

ZipList Raises $2 Million, Helps You Manage Shopping Lists, Search Recipes - route3
http://techcrunch.com/2010/11/24/ziplist/

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route3
I'm new to this startup world, so please correct me if I'm missing something.

A group of investors pooled $2M together and invested it in ZipList. They are
expecting that the company (in just a few years) will be worth quite a bit
more and likely sell to a larger company. The investors fully anticipate
making back their investment plus considerably more. Is that correct?

Does this seem a little much for an application that manages your shopping
lists? To repeat something I've heard oh-so-much here on HN, are they really
solving a problem?

~~~
ig1
Imagine you're the brand manager for a new new brand of ketchup. How much
would you pay to advertise to a customer who's standing in a supermarket
looking to buy ketchup ?

That's why it's worth so much.

~~~
route3
Interesting point.

I don't want to take your example too far, but I would be more interested the
labeling of my product which reaches 100% of potential ketchup buyers
(assuming their eyes scanned the shelves) not just the 0.0001% who might be
using ZipList AND decide to snag your brand as opposed to the brand they
usually buy.

Reading about how an application like ZipList raised $2M is surprising to me.
I'm not angry or jealous (I'm happy for those involved, for sure) but it seems
like a product someone would do for university project or something similar.

Every recipe website I've been to has a button to print a shopping-list style
ingredient list. I'm used to seeing numbers like $20k revenue for a popular
shopping list app, not $2M in funding.

~~~
ig1
I imagine the majority of that money is going to be spent on marketing to
build a user base large enough to attract advertisers rather than on tech
development.

I'm guessing the ROI on advertisements would be considerably higher than
TV/magazine/web/poster advertising where a large chunk of FMCG ad spend goes
today.

------
Mankhool
I am also surprised by this. When was the last time that POS advertising made
you change your brand of any grocery item that you normally purchase or made
you try a new product?

~~~
ig1
POS advertising is still relatively new, the market size is still fairly small
(~1 billion dollars) but it's doubling every 18-24 months. That's the kind of
market startups want to be in.

