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How Can Internet Companies Tap Local Markets?

Apr. 17, 2008 4:03 AM ET
James Nicholson profile picture
James Nicholson

Yesterday TechCrunch reported that FatDoor, originally envisioned as a social network for neighbors, was abandoning its business model. FatDoor is another in an increasingly long line of well funded Internet startups focused on the local market that have gone out of business or changed their focus over the last few years. Why is the local market so hard to crack, even for a company like FatDoor that raised $7M in venture capital?

As the founder of YourStreet, an Internet company focusing on the local market, I can sympathize with FatDoor and try to relate some of the lessons I’ve learned along the way:

Create a foundation of content. FatDoor was essentially a blank slate - neighbors came to the site, figured out who else might have signed up, and then did - what? Talk to each other? Not really. Learn about what’s going on in their neighborhood? There wasn’t much information on that.

We realized this same problem with the first incarnation of YourStreet. We originally envisioned YourStreet as a site where people could go to talk about real estate and what was going on in their neighborhoods. We expected users to flock to the site, adding their invaluable inside information. One problem: people didn’t do it. There was no motivation for them to do so and not enough content for them to stick around or ever come back.

With the current incarnation of YourStreet we realized there had to be a strong core of content to bring people onto the site and keep them coming back long enough so that they would start commenting and discussing things in their neighborhood. We decided this core of content should be constantly updated hyper-local news articles that are aggregated from around the web and plotted on an interactive map. This becomes the foundation upon

This article was written by

James Nicholson profile picture
James Nicholson is an Internet veteran and serial entrepreneur. He is the founder and CEO of YourStreet.com, a website that that aggregates and maps local news and conversations down to the street level. Prior to founding YourStreet, he was the founder and CEO of NetVentures, Inc., a pioneering e-commerce software company that was successfully acquired by CNET in 1999. In addition to his entrepreneurial experience he has worked as an executive in CNET's commerce and operations departments. Nicholson blogs about Internet startups and the business of the web at AfterBeta.com (http://www.afterbeta.com/).

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