Here is a new site that caught my attention, www.geni.com
It is a family tree creation web application that has raised a ton of money from venture capitalists.
At this date, March 2007, there is no recognizable business model to be seen on the site. Is the site named geni because it will require the favor of three magical wishes to ever make a profit?
Probably. Will the owners and investors make a real return on their 10 million dollar investment? Probably. Are we entering the Dot- Bomb era again? Probably NOT.
The application that runs the site is slick in the best sense of the word. It is amazingly easy to use, intuitive, elegant, fast, FREE, and fun. The general media would refer to it as an example of a WEB 2.0 application. That term is fast becoming over used but regardless GENI is technology done well.
Most importantly from an investor's perspective, the simple act of filling out your family tree encourages you to virally encourage others in your family to sign up for geni.
This is viral marketing at its best. Geni is building a community family by family. It is amazing how quickly and effortlessly the brand of geni will spread. I'm sure, the folks at geni even have their own predictive equation that "proves" how fast and furiously their online community will be built. Within a year, I'm guessing they will have 10% of the 50 million broadband users identified as part of their community.
Now the pesky problem of creating a business model or at least a way to achieve ROI for this innovation becomes more obvious. We have the subscription model. What new features would I pay for annually and turn myself into a a paid subscriber? Improving nations' collective families connectedness and communications seems ripe for innovations.
Of course, for the non subscribers they also have the advertising model courtesy of Google, Yahoo, MySpace etc. I really hope advertising is not the primary business model.
The EXIT strategy is to sell the innovation/company to one of the big portals within a few years for ten or 20 times the amount invested. I can see it happening but I really hope it doesn't. The Dot Bomb era created many great new technologies. It did not create quite as many new businesses. In my mind, building a sustainable company should always be the end goal.
It will be interesting to follow the life cycle of geni. I am impressed with the technology and potential, but building a company to flip within 24 to 36 months is just hoping for magic. Let's hope they focus on building a sustainable company.
