My Own Pirate Radio

In “Buy Local—With Town Currency“, BusinessWeek’s Jeffrey Gangemi writes on a local currency called “BerkShares” used in smalltown Great Barrington, Massachusets.

The program works like this: Shoppers visit one of 10 branches of four participating local banks and convert their cash into BerkShares scrip. For every 90 cents, they receive one BerkShare note, that is accepted at some 280 participating area businesses…”

The BerkShares program aims to help keep money in the local economy rather than encouraging trade with other locales. But Gangemi claims BerkShares are “…also honored at about 250 other businesses throughout the Southern Berkshires region that aren’t officially registered.”

This reminds me of Jane Jacob’s Cities and the Wealth of Nations, which I just reread. Jacobs felt strongly that if individual cities still had their own local currencies they could trade much more efficiently with other parts of the world, because the local exchange rate would automatically manage the prices of their local goods and services relative to outside prices. Instead we have national currencies, which don’t generally do a great job helping individual cities, since national exchange rates account poorly for locale-specific costs, availability of capital, supplies of jobs and labor, market demand, and so on. (Think about how Halifax, Toronto and Calgary, for instance: these three very different cities are slaved to a single currency and exchange rate governing their import/export trade. Contrast that to Hong Kong, where the coupling between local reality and exchange rates is tight.)

Perhaps someday we’ll come full circle to city currencies again. It’s fun to ponder, especially as the internet makes it possible for new currency-like instruments such as eBay’s PayPal and Second Life’s Linden Dollars to emerge.

Katrin has a blog! She’s writing about Toronto:

Welcome to the Mukodu Blog: a whimsical exploration of Toronto’s random nooks and crannies, its many unique neighbourhoods, and the lives of its citizens. Mukodu is about culture, places, people, and goings-on around the city. It aims to be a quirky, opinionated and honest sampling of what makes this city great.

Check it out, especially if you’re a Toronto-dweller.

Backfence.com, a “social media” site that billed itself as “Do it yourself local news”, is shutting down operations. Mark Potts, one of the co-founders, posted his learnings a few days ago. Very interesting, particularly on the business model challenges.

One bit in particular from Potts struck me: “Partner with a media company or some other distribution source. Because of the critical need to market to and engage the community, it’s better to piggyback on a print or broadcast partner’s existing community relationships and marketing power.”

Backfence actually didn’t partner in this way, and I find it strange that Potts would recommend this as a strategy. Relying on old media to jumpstart an online community seems wrongheaded to me. Look at Toronto Star’s OurFaves, for example, launched May 2, 2007. It’s a promising notion — “amplify local opinion on what’s great in the city” — but after playing with it briefly I find it empty and unappealing. Part of that is the look and feel: it’s slick, polished… surely passed muster with Star execs, but too stark and corporate to attract the customers they’re seeking. More importantly though, the content seems to come from a very small number of people (forgivable for a while; you’ve gotta start somewhere), appears to be editorialized, and focuses on city-wide popularity as the key vector for discovery. Add that all up and it’s hard to trust as a source for recommendations. They missed the mark.

Partnering with an already-trusted social network like Facebook — the way iLike.com did — is a much better recipe for success.

P.S. I found Potts’ post through Greg Sterling, who often writes about local search and related trends. This morning Sterling put up a post on local and social media. It includes a long-yet-not-exhaustive list of sites in this space. Worth reading.

Businesses that offer content online have a real challenge on their hands with search engines.

On the one hand, content providers need search engines in order to be discovered. (Yes, people also discover sites through word of mouth and advertising, but search engines are undoubtedly the primary discovery mechanism for web sites. Heck, I even navigate using the search box… it’s often faster than remembering where I stashed a bookmark.)

On the other hand, search engines continually raise the bar in terms of the quality and quantity of information displayed on search results pages. And to a content provider, that can be dangerous.

Consider this Google Maps search, for example: “Terroni restaurant Toronto”. A few years ago the search results page just contained a list of possible matches plotted onto a map. Now that same results page shows a map, yellow-pages type information (business hours, type of food served, payment types accepted), links to relevant web pages, and links to relevant reviews on review web sites. Furthermore the reviews themselves are summarized in a five-star rating graphic.

Microsoft’s Live Search is a little clunkier in this scenario, but offers pretty much the same content.

It’s useful, right? Yes indeed… very convenient for customers, and great for businesses like Terroni’s. But if you’re running one of the sites that provided the reviews summarized by Google — Zagats, Where.ca, and NowToronto.com, in this case — how should you feel about this?

The answer depends on your business model.

If your business relies on web traffic to your web site, and your content can be comprehensively summarized within search engine results, you’re in trouble. For instance, if I skim the review snippets, and I like the aggregate rating (5 stars in this case… surprise, surprise), I may just write down the street address and dispense with visiting the review sites. From Terroni’s point of view that’s just fine… they get my business when I walk through the front door. But from the review site point of view that is a business opportunity lost, because I didn’t click through.

Conversely if your business model relies on something else for revenue — customer subscriptions, let’s say — then this sort of disintermediation is not such a big deal.

This is the latest incarnation of the old OS/Applications cat-and-mouse game: Apple and Microsoft enhance every new release of their operating systems with a bunch of new features, thus commoditizing some of the functionality within the apps that run atop the OS. The app developers therefore have to “move up” and differentiate their products by adding new features that aren’t yet offered by the operating system. The same thing will play out in the content provider / search engine space.

Lessons for content providers:

1. Make your content indexable by search engines so that your site can be discovered easily.
2. Make sure your content cannot be easily and completely summarized in a search result.
3. Differentiate your content, and make sure people know you have something different to offer.
4. If possible, select a business model that does not rely entirely on search engine traffic.
5. Never stop improving, because you know the search engine companies won’t stop chasin’ ya