How to Create a Great Vertical Directory

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directoryIt’s tough for a start-up to break into the top echelon of local search players and become a one-size-fits-all solution like Google or YP. The great opportunity that exists in the space lies in serving special interests or special use cases better than anyone has before. Foursquare and Yelp are highly visible examples of this, but other very successful, vertically oriented directories exist, flying mostly under our radar.

That’s because the goals of such directories, though comparatively modest, can be quite well met simply by a company doing a great job of appealing to a niche audience. The great thing about serving niche audiences is that the number of addressable niches will probably always exceed the number of services trying to address them. In other words, if you’re eager to launch a start-up, consider creating a vertical directory.

I’m sparked to consider this by the news this week that RepairPal has secured a $13 million extension of its Series A funding from Castrol innoVentures and RepairPal does two things well: It matches users with certified local auto repair shops and indicates how much a repair should cost according to the region. This is the type of service that hopefully you won’t need often, but when you do, you’ll eagerly make use of it. It speaks to the long tail of local search, which I’ve written about previously: rarely needed services that you desperately want help with precisely because they’re rarely needed.

The opportunity to create vertical directories breaks down into three major categories.

1. Special Use Cases. First, there are directories like RepairPal’s that exist to meet specific needs, typically occasional purchases of a high dollar value. Those two considerations mean that consumers will jump at the chance to receive trustworthy recommendations about local providers. Though a site like Yelp can offer useful recommendations, tools like RepairPal’s cost estimator set niche directories apart.

If you review Alexa’s top ranked U.S. sites, you will observe that a great number of the most prominent “local sites” belong to big retailers like Best Buy, Walmart, and Target, among whom only Yelp and the top incumbents are competitive. It’s clear that what Best Buy and others have done is to create a hybrid local and online shopping experience that helps consumers make big-ticket decisions (with many consummated in-store) or that makes accessible a vast inventory of shopping choices. The big-box stores have proved the effectiveness of a strategy that might be applied elsewhere. Start-ups providing inventories of multiple smaller stores that fit a niche use case would find a ready audience.

2. Special Interests. Another type of consumer underserved by existing directories is the special interest user (someone seeking a broad range of products and services but a narrow band of acceptable providers). Again, Alexa offers a helpful barometer of who is doing well in this area. The rise in environmental awareness, for example, has created a need for directories recommending earth-friendly products and services. The top-ranked sites in the shopping category that Alexa calls Green Living include and; both offer local listings for health food stores and co-ops, pet care services, organic restaurants, city bike-sharing services, eco hotels, and much more. It’s fair to assume that big directories will never do as good a job diving deep into the needs of special interests.

3. Regional Directories. This area has been well established for some time, but significant opportunity remains. Early entrants in the local space like Citysearch made the initial forays into creation of directory-focused news and information sites called “city portals.” As more contemporary arrivals like Patch have learned, the challenge with producing city portals on a national scale is that it’s easy to create generic cookie-cutter experiences but tough to add the requisite local flavor.

By contrast, sites that grow up naturally responding to the unique qualities of a given area stand a much greater chance of gaining user attention. While in New York City recently at the Street Fight Summit, I was reminded that this particular metro area, as a self-contained market, is a veritable hotbed of local search opportunity. Mobile apps like Kapture demonstrate this by creating experiences that a city like New York is ideally suited to support — in this case, a sort of treasure hunt of deals that one can earn by snapping pictures with a phone at a restaurant or shop. Directories in the more usual sense of the word, like CityMaps, are working to build detailed, socially engaging local search and discovery content, born of the fact that New Yorkers have a huge array of choices and a great love for making recommendations.

While New York is an unusual microcosm in terms of its scale, many other local markets would be well served by a venture offering similar experiences, especially when combined with some of the long tail features described above.

Damian Rollison is vice president of product and technology at Universal Business Listing, a company dedicated to promoting online visibility for local businesses. He holds degrees from University of California, Berkeley and the University of Virginia, where he worked at the Institute for Advanced Technology in the Humanities. He can be reached via Twitter.

Damian Rollison is Director of Market Insights at SOCi. SOCi is the leading CoMarketing Cloud for multi-location enterprises. They empower nearly 1,000 brands to automate and scale their marketing efforts across all locations and digital channels.