SNW INTERVIEWS -- Aug 16 -- When I first heard of PerfSpot.com I was taken aback by two things. How
bad there name was, and how great their growth curve was. PerfSpot.com…
Lousy name, great social network! PerfSpot has grown through guerrilla
marketing and has an Alexa score of 82 at this stage! Here's
my interviews with their Founder and CEO, Hart Cunningham and International Marketing Director, Josh Gray. - Mark Brooks
- Interview with PerfSpot Founder and CEO, HART CUNNINGHAM
What is PerfSpot’s Founding Story?
We
wanted to launch a social networking site that would take advantage of
a growth in international Web-users and increased monetization
opportunities, by creating a global community for users that we felt a
lot of the competitors ignored. We saw an opportunity to build a
network that embraced the international community, instead of
segmenting it.
What’s the secret of PerfSpot’s success?
PerfSpot.com
has grown completely organically, without venture funding, which has
made us focus on rapid growth and profitability. We’ve also
concentrated on international markets, where online social networking
is still in its early adoption phase. We grow our member base in
countries that our advertisers are looking to grow. If we have a
client, whether it’s a tourism board, promotions company, travel
agency, etc that is looking to expand into Western Europe or parts of
Asia, we try to utilize this working capital to build in those
countries. The fact that we currently publish our site in 37 different
languages, while other networks only offer a handful of languages to
members, has been a huge part in our success.
What makes PerfSpot unique?
We
have a very open site. We have over 220 million videos with 400
different video partners and millions of user-uploaded pictures that
visitors can view without being logged in. We also have a comprehensive
moderator team based in the U.S. and the Philippines that screens
through up to a million pictures on a daily basis and deletes any type
of pornography, any type of copyright material, etc. So, we feel we
have a very healthy and safe community.
In addition, we have an extraordinary customer service team. If a user has a problem, they can call us on the phone and ask questions to a live person in the U.S. Not many other user-oriented websites have a toll free number for members to call and say, “Hey this person stole my identity”, or “This person is cyber bullying me”, or “I have a question on privacy settings”, or “This software is very confusing.” I think being able to have a global approach while at the same time bringing that personal touch is something very unique that we’re bringing to the table. This combined with our language base separates PerfSpot from others.
How do you think social networks will make money in the future?
I
strongly believe that we’re going to see a dynamic shift in advertising
strategy, with less of a ‘push’ type of advertising technique in terms
of banner advertising, and more of a ‘pull’ type of advertising
technique, which would include widgets, mobile applications, and new
ideas in that vein. CTR’s keep dropping for
standard banners ads that a lot of sites in the US run. I think what we
and a lot of other social networks are trying to accomplish, is a
philosophy in which we present an offering to consumers that is not
bombarding them, but instead embracing them. You see that social
networks are teaming up with Fortune 500 companies and offering
consumers downloadable applications which allow them to interact. And
the companies are paying for that opportunity to engage customers. Say
the average rate for a download application in the U.S. is $2. So as a
monetization strategy, would you rather present an engaging, branded
widget for someone to download and get paid $2 when they do, or just
serve a banner a couple of thousand times, and hope your users click or
act?
What do you think is going to separate the winners from the losers in the social networking race?
I
think there are going to be 5 to 7 main networks worldwide that are
broad based, that will flourish. The rest are going to have a difficult
time unless they verticalize or get into a very specific topic, whether
its career-oriented, medically-oriented, or so forth. And I think it’s
going to be very difficult down the road for someone to create an all
encompassing social network from scratch.
I do believe there is a very promising market for verticalized social networks in industries that have a demand for it, a demand that the existing networks will never be able to serve. I also believe that the white label social networking site part of the business is extremely competitive and I think you’re going to start seeing a lot of consolidation within that industry as well.
Are you currently profitable?
Yes, we have a ~25% profit margin. We were profitable in month three.
You may be the largest, most unheard of social network out there. Is the press missing something?
We’ve
taken a different tack and kind of stayed away from the press, for now.
We don’t have a PR budget, we’re not venture backed, and we’re not in
the Silicon Valley, so we tend to be forgotten by that tight-knit
community. We simply want to offer a service to our members that gets
better every day, every week. Eventually we’ll be able to penetrate
more of the U.S. market and maybe get a little more attention, but for
now we’re just concentrating on creating a safe global community.
- Interview with PerfSpot International Marketing Director, JOSH GRAY
What is the founding story of PerfSpot?
PerfSpot
started as a marketing company. We ran co-branded small events where
photographers handed out business cards and we decided to create a
social network around the idea to let people go back and check out
their pictures from parties and meet other people from the party. And
that’s how PerfSpot.com started.
We went from being a small website to absolutely catching fire and growing into one of the fastest growing social networks in the world. Now we’re at somewhere around 20 million members, we get about 46 million uniques a month and our site is translated into 50 different languages and is in over 200 countries.
Tell me more about the parties.
Right
now we have over 300 photographers coast to coast that go out to events
in Las Vegas, Scottsdale, Arizona, New York, Miami, all the hot spots,
and take pictures for the site. We call it PerfNights. Perfnights is
the part of our site that caters to the upper crust all over the world.
How would you say PerfSpot is differentiated from the likes of a MySpace or Friendster?
Our
site is very uncluttered, it’s very clean and easy to navigate. The
site demographic is over the age of 21, 40% of our user base earns over
$40,000 a year. So we’re a slightly older and more affluent crowd.
We’re really after a certain quality of member.
How does PerfSpot make money?
Advertising
pays for most of the services that we offer for free including the
unlimited document hosting. Members can host as many Word documents,
Excel spreadsheets, PowerPoint presentations and photos as they like
free of charge. There are various sponsorships that are also available
like skinning the home page or widgets which are a really hot topic
right now.
Do you have any users and communities based around advertisers?
Mostly
what we have is a community that is fun loving and loves entertainment.
So a very small percentage (about 10%) within social media are actually
those brand evangelists that we’re talking about. I think in the future
we’re going to see a lot more of the brand interacting with the
consumer one on one through our community.
It
seems like the younger generation are especially capable at tuning out
banner ads. Do you filter your advertisers? Do you have a particular
kind of advertiser that does well on PerfSpot?
A lot of
people are becoming more banner blind. The days of static banners on
static pages are pretty much over. Advertisers that have been most
successful on PerfSpot have been those that get their brand onto the
user’s profiles. The users become the evangelists. Widgets and
applications are really coming up to answer the call of advertisers to
get that message across and to make that action happen.
What are your plans for the rest of this year through 2009?
One
exciting project that we’re working on right now is implementing open
social. Within the next 2 weeks we should be fully compliant with
version 0.7. We have several other goals for our site that are more
internal and I can’t talk about right now. Obviously, we want to grow
as big as we possibly can. Right now we’re adding 40,000 new members
daily and we would like to see that number double within the next 3
months.
