The coffee shops of Mayfair

The Post-Google VC

I have been spending some time with some great entrepreneurs across Europe as part of the FOWA Road Trip and yesterday in Copenhagen was no exception.

In particular it was great spending some time with Nikolaj Nyholm and Nicolaj Reffstrup.

Nikolaj Nyholm made one comment to an entrepreneur which really resonated with me.  To paraphrase:

“You need to raise money from a post-Google VC.  An investor who has lead a company in the last 5 years since Google has been so dominant.”

At one level this is another contribution to the discussion of what makes a great VC (I will leave that one to Fred et al.)

It is, however, of far more significance for entrepreneurs with a web app or offering.

Working for Reevoo and Glasses Direct, both very different businesses, taught me the significance of distribution, and the dominance of Google.  Some examples:

You need first rate SEO?  That will be >£100k p/a for a 19 year old whiz kid.  Someone who will be impossible to manage but can transform your business with organic traffic.

You need to bolster traffic in certain niches?  That’ll be a potentially bottomless pit of adword spending.  (Particularly true if you’re late to a competitive market: look at the differential in adword spend between gocompare, moneysupermarket and confused)

That’s not to mention the possibility of Google using some of their warchest of come after your particular market.

Many entrepreneurs are so focussing on building such a great offering that they also assume virality of distribution is inherent or inevitable.  Unfortunately its not that easy, and Nikolaj is dead right to warn that getting help from people who “get it” is crucial.

Reevoo is a trust filter for the web

Reevoo today announces a $5mn Series A fundraising* from Eden Ventures and a raft of experience angels. There have been a few questions about what is this investment  is all about.

 
Let me give a view.

 
A massive problem with the web is knowing who and what to trust. Not only because of the growth of dodgy review sites and spoof blogs / affiliates but also because “kosher” ecommerce sites themselves want to increase the levels of trust consumers place in them. They have worked out that higher online trust = higher online conversion.

Reevoo is solving this problem with a two pronged attack;

 
1) The ReevooMark product is a service to collect reviews from retailer’s customers who have already bought goods. ReevooMark aggregates these reviews around products and serves these reviews back to the retailers sites. (see Dixons , Currys , Jessops etc ).

 
2)Reevoo.com, which is still very much in Beta, also provides a destination for consumers to read these reviews to help choose what to buy. Price comparison engines were the first generation in helping consumer WHERE to buy.

Reevoo provides a trust filter to help consumers work out WHAT to buy.

I have blogged before about how much value there is in delivering what the consumer wants without them having to ask for it. For me this remains an area of white space on the web and one where VCs have been making their bets this year. Last.fm does exactly the same thing for music.

The other exciting thing is that if Reevoo can dominate the part of the purchase process that focuses on WHAT to buy rather than where to buy it will become an enormously powerful platform for shaping purchase decisions.  Ben Tompkins is the General Partner at Eden Ventures who I negotiated the
Reevoo investment with. In his previously life at Broadview Ben was the guy who sold Kelkoo to Yahoo  for €475 million. Ben understands what the value an investment in a second generation site like Reevoo could yield.

 
*First Capital advised Reevoo on this fundraising.