ShareBloc today launched as a Reddit-like link sharing community for professionals. Originally called VendorStack, the company launched in February as a peer review site that let users rate and review vendors. It was also similar to Quora as it helped the VendorStack community ask and answer questions about a vendor or its products.
At the time, co-founder David Cheng said they also used Mechanical Turk to scrape vendor customer lists. The company triangulated the data from these different sources and analyzed it to provide additional services, such as analytics or market research reports. They also planned to offer premium tools that vendors can use to set up their own profiles on the site in similar fashion to what Yelp does with its member merchants.
But over the past several months, Cheng said they discovered that their old approach would cost them millions for a relatively small piece of the market associated with business content.
Cheng, a blogger himself, used the discoveries he and his team made while building the original service to pivot to the new Reddit/Hacker News-style model. It all seemed right to use Yelp and Quora as models for the service, but they soon learned how different the worlds really are.
To develop a marketplace, a provider has to attract both the buyer and seller. There are countless reviews about business software. For example, Cheng noted in the post, Gartner sells its reports as PDF files and companies like Hello Fax give out information for free. There was also the challenge in actually getting peers to write reviews. That difficulty was compounded by the complexity in writing reviews. Writing critically about business software is more complex than doing restaurant reviews on Yelp.
The competition was fierce, too. Companies pay anywhere from $25 to $200 for a sales lead. They also spend significantly on search engine optimization and other forms of online marketing.
But with a Reddit-stye service, the community builds over time with little investment on the part of the person participating in the community.
With the pivot comes a change in the company’s business model. Cheng said in an email that services like Twitter and Pinterest have mapped the personal interest graph. Twitter delivers sponsored content, and Pinterest is expected to do the same, possibly with an e-commerce angle. He said ShareBloc will provide a similar service but for a professional community. Cheng said a professional CPM/CPA or lead is greater than a consumer CPM. For example, LinkedIn has a professional audience with higher spending potential than a sports site which mostly serves consumers who may buy electronics but not expensive IT technology.
The challenge for ShareBloc will come with the competition it now faces, in particular from LinkedIn. The company has moved aggressively into content but Cheng maintains that the company struggles with engagement.
What comes from a pivot is often far more interesting than what the service originally offered. It’s what makes the ShareBloc pivot worth the study if for nothing else than what the company learned as it made its shift in focus.