These guys wrote this, a thinly veiled dig at Guy Kawasaki. It’s a great read, and got me curious as to what exactly it was that they were doing. Their idea can be summarised as Epinions with filtering: people ask questions, which are answered by other people, and then the answers can be sorted and filtered by, for example, how old the respondent is or where they’re from. VentureBeat has a good review of them, and I generally agree with their take, which is that it’s ambitious but could be an interesting experiment.
Still, I don’t see it as a viable business. And I certainly don’t see it as a $4 million business, which is roughly what their angel investors must think it’s worth to hand over $400,000. Keep in mind, they’re headed into a crowded playfield and their differentiating feature is not protected IP. So, basically, Epinions or eHow or AllExperts or whoever could take their existing databank and just layer on datamining to get a filtering mechanism at least as effective as Avanoo. That’s not to say there isn’t potential here, but given that their business model is based entirely around advertising, you’d have to be really optimistic to figure this is anything more than a startup in a niche that is fairly well-saturated already.
Of course, if I were Avanoo’s founders, I wouldn’t be so worried about AllExperts/Epinions/whoever as I would be about Facebook. Their applications platform is going to absolutely kill a whole lot of advertising-based websites by providing features within the comfortable confines of Facebook that users would previously have had to head to various individual websites for. Web 2.0’s social networking boom is firmly in the convergence and consolidation stage now, and that’s just the plain truth.
One final note: I really can’t see what they need $400,000 for. It’s a fairly basic community website with some data mining thrown in. They’re not inventing the data mining algorithms and if they’re smart they’re not even implementing them, so all they they need right now is rent and food money and a couple hundred bucks a month for a dedicated server somewhere. This is a classic Y-Combinator project.
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