Bad headline from Forrester researcher/blogger/author Josh Bernoff: “Why Web 2.0 Is No Bubble: Corporations Are Willing To Pay For It.”
Good thesis, though: If you’re looking for new Web businesses that work — as businesses, not just as feature sets — ignore the consumer-facing companies you’re already hearing too much about (guilty!). Instead, pay attention to companies that sell actual products to real customers — corporate customers.
As Josh notes, in addition to being inherently unflashy, many of these companies are service intensive, so they don’t have the putative “build the code, watch it scale” appeal of some consumer apps. Then again revenue, cash flow, etc can be awfully sexy to someone selling ads at a few cents per page view.
Josh’s pay-attention-to list:
Listening. Communispace now has hundreds of private communities that its client companies are using to learn about their customers. It succeeds because it’s unlocked the key to running and moderating these communities effectively, and grows despite charging $150K or more per year per community. The other class of listening companies are the brand monitoring companies, and the track record here is great. Research giant Nielsen bought BuzzMetrics. Another research giant, TNS, bought Cymfony. J.D. Power & Associates bought Umbria. MotiveQuest, which is still independent, has typical clients happily paying $30K and up to work with it.
Talking. Talking with the Groundswell is tricky, but there are plenty of agencies ready to help you with it. After building dozens of campaigns and sites, Blast Radius was bought by mega-agency Wunderman. Brains on Fire ignited the spectacular success of Fiskateers. The digital divisions of companies like Edelman also compete in this space, as do the big Web service companies like Avenue A/Razorfish (now part of Microsoft).
Energizing. Ratings and reviews are the easiest way to energize customers to sell others, and the companies that provide them are taking off. Bazaarvoice’s clients have generated over 10 billion customer reviews. PowerReviews works with over 200 retailers. And ExpoTV has built a business around consumers creating reviews on video.
Supporting. Support forums work — they please customers and they reduce costs. Lithium has an impressive client list including Dell, AT&T, Comcast, and Sprint. The community space is crowded, but other companies with growing client lists include Jive Software, Awareness, and Mzinga/Prospero.
Embracing. Startups that enable clients to source ideas from their customers have a bright future, because customer-generated innovation is hot right now. Salesforce.com bought Crispy News and turned it into Salesforce Ideas, which powers idea sites for Dell and Starbucks. And Innocentive is growing rapidly, with 50 companies including Procter & Gamble offering prizes of $10,000 or more to innovators that can solve their problems.
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