If historically I had to maintain and keep up-to-date the contact info of 100’s of people in my address book, with Plaxo I could instead worry about the contact info of just a single person – myself.
Plaxo would do the rest keeping my friends up-to-date on my contact info automatically, and vice versa.
The only real issue was how to bring enough people onto the platform to make it meaningful for everyone. But as this service is extremely viral (the more friends I bring into Plaxo, the easier it gets to maintain *my* address book) – that took care of itself and millions of people now use Plaxo.
Being THE address book synchronizer of the world is a very powerful position to be in, but it seems like that’s the point where Plaxo started fumbling on its strategy (of course now that I say that, Microsoft will probably acquire them next week for $1B and I will look totally stupid… whatever…).
Instead of focusing on its core strategy – being the world’s address book sync’er – they started copying and dog-chasing the flavor-of-the-day companies and tried to become Facebook. I don’t get the whole Plaxo Pulse thing… why do I need to ‘friend’ again the people that I already ‘friended’ within Plaxo when we exchanged our business cards? And once I do that 2nd friending process – what value am I supposed to get?! It’s clear that Plaxo got valuation-envy from Facebook and decided to go in its footsteps. The trouble with that, is that you can only copy what’s already out in the open… if the strategy is not genuinely *your own* strategy, then you have no idea what to do next and why to do it. Which means that almost by definition, if you’re copying someone else’s successful strategy you’re almost doomed to fail. The proof – Pulse is a pathetic copycat of Facebook that adds absolutely zero value (to the user at least… who knows – if they can spin this to some stupid acquirer it might end up adding a lot of value to them…). Last week they even tried to start scraping data out of Facebook (violating FB’s T&C’s…) and use it within Pulse. Ugh…
Now it seems like they’re shopping themselves for $100M. It’s sad to see because this is one rare example of a product that made total sense, which could have made a ton of $$’s by sticking to its core strategy and not trying to copy others. Here’s what I think Plaxo should have done. I offered these ideas to Todd, their co-founder, a couple of years back. But since they obviously chose to become Facebook2, I’ll publish it here. Feel free to take it and build a $1B company out of it:
Plaxo pretty much perfected the product for syncing contact info between me and *my friends*. The next step, and where the honey pot lies, is to let me sync my contact info between me and *businesses* I have a relationship with.
Think about the simple case of moving to a new apartment. It’s a huge headache for me to update all the banks I use, magazines I subscribe to, insurance companies, etc, etc. It takes months to get all of them updated. It’s a similar, or even bigger, nightmare for all those businesses that need to stay in touch with me. They need to put systems and people in place to manage their contact databases, they need to hunt down people after mail is returned or calls aren’t answered, etc, etc.
Introduce "Plaxo for Businesses", and let me share my Plaxo info with businesses the way I do with friends. A business would have to be insane not to pay say $5-per-year-per-client to automatically and permanently maintain a perfect contact record of each of its clients. A magazine that’s printed, shipped and returned probably costs more than $5… If it makes sense for a magazine, it would make sense for pretty much any other business.
It’s rare to have a product that would make so useful for the end user, and would also be so attractive for businesses to pay for . And as this is one of those winner-take-all type of platforms, there ain’t going to be much space for more than 1-2 major players. Plaxo was (and still is, if it wakes up) in a great position to become the world’s address book syncronizer. It might be less sexy than being 17th Facebook, but I think it’s a MUCH better business to be in as the leader. If Plaxo lets this opportunity slip, it’ll be Microsoft (or maybe Yahoo Mail or Gmail/OpenSocial) that takes this. Again. I’d hate to see that happen… 🙁
 Actually – to get this absolutely correct – the app I really loved was Contact.com which was released way before Plaxo even existed (’98 or ’99 I think). Contact.com was founded by Eyal Herzog, one of the smartest Israeli web entrepreneurs who went on to start MetaCafe later. Contact.com was one of the best internet apps ever, and unfortunately it was waaay ahead of its time.
 Is this what Doc Searls refers to as VRM?