UGC + MGC = SA

Clint Chao from Formative Ventures is Smalltown's lead investor. A few months ago, he contributed an article to VentureBeat proposing one way to judge an investment is to ask "Do I want to be VP of Sales for this startup?"

Clint couldn't reveal Smalltown was an investment that passed his test because we were in stealth mode at the time. Now that we've launched, I can discuss why Clint and others are betting our product will redefine the local advertising space.

Many successful websites are based on user generated content. Some other sites make it relatively easy for small businesses to build their own website. Smalltown's innovation is a new type of web presence we call a Webcard. Webcards facilitate user generated content (UGC) and merchant generated content (MGC) in a way that synergistically integrates both to create a new form of social advertising (SA).

Think of Smalltown as word of mouth advertising with the efficiencies of the Internet. Let's say you need to hire a gardener. One could go to a Smalltown site and start a discussion "Can anyone recommend a good gardener?" A neighbor could reply "Yes, we use Tim. He's great. I've attached his Webcard." Tim’s Webcard could have his contact information, references, a calendar of his availability and so on.

Don't you often find yourself asking the same type of question? "Yo, I'm thinking about getting back into shape... Can anyone recommend a hard core personal trainer?" You can already go to a few different sites to ask this question. But Webcards enable us to integrate the question, the answers, AND the merchant's MGC in the form of Webcards that are easy to post, discover and share.

Before we started to build our application, our research showed loud and clear that a merchant's most valuable scarce resource is time. They just don't have time to design a new website or hear another lengthy sales pitch. We knew in order to win in the local marketplace, we needed a value proposition that was quick and simple.

1. At $40 per month, a Webcard subscription is easy to budget because it's a fixed and known small amount.

2. Making and changing a Webcard is incredibly simple. For that reason, our customers are starting to think about Webcards as better than a website. Restaurants are putting up daily specials because it's so easy. Realtors take photos and upload them to their Webcard every time they get a new listing.

3. We offer professional services. If one of our sales people hears a merchant say "I'm just too busy to take on another project," the sales person can answer "No problem, we have designers on staff who can take photos, write copy and create the Webcard for you."

It's a super simple business model. One product. One price. A clear value proposition. By the way, we've just started a search for a VP of Sales. Clint already has a good job; anyone else out there who clearly sees how this Webcard thing will be really big?

- Hal Rucker