On no news

So the blog is on hiatus. The main reason is that work on Zoiads is ramping up the closer we get to release but also that there is no news.

I have gone back to reading the tech blogs since the end of the election and there is not much news. There are lots of reports of layoffs but I get the impression that the big tech blogs are struggling to come up with stuff to write. Nobody is buying anything, nobody is launching much new, mostly it’s more advice on how to deal with the downturn. To me the answer is obvious: business model.

I always thought when we are in a lull news organisations should just admit ‘nothing much happened today’ instead of spinning things out endlessly. So I am taking my own advice. Unless I have something to say I won’t write anything.

On turmoil

In the last couple of days there has been turmoil in the financial markets as everyone waits for the outcome of the bailout in the US. I am not well acquainted with the ins and outs of what got us into this mess but it seems that banks started lending money to people who had no prospect of paying it back, then packaged all these loans up and started selling them to each other. The upshot is that nobody now knows where the bad loans are and banks are refusing to lend to each other with the knock on effects of that being credit markets ceasing up.

How does this affect us in startup land? Well it will have some effects depending on what you are up to. If you are in the me too, build users, ???, profit! business it’s probably game over. Jason Calacanis has got into some trouble merely from stating the obvious fact that 50-80% of startups will go to the wall. If you are doing something genuinely distinctive with a clear business model that will scale revenues along with users then you are probably at an advantage.

Changing strategy

The market conditions have had an effect on our strategy. We suspended work on Zoimusic because we would have needed to raise a significant seed round just to build the technology and after realising that the record industry was not really ready for the solution we were proposing. This doesn’t mean that we have given up on it, just that is has been suspended whilst we wait for conditions to change.

By contrast we can launch Zoiads without any external finance. I can’t get into details of what we are doing before the launch but we have a new way of monetising social networks, we think comparable to what Bill Gross did for search. This puts us in a good position as we are not asking investors to put money behind an idea but a working product. We need the finance to hit the accelerator and build out all the features we want but Zoiads is built to generate revenue from very early on, is distinctive and attacks a huge problem – effectively monetising social networks.

Of course we may fail but launching against a backdrop of financial instability should focus minds on our strength: making money.

Pic: willacw

On local search

Google finally gets into mobile, a move that they had no choice but to make but in this case their only inbuilt advantage is a huge pile of cash because mobile search is a fundamentally different creature to web search.

When someone is on the move the most useful information is what is in their immediate vicinity. I went to lunch today at a fantastic Thai restaurant. The food was good and the service was great, we were in and out in 25 mins for £13. This place is two minutes walk from St Paul’s yet the chances of a tourist finding it are close to zero and they will be stuck with the expensive chains with terrible food which can afford to rent across the road from the Cathedral. Everyone who goes into my place is a local, I found out about it from a colleague and I have since told others. Across the road from there is a great independent takeaway but again only locals really know about it.

For local search to really work we need a way to get this local intelligence from the people who have it to the people who are looking for it. The great advantage Google had over its original competitors was that it took the knowledge of the people who knew the web, its creators, and made it accesible to everyone. To make local search work they need a way to tap the knowledge of the local people and make it available to anyone in the vicinity.

Currently no such service exists. With the iPhone Store and now the Android Market there’s a massive opportunity out there for someone and it’s something we will be looking at once we get Zoiads off the ground.

Pic: Trig’s

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On getting underway

Our developers started work on our new advertising product yesterday. It’s called Zoiads and we’re starting out with a FB app to prove the concept. We decided not to give out any details until it is ready but when we start beta testing I’ll post a link so you can sign up and tell me what you think.