I agree, there is a clear need for a service like this.
Neither of the problems mentioned are fatal for an early company, you can get better at customer acquisition and raise prices (or better introduce some new tiers and grandfather your existing clients in).
"Despite the fact that the team thought our product was "clearly" better than Google Alerts, they thought our product had too high of customer acquisition costs and too low of a price point to leave us with big enough margins."
Thanks. I don't know what the answer is. Some of the technology we are using lives on in some new ways like with Fready (http://getfready.com/) but we decided to not continue selling GoBuzz.
I'm always thinking of new ways to apply what we built over the years. I certainly believe the technology has other applications but Fready is the first one we've landed on.
This is an idea I've had for a while. We would compete with OpenCalais (http://www.opencalais.com/) but I like competition.
I actually have an NLP server that converts any data sent to it to JSON format with names/companies/locations, but no business behind it. I'd be curious to hear a unique idea on applying this data if you have one.
It is said that you shouldn't try to come up with a business model, but steal it. With that in mind, a business model of OpenCalais, which is also similar to DirectedEdge's, is a fine one.
However, OpenCalais is too low level. Which is fine, but you'd want to have a broader spectrum of services, including some applications that showcase the power of the platform. See more here: http://www.directededge.com/products.html
Also, language bind is a must. Having a REST API is fine, but having libraries that make it easy to access on any language is much better.
In the end it is all about execution. Make it really simple to use, show how to use, and let the users show you where the business model should be after a while they are using (Airbnb's presentation on the last startup school really shows how this can happen).
Wait, did they choose to shut down because they weren't accepted to YC? I haven't applied and can't exactly put myself in their place, but I feel like the most successful people would continue to try to grow their company anyway. Or is there a bigger story here I am missing?
Having someone they respect tell them something they that, deep down, already knew, was probably the reason they shut it down. If the business model isn't right, then it isn't right and no amount of coding can fix that.
Though it might seem that way, it was more that YC was a last straw. We think we had an interesting product and there were a lot of possibilities, but there were also a lot of other problems as well, some I wrote about and some I didn't. I definitely wouldn't let a YC decision have an impact on your business, but consider their feedback one part of many that you will receive while building your company, and react accordingly.
Fair enough- I would definitely classify that as other information. Didn't mean to be overly judgmental. I just know that TechCrunch recently had an article about foreign startups aiming for funding and not building a business, and was thinking of that.
FTA:
It was a huge confidence booster that I will take with me into my future projects. I hope to interview with YC again with whatever project I happen on next (maybe Fready?)
Why would I ever stop? :) This product is no longer, but there are many other related ones that build on what I've learned and I'm currently exploring them.
Interesting product. Care to share any details on the backend? Presumably a lot of crawling was required to get content? And what were you using NLP for - to understand the context of a keyword/filter match?
Do you think being based in Wisconsin hurt your chances of success?
I recently moved from Madison to San Francisco, and the difference in the startup scene is tremendous.
You're right there's a market for integrating it with CRM, at one of my previous employers we had an automated CRM system (built in-house) which scanned you email and on your homepage automatically told you any news stories related to your contacts.
(I think they did this by converting email -> domain -> domain to ticker symbol -> ticker symbol to news feed rather than any sophisticated NLP thought)
Personally I'd be more worried about legal issues than profit margin for a service like this.
I'm curious, what legal issues come to mind? We've thought through many and what we always land on is "it's a gray area". Very little precedent and lots of existing services with similar functionality.
Copyright primarily. Fair dealing/usage doesn't protect commercial use except in fairly limit circumstances. Generally search engines get away with it because of "implicit licensing" and the fact that content owners want to have their content indexed.
When you're using the content of someone who doesn't want to be indexed, there's no real legal defence for creating a derivative work.
(IANAL but I took a couple of courses in IP law at uni)
If your NLP is that good and you could figure out how to sell it for more money, you could potentially take on companies like Meltwater News.