The Near Memo, Episode 10

SWYFT Opens New Avenues for SMBs to compete with Prime. Is the FTC getting serious about review enforcement? So long Yahoo Answers, can Google Local Guides get this product category right?

The Near Memo, Episode 10

Greg: Okay, welcome to another episode of the near memo with me, Greg Sterling, Mike Blumenthal, and David Mihm where we talk about what's happened in the week of search, social and commerce with the local inflection on all of that.

Today I'm proud to announce our 10th podcast, which Mike just informed me, puts us in the top 36% of all podcasts in terms of longevity and productivity, I guess, most podcasts don't have more than just a couple of episodes.

S hooray for us. And thank you all for listening and downloading the podcast and we hope you'll continue doing that. And with that, I'm going to turn it over to David to talk about the lead item of the week.

David: Wow, the lead item. I'm not sure I can quite state all right. My lead item for the week item that I thought was pretty interesting, which Greg highlighted; the new funding round for a company called I think it's Swyft. Is that right? That's S W Y F T right? That is essentially attempting to replicate Amazon prime for independent E-commerce merchants.

And then it also caught my eye that Best Buy in the  smaller link section, Gre highlighted Best Buys new membership program, which they're charging $200 a year for and which includes sort of Prime- like shipping and free installation and tech support and all of those kinds of things.

And you've highlighted in the past a fulfillment operation that April Underwood has started in Oakland called Nearby.

It just strikes me that we're starting out to see companies taking pieces of the Amazon Prime playbook and trying to deliver those to independent merchants, which I think is awesome.

And I wish all of them great success, Best Buy maybe not quite as great as success as the other two, but It does strike me that there's probably an opportunity here for someone like Shopify or Square or Squarespace, which acquired Tock last week or Wix or any of these sorts of increasingly platform players in the SMB space to start to aggregate these kinds of services; either by building their own or partnering with a number of them.

And to roll their own version of AmazonPrime for all of their merchants which I think would be a really compelling offering. And I know that Shopify  launched the Shop app  last year, which I have to admit I haven't even downloaded yet.

Greg: It was disappointing.

David: That was promise of that app combined with something like a replicable Prime program A) I think would be a big revenue generator for these guys, especially as so many consumers have expressed the interest in supporting small businesses and B) I think it would also bring more merchants to their platform if they could get to become part of one of these sort of two day fulfillment, free shipping type services.

So I thought that was a really interesting raise by Swyft. And, and again, the fact that Best Buy is rolling its own membership program, combined makes me think that there's an opportunity here.

Mike: You think though, there's this conflict with Shopify between something they try to do like that app versus individual businesses keeping their own brand and living and thriving on their own brand. And there's this conflict that if it goes to the Shopify level, it degrades the essence.

David: I don't actually, because the Shopify merchants maintain their own presence on their own website. And Shopify is merely giving them an additional channel to sell their goods.

That is not true of Amazon, which does not offer an independent website platform that merchants can build their own equity on. So I see it as an additional distribution channel, if it succeeds and not a replacement for their website.

Greg: Amazon bought that company Sells, which is essentially a replay, you know, is a version of that.

They had a platform before they got rid of it. Now they're doing it again to compete with Shopify. I think Mike, I agree with the concern, it's like Google; I mean, it's like anytime you rely on a third party platform for distribution, the danger is that that platform becomes the brand and you simply become some commodity provider of whatever your product is.

But I do agree with David that the two can co-exist because a lot of these small businesses simply don't have the reach, can't get the reach, aren't going to ever get the reach that a Shopify could bring to them. And I do think that consumers want to support businesses,small businesses rather, and anything that makes it easier for them and  takes away the allure of the two day shipping, free shipping from Amazon is good. You have to just remove the friction from the small business purchase and then people will, will buy from them.

Mike: But the app from Shopify, David noted, and I've also not, downloaded it. That's the problem with them attempting to provide new distribution channels.

They don't really have historic means to do so.

David: I think it was probably an MVP last year and they're continuing to invest in it. And at some point they're going to start promoting it to consumers. At which point I will definitely download it.

Greg: So it was not good. I mean, I downloaded it immediately. I looked at it and it was like, I thought this was going to be some small business version of Amazon and it just was not.

The potential is certainly there. And I mean, think about it at Etsy, right? I mean that's a marketplace, that's mostly small businesses, you know, individual crafts people.

And it's done very, very well in the pandemic period. So I think I think Shopify does have a real opportunity combined with the loyalty program. I think somebody is going to definitely do it.

David: I don't see, unlike Amazon, I don't see Shopify ever developing its own white label versions of whatever a successful Shopify merchant is selling.

If it gets to that level, I'll stop promoting Shopify as a good actor in this space.

Greg: Yeah, I think so. I think you're right.

Are we ready to move on to Mike? Okay. All right. And your esoteric but meaningful discovery.

Mike: So I went and revisited the FTC  Press releases about their new rulemaking.

I've always wondered why the FTC was so lame when it came to punishment in review abuse  cases where, and it turns out that they have two functions that they have: FTC guidance and rulemaking.

If something falls under the guidance area, which is easier for them to do, they are obligated to have the sort of first time excuses, “you don't have to pay anything”, it's just [that the business has to] agree to never to do it again.

Rulemaking has always been harder for them to do because it requires formal processes and hearings, et cetera. And what they've done is they've taken rulemaking from the individual departments and consolidated it, essentially to facilitate the skills needed to create rules and have just declared that they're now going to make more rules to deliver effective deterrence for the novel harms of the digital economy.

Which means, and this was stated by Rebecca Kelly Slaughter who is the new chairperson, that they're basically going to put in place rules with teeth against fake reviews and scams around fake reviews and all that whole thing where they've had very, very light enforcement.

I don't know if you remember last fall when Sunday Riley, I think it's a makeup firm, was caught red handed with the president encouraging employees to leave fake reviews. And the FTC said, “Oh, don't ever do it again”.

And I was like, what? They got caught doing, you know, massive amounts of fake reviews.

And this commissioner, the commissioner at the time, Rebecca Kelly Slaughter, who is now the chairperson, took the, a unique situation to actually publish on the FTC an objection to the ruling, which was unheard of at the time. So she's clearly aghast at how weekly the enforcement's been and then just change the whole rule making thing. And now it says they're going to start enforcing.

So I'm. Kind of excited about it because I think that, you know, there's a new sheriff in town and they might actually pull their gun out once in a while.

Greg: Yes. Well, you know, I think, I think this is a massive problem. We all know it's a massive problem that really hasn't been addressed and only sporadically addressed by the platforms to show, “Hey, what a good boy am I. We took down this one bad actor over here” but it is rampant and it is something that I think is really harmful to consumers who rely very heavily on reviews to make purchase decisions, as we know.

So, I look forward to some real  enforcement we'll see, we'll see what that means, but they should also really come after Google and Amazon, Yelp to a lesser degree than others, perhaps TripAdvisor to really sort of get them to put pressure on them, to do something more sustained.

Mike: They did note in this rulemaking change that they were going to activate more rules around unfair competition and their authority to, to control that. So one hopes these two will coalesce in that area, new rules about reviews and their ability to take to task monopolies.

We'll see.

Greg: Yeah, and I should just mention that the company I work for Uber has partnered with another company called (I think they're changing their name to The Transparency Company) to do a pretty significant fake reviews analysis of TripAdvisor, Google, Facebook and Yelp.

We're still going through the data, but what it basically says is there's a lot of fake reviews. And what you mentioned with the employees writing fake reviews is one of the most common fraud scenarios.

David: And I would also hope that this commission looks into Yelp suppression of actual reviews, which I think is equally damaging to small businesses.

I think that their Yelp likes to tout that it catches more fake reviews than anyone, which is probably true, but there's also far more false positives in it's filtered review section, which I think is not worthy of praise or...

Mike: The only thing praiseworthy about the technique they use to capture those is that it makes it more expensive for spammers to leave fake reviews is by driving the cost up and eliminating the reviewer that can leave one or two reviews. They've largely limited the amount of spam from people who are “fly by” spammers.

Greg: It's like catching dolphins in the tuna net, you know,

Mike: right.

So my item this week is the death or the final shuttering, shutdown of Yahoo Answers after about 15 years.

And it's a product I remember and wrote about when it was first, shockingly, when it was first launched.

And what's interesting to me is not so much that Yahoo Answers itself is dying or dead. It's that it's that the concept that Yahoo Answers represents; human curated  knowledge has never really, (I mean, we could debate whether Quara is a success or not) has never really caught on.

I mean, Yahoo answers was the longest lived one of these products, but there was a lot of crap and spam in it and Facebook and many, many startups.

Biz Stone had a startup and there have been a ton of them, Aardvark that have tried to, to create a real time answer engine or matchmaking between experts and ordinary people to leverage human knowledge and nobody's been able to make it work. And it's really kind of shocking to me. Because the need and the demand I would think are there, but it's not ever worked.

Mike: I have two questions for you, Greg. One is, did you write about this when you were 12 years old?

Greg: Oh, I was, I was a prodigy still in diapers when I wrote about that.

Mike: The second is, do you think Local Guides could potentially, at least in the context of local, possibly move into this space at some level? I mean, Google is doing this with Q and A, featured Local Guides with lists and so on.

Greg: Absolutely. I mean, the hard thing  is I think matching, I mean without getting into the mechanics of doing this, which I don't claim to know how to do, I think there are a lot of significant challenges here, but yes, that's a good suggestion.

Local guides could do, they (Google) could do something very interesting with the 150 million Local Guides around local knowledge. They're sort of doing it with reviews.

And they are doing it with QA, but it's just asynchronous, you know.

David: Q & A has been a massive failure. Come on. I mean, the misalignment of consumer expectation and a reality of a business or anyone with a legitimate answer responding is just incredible so….

Mike: Google point of view is that okay? So 20% of is not very good.

David: 98% of it is not very good in my opinion and in your opinion,  you highlight Q and A of the day, every so often on Twitter. Right?

Your Local Guide suggestion or  posit is interesting. I don't know that it will wholly succeed, but there is a way for it to succeed. I think that that involves more of an influencer type of arrangement.

I think the problem is that most local guides are just Joe Blow's who happened to be very active on Google maps.

Mike: I resemble that remark.

David: Well  I'll just leave it at that.

There is a place though for, I think local influencers. For example, if a food critic were to be recruited into the Google Local Guides ecosystem or a golf course critic, in my case, were to be recruited into the ecosystem, I think you might start to see a real consumer following within the Maps app or, or clicking within a search result.

Mike: They did do something like that, though.

Greg: You can follow local guides. They just haven't.

David: You can, but they don't, they have no credibility in anything. Yeah. It doesn't mean anything to anyone.

Mike: Right. They have started highlighting though in certain markets, some local guides that are more, well, bigger reviewers, better reviewers.

David:They're unknown people. I think you need to have a brand that you bring to the Local Guides program already, as opposed to trying to grow one from scratch. Nobody cares what a Yelp elite person thinks either.


Greg: Behind all, this is a kind of a fundamental thing that I think is relevant to the larger search context. I think we've talked about The Wire Cutter in the past, right? When you're looking for a blender or an air purifier or something like that,

Mike: something you don't want to become an expert in when you buy it.

Well, it's it's you want to buy something good,

Greg: right? Yeah, exactly. That's most products. Right. And so if you're talking about a solar roof, it's a different matter or an eBike. You want to go to an expert source that's trustworthy and get three suggestions or five suggestions so that you can then do your own research on.

You don't want to wade through hundreds and hundreds and hundreds of reviews and back and forth, “is this review credible?” and look at the other reviews and find the consensus.

That's so painful to do. I mean, your suggestion, David, that they identify experts in particular, particular topic areas and then allow you to follow them, is great because what people ultimately want are suggestions. They don't want to bear the burden of doing all the research every single time themselves.

I mean, think of what a hassle it is just to go out to dinner. I mean, now we can't go out to dinner of course.

But in the past, you know, it was like, before you would say, “Oh, I want to try that whatever barbecue place”. And now it's like, “Oh, let me get out Yelp”. And then I have to cross reference Google and let's look at these 15 places and no, that's not good enough. I mean, it's just an incredible burden.

And so this is what humans can do is that they cut through all the noise and they offer credibility. And I think that was the promise of Yahoo answers or Facebook answers or whatever and that has never been realized. And the Local Guides thing is a really interesting suggestion that Google could do if it's watching this podcast and takes our advice.

David: AIf we get a lot of downloads this week, and maybe it will trend into somebody's frame of view….

Greg: Exactly this will transform into the Google product recommendations podcast. Okay.

Mike: Yes, good luck with that. I tried that for about 10 years and  I retired from it. It's like they don't want to hear it.

David: I don't think I want to give Google free advice either they could, they could pay me a fortune if they so desired, but,

Greg: okay.

All right. Any, any last words for the week? Any self promotional discussion. David, you and I, and Amanda Jordan did a StreetFight taping, which I thought was a good conversation about the local space and GMB.

David: For sure, And I gather that LocalU this week was a smashing success based on the Twitter hashtag.

So congratulations to Joy Hawkins and Carrie Hill and everyone who puts that on.Greg: and anything from

Greg: Yep. Yep. I gather it was really successful. So, you, Mike?

Mike: I, you know, I am just living every day as it comes and trying to enjoy it.

Greg: So this is the new, this is the new upbeat, joyful Mike Blumenthal.

David: Who are you handing off the curmudgeon trophy to?

Greg: to I'll take it. I'll take it.

Mike:Alright. We nominate Greg.

Greg: Yeah.I was told that I had a bad attitude the other day in a, in a work-related in a work-related conversation. So I'm ready.

Mike: Curmudgeon is not a bad attitude. It is an attitude that looks critically at the reality around us that often sucks.

Greg: Yes. The, the, the skeptic that thinks it could be better.

Mike: There's nothing wrong with thinking. It could be better because it sure as hell could be.

Greg: And on that note, we'll say, have a great fill in the blank of whatever day of week it is.

David: it's a Masters weekend.

Greg: Yes, yes, yes. Right? Exactly. Yeah. And we could have a whole conversation about that, but we can, and we should

David: Actually, there's a great article in the ringer this week about the pretty terrible history, racist history of the Masters. That said it's still an incredibly fun event to watch and I plan to do so that's good, good context.

Greg: while drinking Coca Cola.

That's it for us and please join us next week and subscribe to the Near Media of the newsletter. And we'll see you next time.

Mike: Thanks everybody.