Posted by Sucharita Mulpuru on June 22, 2011
In my ongoing-yet-fruitless quest to find the great social commerce success story, I’ll talk to anyone who will talk to me about the topic. I talked this week to a "venture capitalist" who shall remain nameless, and we had the following conversation:
VC: I’ve seen social commerce success. I have. I’ve seen commerce success on Facebook.
Me: Really? Are you referring to maybe one of the marketplaces on Facebook? Or ShopSocially?
VC: No, no one’s heard of this company. No one in the Valley has heard of this company. Only I know about this company.
Me: And this is a business that can scale?
VC: It’s sooooo scalable. I’ve seen it scale.
VC: They make millions and millions of dollars. I’ve seen it.
Me: Can you tell me who you’re talking about?
VC: I . . . I’m not at liberty to say the name. They want to stay under the radar. They don’t want anyone to know about their secret sauce.
Me: Really? They’ve discovered something that no one, not Silicon Valley, not Facebook’s army of developers, not any retailer in the world has yet to discover?
VC: Hey, I don’t need YOU to believe me! I’m happy to just make my money.
Every few months, I have a conversation just like this with someone who describes some unnamed business that is achieving wild success in some unclear way. I call the company they’re describing The Social Commerce Loch Ness Monster because it’s a mysterious creature that they swear up and down really exists, but that no one else has ever seen. This particular person further lost credibility when they went on to say that Zynga’s success was largely due to it being in stealth mode and that Facebook Credits would take over the world, a perspective so absurd it doesn’t even warrant discussion.
So, what’s likely to be the story? One of two things: That it’s just not true (at best, this so-called social commerce blockbuster is some version of an affiliate or a marketplace, and at worst, it doesn’t exist). There is a tiny chance that this company may actually really be something so incredible and innovative (yet replicable) that telling me more would risk destroying their business. I give the first scenario a 99% chance of being true. What makes me so sure this is a house of cards? I’ve never seen a consumer-facing business get any scale by hiding its name. On the other hand, I have met plenty of venture capitalists who hype their investments.
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