeted sales will do. And the pricing too, works - had it been a market with a limited number of clients, the pricing would have to be spot-on. In the long-tail context, there's more than enough to go around, and the low price guarantees renewal of contracts, and word-of-mouth publicity.
As in most other cases, RJ's style of functioning was a reflection of his background/personal traits. Take for instance, the hiring and firing of employees - RJ, probably as an American, values firing a person just as easily as hiring one. But this is essential in a startup - you need different kinds of people at different stages, and with the right attitude.
You can't afford 'average' people with an 'average' commitment to the job. Fair enough.
However, for me the most interesting insight was something that RJ mentioned in passing - when the whole
web 2.0 idea was exploding, RJ saw that reputations built painstakingly could be destroyed in days and the businesses wouldn't even know. Clearly this was a problem, and someone had to solve it. And hotels were really sensitive to this kind of online review that was just catching on. And pronto, the seed of an idea was sown.
This Wednesday, we had RJ Friedlander over for a talk. He talked a bit about his background, his company, and it's business model. The focus was on the later stages of a startup's evolution, when you have a product out in the market, you have sales and the startup is maturing.
Agree that the pricing bit was arguably the most interesting point of the session.
ReplyDeleteIt was partly responsible to inspire my post on "Free is dead!" which, as you said, it may only work if we are dealing with a looooong tail.