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Why Modoshi will beat DealsPlus

Over the past 2 years I have seen many social bargain hunting sites launch. Most of them had very distinct features and quality design. Yet their flawed marketing strategy made their life very short. If I were to list a few you would most likely have to admit that you never heard the names.

The new kids on the block have been more fortunate in the sense that they started when Digg was already popular and many Internet users have adopted the idea so well that they were not shy digging things anymore. However if you look closely at these websites you will notice that they all suffer from the same problem: they have not built an active community — a community of users who would find and digg up the deals — the kind of community that only FatWallet and SlickDeals currently have.

This is not surprising at all. Bargain hunting is a very narrow niche. It took Digg over a year to become as popular as it is. It will take even longer for these sites if they follow the Digg model.

Social bargain hunting is plagued

We all know that Digg is not community driven in the sense that less than 1% of users control most of the front page news. This is partially due to the algorithms Digg has put in place to favor the top submitters but mostly due to the fact that only a small percentage of users is capable of devoting themselves to the long hours of sifting through the news looking for that Digg-worthy scandal story.

It is obvious that all of the bargain hunting sites currently don’t have even a fraction of the half a million Digg users. I will bet my car that the owners of these sites keep them on life support by searching and submitting deals daily and maybe even by manipulating the ratings to bring the most promising offers to the top for better visibility (for that same reason these websites usually don’t show who voted for the deals. Some don’t even show who submits the deals, at least not on the front page).

The conclusion — social element is there mostly to satisfy your feeling of freedom, to feed your desire to be in control, to create an illusion that you can make a difference. At this time the social part doesn’t do a good job of building a supply of fresh quality submissions for these websites.

How can this be fixed? What can be changed to make the system work? What will compensate for the lack of active users?

It sounds like Modoshi has the solution.

Who are the folks that submit news to Digg? They are mostly teens — school children and college students. They have a very strong feeling of community, they have the time and curiosity to try new things, they are willing to do it for free or for a very small pay. Modoshi is a community where users who submit or pick the best deals are financially compensated. Right now each user only has one shot a day at winning the two daily prizes — $5 for submitting a new deal and $5 for digging an existing one — however as the site growth the prizes will grow as well, according to Modoshi co-founder Vaishali Anga. $10 a day doesn’t sound a lot at all however keep in mind that Netscape was able to sway the top Digg users with a mere $1000 a month — and working for Netscape sounds like a full time job to me.

Modoshi Contest

This is not all however. With each new deal the submitter has to verify 3 existing deals for accuracy. This just sounds like a terrific idea! Once the bugs are worked out the only thing that Vaishali will have to worry about is that his servers are capable to support the crowds of teens who will flock to play the game and earn that penny towards next Wii. By the way, about Wii, the top Modoshi user in January will get one for free — it is another contest the team is running and the prize selection only proves my guess at what the target age is. Seriously though enforcing verification should hugely improve the overall deals quality and as the result will make the site more attractive to those who come to use those deals.

Different game requires different rules

According to Vaishali when Modoshi launched in November it “started on the premise that it was high time contributors to the Internet community in general (who) got a share of the revenue”. The team quickly abandoned the concept though. “Pricier items such as TV etc got unfair advantage. Deal (submission) was based primarily on commissions, not quality”. The contests in contrast provide “a uniform model irrespective of what deal is posted, be it a $10 toy or $1000 hdtv”. Makes a lot of sense to me!

Now what about that rank that social sites display next to each entry? It usually more or less reflects the number of votes the entry accumulated. It makes perfect sense in the Digg case — how else can you judge the value of a news story? It sounds like for shopping deals you could use more data to calculate that number. The item price (compared to the average price for similar items), the item popularity (number of clicks or sales it produces), the submitter credibility — all of these can be factored in to compute the deal rank. Isn’t it brilliant? I wonder why no one else has done it before?

Conclusion

I have been playing with Modoshi over the past month or so and the more I play the stronger the feeling is that they have implemented the best marketing strategy to make a social bargain hunting site a success. I am not saying they are already the best — the site navigation and functionality could be improved quite a bit — but they currently have the best bets at coming out the leader. Sorry DealsPlus, you are not my favorite any more. ;-)


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14 Responses to “Why Modoshi will beat DealsPlus”


  1. 1 Scott Jan 11th, 2007 at 5:25 am

    Got an “Internal Server Error” when I went to the Modoshi’s home page just then. Let’s not speculate whether it’s the revenge from DealsPlus or not :)

    Seriously, monetary incentive for participation is not new. I have actually been giving away cash/gift vouchers on my site for a month as trial, but I don’t think it worked well for me…

    Now, where can I rent a bunch of hard working 13 year olds who can do the bargain hunting for me? :)

  2. 2 Yan Jan 11th, 2007 at 9:54 am

    Simply giving away stuff will not work. You need to create a competition for the prizes to have any effect.

    Modoshi have been very open about their contests and it helps them a big deal. Just look at this data: http://modoshi.com/contest.htm

    As for paying kids, for starters why don’t you write about it on your blog and post it to Digg? ;-)

  3. 3 Anon Jan 11th, 2007 at 10:25 am

    It’s a pity they live in a cave and haven’t heard about RSS feeds.

  4. 4 Jack Jan 11th, 2007 at 1:28 pm

    As the author of BargainJack, another recent entry in the ever-growing list of deal sites, I have been debating different ideas for evolving my website. So I’ve given the community interaction idea a lot of thought. One distinct disadvantage to a self-sufficient system like dealspl.us or modoshi is, deals turn into popularity contests. This can take many forms, whether we’re talking about certain types of products getting more votes than others (just because the product is popular, and not necessarily because the quality of the deal is all that great), or certain users getting more votes just because of their stature within the community.

    I’ll give two examples. For the first case, I glanced at modoshi and saw one of the recent winners had won from submitting a pre-order link for the new WoW Expansion. This is a very popular new product, but not a very good deal in terms of savings. I think it was listed at the retail price if I remember right.

    Another example is when people use Digg to promote websites. I’ve seen several good sites promoted on Digg, with little to no fanfare, and then some bigtime player who already has a well-known name comes along and pushes their site and gets a huge response.

    As much as I like social communities and realize their value to the deal community, I think some form of moderation needs to take form over these communities. While I love Digg and use it regularly for news and other miscellaneous stuff, I would never use it as my source for daily news on the world because of the natural bias in this community.

    My final comment is, I dunno where I’ll go with BargainJack. It will certainly be geared towards community and the free exchange of ideas. No matter which direction I go, I will at least resist some of the temptation to compromise quality for an unmoderated, self-sustaining community–at least until someone comes up with a good way of preserving quality.

  5. 5 Yan Jan 11th, 2007 at 4:20 pm

    A hot product pre-order link is still a good deal, isn’t? We are not talking frugality here…

    Modoshi uses the community mostly to get the submissions coming. Their deal rank is not what you will find at digg or dealsplus. It has social part in it but it is also based on the stats they gather for similar products (see my post). To me this is exactly the moderation that you refer to. Or should I say, social + brains. :-)

  6. 6 TD Jan 11th, 2007 at 6:22 pm

    Modoshi is a great site.
    Good way to make money too

  7. 7 Eve Mar 31st, 2007 at 8:37 pm

    Spam alert! This comment contained referral links which I edited out. It has some good points and that is the reason I kept it. -yan

    I beg to differ on this one.

    I’ve tried both Dealplus and Modoshi. Dealsplus has an amazing community that supports one another and is so easy to use. They even have a Youtube.com video demonstrating how to submit deals, whereas Modoshi is far too bloated, complicated, and submitting deals is a long and excruciating process.

    In respect to submitting deals I also feel like it is a waste of time and effort as not all your deals will go through because of affiliate issues.

    A few of my friends have been rewarded by entering in the free one hour a day giveaway for either an iPod, Zune, Xbox 360, Wii, PS3, and more! Many users have also broadcasted themselves on Youtube.com to validate their winnings. There is also the a free side mirror and frame set just for being a user.

    I could only last 30 minutes on Modoshi before converting back to Dealsplus where my loyalty will remain. Joining just for the wonderful community in Dealsplus alone is a reward in itself. The Dealplus owners ask for feedback and appreciate any advice in its improvement.

    As a last note, in comparing the hot deals in both site’s main page, Dealplus has the better deals on the more popular items people want and need.

    Never pay retail again! DealsPl.us

  8. 8 Eve Mar 31st, 2007 at 11:37 pm

    Sorry I didn’t know that referring was spamming. Thanks for keeping the comment.

    Your site is extremely helpful and insightful for many users. Thanks again.

  9. 9 Yan Apr 1st, 2007 at 12:18 am

    Eve, referring by itself is not spamming. However by writing such a positive comment as yours and including a referral link you place under question the objectivity of your comment.

    You have very good points in your comment and this is why I kept it. However to dampen the bias a little bit I thought it would be better to disclose the affiliation. Does that sound fair?

  10. 10 Frank Jul 29th, 2009 at 12:27 am

    Hey Eve,

    I have been with Dealspl.us for a while and they definitely rock! When they started the macbook contest I went on tweeting about it to my friends and almost had my Twitter account banned! :( Last week I found out about Buxr.com from this blog and guess what – they are giving out cash prizes every day to the users whose deals gets frontpaged. So far I’ve scored two Amazon gift cards for posting a couple of freebies. Not bad huh and I don’t have to spam my friends any more! :)

    Frank

  1. 1 pick!t Trackback on Jan 11th, 2007 at 5:28 am
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  3. 3 Great Post on Social Bargain Hunting (via Probargainhunter) at Starting Up… Pingback on Jan 31st, 2007 at 2:32 am
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