Posts Tagged ‘value proposition’

How long before “It’s not all online” isn’t true anymore?

Tuesday, January 26th, 2010
cgs_iceberg1

Courtesy California Genealogical Society and Library

David Rencher, FamilySearch’s “Chief Genealogical Officer” stopped by the Genlighten booth at NGS in North Carolina last year and we had a pleasant chat together. He asked a question that I’ve thought about often but never come up with a perfect answer to:

How will Genlighten’s business model stay viable over the long term as more and more records become available online?

As you already know if you’ve been reading this blog for long or if you’re one of our users, Genlighten’s unique selling proposition is that we help you find offline genealogy records — the ones that are only accessible in libraries, archives, courthouses, historical societies, etc.. In fact, when a provider signs up and offers to do lookups solely using their Ancestry or Footnote subscriptions, we ask them to modify those offerings to utilize an offline source instead.

Beneath the Tip of the Iceberg

Our unspoken assumption here is that many more records are available offline than online. Or as the marvelous image shown here depicts it, the biggest part of the iceberg is below the surface. I stand confidently behind that assumption, despite the fact that I can’t back it up with any meaningful data or statistics.

David’s question implied that he foresees a time when the statement “Most genealogy records aren’t online” won’t hold true anymore. And in fact, he’s in charge of an organization — FamilySearch — that is working hard to digitize and index every single reel in its vast collection of microfilmed records. Whether it takes five years or ten, they will eventually achieve their goal. Whither offline genealogy research (and our business model) then?

The Power of Family Search Indexing

This point hit home particularly hard for me this last December. I visited the Massachusetts State Archives just outside of Boston, mostly to see what kinds of records Genlighten providers could retrieve there, but also to do some of my own research. I was excited to see how many records were available on microfilm and could be scanned at low cost. Within minutes, I easily found the marriage certificate for my Walter Ferdinand Knapp and Rosamond Guilford.

A local Boston provider, I reasoned, (or one with access to the corresponding FHL film) could just as easily provide Massachusetts marriage record lookups for a reasonable fee and still be well-compensated for their forty-minute trip on the Red Line. Cool! Now I just needed to recruit the right providers and help them take advantage of the opportunities available.

Just as I was about to tweet or blog about this discovery, though, what should appear in my Twitterstream but a link to a post about Massachusetts marriage records becoming available on the FamilySearch Record Search Pilot. I tried the site out, and lo and behold, in seconds I had the image of the very same marriage record I had just finished printing out. Thanks to FamilySearch indexing, that was one lookup opportunity that no longer seemed as attractive. Massachusetts Births and Death records still weren’t available online, but for how long?

A Prediction

longtail2I don’t know how FamilySearch decides which records to digitize and index next, but I can guess. They must know which FHL film sets are ordered most, and I suspect those ones get bumped up in priority. So in the short term, we should expect that films of records towards the left end of the long tail will become available online. FamilySearch and other organizations will gradually work their way down the long tail, digitizing and indexing as they go. Over time, more and more long tail records will become available at low or no cost online, just as obscure bands’ music can now be found on iTunes and films that only a few thousand people even know about are now available on Netflix.

Another Prediction

So Genlighten has four, maybe five years before its business model begins to evaporate? I can’t be sure, but I suspect not. At least, not due to a lack of offline records. I will go out on a limb and predict that for many years to come, as fast as old records are brought online, “new” old records will be discovered. In other words, the entire curve will rise.

Where will these new records come from? Diaries, generic government agency paperwork, medical records (despite HIPAA regulations), legal proceedings, SEC filings… I bet you can think of many more. The types of offline records that Genlighten providers will be asked to look up will change, but there will still be plenty of them to perform lookups for.

Of course in five to ten years paper, microfilm, and even electronic data storage as we know it may have been completely superseded by some grand and glorious new medium. Or Google may simply have achieved by then their goal to “organize the world’s information and make it universally accessible and useful.” In which case, they’ll hopefully have already acquired us!

Five reasons not to “cut out the middle man”

Monday, July 28th, 2008

Phil Hatchard's The Middle Man from FlickrAt genealogy conferences and in some of the responses we’ve received to our recent e-mails to genealogical societies, potential providers have occasionally referred to Genlighten as a “middle man” in the lookup process. Though the connotations of this term can be somewhat negative, it’s a label we’re willing to live with. After all:

  1. We aim to make it easier for genealogical researchers to earn income by offering lookups.
  2. We plan to receive a commission on each lookup request we process.
  3. By creating an online lookup marketplace where genealogy researchers and lookup providers can find each other, we are indeed acting as a form of middle man (though we would probably prefer the term “third party intermediary”).

I’d like to use this post to clarify our intermediary role and explain the value we offer potential lookup providers.

Transaction Fees, but no Listing Fees or Subscriptions

We’ve decided to follow a “transaction fee” business model on our site, rather than a subscription model (such as Ancestry uses) or a listing fee model (which eBay uses). We chose that approach because it lowers the up-front risk to both providers and clients. A provider who offers lookups through us only pays to use our platform when a lookup transaction is successfully completed. If they don’t get any requests, they don’t pay us anything. Similarly, a potential customer pays us nothing unless they find a lookup offering they’re really interested in.

How It Works — A Numerical Example

Suppose the provider sets their price at $10 to retrieve a copy of a vital record from a local government archive. Our commission rate is 15% for independent providers (we discount it to 10% for societies). So when a customer orders a lookup and the provider successfully delivers the requested document, the provider would receive $8.50 and Genlighten would receive a $1.50 commission. [The customer would also pay a separate handling fee to cover the cost of payment processing.]

The Value Genlighten Offers

Why should providers pay us a commission, rather than keeping the entire $10 for themselves? Why shouldn’t they just “cut out the middle man”?

We think we offer a lot in return for the fees we receive. In particular, Genlighten aims to give our providers:

  • A simple tool for creating both lookup listings and customized data input forms, so the provider gets specific, well-defined requests and just the right info they need to fulfill those requests.
  • A secure online shopping cart that handles upfront payments via PayPal, credit cards and electronic checks.
  • A robust customer feedback and rating capability.
  • Targeted advertising on genealogy-relevant sites and searches so prospective clients can easily find providers’ lookup offerings.
  • Aggregated world-wide demand so providers will have enough requests to make the regular trip to the local archive profitable.

Are these benefits enough to justify our fees? We sure hope so. And we’d love to hear what you think, one way or the other.

['Middle Man' image from Phil Hatchard's photostream on www.Flickr.com.]