Yellowikis - A Case Study of a Web 2.0 Business, Part 1

Continuing my series on disruptive Web 2.0 businesses, Yellowikis is an open business listings site that has the potential to shake up the Yellow Pages industry. What Wikipedia is to the Encyclopedia Britannica, Yellowikis may be to Business listings. In an email interview, Yellowikis founder Paul Youlten explained the background of Yellowikis, its business model and why he thinks it's disruptive. I'm going to run the interview over 3 posts, starting with this one.

"We didn't really set out to be disruptive - but we seem to be causing some sleepless nights among the $22bn Yellow Pages industry", said Youlten at the beginning of our exchange. "Their management consultants asked us 'Who is funding you?' and 'Why are you giving away valuable business information for nothing?' They don't understand that it has cost under $500 to set the whole thing up. And $350 of that was on t-shirts."

I asked Paul to elaborate on that. How did Yellowikis come to be and what are its plans for the future? 

It all started when Paul's 14 year old daughter, Rosa, added an article to Wikipedia about a small company she had done research on for a homework assignment. It subsequently got deleted by the Wikipedia editors because it was "non-encyclopedic". Wanting to find a place that would accept such information, Paul and his daughter then spent a couple of hours Googling for a Yellow Pages "done the wiki way", but they couldn't find one. So, as Paul explained, "we decided to set one up."

Paul Youlten used to work in business development at Reuters Business Information (now Factiva), so he's familiar with "the business of business information". He says the information in the Yellow Pages is often poor and he saw an opportunity for wikis to improve the situation, using their collaborative and open nature. 

"Setting up Yellowikis just seemed an interesting challenge", Paul wrote in one of his emails to me, "so I spent a couple of weekends struggling with Linux, Apache, MySQL and PHP and actually managed to get the MediaWiki software up and running. Rosa designed a logo and we were off."

Yellowikis is still a young site, but Paul was encouraged when a couple of months ago someone he didn't know developed a Wikipedia bot that automatically transfers (or "transwikis") companies that are listed for deletion on the English Wikipedia to Yellowikis. So that's solved the problem his daughter had initially, when her Wikipedia article about a small company got rejected. There's a cliche in Web development that the best businesses come from 'scratching an itch' - in other words, building something to solve a problem you've experienced yourself. That's certainly been the case with Yellowikis!

At about the time the transwikis bot was developed, Paul noticed that his Yellowikis project was attracting the attention of management consultants from the Yellow Pages industry. Paul explained:

"They all wanted to know the same things: 1) who was funding Yellowikis and 2) what my plans to make money were. One of the leading publishing consultants for Yellow Pages in the USA asked me: "Unless you are in government development, why provide this business info for free?" Another European consultant asked "It seems a strange business model - without paid for advertising or subscribers, how are you going to make a return on your investment?"."

Paul was taken aback by these comments, because Yellowikis (like a lot of Web 2.0 businesses) was developed very cheaply, uses open source technology and relies on word-of-mouth for marketing. This means Yellowikis "can do things that traditional Yellow Pages publishers can't do" - for example adding a new language, Geo-codes, more categories. "It just happens", Paul said. 

So the low cost of running the business, together with ability to develop and release upgrades rapidly, means Yellowikis has some distinct advantages over its traditional Yellow Pages competitors. 

In Part 2 of this case study of a young Web 2.0 business, I'll outline some challenges for Yellowikis and explore further its potential to disrupt the multi-billion dollar Yellow Pages industry. In Part 3 I'll review the Web 2.0 principles that Yellowikis demonstrates.