Rajesh of LiveDeal discusses the issues and opportunities caused by hyper growth, and how to focus on the core business.
Interview conducted by Nathan C. Kaiser on Tuesday, March 16, 2004 in Palo Alto, CA.
<div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001469"></a><b>Can you give us an overview of LiveDeal?</b> </div> <div class="IntACont">
Our main focus is connecting our local community members. People can buy and sell items through our site, find jobs and services, as we as post personals. </div> </div> <div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001470"></a><b>How do you compete against other auction and community sites?</b> </div> <div class="IntACont"> Most auction sites are more shipping based, where members end up needing to ship products from one another in order to complete a transaction. These sites don't take advantage of the community available within a local area, like LiveDeal. LiveDeal connects local buyers and sellers, which removes the additional cost of shipping from each transaction, which can sometimes cost 20-25% of the item cost. We save our members a lot of money. </div>
</div> <div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001471"></a><b>I would also assume that it takes away the uncertainly associated with buying or selling online, as they have the chance to meet the actual person. Has your focus on local transaction been a key part of your success?</b> </div> <div class="IntACont"> The biggest difference is that there is a unique advantage for a buyer. Current sites offer free listings, which are attractive to sellers, but what is attractive to buyers? LiveDeal provides listings for items that are local to the buyers, which provides a level of security and comfort. Our listings clearly differentiate whether listings are local or not. </div> </div>
<div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001472"></a><b>Where would local markets be most useful?</b> </div> <div class="IntACont"> Having the ability to meet the seller is key for all products. The biggest savings happen for larger ticket items: appliances, cars, furniture, etc. The items that are very hard to ship do very well on LiveDeal. </div> </div> <div class="IntQCont"> <div class="Bold StepFrom">
<a name="QA001473"></a><b>How does LiveDeal expand to new cities?</b> </div> <div class="IntACont"> Unlike other city based marketplaces people can enter any zip code and a local market place is automatically created within a 50-mile radius. We don't have to specifically launch in each new city. We have automated the process to enable the site to grow in conjunction with our user base and to be able to scale to new areas efficiently. Any site can support 20 big cities, but what about the thousands of smaller cities around the countries. </div> </div> <div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001474"></a><b>How do you grow the numbers of buyers and sellers using the site?</b>
</div> <div class="IntACont"> We make the process and system as attractive to each group as possible. We are the best place for sellers of larger items to list their products. We make it easy for them to market to a local audience. The majority of auction site products are consumer good and not the unique one off items such as antiques. Connecting with local sellers creates the key to the marketplace. Then marketing to local areas the services offered will drive buyers to the site as well. Our ability to blend local with national allows for a buyer to have an available market nationally, until the local marketplace develops. </div> </div> <div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001475"></a><b>You also differentiate your service in regards to the fees charged to buyers and sellers.</b> </div>
<div class="IntACont"> We decided to give our service away for free to allow new people to join and test it out. Our service is so unique that we are adding such a value to each community and charging for the basic services wouldn't help our members or us. We plan on keeping the basic service free and have launched our store service, which is a pay service. </div> </div> <div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001476"></a><b>What is the value of a user paying for a storefront on your site?</b> </div> <div class="IntACont">
Unlike other auction sites where storefronts are for cheaper goods so that the main business doesn't get hurt. There is no strong listing service available. LiveDeal storefronts allow our users to set up directories of products. So that a user who have ten furniture items, five computers, and two cars to sell can set up individual areas for each category. Also, our site also cross-markets store items throughout the site to significantly increase the interest that each item receives. </div> </div> <div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001477"></a><b>What type of growth are you targeting?</b> </div> <div class="IntACont"> One thing how Internet businesses grow versus traditional businesses is that they grow ten times as fast. We are looking for hyper growth here at LiveDeal, similar to what I saw while working at eBay. Speed is very important online, and having said that the key is growing your user base, getting your product or service out there, and moving quickly. </div>
</div> <div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001478"></a><b>What are the disadvantages of hyper growth?</b> </div> <div class="IntACont"> The main issue is whether or not the system is stable. That is the first pain point that you see when growing very rapidly and was an issue that affected eBay. My background is in Engineering and having done this type of thing before our system is very scalable. We have seen our traffic increase ten-fold in a short time, which hasn't even affected our servers. According to Alexa.com 75% of sites are slower than us. This is an important criteria, because it has a direct impact on the user experience. If you can't maintain a high level of service then hyper growth can definitely hurt you. </div> </div>
<div class="IntQCont"> <div class="Bold StepFrom"> <a name="QA001479"></a><b>What are the key aspects of entrepreneurship?</b> </div> <div class="IntACont"> Responsiveness to customer needs and a high uptime for site performance are key to success. They are the most important aspects for any Internet business. Our number one priority is member support. We offer 24/7 support with Engineers on staff to maintain the system. We are also always looking at what it would take to manage ten times growth in the next few months, so that when it happens we can support it. </div> </div> <div class="IntQCont"> <div class="Bold StepFrom">
<a name="QA001480"></a><b>What is your goal for LiveDeal?</b> </div> <div class="IntACont"> We have a good entry point with the big-ticket items, but we are seeing the same members posting all types of products on the site as well. The goal and vision is that we will be the leader in the local markets. If we are successful, then there shouldn't be anything left for our competitors. </div> </div>
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