Distributed Classifieds
Naval Ravikant, founder of ePinions, legal tango partner to gregarious VC and their term sheets, has launched his new startup, Vast.com. Here is his introductory post and here is a thoughtful post by Peter Rip, an investor in the company.
Vast.com crawls the web and indexes classifieds. It is part Edgeio, part Oodle and part Google.
They capture the heart of the classifieds, like Oodle, they recognize a growing trend in some people wanting to post classifieds on their own blog/site and they are doing it in a generic, non-specific fashion (as opposed to folks like Oodle and indeed Homethinking, who use site specific adaptors).
It is quite a powerful idea. Even more powerful they don’t want people to come to their site, but rather they want existing sites to take their API and plug it into their own user bases. A Mercedes car club, for instance, could plug in Mercedes for sale from the cars API.
The idea is fascinating from an intellectual point of view, and the technology is quite amazing to be able to extract structured data generically (i.e. recognize a car for sale ad, is a car for sale ad from the raw page).
I just think it’s very hard to make work. That’s primarily because marketplaces have the wet-your-pants economics of buyers attracting more sellers and attracting more buyers. Everything is self-reenforcing.
New entrants can’t compete on price, because sellers are basically buying advertising and new entrants have no audience and existing ones (e.g. eBay) has everyone. They can raise prices because their audience is growing.
Also the classifieds industry is being destroyed and rebuilt by Craigslist, who does not have a profit motive. To me, any profit-motivated entrepreneur should be scared shitless by Craigslist. More so than Microsoft or Google. At least Google and Microsoft play by the rules of capitalism. Craigslist is quite happy to run at cost (which is a fantastically noble aim, by the way) and is making consumer to consumer transacting more efficient (the economic definition of efficiency is the erasing of profits from an industry).
But I’ll watch Vast with interest, they certainly are the most interesting company I have seen in the space so far.
