The Big Winner

June 24th, 2008 by admin

Canada IT has a great story about the web company Geosign and the firm’s competition with Google:
http://www.canadait.com/cfm/index.cfm?It=106&Id=26146&Se=0

It’s unfortunate that the founder wasn’t able to comment due to pending legal action. Maybe he would have had a different perspective than the one offered by other insiders and investors. But that’s neither here nor there. With the information that’s given in the article, there are a couple of good points related to strategy and success.

1. Have a concrete business model. Business models always change and investors know that. Still, it seems easier to develop a compelling value proposition and make incremental improvements after tests.
From the article: Retracing Geosign’s origins through old news stories, Nye sounds like he spent considerable time searching for a business model. In early interviews, he described Geosign’s business in vague terms, suggesting it was somehow linking online consumers with local businesses. “The market is connecting buyer to seller, and up to now, the consumer has been left out,” Nye told the Guelph Mercury in 2001. He called his new technology “geosearching,” and added that his company had inked an arrangement with an Internet search engine, but wouldn’t disclose the name. Still, he told confidantes and investors that he had grand ambitions for Geosign extending far beyond Guelph, concepts that would create a business with huge upside.

2. Promote your business and how it will generate a return for customers, investors, and other stakeholders.
From the article: Not that anyone outside of a small circle knew of Nye’s plans. For the next five years he stayed out of the limelight. Even in a small city like Guelph, he and Geosign garnered no media attention.

3. Don’t make your revenue dependent on a single company
From the article: Instead of buying ads and keywords from Google, Geosign had always purchased keywords from the search engine company and directed the traffic to sites filled with ads from rival Yahoo! That meant Google was receiving millions of dollars from Geosign for access to its keywords, but didn’t know where the traffic was directed. Given the amount of money flowing to Google, most in Geosign thought the search engine would turn a blind eye.

4. Structure your company so your personal investments aren’t impacted.
From the article: Those close to Nye say he did very well financially with Geosign even before the American Capital deal, has a home in Barbados, and often uses a local service to charter private jets.

I don’t know the full story of Geosign, but from this interview Tim Nye sounds like an innovative leader:
http://frankschilling.typepad.com/my_weblog/2007/03/evocative_qa_wi.html

I wish him and his fellow Geosign people the best of success in the future. They had an innovative concept and I can’t wait to find out what Tim Nye and the other Geosign employees will be up to next.