Local community and recommendation site Angie’s List received $35 million in funding today from Battery Ventures. This comes a day after local rating site Grayboxx sold its assets after failing to get enough traction around its more automated local ratings (“preference scoring”).
Together these probably say something about the importance of personal touch in local niches that are based on community. It also in some ways symbolizes the ups and downs we’ve seen in the local social segment, where some companies make it and some don’t (Judy’s Book, Insider Pages, etc.).
Why this happens seems to involve a complicated formula, partly based on the whims of a crowd mentality in your target audience (as it goes in social media). Picking the right target audience has proved imperative, if you look at Yelp’s success — hinged on targeting the twenty- and thirty-something urban foodie hipster.
Part of the formula is also the right match of content for that audience that lends itself to viral exchange and community. The soccer mom demo has proved to be one that has these qualities for all things home & garden or child raising. Or, like Yelp, tap into a subject area and a demo where people like to hear themselves speak (who doesn’t want to be a restaurant reviewer?).
There is of course a lot more to it, but a great deal of the formula for success in this segment seems to be “learn as you go” with lots of hard work put in meanwhile. We’ll provide more later and find out where Angie’s List could go with the money.