Swipely and Blippy Take On Amazon, Mint and Facebook for the Most Valuable Web Data in History
A new share-what-you-buy startup called Swipely has announced it's pulled in $7.5 million in venture funding to take on Blippy, its better-capitalized rival. Both sites allow you to announce big purchases to your social networking friends, almost as if you'd given them a glimpse of your credit card statement.
The two startups, whose funding combined equals over $20 million, have elicited an unusual amount of skepticism: people are sharing what now? Kara Swisher at All Things D has suggested copycats like "Wipely," to record and share your bathroom-cleaning, and "Diaply" for diaper changes. (She goes on, but the joke only gets less funny from there.)
The real source of the incongruence, though, isn't the idea -- after all, plenty of inane Web ideas are hatched every day -- but the sterling list of backers behind both. Swipely counts Greylock Partners, Index Ventures, First Round Capital and deal-making angel investor Ron Conway, who helped seed Google (GOOG), Ask Jeeves and PayPal (EBAY). Is sharing your purchases that much of a golden egg, or are these guys crazy?
Despite obvious stumbling blocks, the answer is the former. Security risks are a formidable problem; Blippy accidentally let users' credit card numbers get crawled by Google last month, making them available to anyone. And sharing all the crap you buy with your whole social graph strikes many people as, well... indiscreet, to put it diplomatically. But those worries will be quickly outgrown.
That's because Swipely and Blippy are pinned on some of the most sound principles in social networking -- principles established by big guys like Facebook and Twitter. Note that the Swipely "feed" is basically a Facebook News Feed for material goods, and there's obviously some mutual benefit to all these "feeds," because people keep contributing (and reading).
Some brain scientists say that sending and receiving electronic missives generates a small dopamine rush in our brains -- just like the acts of buying, sex and eating do. Director of UCLA's Memory and Aging Research Center Gary Small says that for some of us, the sensation may even border on dependence (emphasis mine):
The same neural pathways in the brain that reinforce dependence on substances can reinforce compulsive technology behaviors that are just as addictive and potentially destructive. Almost anything that we like to do -- eat, shop, gamble, have sex -- contain [sic] the potential for psychological and physiological dependence.
I think "destructive" is a little overstated, but the principle remains: we humans like creating narratives about ourselves, and reading the narratives of others, because it feels good. Combining sharing and buying may double our pleasure.
All sorts of services are jumping on the purchase-history bandwagon. Yesterday I spoke to Mint.com (INTU) Founder and CEO Aaron Patzer, who showed me (under embargo) some of the site's coming updates. Patzer is fresh off a New York City "town hall" event in which he discussed debt management and savings techniques with customers. When I asked about the impetus behind the new features and, by proxy, the town hall meeting, he told me he wanted Mint to be able to "know what users are buying, because that data is very valuable."This kind of information used to be the guarded treasure of e-commerce giants like Amazon (AMZN), who could use their enormous customer purchase history to recommend better products to users and adjust what they sell.
Now others want in. The reason: knowing people's buying habits allows these sites like Blippy, Swipely, Facebook and Mint to offer hyper-targeted ads and strike deals with e-commerce partners, which creates something like a traditional advertising relationship on steroids. Instead of impressions or click-throughs, though, these sites are now offering the actual opportunity for customer purchases. Whether Swipely and Blippy can withstand the competitive efforts of Facebook and Mint remains to be seen, but one thing's for sure: their investors aren't crazy.