As you may know, Benny and I have killed off Friendslist and refocused our efforts elsewhere.  The Friendslist product was live for about 6 months.  In that time we disproved our core hypothesis: that we can compel people to build and run their own thriving marketplace.

Few people used the product. Even fewer loved it. And Benny and I thrive when making things people love.

The idea: In the same way that the original Craigslist had a trusted person at the center (Craig Newmark), our product empowered people to build and run their own private marketplace where their friends could trade apartments, jobs, employees etc.  The product promised to help “connector type” people solve their friends’ needs and make them more helpful.

Let’s start at the beginning: July 2010. I was trying to help a friend find an apartment and I turned to the legendary Nick Gray for help.  Nick pointed me to something called Janelle’s list. “It’s like a smaller version of craigslist — my friend Janelle runs it” he said.

Janelle’s list is amazing — it’s a 2000 person private facebook group that is “craigslist without the creeps, linkedin without the lame.” Everyone in the group is a friend or friend-of-friend of Janelle and it’s one of the best places to find an apartment, roommate, or upload your resume for hire.  The community is awesomely active and the listings are all 100% genuine and scam-free.  Discovering Janelle’s list felt like I had discovered a little hidden island of awesomeness: a private product with high user engagement.

The group was started by Janelle Gunther, a popular Williamburg socialite, and inspired by Lawrence Lewitinn‘s “Lawrence’s List.”  People have successfully used these lists for apartments, roommates, job searches, employee searches, selling products and dozens of other use cases.

Both groups started the same way — Lawrence and Janelle were overwhelmed by the number of inbound emails from friends looking for things.  They wanted to be helpful and their lists were a way of letting their friends connect while eliminating their exhausting roles as middleman matchmaker.

This was a pain point I personally felt. The more I researched, the more similar products I found: Barney Pell (Powerset/Microsoft) runs something called BarneyJobs – a yahoo group that helps connect people to jobs. Mollie Chen (birchbox) runs a summer mailing list to help connect her friends to each other.  There’s even a private community marketplace site called Quentin’s Friends run by, you guessed it, Quentin.

All of these products had one thing in common.  They were hacks.

BarneyJobs is a Yahoo group. Janelle’s list is a Facebook group.  The wall posts are being used as a classifieds board…a Facebook group isn’t supposed to be a marketplace!  Entrepreneurs are trained to look for hacks: makeshift solutions to pain points.  Hacks represent an opportunity to build a killer product.

Friendslist would be that killer product. We would be the platform to enable people to build their own craigslists, fitting that use case like a glove. And we’d lower the barrier thereby turning an early adopter action into a mainstream action.

Janelle’s list was the first time I had ever seen anything rival Craigslist. All we had to do was replicate that action a few thousand times. Our big vision was that if we could build a bunch of small Craigslists on a unified platform, we could eventually combine these to get to massive scale and be THE Craigslist killer. We believed we had a unique approach to building market liquidity: tapping superconnectors who would want to run their own craigslists.

Friendlist was going to be BIG!!!  And the thought of someone playing ‘craig’ fit into my personal wheelhouse of quirky, slightly absurdist products that are pressworthy. I could see the headlines already:  ’The story of FriendsList: how Jim’s list, Jane’s list, and Jon’s list beat Craigslist!’

The prototype

The first step was a prototype — a simple Facebook group called Wegslist.  People GOT it and instantly it filled with postings.  Over the next few days, the users of Wegslist basically invented the service themselves.  Jesse Middleton wrote:

As I thought about this idea the other day, it really resonated with me. I’m not sure if you’re on to something but it would be worth exploring some manner of allowing people to replicate this easily — jmiddleton.wegslist.com for example — and then offering a bit more categorization. I love the idea of building it on top of Facebook as the connections are already there.

And Peter Dixon-Moses wrote

So I like the idea of having personalized wegslist pages. Draw a parallel between the model for real-estate (typically rentals) from a big outfit like Corcoran where every realtor has their own listings page. And even though listings may be duplicated, each realtor can present the opportunity in their own words (for their particular audience).

At that point I was 100% sold on pursuing this product:

1) I had identified an early adopter hack — people building their own marketplace and playing Craig.
2) The members and owners of these marketplaces are normals (read: not early adopter tech community geeks) which means mass adoption is possible.
3) Using a Facebook group as a prototype, I confirmed that this messaging works and my friends are using the product.

Everything should be smooth sailing from here on, right?

Continued on part 2…

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Interestingly, there’s a strong first mover advantage to the business – it’s hard to see people signing up for multiple services that do this same exact thing and it’s hard to imagine a strong reason to *change* to a swipegood competitor.  And it seems unlikely that a customer would cancel, which means the customer lifetime value is probably quite high.

And it means this is a total marketing/awareness game and a bit of a landgrab. At $9/year, the entire business rests on keeping customer acquisition costs low (and so far it looks like they’re doing a great job with incentivizing you to ‘invite a friend’) and getting to a scale that matters: if SwipeGood gets a million people signed up for their service, that would be $9M in annual revenue.  It’s possible that they can go big and get 10x that number signed up..and that would be killer. But overall it seems like the ceiling is pretty low for the business.

It’s possible (and likely) that SwipeGood has much bigger plans for monetization. Just to riff on a few ideas: Perhaps charities could pay to be featured on the site to get more donations. Perhaps charities could pay swipegood for customer acquisition (a la care2.com, a giant charity-focused lead gen play).  Or users could be upsold/cross-sold for a healthy commission.