Thursday, July 29, 2010

Retrospective on ShortTask vs. Predictify. Only the strong survive!

Internet business bears some resemblance to the law of the jungle, or perhaps Lord of the Flies -- the strong survive and eat the tattered remains of the weak (OK, so maybe I only read the beginning and the end). As a case study, let's compare ShortTask, which is still in business, with Predictify, a website that has closed its doors. Along the way, there are some lessons for other online entrepreneurs on how to avoid pitfalls of the past.

Both ShortTask and Predictify harnessed the power of the web for commercial purposes. A brief background:

ShortTask: people seeking solutions for simple online tasks can post a job description and cash offering (anywhere from a few cents to several dollars, depending on difficulty) and individuals can choose which tasks they wish to complete. At the time of this writing, there were 12,849 tasks available to choose from, and over a million have been completed so far.

Predictify: a predictions market where anyone can post a question (e.g. "will Tiger Woods be over or under par in the next Iron Woods Open, and by how much") and the guessers who are most accurate receive a higher reputation or on occasion, a cash reward. I'm fond of Predictify, as it made me twenty bucks a few years back, but sadly it closed back in 2009. Note: Don't try going to their website, it's been replaced by something shady that will install malware on your computer.

First, the similarities between the two sites. Both ShortTask and Predictify rely on individuals willing to devote time toward a goal set by others. Both also allow experienced users to gain a reputation, increasing their opportunity for higher rewards.

It's about there that the similarities end. Predictify allowed anyone to submit a question free of charge. The majority of prediction topics would only boost your reputation, with paid questions few and far between. On ShortTask, everything has a direct dollar amount (even if very small).

How did Predictify ever hope to make money, or was it just a bad idea from the start? Theoretically, Predictify had a kernel of profitability. As some commentators quickly noted, the real purpose was to function as a survey engine for marketing purposes. The cash reward was an incentive to guess correctly, so the data collected would have maximum accuracy. The downfall was that there's no way to tell how accurate their predictions actually were overall.

Unlike Predictify, where you never could really tell when or if you'd get a reward, ShortTask is very consistent and straightforward with how to make money. Complete your task, report back, get paid. It's been called one of the most effective money-making portals, and there are over 5,000 employers regularly assigning tasks. Especially with the growing popularity of social media marketing in lieu of traditional advertising, ShortTask has become a useful tool to get online promotions done without hiring an outside consultant. Filling the need for temporary yet reliable online labor has created a steady niche that will likely keep ShortTask around for some time.

What can other aspiring entrepreneurs learn from the differing fates of ShortTask and Predictify?
A few thoughts:
  • Find a need and fill it. Or, if you can't think of what people need, provide avenues for them to tell you themselves. The most successful websites today (Amazon, Craig's List, Facebook, Ebay, etc.) are all match-making services which allow buyers and sellers to find each other more easily. This capacity takes advantage of the best parts of the web - instant connectivity and global access - to bring people together, then lets individual business sense do the rest. ShortTask is one example of a niche market within this larger trend, and its success demonstrates there might be room for other niches as well.
  • Fill a direct need, not an indirect one. Predictify users were rewarded for accuracy, but this was just a proxy to generate better survey results. ShortTask is very simple and direct -- they pay for results. Either you complete the assigned task or not, so there is immediate feedback and quality control. Instead of doing indirect marketing, ShortTask provides connections so companies have it done themselves. Intuitively, users are turned off by jumping through hoops. Simplicity keeps transaction costs to a bare minimum, encouraging more use of the site.
  • Feedback goes both ways. On Predictify, users interacted solely via predictions, and couldn't tell whether their guesses were right or wrong until the event occurred. There was no way to calibrate your guessing strategy, because by the time you knew what had gone wrong, it was too late to adjust your other (already made) predictions. For ShortTask, there is a two-way dialogue between seekers and solvers, where both have to be satisfied by each transaction. ShortTask realizes that if people can plan their social schedule online, they can probably plan the work-day there too. This shows new businesses that can harness the untapped personal initiative available on the internet have a better chance of success.

Unfashionably Economic

No comments:

Post a Comment