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August 18, 2006
Getting Personal: Flakes versus Vibes
With rival Netvibes raising €12M this week, we asked Pageflakes, which we've been keeping in contact with since it launched a similar personalized homepage application in February, if the news was keeping the team up at night.
Christoph Janz, Pageflakes co-founder and CEO answered that it is customer feedback like this: “I’ve been using MyYahoo for six years now. But now I’ve switched to Pageflakes!” that keeps them up.
He is suggesting that the entrepreneurial team is motivated to work harder because happy users, might lead to happy revenue-generating users. When a business is following the freemium model it is as good as it gets. (See Link below).
But what about the Netvibes competition? “I think Netvibes is a very serious competitor, but competition can also be helpful in conveying the general concept of personalized AJAX [Java Script and Extensible Markup Language] desktops to a broad audience. There’s a German saying, Konkurrenz belebt das Geschäft,” said Janz.
In other words, the fact that there are several teams trying to promote more open personal "homepages" for users means that it could fire market demand, encourage software developers to make adds-on for it, and attract strategic partners.
It's a classic emerging technology pioneer scenario, although we're more accustomed to seeing it in the chip or enterprise software market.
The competiton is pretty close. Both tapped deep-pocketed venture capitalists. Pageflakes is backed by Benchmark Capital's European fund. Netvibes is backed by Accel's, along with Index Ventures.
Pageflake's "homepage" application, like Netvibes’s, makes available small applications, or modules, (Flakes as the German firm calls them) to put webmail, ToDo lists, and user applications all in one place, and it displays newsfeeds that the users can easily add, edit, and remove.
We interviewed Christoph Janz for a profile a few weeks ago and took a quick look again this week, noting that it has been developing a lot of “Flakes” in-house, particularly ones that can bring in some affiliate marketing revenues, such as shopping comparison engines, music downloads, and text messaging, among others.
Pageflakes also has a feature that makes it easy to share a homepage with other users.
Comparing usage, Pageflakes, the younger site, is getting 20,000 visits a day, about 600,000 visits a month, and the users are typical early adopters, said Janz, confirming that most are tech savvy. Netvibes says it had 5 million such visits in July.
We note here that the companies are talking about "visits". We checked with both firms and neither could tell us the number of actual users that the visits numbers represent, those that have created a homepage, put a name on it, and filled it with personal favourite feeds, and widgets. They say that the way people use the application, combined with a lack of good analytics software make it difficult for them to give such numbers.
We asked Janz how Pageflakes will attract a less techie set of users to sustain growth. He answered, "By developing modules targeted at mainstream users, it should become more attractive for them."
There's a good team there to help him do that. Pageflakes was founded by a team of five, one of whom, Ole Brandenburg was a co-founder of the German auction site alando.de (which was acquired by eBay a few months after it raised venture capital), while Janz, founded in 1997 DealPilot, an online shopping comparison engine, and he stayed on for some time after it was acquired by shopping.com in 2000.
Since then, Janz spent his time providing management consulting for three startups, starting work on Pageflakes in 2005. It was launched in February '06, about six months after Netvibes.
Interestingly Netvibes’ Co-CEO Pierre Chappaz also built an online shopping comparison business in his previous venture, Kelkoo, one of Europe's homeruns back in 2004.
In both cases, as we understand it, the entrepreneurs did not focus on generating sales until quite some time after actually launching – getting traffic was first on the agenda. What is more, they changed business models at least once in the lifetimes’ of the ventures, eventually getting right.
In other words, both are following a formula this time around that they know. It is not a bulletproof way to go. The upstarts are trying to attract some of the same users that the bigger names in consumer-oriented web portals are getting today. And there open questions: will traffic growth levels continue and more importantly, will they find a way to make money, and finally what kind of exit is going to be possible now that they raised VC money.
It is risky, but then again, let's state the obvious, what is venture capital without risk.
Read - Biz Model With No Name Gets One: Freemium (alarm:clock euro)
Read - Netvibes Raises €12M B Round (alarm:clock euro)
Read - Netvibes Founder Says Usage Up, But Still No Biz Model (a:c euro)
Posted on August 18, 2006 06:23 AM | Posted to Web 2.0 | Permalink
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