Haystack is a brilliant idea, with a revenue model too!
Posted by Carlos Pero | Filed under 37signals
This week Jason Fried and the 37signals team debuted Haystack, a new Web site that lets companies visually search for designers in their price range and desired location. The site initially debuted without browsing and filtering features, meaning it was a "pre-launch" phase where designers could submit their information, and when the site reached around 1,000 members the browsing would be enabled. That happened later that day, faster than Jason anticipated.
First of all, the idea is remarkable. Of all the places you can go and try to find a designer, why not start a new one? It would be highly visual by letting you glance over snapshots of their work easily...take a look at the designers in Chicago between $3,000 and $10,000. As you scroll down more appear. Even the URL
http://haystack.com/chicago/3000-to-10000 is beautiful and RESTful, encouraging linking.
Second, there is a clear way to generate revenue. Jason is a designer, and this product helps real people and real companies connect, and that is worth some money. Imagine there are 50 other designers in your city and in your price range, how do you stand out? You spend a little money, that's how. Haystack offers a Pro listing for $99/month. That's a little pricey as a recurring monthly charge, but initially that means only the elite will stand out, and ultimately if a designer books even a single new job through Haystack, perhaps they'll justify the $1200/year expense to be listed as a Pro. The reason I like this is because it's scratching your own itch and a minimum viable product.
Lastly, and here is the trick, is that 37signals had a tremendous amount of influence online to ignite participation. They needed 1,000 designers to register, and they achieved that the first day to be able to enable viable browsing. And the site doesn't even need to be a true success (companies booking designers) right away for revenue to start coming in from the Pro registrations, though it certainly adds credibility. This would not have happened so fast if their Signal vs. Noise blog RSS feed didn't have over 88,000 subscribers and over 20,000 followers on Twitter. Being so well-known also allowed their news to be re-tweeted and sharing amongst the people in-the-know.
This is solid proof why "Social media is rapidly becoming much more important than Google", at least for an initial product launch. But even for the long-term, is someone going to search Google for a "visual designer referral site"? No, they will have heard about Haystack via word-of-mouth and Googled to find it if they didn't just try the domain name first.
If you don't have the juice of 37signals to be able to pull this off, and don't have the capital to spend on a marketing campaign to target your potential customers, then you're left with what Gary Vaynerchuk advises in his Crush It book to work very hard and have a lot of patience, so you can take the time to connect with people and start to build up your personal brand to be able to spread the word on your new project. Of course that's an uphill battle compared to how easy it is for the Web elite to be able to do it, but what other choice do you have?