business advice | Paul Wallbank - Communications Professional

The business of denial

Denying market realities is rarely a good business move

Denial is a powerful sedative, it allows us to trundle dozily along a well worn patch oblivious to the reality our comfortable world has changed.

Last week’s claim that youth is fed up with the iPhone by Nokia’s Niels Munksgaard – who has the wonderful title of Director of Portfolio, Product Marketing & Sales – is a great example of how far and how long denial can continue while there’s still money to pay executive bonuses.

Canada’s beleaguered Research In Motion, manufacturers of the Blackberry phone, showed the same delusions when they released their Playbook tablet computer with the declaration Amateur Hour Is Over.

The only amateur hour was in the hubristic minds of RIM’s marketing team.

While profits keep flowing big organisation can afford delusions – Google can indulge their social media fantasies while the Adwords rivers of gold continue to flow ever faster and Microsoft can continue to indulge their delusions while their Windows and Office products remain immensely profitable.

Microsoft’s “droidrage” campaign, designed to embarrass Google’s Android mobile phone platform, is part of that delusion; for Microsoft’s campaign to work they have to prove there is a widespread Android malware problem, show their system isn’t prone to the same flaws and – most importantly – have enough product on the market to sell to those disillusioned Google customers.

Such a negative campaign has many fallacies – it assumes there are widespread security problems in Android, that Microsoft will pick up disaffected Google customers and there are enough Microsoft based products to grab those sales.

Probably Microsoft’s biggest problem is the assumption that customers actually care about that stuff – for years Windows dominated its market despite being riddled with computer with security holes and malware.

Microsoft succeeded because their competition was delusional; the best example being WordPerfect claiming graphic systems like Windows were a fad at a time when an inferior Microsoft Word was gobbling up their markets.

By the time WordPerfect realised their error and released a truly dreadful WordPerfect for Windows it was all too late, like a stagecoach company realising the motorcar is here to stay.

The problem for businesses in denial is that reality eventually does bite; plenty of people in the newspaper industry believed their advertising based model was secure and profitable – indeed many of the cosseted managers in that sector still believe it is – which now leaves them struggling in a changed world they thought they could ignore.

Denial among incumbents is a great opportunity for newer, more flexible players; for years mobile phone and tablet computer manufacturers were in denial about the usuability of their product – Apple proved them wrong and now commands the most profitable chunks of those markets.

Being the village blacksmith or a buggy whip maker was a good business to be in at the beginning of the 20th Century. Thirty years later those block boys and saddlemakers who hadn’t made the jump found themselves out of work.

It’s going to be interesting to see will be this century’s buggy whip manufacturers.

Quitting our email addiction

What can we do to reduce the size of our electronic inboxes?

This post originally appeared in the Xero Accounting Blog on December 9, 2011.

With 74,000 staff, you’d expect the CEO of French technology company Atos to be buried in email, but Thierry Breton hasn’t sent an electronic mail message for three years.

As the US ABC news service reports, Atos and Breton are implementing a zero email policy for their employees, steering them to use instant messaging and collaboration tools that reduce the need to send attachment heavy messages.

Breton claims only one in ten of the 200 messages his employees receive each day are useful and 18 percent is spam which – given some security companies estimate over 90% of world email traffic is unsolicited messages – shows Atos has a pretty good spam filter.

Email has been one of the main applications of business technology for the last twenty years, so how feasible is it really to move away from the inbox as being the first and last thing you check each day?

Instant Messaging

The ability to send quick messages between computers has been around since they were first networked in the 1950s but consumers and business largely ignored these clunky features until they were made popular in the late 1990s by the web based AOL and MSN Messenger services.

Most business communications platforms like Microsoft Office, Google Apps and Novell Groupwise have an Instant Messaging (IM) tool built in which can be easily turned on.

None of this is new technology and it’s probably one of the most used business features in the Skype Internet telephone service.

A downside with IMs is they generally demand immediate attention and can distract someone from their work. They also leave detailed logs so don’t for a minute think your rant about a customer or staff member hasn’t been recorded.

Social media

Many of the social media tools have their own built in instant messaging with LinkedIn, Facebook and Google+ having their own services with Google’s service offering the Hangouts feature to create impromptu video conferences.

By definition Twitter is an instant messaging service offering both public and private channels. The Yammer platform is a grown up corporate tool that offers all the social media functions for a business environment.

The downside with using social media platforms as mission critical business tools is their reliance on the best efforts of external providers that can raise security and reliability issues.

Wikis

Atos makes specific mention of their company wiki. Simply put, a wiki is a website that can be easily updated by anyone with permission to do so.

It’s possible to lock wikis, restrict access or to undo any changes that aren’t suitable so all the information is controlled and subject to review. These can be run on your own office server or hosted on an outside cloud service.

Wikis are a fantastic tool for building a corporate memory and developing standardised procedures and policies across an organisation.

Collaborative tools

One of the big changes in the modern office is the rise of cloud office software services like Google Docs, Basecamp and – of course –Xero Accounting that allow people to work together on the same files at the same time.

In the past, office software has locked individual documents while one person used them and that aspect alone has probably been responsible for many of the emails spinning around corporate offices.

Another benefit of the new breed of collaborative tools is they make it easy to control documents as all team members are working only one version of a file, meaning there’s no uncertainty of who has the latest version.

External risks

There are some outside risks with some of these services as they are cloud based so Internet access is important and there can be some questions of security and reliability with trusting processes to outside providers.

Email itself is evolving into a cloud based commodity as many businesses move to Gmail or hosted solutions rather than running their own email servers.

If those external risks are a concern, then it is possible to run these services on your own networks although most businesses are comfortable with outsourcing their technology.

Discovery

One of the first things that jumps to mind from a business IT point of view is that moving to a non-email environment reduces the risk of having to provide masses of data in the event of a legal dispute.

Many organisations have been caught out by a “smoking gun” message hidden within the pile of emails sent within an organisation every day.

The reality is that instant messaging, wikis and collaborative tools all leave their own “digital fingerprints” and if anything the non-email platforms may make it harder to hide evidence from a determined investigator.

Outside parties

Atos aren’t banning electronic mail with outside parties though, with a company spokesman quoted saying their goal is focused on internal emails rather than those from outside the company.

This makes sense as email is still a key business communication tool and not using it to talk to suppliers and customers wouldn’t make sense. For most organisations such a ban would make it impossible to send invoices.

Email is a key part of business and probably will continue to be, what we are seeing though is an evolution of how it is used in the workplace as new tools are developed.

The last word goes to Thierry Breton who said when announcing the policy, “We are producing data on a massive scale that is fast polluting our working environments and also encroaching into our personal lives”. He has a point.

How are you managing your business email and would you abolish it if you could?

Failing our customers fast

Does fail fast mean we get ahead of our customers?

The New York Times suggests the new Amazon Kindle Fire could be the Edsel of electronic devices, Twitter’s new interface is met with dislike and accounting software company MYOB’s latest update receives a universal thumbs down.

At a time when software tools, online publishing platforms and contract manufacturing mean we can get products quickly to market, it’s easy to get ahead of our customers and even our own quality control.

Having the ability to get a something new out at low cost has given rise to the “fail fast” philosophy.

While “failing fast” is changing the way industries work while giving rise to a whole new breed of innovations and entrepreneurs, we want to make sure we don’t fail our customers too badly or too often.

Fading markets, falling margins

Are we fast enough to recognise when our business is changing?

“They don’t pay for us to go to trade shows anymore,” lamented a journalist at a recent industry PR event. The era of international trips and freebies is over for most technology journalists and its passing is mourned by many of them.

Media junkets, industry conferences in exotic locations and management retreats to exclusive resorts are what businesses with fat profits can afford. Most of the tech industry is past that point as most of the sector becomes commoditised.

Slowly, vendors come to understand what a commoditised market means as Acer have with their announcement they will stop selling cheap systems while others, like Apple, have managed to avoid that trap entirely.

As technology changes, cheaper manufacturing locations appear and consumer preferences change many businesses will find their markets change. Some will identify those changes early and change course while others will wonder what has happened to their fat margins and why they can’t afford management, client or media trips to the Pacific or the South of France anymore.

That’s good for consumers, but a terrible thing for those managers who are little better than corporate bureaucrats and their friends in the media.

Interestingly, it’s the jobsworths and the overfed incumbents who are the slowest to recognise when their businesses are changing which is why there’s so much opportunity for smaller, smarter enterprises.

Who the hell do you think you are?

The romantic delusions of managers and entrepreneurs

“We have a startup ethos,” proclaimed the manager of a huge organisation funded by the government.

It was the third time this month I’d heard about a “start up ethos” from managers of ventures backed by government or corporate money and it’s interesting that this thinking like a cash hungry startup has become a badge of honour among those who have never really lived or worked that way.

At a time when we’re glorifying twenty something entrepreneurs it’s understandable a middle aged manager of a large, conservative and bureaucratic business might want to grab some of that glamour.

Where does this idea of being a start up take an organisation that is anything but entrepreneurial?

The entrepreneur myth

Right now we’re obsessed with the cult of the entrepreneur; many people are getting rich on selling the idea if liberate yourself from the corporate cubicle and buy your doughnut franchise then in a few years time you’ll be sipping daiquiris with Richard Branson on his private island.

For most of us, the tough reality of a building a new business is we are going to work very hard and the odds are stacked against us succeeding; that’s the risk-reward equation that underpins the free market economy – you take the risks and if you’re successful you reap the rewards.

Many people though don’t have the appetite for taking those risks; they are happy working for a wage, paying off a mortgage and getting a nice safe pension at the end of their career. There’s nothing wrong with that.

Similarly, the majority of business people have no desire to be the next Richard Branson – most are quite happy for their doughtnut franchise, computer repair company or dog walking service to create a decent living and saving for their family. If the business is worth a few bob when they retire that’s a bonus.

Bureaucrats matter

The success or otherwise of a society depends upon the mix of established institutions and the ability of entrepreneurs to realise new ideas, take the balance too far either way and you have either an inflexible or unstable economy.

Bureaucratic managers, their processes and their established procedures have their role in a modern society, as do the risk takers, the business buccaneers and even the snake oil merchants selling dodgy ideas to frustrated corporate employees.

The danger of business delusions

Misunderstanding who, or what, you and your organisation fits into this spectrum is a risk in itself; the manager of a big corporation or government agency who thinks they can pivot a business the way a start up can, is probably risking their own career and by falling for the romance peddled by snake oil merchants they are risking their savings.

Similarly the small business or real entrepreneur that acts like a government department is probably squandering their market advantages by being slow and unresponsive.

In many ways, seeing a manager in a big corporate environment indulging in Walter Mitty like fantasies of running a start up is somewhat touching – the real danger for those bigger organisations is when their leaders start believing they are something they aren’t.

Romantic delusions are never a good asset when managing a business.

The online business playground

This article originally appeared as The Business Playground on Smart Company.

Last week, I was lucky to be invited to talk about digital citizenship with school kids and their parents in the Griffith area.

The concept of “digital citizenship” is pretty simple – your behaviour online should be no different from how you’re expected to conduct yourself in the playground or business world.

When talking to some of the parents about the issues their kids face, it stuck me just how seriously most of the concepts like being accountable for your behaviour, safe computing and avoiding bullying are as applicable as much to business as the schoolyard.

Bullying in the workplace is pretty common and – as the tragic case of a young waitress who killed herself after being bullied at a Melbourne café shows – employers are directly responsible if they don’t control it.

While the Melbourne case didn’t have a digital aspect, what employees put up about their co-workers on social media sites or on blogs or in emails can be bullying as well.

Making things worse when social media or the web is involved is that most of the evidence is in writing and difficult to erase.

Safe computing, such as creating strong passwords and not sharing them, is one important part of being safe online.

Just as kids get into trouble by sharing their passwords with their friends, so too do businesses that common login details for their key systems and services.

Some weeks ago there was the story of a Texas waterworks that was hacked because their systems had a simple password.

No doubt the login was kept simple to make things easy for staff and management, just like a 12-year-old sharing their Minecraft or Moshi Monster accounts with their big brother or best friend.

Being accountable for your behaviour is probably something both kids and business people struggle with; just as kids don’t understand that taunting their friends through a Facebook page has real life consequences, many managers and entrepreneurs forget that laws and professional standards apply online as much as they do in any other area.

Of course in business, it’s not just ourselves that can cause problems – our staff can get us in trouble too. Employees need to know that upsetting co-workers, customers, suppliers and competitors is unprofessional and can cost them their jobs.

Having a staff acceptable computer use policy makes it clear employees are responsible for work related comments they make even on their personal accounts outside of working hours is now essential for all enterprises.

In many ways, business is just like being in the playground. It’s usually fun, but when things go wrong it can be painful in many ways.

Just as schools are on the look out for digital trouble among students, watch out for similar pain points among your staff.

The auctioneer’s dream

“One day I’m going to buy a whole pile of junk PCs from a company that’s gone bust and sell them at an auction like this,” said Mark, an old business partner, as I lost a bet that a group of almost valueless laptops wouldn’t be sold for more than $10 each.

The media release behind yesterday’s article on protecting USB data found on attracted criticism about Cityrail’s attitude towards privacy – which is fair enough as good manners, if not privacy laws, dictate you’d wipe someone else’s data before giving a drive away.

More notable in the IT News article is the comment that Paul Ducklin, chief technology officer at Sophos, “was shocked when the auction price was nearly twice the average retail value of the USBs.”

Paying over the odds for second hand technology is a trap many fall for, the average consumer doesn’t comprehend just how much technology depreciates or the risks, such as malware or defective hardware, that could be found when you finally take that computer bought at auction home.

The main attraction of auctions is that people believe they are getting a deal, the idea things were dirt cheap on eBay drove the service’s growth for much of its first ten years.

Of course that hasn’t been the case for some time and many people paid a lot of money for junk they didn’t need even when things were “cheap”.

The only way to really get a deal at auction is to know the retail price, then factor in realistic depreciation and the risk of buying a dud.

My rule of thumb at those IT auctions I used to attend with Mark was that when the bids passed more than a third of the retail price, people were overpaying. I rarely bought anything except office chairs and the odd filing cabinet.

I haven’t heard from Mark for a while, I suspect his business plan didn’t work out when he overpaid for some surplus equipment from a liquidator.

Business is fine

Everything is good in business, until one day it isn’t.

“I don’t need high speed broadband,” snarls the businessman in a country town, “business is fine as it is.”

A hundred years ago this year the iconic Australian horse coach company Cobb & Co went into its first bankruptcy as it declined from being the dominant transport service of rural Australia.

Cobb & Co was founded in 1854 by four young Americans in the Victorian gold rush and grew around the expansion of Australia’s rural farming and mining industries. By 1900 the company had 9,000 horses travelling 31,000km (20,000 miles) every week.

By 1924 Cobb & Co was gone. Displaced by the motor car and restrictive state government rules designed to protect their railways.

Many businesses, including the management of Cobb & Co, thought the motor car was a fad. No doubt many at the time also thought electricity was dangerous and unnecessary.

Business worked fine as it was when stagecoaches carried the mail and bullock carts carted the crops, steam engines were fine to power the farms and businesses while the telegraph was just fine for those times when a three month letter to your customers or creditors in London or New York wasn’t quick enough.

All those businesses went broke. They didn’t go broke fast, it was a slow process until one day owners realised it was all over and then the end came surprisingly quickly.

That’s where many of us our today – cloud computing might be the latest buzzword, social media might be a distraction for coffee addled children of the TV generation and the global market might be just a way to dump cheap goods and services on gullible consumers – but markets and societies are changing, just as they did a hundred years ago.

Sure, your business doesn’t need fast Internet. Business is fine.

Stage coach image courtesy of Velda Christensen at http://www.novapages.com/

The dying Yelp of Sensis

Can a social review site save a fading directory company?

This story originally appeared on Technology Spectator

Fifteen years ago Sensis, the directories arm of Telstra, was untouchable. A listing in the Yellow and White Pages was essential for every business and Sensis’ monopoly was a true river of gold.

Sensis’ launch this week of an Australian partnership with the US based review site Yelp is Telstra’s desperate throw of the dice to survive in a market where its directories business has become irrelevant.

Attempts to stay relevent

There have been many attempts by Sensis to overcome this erosion of its core maket including purchasing an IT services business and unsuccessful forays into publishing and online search with Trading Post and CitySearch.

Probably Sensis’ lowest point was the squandered millions of dollars and years of management time wasted in trying to compete against Google after Telstra CEO Sol Trujilo made the sneering comment of “Google Schmoogle”.

Declining values

At the time of Trujillo’s comment in 2005 Sensis was valued at $10 billion as a stand alone company. After last week’s disappointing results that saw revenue drop 18 per cent for the year, the value of the division is an optimistic $5 billion.

Yelp itself is unlikely to help Sensis’ revenue woes. Despite filing for a $100 billion public offering, Yelp has never made a profit in its seven years of operation. Although licensing their service to failing directory companies around the world might prove to be a handy revenue stream.

That lack of profit – on North American revenues that are tiny compared to Sensis’ Australian cashflow – shows the fallacy in the social media business model that many of the popular online services are faced with.

Users of social media services like Yelp are looking for a community of trustworthy and relevant referrals. The directory sale model is based on displaying the biggest advertisers prominently, which is exactly what social media users don’t want.

Yelp also comes into a marketplace already crowded with competing, established services like Word Of Mouth Online, Eatability, and the faster moving social media platforms like Foursquare.

Competitors’ Missed Opportunities

In many ways Sensis has been lucky in that most of the competition has been from smaller upstarts while their bigger competitors haven’t capitalised on the market opportunities.

Google Places, the biggest competitor to the world’s Yellow Pages directories, is mired in bureaucracy and isn’t doing a good job in telling business its story while Facebook’s local search function isn’t getting much traction either.

Of the local Australian incumbents, ninemsn isn’t interested in local business with its international partner Microsoft not offering an Australian product and the local team preferring to deal with big spending advertising agencies, while Fairfax squandered its early advantage and eventually sold the CitySearch service to Sensis.

News Limited’s True Local is having limited success while it struggles with the transition from print to online. At News’ recent launch of its new digital platform, the company’s executives stated they expected journalists to develop a “digital mind”.

Lacking a Digital Mindset

That “digital mindset” is the key to the problem at companies like News Limited, Fairfax and Sensis. In a marketplace where customers, advertising and readers have moved online it requires management, not just the lower workers, to “think digital”.

Sensis’ key problem is its management structures – and more importantly its sales teams’ commissions and KPIs – which are still based around its traditional business models that will make selling services like Yelp difficult.

The phone directory business model is a product of the 1920s and in many ways Telstra and the other Yellow Pages franchisees around the world should be grateful it has lasted so long.

Whether the phone directories that have been so profitable for phone companies can make it to their one hundredth birthday is an open question. One thing is for sure, bolting on an unprofitable and late to market social media service isn’t the answer.

The creative deadbeat

There’s some terrific excuses for not paying bills, some are worth collecting once the pain of extracting the money is over.

This post originally appeared on the Xero Accounting blog under the title “Sorry, we’re not paying you”.

“Your star readings were negative after you serviced my computer,” the astrologer said sweetly, “so I’m afraid I will not be paying you.” Then she hung up. It was a good start to the week.

In business, bad payers are an unfortunate fact of life, one of the redeeming features is most of us end up with a great collection of reasons deadbeat customers give to justify not paying their bills.

Along with the downright strange is the quasi-legal; “your tax file number is in the wrong format, so we can’t pay your invoice” is one of the better excuses I heard in the years of running my business.

“I gave your technician a cup of coffee while she was here, so you’ll have to give me a credit” was another great claim.

A teacher once threatened to report my business to her union on the basis we were exploiting low paid women workers. The funny thing was we’d cut her a big discount because I realised she’d struggle to pay the full rate.

Big boys’ excuses

Those excuses were from smaller customers, but the corporate sector can be no better, some of them treat their suppliers as banks who give them an interest free loan

One multinational suffering cash flow problems decided to pay all bills after 270 days, regardless of the agreed payment terms. They didn’t bother with excuses and their accounts team were blunt – if suppliers didn’t like it, they could sue and wait five years for their money.

That company had its come-uppance when every supplier in the country put the company on a cash up-front basis to avoid a nine month wait.

Another big corporation decided to tangle their contractors in knots by implementing an arcane system involving submitting an invoice by the 30^th of month one, backing it up with a statement of account by the 20^th of month two paying thirty days later. Make a mistake or miss a date and the whole cycle started again.

Probably the most irritating excuses can come from government departments, a common one being, “our budget has run out for that item, so we can’t pay your invoice until the next financial year. Would you be able to reissue it under a new purchase order for paperclips?”

Chasing the bad news

A truism with collecting debts is the longer we let them slide, the less likely it is they will be paid so we have to be on the ball in chasing those late payers.

In Xero’s accounting software you nominate the due date when creating the invoice and this will appear on the copy the customer receives.

As soon as the due date has passed without payment, follow up with a reminder or a phone call.

Whenever you have a slow payer, it’s best to talk to them. Showing you watch our money closely indicates to the customer that you are serious about your bills.

Identify problem customers

The good thing about late payments is it’s a pretty reliable guide to who is a bad customer – if they constantly pay bills late, then you don’t need them in your business life and it’s time to get rid of them.

More insidious is the good client gone bad – a previously good payer who suddenly starts making excuses could be in financial trouble. If so, it’s worthwhile making sure your business isn’t too exposed if that client suddenly goes under.

At one client the secretary insisted on paying most of our bill out of petty cash. Two weeks later the company, a Scotch whisky broking service, closed shop and left thousands of angry customers and suppliers out of pocket. It took the creditors ten years to get a fraction of their money back and the secretary did us a great favour.

Not every late payer is a bad guy though, even in the best of times good customers can hit a bad patch so making arrangements with a good customer who has hit a rough patch can be a good long term strategy.

Incidentally, the astrology lady eventually did pay her bill. Attached was a note explaining something about planets transiting Scorpio during a waxing moon. We never heard from her again.

At least with bad payers we get to have a laugh at their excuses later, what the best stories you’ve heard from deadbeat customers?

Comparing local review and search sites

How do the local search services compare?

With the Australian launch of local search and recommendation site Yelp, it’s worthwhile comparing the different sites to see how well they worked.

The sites work in different ways, some – like Sensis Yellow Pages and True Local – are online directories that search just the title and description of business.

Yelp, Foursquare and Word Of Mouth Online, are socially based and derive their searches on the content and number of community reviews. Their algorithms, the formulas to figure out what customers are looking for, are more complex than the basic online directories.

Most complex of all are the hybrid searches, notably Google Places and Facebook Places, that build local upon their search and social media data.

Each model has it’s own strengths and weaknesses which shows when we do a search. Due to time restrictions we only did two.

Looking for brunch in Neutral Bay, NSW

The first search was using what somebody might be expected to search for on a casual weekend or holiday morning. Neutral Bay and surrounding suburbs have plenty of cafes catering to the brunch crowd so it should be expected to return plenty of hits.

Yelp

The new contender only found one local result and the rest being on the other side of the Harbour Bridge, including one at Bondi Beach which may as well be in the Upper Amazon to the average Sydney North Shore dweller.

Interestingly, entering neighbouring suburbs changes the first two or three results to that suburb but the subsequent listings are the same remote locations as for the Neutral Bay query. This might indicate popularity with the current Yelp users or may be part of the package merchants get when they pay for a listing.

True Local

News Limited’s True Local disappointed one cafe in the district was identified and the number one result was in the city.

This poor results are probably due to the word “brunch” not appearing in the local cafes’ descriptions or titles, but this is a serious weakness for True Local, particularly in a district where they dominate the local news media.

Google Places

Surprisingly, Google Places returned an extremely poor result with no local businesses found.

Again, this is probably due to the failure of business owners to ensure keywords are entered in their business description and it illustrates how Google is allowing an opportunity to pass them by.

Facebook Places

Nothing. Nyet. Zip. No brunch for you.

Yahoo!7

Another poor result that has just scraped information off the web. It shows the weakness of the Yahoo! and Channel Seven joint venture which, like News Limited, is letting opportunities pass.

Bing/NineMSN

Probably the most disgraceful of the results, NineMSN returned two cafes for the whole of Sydney, a city of four million people.

The second result entailed, according to Bing’s directions, a 38km drive timed at an optimistic 23 minutes involving $9 in tolls and an illegal u-turn.

NineMSN’s performance shows just how irrelevant Microsoft has become in the online space and their Australian joint venture partner is more interested in selling big integrated campaigns to advertising agencies.

Given NineMSN and Bing are the default browser and search engine on nearly two million computers sold in Australia each year, not having a local business strategy is squandering a massive opportunity.

Citysearch/Sensis

Founded by Fairfax, Citysearch could have been a great success combining the assets and readership of Fairfax’s metropolitan and local newspapers coupled with their experienced sales teams selling advertising space and subscriptions. Good management could have done this.

Sadly Fairfax was being run by Professor Fred Hilmer and his army of power suited McKinsey consultants and Citysearch was eventually sold for a pittance to Sensis, who have allowed it to shrivel away as the zero result for our search shows.

Eatability

Eatability was a genuine surprise, returning no brunch establishments in the area. The only thought is that no cafe in the neighbourhood has the word “brunch” in their keywords. Still a very poor result.

Urbanspoon

The web version of Urbanspoon returned the most bizarre result, correctly finding one local cafe but misinterpreting the address as being in Bankstown on the other side of Sydney.

Urbanspoon’s iPhone app returned a far better range of results in surrounding suburbs although it only found one cafe actually in Neutral Bay which wasn’t the one incorrectly found on their web app, which didn’t appear at all.

Word of Mouth Online

Word Of Mouth Online delivered the best result of the web pages with two of the first three results being relevant. Of the other seven, they met the criteria of being within a 5km radius of the location which in Sydney can be a 12km drive.

The results would have been better with more local establishments but it appears the keyword “brunch” hasn’t been used by many of the WOMO reviewers.

Note: After the review I was contacted by the founder of WOMO, Fiona Adler, it appears some of the reviews have have been updated in the meantime. I’ve changed the results below, but the left the one above as it was correct at the time of the review.

Foursquare

Like Yelp, Foursquare relies heavily on users’ contributions and this shows in the flaky, almost useless results for our search terms on a web based search.

Foursquare’s iPhone app was far more efficient, identifying a range of good venues in the area which were ranked according to friends’ recommendations.

Sensis/Yellow Pages

Again, “no brunch for you.” It’s almost scandalous that Yellow Pages has no entries at all for “brunch” for an inner Sydney suburb.

Redoing the search

Clearly the term “brunch” is problematic in all the services, so as a check here’s the relevant first page results for other search terms on each of the services;

Service	Café Neutral Bay	Breakfast Neutral Bay	Lunch Neutral Bay
Yelp	7/10	2/10	7/10
True Local	9/30	0/30	0/30
Google Place	10/10	0/10	10/10
Yahoo!7		not relevant
Bing/MSN	3/10	0/10	0/10
Citysearch	6/10	3/6	4/4
Eatability	40/50	8/8	23/31
Urban spoon	3/3	0/0	0/0
foursquare	3/20	1/20	1/20
WOMO	8/10	2/10	5/10
Sensis	7/10	0/10	0/10

As we found with the earlier search, Yelp was somewhat inconsistent and no doubt the social aspects will see it improve as more users come on board, the results are highly dependent on the terms used by reviewers and this will affect the search results.

True Local’s score was surprisingly bad, the search for “cafe” found 12 places but three are long closed. “Breakfast” listed B&B accomodation and “lunch” found outlets in the city and Eastern Suburbs.

Google Places also disappointed on “breakfast”, picking up some B&B establishments along with some city cafes. This is almost certainly due to keywords missing in descriptions.

Yahoo!7 doesn’t get a rating as all it does is scrape other sites and often refers you to other search services. They are just going through the motions.

Microsoft and NineMSN’s service again failed dismally; the “cafe” result was poor, “breakfast” looked for B&Bs and “lunch” amazingly didn’t find a thing in Neutral Bay.

Citysearch’s results for “cafe” found nine places, three of which are long closed which indicates the lack of maintenance their database receives. Encouragingly, Citysearch was one of the best performers for lunch and dinner, albeit only on four and six places found.

Eatability had by far the most impressive number of results, however a large proportion of the places have closed and are not flagged as such. This probably indicates a lack of maintenance by the owners.

WOMO was good and like Yelp their results are highly dependent on the words used by reviewers, so key words could be missed simply because reviewers didn’t use them.

Sensis performed well on “cafes” except that three of the ten listed were closed. The lack of results on “breakfast” and “lunch” is due to no places having those words in their name.

Conclusions

This comparison is not scientific, being based on a narrow search and small sample size, but there’s a few things we can take away from the experiment.

Search is still young

Right now, search is still a crude tool.

From the results, we can see that the keywords used by reviewers and businesses matter. If the public are looking for “brunch” and that isn’t on your cafe’s website and online listings, then you won’t appear.

Over time that will change as the web and search engines get smarter but right now search is still at a basic stage in its development.

You have to be there

Customers are using these tools to find what they need and if a business isn’t listed, then they can’t be found. Setting up a profile and getting some favourable reviews is important.

The business who are being pro-active are the ones who are succeeding.

There’s a lot of opportunity

It’s no surprise that older organisations like Fairfax, Sensis and Microsoft are failing to understand local search. What is suprising is how poorly the newer players like Google and Facebook are doing.

This opens up a lot of opportunity for services like Yelp and Foursquare in adding value to the data already available through services like Google, Facebook and Sensis.

Yelp’s tie up with Sensis makes a lot of sense from the US company’s point of view; they get to ride on Sensis’ sales team, maybe some licensing fees and – most importantly – they can access the richest, albeit not always accurate, database of Australian businesses.

For small, local business there’s a lot of opportunity as well. By getting online and registered on these services, it’s possible to become more visible and improve your competitive position.

The market’s young and there’s a lot of potential for disruptive players. It will be interesting to see how incumbents deal with the threat.