For the fifth installment of my Word-of-Mouth Wisdom interview series, I decided to tap our investor base.  At Bazaarvoice, we are fortunate to count six serial entrepreneurs as investors in our company.  One of them is Josh Kopelman, the founder of Half.com and a prominent figure in the Web 2.0 scene.  Josh calls himself a "coastally challenged VC" on his blog "Redeye VC" because he is based in Philadelphia.  But you wouldn't know it because his investments are in some of the most prominent early-stage companies that I know of.  His portfolio includes companies like 1-800-FREE411 (currently owns 6% of the 411 market out of nowhere), Aggregate Knowledge (a recent Bazaarvoice partner), Krugle, Riya, Root Markets, StumbleUpon, VideoEgg, Wikia, and YackPack.  I can tell you from personal experience that Josh is an extraordinarily helpful investor.  His connections are extraordinary and his entrepreneurial experience is incredibly impressive.

Josh KopelmanHe also knows a thing or two about word-of-mouth marketing.  Outside of the fact that he has made many investments that have to do with the subject, you may remember that Half.com bought the naming rights to a city in Oregon and renamed it Half.com.  This was a seemingly silly PR stunt (as I remember how the media initially reported the story at the time), but it paid off in spades.  Read Mark Hughes bio (a past speaker at a Word of Mouth Marketing Association conference) and you'll see what I mean.

 

1. In December, Time Magazine announced that their “Person of the Year” is “you”.  As in the “prosumer”, or consumer-turned-producer.  Do you agree that the power of the “crowd” was the biggest trend of 2006?

Yes.  I think we’re seeing a major shift in the online value chain.  The initial killer application of the Internet was email (one-to-one), followed by websites (one-to-many).  We’re now seeing the creation of a whole class of tools that easily allow people to create, organize and publicize content (many-to-many).  With so much content being put online every day, the big challenge (and opportunity) is to find ways to help people discover the stuff that is relevant to them.  Leveraging the “wisdom of crowds” to intelligently filter/recommend content is a very large and meaningful opportunity.  

2. What are your most interesting investments in this area?

Other than Bazaarvoice (of course), other “social media” companies in our portfolio include:

VideoEgg has built a very powerful distributed video network – and currently power the user-generated video of 5 of the top 20 social networks (AOL, Bebo, Hi5, Tagged, and MyYearbook).

StumbleUpon has developed an innovative (and addicting) way to harness the wisdom of crowds for website discovery.

Aggregate Knowledge uses the behavior of previous visitors to a web page to automatically generate product and content recommendations.

Wikia was founded by Jimmy Wales, the founder of Wikipedia.  The company leverages people's innate need to create, share, and contribute to the subject areas that they are most passionate about.

3. How do you think consumer-generated content will impact the world of advertising?

I see it having an impact in a couple of ways.  First, advertising goes where the eyeballs are.  Consumers are spending far more time consuming consumer-generated content so over time advertising budgets will increasingly move towards that space.  Second, it increasingly allows consumers to participate in the advertising process itself.  The traditional one-way advertising broadcast model is now evolving towards more of a dialog between advertisers and consumers.  Forward thinking advertisers are using the collective intelligence and creativity of their consumers to help them craft their messages and even create their advertising.  This will result in advertising that is much more personal and relevant.

4. Do you think Google overpaid for YouTube?

No.  With its massive user base and powerful community, YouTube has clearly emerged as the leader in the online video sharing space.  With online video advertising set to exceed $1BB by the end of next year, and Google's ability to extract the most value out of any given online inventory, the acquisition seems like a very savvy move on Google's part.  This is especially true when you think about the fact that we are only beginning to see the potential of video on the Web, and the opportunities that lie ahead in this space.

5. Given your experience at Half.com, what advice would you give our clients in leveraging their consumer-generated content?

I think it's important to understand the impact that consumer-generated content such as ratings and reviews can have on a business.  In addition to allowing your consumers to communicate with each other, they also allow online merchants to begin tapping into the wisdom inherent in their current consumer base, and leverage that to create a better shopping experience for everyone who comes after them.  Companies can no longer afford to not participate in the dialog that their customers are having about them and the products/service that they provide.

6. What is the future of consumer-generated content?  Where does all of this lead us 5 years from now?  10 years?

Consumers today are more empowered than ever. It is now cheaper and easier than ever to create content, share your opinion, and distribute it over the Web. While this will inevitably create an overabundance of content, it will make finding the content that is most relevant to you increasingly difficult.  Over time I think there will be less reliance on traditional “editors” (e.g. newspapers) and “packagers” (e.g. music labels, publishers and studios) and more reliance on automated discovery tools that harness the "implicit web" to allow people to find the content that is most interesting to them.

7. What do you think the biggest trend of 2007 will be?

Online video has reached a tipping point. Given the amount of innovation, new developments, and widespread consumer adoption in this space, I think video will continue to be the biggest trend of 2007.

I'm sure Josh would love to hear your comments, so please write in. 

10 Responses to “Word-of-Mouth Wisdom #5: Josh Kopelman, First Round Capital”

  1. Brett Hurt

    A small business, like a law firm, could benefit by launching a blog and giving free advice to gain a following and engage potential customers. Then make sure to market that blog locally so many local sites link to it, because of the fact that it gives away free advice and is written well. This will also help with your SEO rank and give you a personality that so many local businesses are lacking with a static website presence only.

    You can see the full interview series here:
    http://blog.bazaarvoice.com/category/interviews/

  2. Brett Hurt

    A small business, like a law firm, could benefit by launching a blog and giving free advice to gain a following and engage potential customers. Then make sure to market that blog locally so many local sites link to it, because of the fact that it gives away free advice and is written well. This will also help with your SEO rank and give you a personality that so many local businesses are lacking with a static website presence only.

    You can see the full interview series here:
    http://blog.bazaarvoice.com/category/interviews/

  3. Brett Hurt

    A small business, like a law firm, could benefit by launching a blog and giving free advice to gain a following and engage potential customers. Then make sure to market that blog locally so many local sites link to it, because of the fact that it gives away free advice and is written well. This will also help with your SEO rank and give you a personality that so many local businesses are lacking with a static website presence only.

    You can see the full interview series here:
    http://blog.bazaarvoice.com/category/interviews/

  4. Hello,

    With so much power in the hands of the consumer it seems like small to medium sized companies can greatly benefit from this emerging trend in UGC / Online Video / Word of Mouth. Do you have any tips for a small business, say a law firm, or web shop to take advantage of these trends in their marketing, lead gen, and loyalty campaigns?

    also, is there a link to the archive of the WOM series?

  5. Hello,

    With so much power in the hands of the consumer it seems like small to medium sized companies can greatly benefit from this emerging trend in UGC / Online Video / Word of Mouth. Do you have any tips for a small business, say a law firm, or web shop to take advantage of these trends in their marketing, lead gen, and loyalty campaigns?

    also, is there a link to the archive of the WOM series?

  6. Hello,

    With so much power in the hands of the consumer it seems like small to medium sized companies can greatly benefit from this emerging trend in UGC / Online Video / Word of Mouth. Do you have any tips for a small business, say a law firm, or web shop to take advantage of these trends in their marketing, lead gen, and loyalty campaigns?

    also, is there a link to the archive of the WOM series?

  7. Brett Hurt

    Andrew, thanks. I am really enjoying doing this series. Many more interviews to come.

    To answer your question, “yes, firms can and should seek input for their own product development when reading customer-generated content”. This is simply listening to word of mouth – and online we have the first digitally archived form that makes this possible. Sam Decker calls it “customer oxygen”.

    The most profound example of this is how our clients, like Bass Pro Shops, are actively analyzing word of mouth (i.e., using our analytics platform) for products with high return rates. Their goal, obviously, is to reduce the return rate by understanding why customers actually return the product. When customers speak to each other, they are usually very honest. When they speak to a store representative when returning a product, they are usually trying to get out of the store as soon as possible – it is an uncomfortable experience. We are enjoying helping clients attack this problem – returns are very costly, and are an especially big problem in the apparel category.

  8. Brett Hurt

    Andrew, thanks. I am really enjoying doing this series. Many more interviews to come.

    To answer your question, “yes, firms can and should seek input for their own product development when reading customer-generated content”. This is simply listening to word of mouth – and online we have the first digitally archived form that makes this possible. Sam Decker calls it “customer oxygen”.

    The most profound example of this is how our clients, like Bass Pro Shops, are actively analyzing word of mouth (i.e., using our analytics platform) for products with high return rates. Their goal, obviously, is to reduce the return rate by understanding why customers actually return the product. When customers speak to each other, they are usually very honest. When they speak to a store representative when returning a product, they are usually trying to get out of the store as soon as possible – it is an uncomfortable experience. We are enjoying helping clients attack this problem – returns are very costly, and are an especially big problem in the apparel category.

  9. andrewmbode

    Thanks for the comments Josh, and great series Brett. I thought the comment about user participation in question 3 was interesting. I’ve seen the user created advertising, but do you think firms can read into such user-influenced advertising to take in input for their own product development? Are there examples of this happening? It seems directly asking users what they want doesn’t produce a lot of innovation, but if the users are engaged in this creative process, maybe the derived insights are more telling?

  10. andrewmbode

    Thanks for the comments Josh, and great series Brett. I thought the comment about user participation in question 3 was interesting. I’ve seen the user created advertising, but do you think firms can read into such user-influenced advertising to take in input for their own product development? Are there examples of this happening? It seems directly asking users what they want doesn’t produce a lot of innovation, but if the users are engaged in this creative process, maybe the derived insights are more telling?

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