Magic and Its Implications for Search Start Ups
June 21, 2011
“Abracadabra! Magic Trumps Math at Web Start Ups” struck me as a reminder that in a lousy economy, sizzle remains important. The write up references some interesting terminology and the even more interesting Groupon red ink. But with marketing magic mixed with accounting legerdemain, some start ups look quite exciting. Sizzle or the odor of freshly popped corn at the movie theater in a mall.
What about search start ups?
I have had briefings from several search start ups in the last week. I received one email this morning asking me, “Should we start marketing even though we are a new company?”
My answer was, “Sure. You can never be too rich or too thin or do too much selling and marketing.”
Then I realized that as sizzle starts to take precedence over financial performance, there may be some tough sledding for search and content processing vendors. Here’s why:
- Anyone can get search “free” or at low cost. Some outfits will toss in search when the client licenses another product.
- The financial performance of search companies has only a couple of bright stars amidst a number of brown dwarfs. Autonomy has done well, but other companies have flopped or been unable to mount an initial public offering.
- The market for search has shifted, so even Google killers are likely to struggle. Heck, even Google is marketing like crazy in order to keep its revenue engines running at peak efficiency. Despite the effort, traditional search is starting to pant. Social search seems to be keeping pace.
- Investors like data analytics and nifty outputs. Search systems can perform this trick, but specialists seem to be hogging the spotlight.
I think magic is important. Dassault Exalead has some, but the company is diversifying its technology across high profile, high value enterprise challenges, not just search. I don’t see too many vendors getting a gig in Las Vegas with information retrieval showmanship.
Traditional search is at risk of becoming a “Norton utility” in an outfit like Symantec. Magic is needed and quickly by start ups in the search sector. Repositioning key word search as customer support, business intelligence, and knowledge management won’t work as well as in the past with today’s funding sources in my opinion.
Stephen E Arnold, June 21, 2011
Sponsored by ArnoldIT.com, the resource for enterprise search information and current news about data fusion
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