TableXChange is exactly what the name implies – a website that helps people secure hard to get reservations at some of the most exclusive restaurants.  Want to impress by taking a date to Il Mulino’s to sample the divine Italian food of Chefs Fernando and Gino Masci but didn’t think to book ahead?  If you’re lucky then you can buy someone’s existing reservation – the price for a secured reservation for two this Friday at 8pm is $35 bucks.  Not too outrageous when you consider that’s the cost of three jars of Pomodoro Pasta Sauce through Il Mulino’s website.

Business Model:
Sellers can list as many reservations as they wish on TableXChange.  There is a $40 cap on the amount that they can charge reservation ‘buyers’.  How does TableXChange make money? Simple, for every reservation ‘sold’ TableXChange makes 12% of the agreed price.  If the reservation does not sell, no harm no foul, it was free to list and the failed ‘seller’ does not owe TableXChange any cash at all. So, sell a reservation for $30, then TableXChange takes a $3.60 cut.  You get $26.40 – not bad since you didn’t actually pay anything for the reservation – just five minutes on the telephone. Even at AT&T rates – that’s still a pretty good deal!

Some Core Functionality:

• Free to list and free to search by restaurant, date, time, neighborhood and price
• Free to cancel the sale at any time as long as it’s not sold. 
• No personal information is shared between parties – accept probably the name of the reservation i.e. Table for 2 for Smith but this only occurs when the reservation is sold
• Only three (3) reservations max at the same restaurant per night allowed
• Payment within 48 hours of reservation sale
• Pay and receive payment via Paypal. Easy!

Likes:
A neat idea!  Could do favors to buyers, sellers and restaurants especially if restaurants fill more tables if reservation makers sell their reservations rather than being ‘no shows’.  As a busy married guy the ability to get reservations at the last minute at great restaurants could really help…especially for this special days when I know I should have booked 45 days beforehand, but let’s face it, who really thinks that far ahead?  

Dislikes:
Just a few questions/concerns:

• As there is a $40 cap on the reservation price and a maximum of three reservations per restaurant per night, the very ‘special’ restaurant, in high demand will not be at the real market rate and should be snapped up quickly. This means that the really great restaurants that should ‘drive’ the adoption of this site may not actually be on the site for too long.  If they are not there, why should I go?
• At some point these guys should try to integrate into a larger site that offers users the ability to see if there are reservations available without needing to buy it through the system.  It would be plain annoying if I find I could have just called and booked direct for free.
• One obvious one is that TableXChange is just New York City and the Hamptons at this time. More place please.

Suggestions:

• Lost revenue opportunity:  Members need paypal, they refer people to paypal but don’t use a paypal referral number. Odd!  They could be making additional revenue from paypal for referals. This doesn’t cost members anything but is a ‘thank you’ from paypal.
• The restaurant listings do not include restaurant website links, descriptions or reviews.  I know I should know every restaurant on the site by reputation but the reality is, I don’t! If I’m going to pay someone $30 for a reservation, I’d first like to check out the restaurant, the Zagat rating (here’s another potential revenue stream for TableXChange) and customer reviews.

My Virtual Investment:
With my virtual $1M, I would virtually invest $250K! Today New York and the Hamptons, Tomorrow the United States, and Friday the World! There are some obvious spinoff opportunities but I’ll leave that for dessert!

http://www.tablexchange.com

Andrew – Founder
http://www.AdvisorGarage.com/community

Social Flowers is an innovative idea!  If you are part of a social network (and let’s face it…who isn’t nowadays) then using ‘Social Flowers’, you can send flowers, gift baskets, balloons to another member of your social network even though you don’t necessarily have their contact information, name, address etc.

Business Model:
Like most online flower stores, customers are charged for the actual items along with a service charge.  Items range from around $35 and can go up to $200 or thereabouts.  If you wanted to be even more extravagant than that, I’m sure Social Flowers will probably create something just for you and your social networking pal!  Thankfully there is no distracting google ads etc so this is a nice clean site.

Some Core Functionality:
Here is how the process works.

• In a social network, the sender selects the Social Flowers application. The sender then selects the recipient of the flowers from their list of friends.
• When the recipient has been selected, the senders clicks on a link which takes the sender from the social network to the SocialFlowers.com website.
• At SocialFlowers.com, the sender chooses the flower selection, goes through checkout and enters credit card information.
• The sender is returned to the social network. The Social Flowers application inside the social network sends an email on the sender’s behalf to the recipient letting them know that they have been sent real flowers.
• In the social network, the recipient receives an email letting them know they have been sent flowers from the sender. The recipient clicks on the link in the email and goes to SocialFlowers.com where they are asked to provide an address for the delivery of flowers. The recipient is returned to the social network after a delivery address has been provided.
• Social Flowers fulfills the delivery of fresh flowers to the recipient from the sender using our network of over 30,000 local florists across the United States and Canada.

Likes:
This is a nice and simple business model and it’s interesting that a ‘traditional’ business like a flower delivery service is working to cross the web 2.0 digital divide and with luck capitalize on the relationships people are establishing online.

• A key ‘like’ is that I just plain haven’t seen this kind of business before so you have to tip your hat to the maverick that thought of the idea. For that reason alone, I wish them loads of luck!

Dislikes:
I have a few concerns:

• Will people really pay $40 to pay to send flowers to a person they have never met, don’t even know their real names or where they live?  Isn’t part of the joy of giving seeing the persons face after receiving your thoughtful gift?  My wife and Mother are lucky if I send them flowers using an online service – would I or most other people really be thoughtful enough to send flowers to someone they don’t ‘really’ know?
• The site is bland.  The design could be much more innovative, especially as it’s supposed to appeal to the web 2.0 crowd. At this stage it looks like a template that they have been given by an interflora type company. Social Flowers is part of Florist One who state they are first and foremost a florist. That’s good to know but come on guys – turn the visual experience up a notch!
• I’ve received phishing emails telling me someone has sent me virtual flowers and the like.  This may cause challenges for this business model given someone is receiving flower notifications from people they don’t know. Does Social Flowers still charge even if the flowers can’t be delivered or aren’t received?

Suggestions:

• As they are focused on web 2.0 market, try using some of the common tools of this space.  Customer reviews, send to friend, bookmarking, community etc – If community members send each other flowers, add a card with a special reference number to your website so the recipient can write a ‘thank you’ and start a more personal dialogue with the sender via your site.  This would create a lot more traction.

My Virtual Investment:
With my virtual $1M, I would virtually invest $150K as I don’t trust that virtual friends will really do anything more than send virtual flowers to each other.  But perhaps the world really is crazy and I could be VERY wrong about this!

http://www.SocialFlowers.com

Andrew – Founder
http://www.AdvisorGarage.com/community

ILetYou hasn’t even launched yet but this site is going to be HUGE! HUGE I tell you!!!! Cackle…Cackle!

What’s the basic idea?  People with DVDs and games at home set up their own ‘online rental stores’ and rent their own DVDs and games to others. The more people who sign up the more variety and eclectic the catalog becomes – I wouldn’t be surprised if you will ultimately be able to find DVDs and games here that you can’t find anywhere else but Ebay…plus the rental prices are less than Netflix etc…does anyone see an industry shift over the horizon?

Business Model:
ILetYou will let users set up their own online rental store and list DVDs and games for FREE.  Their business model is to charge a small slice of the transaction fee for each rental so in the 40 cents range.  Not huge but multiply that by 100,000+ rentals and this business becomes a cash cow overnight.  Not too hard to imagine if they have the referral/viral elements right.

What do they provide?  The platform, the credit card processing engine and the marketing – WOW! What a business! Wish I had thought of it!  Damn!

Some Core Functionality:

• Members can create their own online rental ‘store fronts’
• ILetYou handles credit card transactions
• Orders are passed through to the store ‘owners’
• …will need to see the site live to comment on the viral elements… 

Likes:
Like, Like, Like…what’s not to like?

• DVDs & games at cheaper prices than the ‘high street’ rental stores & mail to rental companies
• The ability to rent my own DVDs and games without selling them once at an Ebay or similar – ongoing revenue stream…wow!
• All the hassle of finding renters dealt with by someone else…double wow!
• Will likely result in a range of DVDs and games that I probably cannot find elsewhere
• And I can choose what I rent rather than making a list of my top 10 and being suprised according to what the other online rental companies have in stock…triple wow!

Dislikes:
The only itsy bitsy potential dislike is when I rent via ILetYou I’m dealing with an unknown vendor – I’m not to concerned about the quality of the DVDs being sent (although some may be), but I am concerned about the scenario where you get a DVD, watch it, send it back and start getting angry emails or whatever from a ‘scammer’ who complains the DVD is broken, its my fault and I need to pay for it.  May not happen but when you are dealing with individuals – you just never know.  Does ILetYou have an answer for that kind of scenario? Perhaps a guarantee or something? Don’t know but if they did, it may make the reticent dive in!

My Virtual Investment:
With my virtual $1M, I would mail the whole amount to ILetYou tomorrow if they would take it! And they wouldn’t need to return it after a week either…what a business! BTW, this is my first $1M virtual investment! Congrats ILetYou! As if you care…you soon to be VERY wealthy guys!

http://www.iletyou.com/

Andrew
Founder
http://www.AdvisorGarage.com

ILikeTotallyLoveIt is a new website where people post objects that they ‘Totally Love’ and include links to where the items can be purchased.  As the objects get voted on by members using a ‘Digg’ similar approach, the more popular items get moved to the front page. So its a popularity site for products people adore… 

Business Model:
The business model seems nice and simple for this new site – Google Ads and vertical banners served up on the right margin which seem relatively targeted to the twenty somethings that are posting the items that they ‘Totally Love’.  There is currently no fee for posting an item and believe or not, there are a few hundred items already posted.

Example:

Totally Loved

http://www.zappos.com

Converse All Star Deluxe Mary Jane Ox
posted by bdavies 16 hours ago view profile

A cute, cute Converse! These are a blend of the classic Chuck Taylor shoe and a traditional Mary Jane silhouette. These have leather uppers and an arch support.

Some Core Functionality:

• Product Voting – popular products move to main page 
• Multiple categories and price ranges
• Tell a Friend
• Comments on items
• Tags
• Trackbacks
• RSS feeds 

Likes:
This site is cute in that it brings ’design’ into the product mix and combines it with product recommendations and voting.   

Dislikes:
A few little dislikes:

1. TotallyLoveIt is a little messy from a design perspective but it is new so hey they’ll get there or perhaps that’s part of the charm. You decide.
2. The construction and set up of the site seems a bit too much like all the other ‘voting’ websites out there and it probably leverages Pligg software so there’s little real innovation.  It’s literally just found a nice little niche of young users who want to recommend, vote and sell items to others.
3. My key concern for this site is one of long term sustainability – is it adding enough value to stay around for years 2, 3 and onwards?  I think that depends on the founders and where they decide to take this site – right now, its cute but I don’t see alot of long term incremental value and the members will likely get bored after a few months. 

My Virtual Investment:
With my virtual $1M, I would invest $100K as I only just ‘TotallyLoveIt”.

http://www.iliketotallyloveit.com/

Andrew
Founder
http://www.AdvisorGarage.com

CherryPicka is a very early stage South African site that has an innovative business model.  CherryPicka is an online new product showcase which allows customers to purchase and try new and recently launched products at a significant discount to the recommended retail price and encourages them to write reviews.

Business Model:
CherryPickas encourages companies with new products to offer a certain number of these products to CherryPicka for free, CherryPicka then adds a small percentage and in turn offers them to their membership to try and review.

In addition, CherryPicka intends to leverage banners ads and other forms of advertising as this site picks up traction.

A smart and interesting element to this is CherryPicka does not take ownership of these items but rather agrees the quantity of new products or services to be donated and then passes on the customer contact details directly to the companies.  Smart because it reduces their costs and also because the companies gain:

1)  A series of customer reviews online (creating buzz and links)
2)  The contact details of customers interested in their products

…at no cost aside from ‘donating’ a certain number of trial products that they would likely need to offer to start the buzz rolling through more traditional, perhaps less impactful channels.

Some Core Functionality:

• Each product has a dedicated page which ’showcases’ its uniqueness, selling messages. user reviews and link backs to the launching companies homepage
• Send to Friend functionality for each product, alongside the capability to review and find out more information
• RSS Feeds of new items so customers can be updated. Necessary as items seem to sell out quickly

Likes:
By offering deep discounts on new and innovative products the customers are getting a great deal. This should encourage the early adopters and first movers to try the products with little risk.  As they are getting a great deal, they should feel encouraged to review the item.

The companies are getting their products out to interested consumers and this can help provide the data they may need about customer acceptance to help secure new distribution channels – particularly useful for young service and product companies that are struggling to penetrate new retailers, catalog companies and so on.

The reviews are not controlled so they can be positive and negative – better negative comments are instantly seen by the manufacturers and inventors than a grass root negative campaign takes hold without their ability to consider the feedback, respond or change. 

Dislikes:
A few little dislikes:

1)  Great concept but mostly limited to South Africa – Anyone want to tackle other countries?
2)  As its new this could explain it but a significant number of the items are sold out
3)  More items required. Stay tuned, this seems to be because its a new site

My Virtual Investment:
With my virtual $1M, I would use $100K to pick CherryPicka.

http://www.cherrypicka.com/index.php

Andrew
Founder
http://www.AdvisorGarage.com

Auction Ads is a company which has just launched some new technology which places items within eBay auctions within blogs according to the blogs content. I LOVE this business in terms of the potential win/win for customers and the company and the potential revenue stream for the investors.

Business Model:
Auction Ads business model is compelling:
1)  EBay has an affliate marketing channel which pays affiliates when they refer customers to their site
2) The eBay affiliate program is tiered.  As the affiliates monthly revenue increases, so too does the percentage of revenue. It begins at 40% of the fees ebay earns and caps out at 65%.  But to hit 65% you need to refer at least $1M to eBay.

Ebay Tiers:

Some Core Functionality:

• Cut and paste ad codes straight into your blog
• Customized ads based on blog subject matter
• All ads include a referral link so if anyone signs up you get credit 

Likes:
There is so much to like even though its such a headslappingly obvious business model:

• By consolidating the monthly revenue made across multiple blogs and sites it should not take took long to hit and pass the $1M monthly revenue number.  It should therefore be possible for Auction Ads to give their blogging channel a higher monthly payment than they could capture directly through eBay.
• As all ads have a referral link their channel partners (the blogs) can also gain revenue from other blogs who sign up via their ads. Another incentive to stay with the Auction Ads program
• There are viral marketing elements to the business model which should spread the Auction Ads program quickly and ensure the highest monthly tier rate is achieved within eBay.
• In a previous article I mentioned how I believe people are mentally blanking out adsense ads on the web.  This is an alternative that will not be instantly categorized as ‘adsense ignorable’ and should have better click through rates.

Auction Ads in Action:

Dislikes:
The only concern I have is eBay sells alot of stuff, but how much of it is absolutely relevant to the breadth and depth of subjects covered by blogs and are the blog readers in the market for whatever is being sold?

For example, let’s say there’s a blog about cars…easy to have an eBay ad.  No problems at all to imagine.  What about a blog on cat neutering – I know, perhaps one of my more obscure examples but that’s the point.  Yes you could sell eBay books on the subject, but are cat neutering readers going to be interested in bidding on an eBay book on the subject? So, a great model for obvious and mainstream’ish blogs and sites…maybe not so for quite a few blogs out there and even if they do place ads, will they generate any volume?

Saying that which blogs have most traffic?  Are there 100 blogs out there that have the lions share?  If so a)  this ad program makes sense especially for the top 100 b)  but why would they use Auction Ads rather than just having their own affiliate links?  Because its easier than doing it themselves it probably the answer but what’s the difference in revenue for them to go with Auction Ads rather than direct?  If I was Auction Ads, I’d be striking some low margin deals with the top 100 which would also give them further exposure to the wider market.

Another question that makes me hesitate a few seconds is what are the barriers to entry for a company doing the same thing?  The barriers will get higher as Auction Ads gains more and more market penetration but they had better hope an exact competitor does not come out of the woodwork very soon.

My Virtual Investment:
With my virtual $1M, I would hope my bid to invest $500K would be accepted by Auction Ads.

http://www.auctionads.com/

Andrew
Founder
http://www.AdvisorGarage.com