Local services startup Smalltown Inc., one of several companies trying to remake the small-business Web site category, has extended its first round of venture funding from Formative Ventures and launched a new marketing initiative intended to scale the business nationwide.
The company, which previously established community sites in six towns on the Peninsula south of San Francisco, is launching Webcards.com, a site that allows small businesses to create and maintain a Web presence that Smalltown will syndicate to various sites such as social networks and yellow-pages aggregators.
Smalltown is essentially crowdsourcing its next set of community sites. If enough businesses in a town or neighborhood purchase Webcards, the company will build its next communities around those businesses. That's the opposite of what Smalltown had previously done -- choosing towns first, then selling to local businesses. Selling into the local business market is extremely expensive, and has led to some casualties in the past. Founding CEO Hal Rucker says this move was always part of Smalltown's plan, though, and insists it's not a strategic shift.
The Webcards will be inexpensive but not free, according to Rucker, in order to promote quality. Smalltown may have difficulty selling Webcards to businesses that don't yet know whether their communities will get their own sites, but the crowdsourcing idea will certainly spare it from the frustrations of marketing to small businesses one by one.
Rucker said Smalltown will pursue a Series B round later this year. The original $3 million Series A round from Formative was announced in Fall 2006, and the extension came at the same valuation but did not involve a new investor. -- Paul Bonanos
See Feb. 20 post on the local services market from Tech Confidential
See Octobert 2006 story on Smalltown from TheDeal.com
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