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May 2000 |
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Another shopping bot? Robert Wight puts consumers on target with Youknowbest
By Christine Blank
Clad in a blue Hawaiian shirt and casual slacks, Robert Wight is looking Internet-ready in his new office with a view...of a parking lot. The humble surroundings, Wight explains, reflect his opinion that none of his 100 employees should fare better or worse in the digs department, a carryover from his stint at Microsoft Corp. The same thinking also applies to Wight’s startup comparison shopping site, Youknowbest.com, where he’s chairman and CEO.
Due to launch this summer, the site will help shoppers take aim at competing and often confusing product offers on the Internet by letting them set up profiles of goods and features they want to see, all under a seal of privacy. Consumers, Wight insists, simply want to shop the Web for decent deals without fear of being spied upon. In fact, that’s one way he intends to set Youknowbest apart from the crowded field of shopping bots, which line the Web, like minivans at the mall. Soon, Wight predicts, all e-businesses will realize the value of Youknowbest’s user-affinity model, which he calls “the next generation of the Internet.”
If investors are any indication, Wight’s company may have more than a fighting chance of making a name for itself: Youknowbest has a long-term commitment for $20 million in financing from Aweida Ventures Management of Boulder, Colo. In an unusual arrangement that stems from Wight’s professional ties to general partner Jesse Aweida, the firm evaluates requests as Youknowbest needs funds. “Net startups don’t usually get that kind of commitment,” acknowledges Dan Aweida, a partner who serves on Youknowbest’s board of directors with his father. “The traditional way of being successful is that the customer is always right. Youknowbest is putting that back into line.”
Wight credits his brief stay at Microsoft for inspiring such views. In 1998, after only a year on the job, Wight relocated his family from Seattle to Orlando, Fla., in hopes that the warmer climate would end his eight-year-old son’s battles with severe ear infections. After several unsuccessful surgeries, doctors recommended the change of venue for the boy.
Wight passed up Microsoft’s offers for management jobs at its sales and consulting offices in Phoenix and Los Angeles, saying he couldn’t imagine the shift to a sales position after working on the teams that design and develop Windows software. If it weren’t for the move, he insists, he’d still be at work in Redmond. Instead, Wight has put down roots in an Orlando suburb called Celebration, a utopian community designed and built by the Walt Disney Co. Silicon Valley it isn’t, though the setting turns out to be apt enough: Every home is wired for high-speed Internet access.
The idea for Youknowbest began percolating more than 10 years ago, when Wight and longtime friend Alan Fulmer worked at Maynard Electronics, a developer of storage management software. The two began talking about businesses they could start. Youknowbest grew out of their discussion that newcomers, whether to a community like Orlando or to the Internet, rarely know where to get a deal on a pair of jeans or new refrigerator. “Even on the Internet,” says Wight, “you have to go out and find all that stuff for yourself.”
Buyer be bold
He and Fulmer see Youknowbest as a place where consumers will tell manufacturers and merchants what they’re in the market to buy, choosing from some 150,000 products the site will monitor. Sellers will respond with prices and features. And in a decision that could not have been better timed with today’s Internet privacy controversies, consumers will remain cloaked in anonymity until they’re ready to buy.
“Today, the Internet is controlled by large stores that try to control their customers by secretly tracking the actions of people who visit their sites,” charges Fulmer, president of Youknowbest. “We take that control and give it back to the buyer, where it belongs.”
Wight and Fulmer hammered out a basic business plan in December 1998 and started recruiting their creative and development teams, which includes executives with backgrounds at Disney, Universal Studios, Anheuser-Busch, Lockheed Martin and various publishing companies. Last July the founders penned a more concrete version of the business plan before courting investors. By November, Aweida and other investors—whom Wight won’t name—had offered to put up $20 million. Wight has tapped only $5 million so far. “We have more people trying to give us money than we want,” he says. “We see about one a week trying to join us.”
Investment interest aside, Wight knew the site’s success hinged on attracting development talent worthy of Redmond and Silicon Valley. So he patterned Youknowbest’s business policies after Microsoft’s, offering shares to all employees, mandating that meetings remain open, posting salaries for all to see and banning office gossip. Wight is convinced that’s why he was able to recruit people like Anibal Santiago, a database developer hired away from the American Automobile Association; John Staubly, a computer animator most recently at Lockheed Martin; Shailesh Adhav, a finance chief lured from Disney; and Tom Geraghty, a creative executive wooed from Universal Studios’ Islands of Adventure.
Out of that environment, Youknowbest’s software developers and content editors are molding product information and consumer ratings on merchandise in 15 categories into a searchable database. Products profiled will run the gamut from DVD players to dog food.
The site’s categories span a wide range, too: fashion and beauty, health and fitness, hobbies and leisure, home and garden, electronics, computing, office, sports, vehicles, travel, entertainment, food and drink, money and finance, pets and children. Youknowbest’s search engine will let consumers scan for various features and ratings until they have narrowed the list to goods that meet their specifications—a shopper could choose a sofa by color, size, fabric, cushions, price and name brand, for example.
Virtually informed
After users search the database, their preferences and any personal data they choose to disclose will become part of a profile dubbed My Virtual Me. These details then will be vetted with sellers whose merchandise fits the parameters. When consumers return to the site, they’ll log into My Virtual Me to view bidding merchants’ prices, available rebates, and commissions that Youknowbest will earn on the sale. The user then will click through to a retailer to buy the merchandise directly.
Although many other shopping bots, including MySimon, Jungle and Dash, provide similar services, Youknowbest differs in its privacy assurances, according to Wight and his development team. If customers choose, they can remove their profiles from the site and download them for safekeeping at home. “You can take the information off our servers and share it with family and friends or put it in your hand-held computer and take it to Best Buy to compare,” says Geraghty, the site’s director of market development.
Youknowbest engineers are still working on the security protocols that will assure users that the site holds on to nothing once a customer opts to remove it. Such assurances are necessary at a time when tracking customers and their purchasing patterns is taking a beating in the press. “It is going to become clear that what these companies know about you is incredibly frightening,” Wight says. “People will say, ‘I’m not shopping on the Web.’”
One bot too many?
Beyond its approach to privacy, Wight says Youknowbest will part company with competing bots by offering “non-biased” product information. While some competitors charge retailers for listing their products—just as Web sites pay search engines to be listed under keywords—Youknowbest will make money only if consumers complete the sale. Plus, if three TV retailers pay commissions of 3, 5 and 7%, Youknowbest says it will take the lowest and give the rest to the shopper.
By the end of the year, Wight expects to have struck commission deals with “thousands” of merchants and manufacturers. But that may be too late, since industry watchers doubt a new comparison shopping business can do well in such a crowded space. Yahoo, Excite, Alta Vista and other portals already feature shopping engines, while independent bots are likely takeover targets for the few without. “All portals pretty much want to do the same thing,” says Seema Williams, senior analyst at Forrester Research in Cambridge, Mass.
On top of that, shopping bots are struggling with business models that emphasize click-throughs and commissions from retailers. “Merchants are reluctant,” says Ken Cassar, analyst at Jupiter Communications. “They don’t want to be evaluated solely on the basis of price.” And like the merchandise they search for, shopping bots are seen as commodities by the companies acquiring them. “The revenue stream is less important,” Cassar adds, referring to Amazon’s purchase of Jungle and CNet’s $700 million buy of MySimon. “They’re more important as drivers to other sites.”
Yet Williams and other analysts sees a window of opportunity for shopping bots geared toward consumers who want to buy several items at once and who still need help finding the right product. “With an extremely large amount of noise in the retail space, consumers are seeking tools that help them make that decision,” agrees Liz Leonard, senior analyst for Gomez Advisors, Lincoln, Mass. In fact, comparison shopping sites played an important role in the 1999 holiday shopping season. As the season opened the final week of November, shopping bot traffic rose 71%.
Youknowbest’s model could be successful, says Ken Neibaur, vice president of e-commerce at Alta Vista, provided the site can generate enough traffic. “I don’t think anyone has the market cornered,” he says. A new bot must offer value that rivals do not, adds Leonard. “If the company is able to make it a personalized tool, lending a personal touch to a very impersonal online space, it may be successful,” she says. “Whether it’s profitable or not is questionable.”
Wight says he’s far from worried about profitability. He expects the site to generate $1 million its first year—and maybe as much as $24 million by year two. To reach that, he plans to spend millions on marketing—mainly on banner ads, but also national TV, newspaper and radio spots—once the site debuts. As for profits in the long run, under Wight’s scenario, he may never have to worry. Following the footsteps of other bots, Youknowbest soon may be in for you-know-what: That’s right, an acquisition. •
Christine Blank is a freelance writer based in Orlando, Fla.
Robert Wight
— Background
1999 to present: Chairman and CEO of Youknowbest.com, Celebration, Fla.
1997 to 1998: Director and general manager at Microsoft Corp., Redmond, Wash.
1994 to1996: President, Avail Systems (sold to Wang Labs),Boulder, Colo.
1984 to 1994: General manager, Maynard Electronics, Lake Mary, Fla.
— Education Course work at Wright State University, Dayton, Ohio
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