Do you know how much Dow Jones paid for Generate?

At last Web 2.0 Generates a Winner in B2B Social Media!

The sale of Boston-based Generate Inc. to Dow Jones on Friday is the first piece of good news venture capital can point to in B2B social media space. There have been surprisingly few successful exits in the space in the 5 years since the funding of the first wave of B2B social media companies like LinkedIn. Generate brings together next-generation search and extraction technologies with great client relationship mapping and is clearly a second generation play. Generate’s approach has been to carefully look at the experience of early entrants like TrueAdvantage to locksmith a superior solution that really works for sales. LinkedIn continues to build a great franchise but no exit yet, despite rumors of acquisition last year with Murdoch’s News Corp.

There are three types of Web 2.0 plays in the space:
· Better search engine and organization of online content for sales - like Generate
· Dynamic community - like LinkedIn
· Knowledge trading from the community - like NetProspex

LinkedIn is popular with business development executives and for sales people in relationship sales environments where business introductions matter. But LinkedIn doesn’t help transactional sales executives, who don’t have the leverage to get someone to open their network for the process of selling lower ticket items. This is a big space as the vast majority of B2B transactions are below $50k.

NetProspex, also out of Boston is another second generation Web 2.0 business that parallels the Generate approach. The first entrants in contact trading, like Jigsaw are finding that data quality is just as important as trading. Without it, abandonment rates make it difficult for a user-maintained system to get enough users on the system to keep the data clean. Like Generate, NetProspex has used the lessons learned to build a better mousetrap. NetProspex allows sales people to trade their internal prospect lists, but scrubs the data during and after the transaction. Sales contacts are a perishable commodity, a bit like fish…they soon go off. NetProspex technologies filter and validate contributed data to greater than 99% accuracy. Why is this important? Sales needs a higher level of accuracy, because it can get really irritating if every other phone number or email address is wrong. NetProspex expects that with the quality issue resolved, there is no reason why sales people shouldn’t have a great prospect map of their territory to find those customers they don’t yet have.  It’s an exciting market and a very large opportunity, and as these second generation businesses realize the potential in the B2B social media space, more success stories will follow.