Will video + e-commerce + social = success?
Sukhinder Singh Cassidy, former head of Latin America and Asia-Pacific operations for Google , yesterday officially launched a new company called Joyus. It’s an online video meets e-commerce meets social platform that might best be described as a next-generation QVC.
Here’s how it works: Joyus signs up makers of women-focused products, with a particular emphasis on the beauty, fashion, lifestyle and home verticals. It then produces a several minute web video, which is designed to be optimized for online customer conversion (which is a different animal than 30-second TV spots). The company charges a small fee for the ad, and then takes a cut of any resulting revenue.
Joyus launched this past February with a “seed audience” of 250 friends and family, who all were allowed to invite their own friends. Then it bought a style blog called Splendora, which came with a list of between 70,000 and 100,000 women who now see Joyus videos accompany the recommendations of blog founder Gina Pell. Today users began being able to “like” Joyus videos via Facebook, and plans are to open the site up to all comers sometime this fall.
The company raised a $550,000 convertible note at launch, and since has secured $7.3 million in Series A funding. Accel Partners, where Singh Cassidy had been an entrepreneur-in-residence, and Harrison Metal co-led the round. They were joined by angel investors Joel Hyatt (CurrentTV CEO), Venky Harinarayan and Anand Rajaraman (e-commerce execs at Walmart).
This is supposed to be the part of the post where I tell you if Joyus will succeed, or become just another VC-backed casualty. But I can’t do it. So I won’t.
This isn’t to say that I can’t make up a list of pros and cons. For example:
Pros:
- Impressive management team, including Singh Cassidy and eBay’s former fashion product boss Diana Williams.
- Opportunity to disrupt current home-shopping market that focuses on TV and skews older, by going online and concentrating on younger buyers.
- Chance to add personalization, by tapping Singh Cassidy’s Google roots. If you and I both watch QVC, we see the same items. Same with Joyus right now, but probably not for too much longer.
Cons
- No obvious tech or market barriers to entry. Joyus thinks its value proposition is combining e-commerce with high-end video and social, but pretty much anyone could do that (including other e-commerce companies).
- The current lack of personalization, which digital buyers have almost come to expect. Plus a rash of other women-focused product sale sites.
- Do 20-somethings want to sit through a 4-minute video about body lotions? Remember, this is a generation annoyed by just 15 seconds of pre-roll ads.
But I can’t reach a conclusion because so much of the above is largely irrelevant. Joyus is a consumer-facing tech company without any defensible technology – just like dozens of other startups that raise venture capital each month. That means most of its success or failure will come down to brand marketing (plus its ability to secure merchandise, which may be a chicken-and-egg game with brand marketing).
Can Singh Cassidy make Joyus synonymous with fun or value or beauty or compulsive shopping? If so, it can become FourSquare or One King’s Lane. If not, it could become Gowalla or BeautyStory.com.
And, at this point, there is no way of knowing. Not for me, you or the Joyus venture capitalists. Such ignorance has always been endemic to early-stage companies, but it seems elevated with companies like Joyus. The only saving grace is that VCs generally get an indicative answer before plugging in tens of millions of dollars.
So we wait and watch. Predictions make for better copy, but not always smarter copy.
Read Singh Cassidy’s take on launching a startup company here.