SportsLizard Entrepreneur Blog

Wednesday, April 25, 2007

The Price Guide Mini-Business Plan

Last night around 2 AM I finished off the programming for the SportsLizard Price Guide...well you never really "finish" so I suppose I should say I got it to the point where I'm comfortable launching the site. I'm pretty sure it was Reid Hoffman, founder of LinkedIn who said something along the lines of "if you aren't embarrassed when you look back at the site you launched, you launched too late". I realize this is only the beginning, but nonetheless it's the end of an important chapter in the deployment of my latest project, one that I really think will define the ultimate success of SportsLizard and possibly my entrepreneurial success.

Here's my plan...all of it.

Why a Price Guide?

I think I've gotten a bit ahead of myself in my explanations as to WHY this is such a big deal. Everyone in the cards and collectibles industry uses price guides to determine the value of their card/collectible. This is important to know for selling, trading, and bragging rights about who has the most valuable card. They also subscribe to price guides for the news and articles about the hobby, but that is a distinctly secondary purpose.

For my entire life there have been two main players: FW Publications (which makes Tuff Stuff and Sports Collectors Digest) and Beckett. Both have made online versions of their price guides, but they are essentially the exact same as the print versions that come out monthly. As a collector, many times you have to rely on speculation and rumor to determine the value of something for a month or two until pricing comes out. Both have used email newsletters to release "first pricing" so you don't have to wait, but not for all products.

They both fail to take advantage of the ever changing internet. We've come to rely on "live" stock market updates, so why not a "live" price guide? They also both use questionable methods to determine their prices (surveying card shop owners and looking at eBay...and then adjusting as they see fit) which helps them "inflate" the value of a card to the point where it's NEVER worth even 75% of what they say it is.

I've known about this opportunity for a while, but never really had a solution. Oh, and to top it off, in doing my SEO keyword research I uncovered that "free price guide" is searched more than almost any other collectibles related phrase! And there are NO relevant results.

Our Solution

I had about 10 different ways I wanted to approach this, but I knew we'd need access to millions of data points, which could be problematic for a small company like Pure Adapt. Could our database store massive data like that? Could we efficiently query a database that large? Those questions were a bit out of my league and I wasn't really going to risk launching a product that had a chance of crashing when 25 people were using it.

The solution came with the Google Base API - Google Base (Froogle...or now Google Product Search) stores products from eBay, Beckett, and about 50 other cards/collectibles sites that makes up the majority of online collectibles sales (the only "huge" site that I know of that's factored out is Naxcom). By querying the API and mixing the data with SportsLizard's own data, we've got ourselves a pretty sweet and unique mashup that gives you a price based upon what it's really selling for.

In all honesty, I'm a much better programmer than I've ever been before and the technical capabilities of this app absolutely crush anything else I've ever done, including iPrioritize (although if you try it out you'll see I borrowed heavily from the iPrioritize infrastructure as a starting point).

Here are the highlights of it:

  • You search for a collectible by entering the collectible name and "negative" words that you don't want factored into the search. The output is SL's price, our confidence in that value (low/med/high based on standard deviation and sample size), advanced stats, and the individual items factored in (so you can refine your search with more negative phrases). It sounds like a lot, but when you see it presented to you it's very simple and not overwhelming at all.
  • There are two account types - free and premium. A free account gives you 3 searches per day and that's it. A premium account is free for 7 days, and then $4.99/month (in line with Beckett's online pricing).
  • A premium account gives you unlimited searches and lets you save items to your collection so that you can track trends, see the total worth of what you own, and export to PDF or Excel.

This was a very well thought out business model. It's similar to iPrioritize, except I picked up on a few things I've learned...primarily the importance of a free trial period. The 3 search/day limit is borrowed from SEOmoz.org and works well for their SEO tools so I "stole" it from them.

Marketing Plan

So just how are we going to spread the word about this bad boy? Well the existing SportsLizard infrastructure is going to be huge. Success for the price guide FEEDS the monster of SportsLizard - more advertisers, more people reading our content, more people searching for collectibles in our marketplace, etc. Here's the crux of what we'll be doing:

  • PR - this includes a well-written online press release, but more importantly will consist of me giving away premium accounts to influential people in the industry (many of which I already know). Getting forum owners, bloggers, and other key people on board is huge. I need them to be my marketing staff for me and spread the word.
  • Box Breaks - this one is going to be huge for us also I think. I mentioned it before, but the basic idea is we video tape us opening a box of cards (called a box break) and post the video on YouTube (1) and on our site. Other people do this and there's a huge cult following - people like to see what other people get out of a box. We'll also post the breakdown of cards on the blog (2), sell the best cards on eBay (3) and include an ad for SL in the auction text (4), and give the rest to local charities as a part of a "cards for kids program" (5). That's FIVE things that each box of cards will contribute to help grow SL.
  • PPC - I've never been immensely successful with Pay Per Click advertising, but remember how I said that "free price guide" is searched more than almost any other collectibles related phrase? Well since no one has a free price guide, no one has purchased these ads. They are dirt cheap and extremely relevant. Wohoo!
  • Continuing to write articles, contact potential sellers, and contact potential advertisers. SportsLizard's content is the main source of SE traffic and how I generally get to meet and interact with the community.

Why this will Succeed or Fail

I don't think anyone will disagree that this is a bad idea and something that there isn't a market for. The question is whether or not I can EXECUTE and turn this into a success. And if I don't, I'm going to have to look in the mirror long and hard at myself. This project encompasses everything I know well:

  • Stats. When people hear that I was an engineer, they think of a mechanical/civil/electrical engineer. I was an industrial engineer - one that uses data to optimize a process to make it as efficient and effective as possible. With that, I used to do fun things in college like use calculus to figure out the optimal layout of a manufacturing facility. But the same data analysis techniques can be borrowed and applied to ANYTHING (the reason I majored in it). This enables me to really dig into the data and understand sampling, distributions, and the impact (and validity) of what we're presenting to a user.
  • The web. Secondary to stats, I'd say the thing I know best is web design/web marketing/SEO/web development.
  • Sports Collectibles. Something I've been involved in my entire life - if there's an industry I know and understand how to exploit the flaws, this is it.

I think I am one of the only people in the world that has the background to make this happen, and that's an exciting thing to me. With the backing of my team, we are going to give this idea 100% and do everything in our power to make it work.

How could it fail? I only see two possibilities: we don't give it 100% and bail too soon (something I've done too much in my life) or the industry just doesn't want it/isn't ready for it. I don't believe that's the case, but the collectibles industry is archaic and anything is possible.

Why did I write this?

As you can tell, I picture this as a defining moment for me. It's the culmination of what I know best (come on, how else could you combine statistical analysis, web development, and sports into one) and if I can't make this work with the backing of my Pure Adapt teammates I'll have to take a step back and really evaluate the past 24 years of my life.

I want to look back at this as the beginning of something special, and I want to document the entire ride, so this is that start of that. Hopefully you'll learn something that will help you in your life or career.

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