#SFSNYC: ReachLocal, ShopKeep, and Swipely on Whether or Not Vertical Approaches to Local Inevitably Become Horizontal
Small businesses have a lot of options when it comes to choosing tools that keep things running smoothly. In fact, they have a lot of options even when partnering with a single vendor because companies within the connected local economy are transforming into one-stop shops of sorts for marketing, advertising, point-of-sale (POS), and countless other solutions critical to the daily operations of SMBs.
Tackling this topic in a Street Fight Summit panel were Sharon Rowlands, CEO of ReachLocal; Jason Richelson, co-founder of ShopKeep; and Angus Davis, CEO of Swipely. All three discussed the challenges and opportunities of providing services within a fragmenting market to small businesses juggling online and offline marketing needs.
Unlike Swipely and ShopKeep, newer companies still focused on the payments and POS solutions products they respectively began with, ReachLocal has evolved from specializing in search to offering a variety of local marketing services. “The most important thing a local business needs to do is to get customers, and search is still one of the most effective ways to do that,” Rowlands said. Search’s position as a fundamental marketing tactic has informed ReachLocal’s horizontal growth; all three panelists frequently referred the importance of remembering their companies’ foundations.
Davis and Richelson were more hesitant in discussing horizontal approaches — Swipely and ShopKeep are very much focused on the brick-and-mortar world of dining and retail. Richelson’s perspective is influenced not only by his experiences founding and growing his company but also by being a local business owner himself (he owns two wine shops, a grocery store, and a coffee shop, and, yes, he uses ShopKeep). Though “going horizontal is sexy,” Richelson said, a vertical focus is important for customer retention.
Both companies offer software solutions, making the ability to offer insights and analytics key to their business models. “We’re singularly focused on being the general manager of the cloud for restaurants,” Davis said. “We’re disrupting something big that’s already there.”
All three panelists stressed the importance of educating their customers and enabling them to understand the importance of the technology they’re being offered. “There’s a lot of education involved,” Richelson said. “Small businesses are getting disrupted by younger people who know how to use technology.” Davis agreed, adding that one of the main challenges Swipely faces is targeting SMB owners who “don’t have a lot of money, technology sophistication, or time.”
Ultimately, a combination of client demand and strategic opportunity drives expansion, the panelists said. “But you have to nail the niche first,” Davis noted.