Scott Smigler's BlogYoung Internet Entrepreneur and E-Commerce Marketing Leader

There it is, my first national television experience – with JJ Ramberg on MSNBC’s Your Business! The show just aired (7:30 this fine Sunday morning).

It was a great experience. I usually don’t get nervous, but I have to admit that I was a bit anxious as I stepped into the “elevator” for the elevator pitch. That part was actually filmed first and I was able to get most of the butterflies out of my system. Amanda (from RealTimeShredding) who pitched Jeff and I (my fellow panelist) was incredibly sweet, and I think she did a great job. Elevator pitches like that aren’t easy and she knocked it out of the park. Jeff is a super-smart entrepreneur and VC; and it was a pleasure being on with him.

Are you a small business owner? I’d love to hear from you.

Several weeks ago I was invited back to Bentley to speak to Professor Shuman’s class (he teaches a great course on entrepreneurialism). Professor Shuman asked me to share my story with the students, and I was asked lots of questions about how I managed to build a company from my dorm room, and what it’s like to be a young CEO now that i’ve graduated.

I’ve done this several times over the years and I really enjoy it. Students (especially Bentley students) are not afraid to be blunt, and often what ensues is a very open conversation that includes both the pros and cons of Entrepreneurship.

One of the students who attended just sent me a nice email:

I should have emailed you a week or so ago but it slipped my mind until I came across your business card today. I wanted to thank you for speaking to our entrepreneurial thinking class. Your visit was one of the more informative and interesting presentations we have had over the course of the semester and I just wanted to let you know that it was appreciated.

- Tara

That really made my day.

For a while now, myself and many of my collegues have discussed the concept of the long-tail and the impact it will have on both the Internet and our lives in general.

In my essay, “Reflection on Joe Trippi’s ‘The Revolution Will Not Be Televised‘ ” I talked about the importance of a two-way dialogue between customer and company. In reality, the Internet fosters an integrated dialogue, rather than just a two-way dialogue, where may key stakeholders influence the discussion.

In a follow-up, “The Revolution is Happening Right Now,” I provided real-time examples of the long-tail at work, as a way to demonstrate its power.

Then, in MySpace is Dead, I took the example of a large Internet company, “MySpace,” and argued that niche sites that do something very similar would begin competing with it. It has started already.

So, what will this revolution look like?

It’s hard to predict human behavior, but here is what I think will happen.

On television we have several major television networks, and then a number of premium cable channels that cost extra.

On the Internet, while we’ve gone through cycles of expansion and contraction, it would appear now that the revolution will manifest itself in the following way:

Thousands… hundreds of thousands, maybe millions of little Web 2.0 companies will emerge, each one catering very specifically to the needs of a very small group of people through the Software as a Service model.

- Want to plan a party? Check out MyPunchBowl.com – a company whose time is dedicated solely to helping you plan the best party every.

- Like online gaming? Check out GuildeCafe – a social networking platform that brings gamers together in teams.

- Need a better tool to track your finances? Check out Geezo.

These Web 2.0 sites are popping up every day to address the needs of small niche groups in powerful and compelling ways. Some sites focus on entertainment, while others focus on personal or professional progress.

But… Web 2.0 companies that are being created target more than just consumers. Many people know of SalesForce.com (web-based CRM)… one of the first companies to deliver software as a service… but we have a client who is, in many ways, the SalesForce.com of the staffing industry. They’ve targeted a specific niche and created a product that appeals to that niche better than the goliath in the market. Have they been successful? Unbelievably so!

It’s true… in the Web 2.0 world, companies will have to either Go Big, Go Niche, or Go Home.

The interesting thing here is that while it costs a lot of money to build and distribute a television station, it costs little money to build a disruptively powerful website, at least in the eyes of the niche it targets. In fact, some venture capitalists are concerned because entrepreneurs need less and less money to build their companies (Web 2.0 companies), and the exits are likely to be small as well. YouTube aside… these Web 2.0 companies sell for good money quickly, but only few will fetch billion-dollar price tags.

In a lot of ways… These Web 2.0 companies are the enemies of the YouTube/MySpace/FaceBook world. The former gets very specific, while the latter (YouTube/MySpace/FaceBook) target everyone and their brother.

The Internet is ushering in a new era of entrepreneurism that will indeed change all of our lives… because that is the specific focus of all of these companies: To change our every-day lives, one niche at a time.

When Yahoo! sets out to do 500 things (build a great television portal, build a great movie portal, build a great financial portal, etc) they get spread thin.

When a lone entrepreneur, or small group of entrepreneurs set out to focus on building one great thing, they can direct all of their efforts exclusively on that one thing. Check out MyPunchBowl.com (listed above)… they have literally streamlined the party-planning process in a compelling way. We’ve all used Evite.com, but the workflow on PunchBowl rocks in comparison.

As you can see from the picture below… these entrepreneurs are hungry. This picture was taken at a WebInnovators event that I attended last Monday. Most of the people in this room at entrepreneus who have the sights set… not on changing the world, but on changing your world… if you fit their niche:)

Visit the site here.

Last Tuesday I attended one of the more interesting industry events of my career.

Thanks to a connection from David Teten at Nitron Advisors, Majestric Research (an investment research company) invited me to have dinner with with fund managers and investors from major global investment firms. I was joined by a handful of other industry experts, including Adam Epstein (President & COO of adMarketplace), Joe Myeress (eBay Powerseller placing in the top 200 eBay sellers in 2005), and John Aiken from Majestic.

This was no traditional event. Myself and my fellow experts sat together in a private room in Spire Restaurant, located in the trendy Nine Zero hotel in Boston. We drank wine, consumed delicious food, and were peppered by insightful questions from a select group of the world’s leading investors and analysts covering the Internet space.

- What will happen to Yahoo if they crack down on paid search arbiters?

- How do you explain the low adoption rate of Google Checkout thus far?

- Will the “long tail” become saturated?

- How does Yahoo combat the brain-drain Google has catalyzed by sucking up the best minds from all over the world?
- How will Google’s quality score affect CPC rates?

These are just some questions the analysts posed to the group. In sum, and to put it bluntly, I was shocked at the depth of knowledge these analysts possessed. They knew more about the field than many people who call themselves Internet marketing experts, and the breadth of industry data offered by Majestic would excite geeks everywhere.

This event was small, intimate, and wonderfully challenging. I’d love to do more of these.

E-mail Flows
So many to respond to
Start with one

A few years ago I won an award after being recommended to the the Global Student Entrepreneur Award contest held at St. Louis university. I just received an email from a subsequent winner announcing an interesting new website.

The link is www.MuseBox.com.

From Brian, the founder of MuseBox:

“When I set out 11 months ago, my goal was to build a tool that would allow creative people, especially students, the chance to compete in specific challenges via the web. Today, Musebox features creative challenges (across all media) in which motivated students can participate and get recognized for their talent and creativity prior to graduation.”

I browsed the site – and I think it’s pretty neat. Kudos Brian on coming up with a unique idea! I look forward to participating.

I hate to break it to you Rupert… but MySpace is dead. Well, at least it is in the process of dieing. Rupert, I know you’ll tell me that MySpace is still one of the most popular websites on the Internet. You will tell me that it has tens of millions of loyal users (and growing). And you’ll also tell me that the smartest fund managers and financial gurus in the world praise you for stealing a multi-billion dollar Internet property for less than $600 million. But if you listen closely you’ll hear the fat lady warming up her vocal chords, and she’s about to give a great performance.

So, Rupert, let’s start with your first claim, that MySpace is one of the most popular websites on the Internet.

I can’t argue with this one. It surely is. I also know that it is responsible for a large chunk of Google searches. But do you remember the Altavista sensation of the late 90′s, during the Internet boom? Probably not… my guess is that you weren’t the Internet mogul then that they say you are today. Altavista was an immensely popular search engine that became popular VERY quickly thanks to the viral nature of the Internet. Despite the fact that, for a while, Altavista didn’t even own its own domain name (www.altavista.com), it proved that an online application that is much better than everything else out there will become popular quickly… simply because it is much better than the second-best option.

So what happened to the darling search engine that both the web geeks and the web masses adored so lovingly?

Google.

Google came online with this massive marketing machine and just promoted the heck out of themselves to steal market share from Altavista. Right? Well, not exactly. A couple of students launched Google, and without much marketing, Google came to be the most popular search engine on the Internet. Few people remember Altavista. Altavista wasn’t the first search engine, just like MySpace wasn’t the first social networking site… but Altavista ushered in a new era of search engines similar to how MySpace ushered in a new era of social networking… but because NEITHER of these two companies were/are truly great companies, the former became completely insignificant, and so too will the latter.

I can see you now, Rupert. Sitting on your executive leather chair, behind your big, masculine desk, which probably doesn’t even have a computer on it… talking to your MySpace chiefs.

You’ll say something like: Our user-base is growing like crazy, traffic is swelling… let’s just stay on course guys. Keep operating expenses low and focus on selling ad space. No creative missteps here… just stay the course and don’t do anything to rile the base.

Hannibal the cannibal couldn’t have said it better if he tried… despite the brilliance of Anthony Hopkins.

Rupert, MySpace hasn’t had any substantial interface changes in years. It’s impossible to navigate the darn thing… even for someone who has overseen the development of thousands of websites! It’s just not intuitive.

While FaceBook is slaving away, addressing detail after detail of user experience (advanced privacy features, a constantly tweaked UI, improving server-side performance, etc), MySpace just leaves well enough alone. Any social networking site by its nature will have an element of chaos… the goal of course being to maintain a concept of “organized chaos.” But the problem with MySpace is that it’s not organized at all… it’s just chaos. MySpace doesn’t help me to organize my world… it helps me to build a list of friends (many of whom i’ve never met, and never will meet)… while Facebook is actually trying to help me organize the world around me based on various spheres of influence.

FaceBook addresses the element of community… my community, which is complex and ever-changing. MySpace is all about linear relationships, with no profound contemplation of community.

When I log in to MySpace, I see 500 spam messages from computer hackers and guerilla marketers trying to get me to add them as a friend in my profile. Of course, these computer hackers and guerilla marketers have profiles with pretty sounding feminine names and pictures of attractive women. They think that because I am attracted to the fairer sex, I’ll add them into my profile as a friend, thus giving them access to spam all of my other friends. In sum… a cheap experience. In FaceBook there is none of that. FaceBook is a controlled, well-organized community. MySpace is just chaos.

FaceBook started out as “College students only,” but now it is growing. Alumns can join, and so can companies (and their employees). My guess is they won’t stop there. MySpace started as “all things to all people,” and despite the perception that it’s for high schools, a large percentage of its users are over 35 years-old.

What else does MySpace have to worry about? The long-tail.

What’s the long-tail? Arguably the most important concept in Internet communities. The basic premise is this… be a big fish in a small pond, rather than a small fish in a big pond. If you are a retailer, for example, rather than opening up one big sporting good website… you open up a website for fishermen, and you craft a unique shopping experience for this very specific audience. Really focus in on their particular needs. The brilliance of FaceBook is that, even though it is big, it does go after the long-tail based on the way it designs its networks. It allows me to join a “Boston” network for example, or my company network, or a “group” of people who believe in community activism (MySpace has groups… but it just isn’t the same). And again, I can do all this without the fear of spammers and manipulators.

But FaceBook’s ability to employ the long-tail concept is not MySpace’s only threat. Whenever a massive phenomenon like MySpace hits the Internet, it is an absolute guarantee that copy-cats will follow, but Internet copy-cats are smart because they get the concept of the long-tail. They know they cannot beat MySpace at its own game, and so divide-and-conquer kicks in. One student entrepreneur starts a social networking site for high school students in his home town. A web company starts a social networking website for baseball players. Another company starts a social networking aimed at yuppies. Yet another starts a social networking website for retirees. And slowly but surely, all of these individual, small social networking websites offer a better experience to its users than those users could get at a generalist website like MySpace.

As for those who want to be involved in a BIG social network that everyone is a part of… we’ll have those too. Applications that work better and faster than MySpace (like FaceBook), and perhaps, applications the aggregate data from many different small social networking websites to create one big community from many very small communities will come about.

MySpace lacks direction. And it’s not that MySpace can’t smarten up and change. By all objective accounts they are on top of their game. But if you really follow the social networking sector, and if you’ve really followed MySpace over the past few years, you’ll see very few signs that MySpace, under the leadership of Rupert, is actually a GREAT company. I’m not saying it is a bad company… i’m just not saying it is a GREAT company. You don’t have to be a GREAT company in a mature market to succeed, but you do have to be a GREAT company in an ever-changing market to succeed, and I just don’t see that greatness in MySpace. In fact, I see nothing but slow servers, an antiquated user-interface, and an abstruse, jumbled user-experience. MySpace no doubt has great programmers, server people, and staff… the question is, do they have good leadership?

So while MySpace boasts huge user acquisition, I encourage everyone to ask the question:

Do these NEW users stay and play? Or, do they sign-up, browse, and decide MySpace isn’t for them?

MySpace knows the answer to these questions. They know the percentage of their huge user base that is active, versus passive… I wonder if they will share that with us anytime soon.

If you had:

- Unlimited time
- Unlimited money
- Unlimited abilities

How would you change the world?

A year or so ago I received a random call from a high school teacher asking me to come speak at her school. I said I would be happy to, and I asked her how she heard about me. It turns out she teaches a class on entrepreneurship, and some how my story had made it in the textbook without my knowledge.

The funny thing is that it just happened again. I was browsing Amazon, and I decided to do a search on my last name. I came across a book called Automatic Wealth for Grads… and Anyone Else Just Starting Out by Michael Masterson.

Link

I logged in, took advantage of Amazon’s “search inside” feature, and sure enough I found a passage that tells my story of entrepreneurship. The story was 3 years old, but it was pretty accurate.

What’s strange is that people are using my story without calling me for it directly. It’s kind of fun… but i’m always happy to get a phone call about something fun like this:)