GoDaddy Balances Tech and Self-Service in a Fragmented Marketplace

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Putting tools for creating websites in front of local businesses does not always mean they will jump to attempt web design for themselves. Whether it is to produce a true e-commerce channel or digital marketing to reach local customers, business owners scarcely have time to figure out how to get started.

Providers such as GoDaddy help these businesses establish their online presence and position themselves to be quickly discovered by potential customers. This is still a frontier where technology and service providers can rise and fall like the setting sun — with the possibility for consolidation ever on the horizon.

Steven Aldrich, the chief product officer at GoDaddy, will join us at Street Fight Summit on June 12th-14th in Brooklyn. He spoke with Street Fight recently about the different ways GoDaddy serves small and medium-sized business (SMB) customers and whether or not consolidation is on the rise.

Self-service has long been kind of a holy grail for companies dealing with small businesses. It’s been suggested that if you could eliminate some of the friction in the sales and support operations dealing with SMBs, the economics of serving small businesses at scale make a lot more sense. From the beginning, GoDaddy has had a large self-service component to it—how do you create DIY products that nevertheless can deal with the wide range of SMB needs?
Interestingly, I totally disagree with the concept of needing to pull the people out of a small business product or service. The reason why is you do want frictionless products, you want them to be spectacularly easy. You want them to deliver quick time-to-value, but small business owners have a lot to do during the day. The main issue, number one issue we hear over and over again is: “How do I get customers and keep customers?”

You need to make it super simple for a business to get up and running by themselves. And if they ever have questions or issues, whether it’s a “How do I” question, or a specific technical challenge they’re having, you want that small business owner to be able to definitely get the help they need.

Many times, because a small business owner is a chef, a bike repairperson, a soccer coach for kids — that’s what they do every day. They don’t want to spend an hour searching through help logs. They don’t want to spend any time trying out solutions. They want to talk to an expert who’s empathetic, and get that question answered or problem resolved. There’s a bit of a false hope that you can ever get to a fully self-serve solution for small business that they’d be happy with.

We do think quite a bit about: “How do you create amazing products for small businesses that are easy-to-use that break the false tradeoff of easy-to-use versus valuable and affordable?” That is a cornerstone of how I think about GoDaddy products. On top of that, you need live people who are empathetic and knowledgeable to help as well.

SMBs have long said that they feel overwhelmed by the marketing choices that confront them and the many vendors that call on them with different marketing promises.  How do you cut through the noise to advise them on what they actually need to do?  

That’s a fantastic challenge. The basics come back here as what’s being critical. The small businesses we talk to get cold-called at least a dozen times a week. Some of the folks we talk to get many calls every single day, promising some great new solution. In general, small businesses buy a product because they hear about it from another small business. The way that you cut through the noise is to build products and services that are loved by the people who use them so much that they proactively tell their neighbor next to them, or proactively tell the business group they are a part of, “You’re never going to believe how easy this was. You’re never going to believe how this service helped my business.”

One example specific to GoDaddy: we recently relaunched our website builder product. What we’re finding is folks didn’t believe you could create a full-fledged website from their mobile phone. As we see people use the GoCentral product, they are starting and finishing the entire website build process from their iPhone, from their Android device, and they’re delighted. That was something we focused on because obviously we’ve seen the rise of mobile visits to our small businesses’ websites. We also see them running around trying to get work done, and the only device with them for much of the day is their mobile phone. So that was an example of cutting through the noise by delivering a service that goes well above what small businesses imagined was possible, and then they start telling their friends about it.

What are some of the most promising new technologies that you’re experimenting with? Is GoDaddy looking at things like AI and bots?
We are totally focused on how do we make life for small businesses easier; how do we make the products simpler and faster. One real world example of AI that we’re using is when a small business owner creates a website — they describe their business, they tell us what industry they’re in, and they give us their business name if they have one. As the business owner then goes to publish their website, we use the information they’ve given us, along with a bunch of machine learning that we’ve created in the background to suggest the best domain name for their business.

What we find is a lot of folks in small businesses early on know they need a website, but they haven’t yet bought a domain. So they get on the path to building a site, they go to publish it, and then they realize they need a domain. It’s got to be findable on the Web. We’ve created a fantastic set of algorithms to take all this content from the small business, look at what domains are being searched on, and bring those together to recommend a domain name to that small business owner. We think AI, when used in existing services, makes better choices obvious to the small business owner, reduces the cognitive load, and brings information they don’t have.

We’re looking for lots of places to apply AI and machine learning. We’re doing some experimentation with bots, nothing that we’ve found to be noteworthy. There’s a lot of work being done on social and local, geography-based marketing. One of the advances I like a lot is the fact that you have small business owners who can now target very, very directly people in and around their neighborhood, both in general through advertising and Facebook, but also specifically when someone as walking near a store and show geography-based advertising. That’s really effective if you’re a retail location. Those are all very interesting developments based on technology that most people now have on their person.

Is there any other type of technology out there that looks promising?
I think VR (virtual reality) and AR (augmented reality) are still a bit too far away. They’re interesting, but not mainstream enough for small businesses to worry about them yet. I’m interested, but it’s still a little too early for most businesses to be thinking about the combination of not just bots, but actual robots as helpers that are programmable. We’re starting to see some help there. One is example is if you are a small hotel that has a single person at the desk to staff the check-in area, and if a guest needs something — if you have one person in the hotel and you’ve got to leave the front desk to go to the guest’s room to bring them toothpaste, you’re leaving the front desk uncovered. Hotels don’t like to do that.

I’ve seen a robot designed for this purpose. The robot can stay at the front desk, be given something to bring to a guest room, whether it is a tube of toothpaste, cold medicine, or water. That way you don’t need the staff person at the front desk to leave. It gives more leverage to the staff at the hotel and makes a better guest experience. I think we’ll see more special purpose, programmable robots that a complementary to the people in the business to help them get more done.

With the recent ReachLocal acquisition of SweetIQ, many are saying that there is a consolidation underway in local, with some of the bigger companies (such as GoDaddy) poised to scoop up some of the smaller, tactical players. Do you think this is happening, and where do you see GoDaddy’s place within that?
I don’t see an accelerating trend here. If you think back, GoDaddy has acquired companies in the marketing space and an example there would be Mad Mimi. We brought in folks in the WebPro space as well to help us deliver new products and services to our customers. You have the folks at Constant Contact being acquired, so I think there’s always been deals happening. I haven’t seen it accelerate. I do think that what I’ve found in my 20-plus years of working in the small business space is it’s really, really hard to scale a service when you’re targeting small businesses.

When companies that have great technology have not gotten past the scale barrier yet, are looking to raise their next round of funding, in any environment that’s hard. In the current environment, what you’re seeing is venture capital going to the bigger and bigger players.

We’re always on the lookout for marketing services companies in the US, marketing companies outside the US, and would be excited to talk to folks who wanted to bring their services to millions and millions of small businesses around the world.

Do you think the fragmented local industry will remain fragmented with point solutions? Where are we within the evolution of the industry?
Because there is so much inefficiency in reaching small businesses, it’s hard to scale. There’ll always be many local players. That’s good from an innovation perspective, because you’ll have a lot of businesses experimenting, but those businesses in many cases will never reach escape velocity — meaning they’ll never get to millions of customers. The likelihood that it gets incredibly consolidated is low because there aren’t a lot of network effects in the small business space. Just because a small business in the U.S. really likes QuickBooks doesn’t mean that a small business in Australia will really like QuickBooks. There’s not that much scale in that part of the small businesses’ world. In the same way there’s a little bit more scale and universality in some of the marketing solutions that might show up because you learn how to use a platform like Facebook or Google better.

I think we’re going to see a fragmented local space for a long time to come, and that’s going to make small businesses’ lives harder. What I do think we’re going to see more of is players such as GoDaddy connect their core services to widgets and third-party APIs to pull in the best of these tools. That’s something we’ll see as tools rise to the top. You’ll still see fragmentation, but to make the customer’s life easier, there’ll be more connectivity between these solutions.

Joao-Pierre Ruth is a Street Fight contributor.

Join GoDaddy’s Steven Aldrich and hundreds of other top local companies and brands at The Best Street Fight Summit Ever — a three-day extravaganza in Brooklyn on June 12-14. Click here to register now!