Local Conferences - Kelsey Marketplaces Show

I've spent the last 3 days at the Kelsey Marketplaces Show in LA and have to say I've come away very impressed with a lot of the companies on show and what they were doing (and the success they're having with them).  As Kelsey said on their blog, even in the current environment, everyone is very optimistic and there's tons of room to grow in the Vertical space.

A few companies jumped out at me from the discussions:

• AutoTrader - They have a very traditional business model (paid inclusion with 2 flavors), but execute it so well that they have grown over 20% YOY, and were a $650 MM business last year.  This one shows me that if stay focused on one specific area, in a large market space, you can be very successful.  What they haven't done is dilute their message by selling 10 different products, but have sold one that works for both users and advertisers and also gives them comprehensive data to share with other sites

• Dotmenu - Dotmenu has done something very different in their space.  While many local companies stay away from Restaurants because of their traditional lack of advertising spend (in YP, etc), Dotmenu is not only pursuing that category, but pursuing low-end and mid-level restaurants that their competitors like OpenTable won't touch.  Through their Allmenus site, they have focused on digitizing print data (menus) and developing comprehensiveness, making them the place to go for that info (also, unlike others in this space, they haven't just posted menu scans, but have formatted data that search engines can read).  They also have a college site that helps utilized those focused markets, where users are especially likely to interact with social components of their site, both online and on mobile devices.  But the real wow for me was how they are getting inside the transaction.  While their sites initially serve as marketing, for many restaurants, they will actually take orders and collect money on behalf of the restaurants.  They then deduct the advertising spend from the money collected and end up paying restaurants at the end of the month, rather than billing them, meaning no collections issues, while at the same time taking what had been a lead business and making it transactional.

• TeachStreet - To me, this was the #1 wow company of the conference.  TeachStreet focuses on non-degree learning/classes (things like cooking, dancing, art, etc).  They have taken an interesting approach to this multi-billion dollar market.  The first step is that they determine a market to enter and have an offshore team scanning all the sites in that market to collect information on businesses and instructors, and classes available.  They create pages for each of these and are focused on comprehensiveness of data.  However, rather than creating a walled garden for that data, they are clearly focused on making it as open as possible.  How can they do this?  Because in my view, they are focused on being a platform for these businesses, helping businesses market themselves, schedule classes and collect money.  So they are making themselves part of the transaction, regardless of where the user comes from on the Internet.  This also makes it easy for individual instructors to set out on their own and make money outside of the school they work in, giving them more revenue and potentially lower prices for buyers.  Finally, looking at their website, they are making the smart move of encouraging their instructors to create content for their site, both adding value for users and SEO traffic.

There were several other impressive companies, among them the Active Network (up to $250MM in revenues with 3000 employees with plenty more growth to come - most interestingly they get a lot of their revenue from large brands) and Oodle, who really is taking the lead in classifieds aggregation and sounds like they really understand how to interact in the new, social world on the Internet.

All in all, this has been a great conference, interesting seminars and the ability to interact with the decision makers from a lot of great local/vertical companies.