Interview with ThisNext CEO Gordon Gould

I spoke at length with Gordon Gould this week, CEO of ThisNext, to talk about where his company is headed, why the space is heating up and the principles behind the company.

Gordon is an impressive individual -- not to be confused with the inventor of the laser -- having started and sold Blogsmith, the engine powering Weblogs, Inc. and Upoc, the longest-standing mobile social network.  And he was President and COO of the Silicon Valley Reporter with Jason Calacanis during the first dot com boom.

Interview Summary

• Setting the stage: ThisNext & existing social players
• The Product Graph
• Enabling what market?
• The audience
• Social shopping vs. CSEs + social functions
• Marketing the vision

The Meat
Recently the press has been eating up announcements by Facebook and Google that seek to enable new types of transactional data sharing amongst friends.  The most relevant announcement is Facebook Beacon, which integrates retail sites directly into the social graph already present on Facebook.  How does this affect ThisNext and how is it different?
The core philosophy of people recommending products to each other is right on, but I think the Facebook move is more PR.  There are some truisms on the Internet -- any company that's gotten any scale and traction in a space has only been able to do one thing well.  The best example of this is Google and search monetization -- their other products haven't really taken off in the same way.

One of the basic operating principles in this industry is hyper-competition-- which makes it very difficult for the same organization to start spinning out related businesses in things not core to what they're known to be good at.  In Facebook's case, the opportunity to own the social graph is a tremendous opportunity.  But it's a land grab, and the company has to put all resources against all that.  Everybody else is trying to figure out how to do this and take him down so he doesn't own social graph.  As big as they are, for them to move from being a horizontal platform where people make their home on the Web to getting into more vertical apps is suicide. 

It's distracting and companies historically on the Web have never beeen successful at doing this in parallel.  For Facebook to try and do this when they're already in the crosshairs is a mistake.  They've got some momentum and some PR pop, but at the end of the day the social shopping layer that succeeds will be best of breed and independent. 

And I think that will be us.

If you look at the evolution of online services in general -- for example, if I had said there's a huge opportunity in online photo management a few years ago as an independent, you would have said I was crazy.  A few years ago Facebook, Microsoft, AOL and Yahoo had their own offerings -- but in the interim we got Flickr, Photobucket and Slide.

The point is that incumbents are not able to launch side businesses. They're not the best people to innovate within a category.  All Facebook has done here is to say it's a valid area and created opportunity and awareness, but the winner is going to be best-of-breed. 

The social graph is an enormous market and one that Facebook can realistically try and own, but owning the product graph at the same time is crazy.

What's this 'product graph' about which you speak?
I believe we coined it here -- it's an apt description of what we do. Social shopping is about the product graph and saying that you live a life and have network of people that you interact with -- in other words, what is the network of relationships between products we all share?

It's another layer in identity.  Facebook will do one layer really well and nothing else.  And if Google can't do it, Facebook definitely can't do it.  Google as a company is set up to be rapidly innovating but they haven't executed well on anything other than search.

You call ThisNext an "innovation-based Brave New World company" -- in other words, you're creating and uncovering a new market.  What exactly is this new market you're creating?
The market we're enabling is really a market that exists everyday and is what people do when they go shopping.

Typically you go shopping with friends and family. 70% of all retail purchase decisions are actually made in-store.  When you walk into a store you may think you get x but you end up getting abc instead. In other words, the browsing experience and emotional validation you get by going with friends and family is a behavior that's not well captured online.

With a comparison shopping engine, it's all about getting to bottom of funnel as fast as possible -- narrowly constraining choices as soon as you can.  But the behavior that drives decisions offline is a social behavior.

The knowledge / insight / desire for people to express opinions about favorite products and get social validation hasn't been structured or captured anywhere online…the may be haphazard discovery but there's no central location to do so -- and no place to go to become a maven or identify mavens about products.

We have a key phrase at the company: we want to enable a million mini-Oprahs.  She's incredibly influential -- but let's say you're a fly fishing guy. Our recognition platform creates a place to project this expertise.  As a fly fishing guy, you're being quantitatively validated in the case of taste in certain areas and geographical locations.

So here's the Big Vision and the dynamics we're taking advantage of to get there --

1. User-generated content is here to stay
2. Social networks are part of people's lives -- 50% of time online is spent with UGC, because people want to connect to each other.  As more of people's identities go online, they'll want best-of-breed services that can help them do things best.  In the case of product discovery, we want to build a platform where people can figure out if they're wasting money on certain products and what's cool for them based on lifestyle and interests

ThisNext seeks to occupy the product recommendation layer. We want to be the maven's sense of digital identity and be the go-to place for consumers looking for great, cool stuff.

We estimate there's about 60mm SKUs on North American market.  That means somewhere along the way there's something super cool for you if you can figure out where or even what it is.


How would you characterize the audience using ThisNext?  How do you want to see it evolve, or are you leaving it to the community to steer this?
Our audience skews:

• 45-50% male / female
• Largely US-based
• Make $85k or above and  fairly affluent

In terms of evolving the community, we leave it to the community to self-evolve.

 

We want people to make recommendations who have strong points of view and have a sophisticated take on the world and a discerning palate about whatever it is they're into.

 

There are definitely a number of people competing in fashion, but we believe limiting yourself there isn't going to do you any great service -- it's such a mercurial vertical so inventory is worthless 3 months from now -- there's such a huge volume moving through that you're never going to have a meaningful depth of content since it expires so quickly.

 

And as a side effect, once you're known as a "chic" fashion place the guys will never come.  So you're stuck.  Another example of this is Amazon -- they're still branded as the place to buy books, yet they offer so much more.  Once you get branded in the mind of a consumer, it's difficult to move beyond that perception.

 

Speaking of fashion, we'll be announcing partnerships in the fashion space but it's one of 5-6 key verticals we focus on, which are:

• Parenting
• Design
• Food/wine/beer/booze
• Eco-friendly
• Outdoor sports
• Gadgety-type stuff

Is it better to have less products vs. every product imaginable?  How do you view current CSE players that are gradually enabling social features like Pronto?
The whole point of ThisNext and social shopping is obviating the need to wade through masses of data -- I don't want to look at every single bike pedal or whatever that's out there.

Anybody that doesn't make that core distinction between discovery and search is going to try and compete with Amazon and their reviews.  The value proposition there is to be comprehensive -- this isn't what ThisNext wants to be.  We want to cover categories that people care about and want to show  only the top 3% of products.  And any product can be in that top 3%.  It's based solely on what the relevant community says should be there.

CSEs are largely still review-oriented and are still in the search paradigm. 

What's the difference between search and discovery?
Search is knowing in advance what you're looking for, to varying degrees of specificity.  If I want a digital camera or whatever and type in magic words, I'm now saying this is the specific item I want and here's a specific price comparison, with reliability and trust ratings.  It's very purchase / intent-driven and then I'm done, like an errand.  It's usually only good for something you really want to research.

Discovery is more akin to window shopping in cases where one doesn't know specifically what one is going to buy, so it's a browsing experience.  It's a situation where you might have some idea where to start but walked out with other stuff you probably didn't think you were going to particularly buy, nor you know what specific item you were going to buy before walking in.

Another perspective is that not everybody is an expert in everything and this platform provides a way to get the information one needs without doing all the research.  Instead, people can identify and connect with the experts.  The current search paradigm sets it up so that you as a shopper really have to do the research.

Most of the products people buy are emotionally / aesthetically driven and researching isn't really a productive exercise.  There's a scale problem here -- finding someone who's taste / lifestyle is similar to one's own.

Here's the key point: a lot of social shopping sites that are emerging make no distinction between recommendation and review.  Reviews are still part of the search paradigm -- showing you 400 different cell phones -- but ThisNext is about showing great stuff.  We want to show you the top 1% of products in specific areas, driven by people's opinions you trust.

Conducted & written by Scott Hurff -- scott.hurff at channeladvisor