Wall Street has fallen hard and fast for this pitch: a single website that caters to virtually all small-business needs. Witness the meteoric rise of AllBusiness.com, BizBuyer.com, Onvia.com and Works.com. Meanwhile, Workz.com has quietly carved out a niche telling businesses how to sell online. And in May 2000 it will introduce its own Marketplace. Here’s how President David (Johnson) plans to take on the Goliaths.–SJ
Seattle24x7: David, what does Workz.com want to be when it grows up?
Johnson: (Laughs.) We want to do, or solve, anything related to e-commerce. There are no companies out there focusing only on the e-commerce needs of small businesses. We’re going deeper, rather than broader, and we think that will provide more value to the end-user.
Seattle24x7: Won’t the comprehensive small-biz sites roll all over you?
Johnson: We’re going to let those guys duke it out and spend all kinds of money on advertising, while we come in under the radar with a slightly different business model that’s more customer-oriented. I think the “broad” business model is designed to appeal more to venture capitalists and the [stock] market rather than to provide a real valuable service. For instance, they’re often listing just one vendor for particular products and services.
Seattle24x7: But you, yourselves, now list only one vendor (at times one of your advertisers) in quite a few areas. How will the new Workz.com Marketplace be different?
Johnson: For one, we’ll offer products and services from multiple vendors, and we’ll be very narrowly targeted on e-commerce. Want to buy banner ads? We’ll list at least five sellers and have a low minimum–say, $500. Want ad-service software? We’ll give you some free options and some for pay. We’re allowing people to do comparison shopping in niches that are too small to justify a dedicated website. Also, we’ll spell out which vendors are paying us to list their products. Workz.com will get a cut of all transactions, but all transactions will be processed at the vendors’ sites, so it won’t create extra back-end work for us.
Seattle24x7: Where’s your revenue coming from?
Johnson: Mainly advertising. We’re charging $30 to $200 [per thousand impressions], and we can probably sell three times as much because of the demand. Although our site traffic isn’t as high as we’d like, we have a very defined audience-people in education mode, and that’s a great time to put a purchase proposition in front of them. We now have close to 40,000 members [non-paying], and they can opt in for e-mail newsletters, discussion lists, etc. We also get some revenue from syndicating our content; Inc.com, for instance, recently signed on. And we’ll soon have the Marketplace transaction fees.
Seattle24x7: Is Workz.com positioned as a buyout candidate?
Johnson: No, we’re talking pre-IPO. We think we have a better long-term business model than Onvia. We’re using very relevant content to pull people in, and we’re getting paid for that through advertising, syndication and sales-transaction fees.
Seattle24x7: How desperate are you for more funding?
Johnson: We’ll soon be getting more funding. But even with no additional funds, Workz.com is almost self-sufficient. Our biggest investor to date is Internet.com (NASDAQ: INTM). We have a low burn rate. We do our own advertising, relying mainly on “pay-per-click” online ads, where we pay only if someone clicks through to our site. We haven’t placed any ads in traditional media (newspapers, billboards, etc.). Based on the new funding, we’ll probably more than double our staff (recently at 30), and we’re looking to move out of our Pioneer Square offices into a bigger space by mid-year.
Seattle24x7.com: We’ve noticed you’ve lured away people from Freeshop.com, Microsoft, Seattle Times and CBS Radio. How?
Johnson: The usual: stock options and the chance to get in on the ground floor of a hot B2B.
Seattle24x7.com: When would you consider selling out?
Johnson: We’d love to get into an auction situation. But at this point, we’re not talking to anybody. We have a lot more to do to build this business.
Seattle24x7.com: OK, better let you get back to that.
Soula Jones is Content Chief at Seattle24x7.com
Give me the Workz.com
216 First Ave., South, Suite 260
Seattle, WA 98104
Biggest investor: Internet.com