The Very Strange Story of the Startup That Says It Made $10m Before Launching
Ben Behrouzi came from the shadowy Lead Generation business, but some people in that field said he played too dirty. Now he's got a real-time search engine that just came out of beta today, called Leapfish, and he says the company will already report $10 million in revenue this year despite having barely launched to the public.
This is a strange story, but no one said the path to the future wouldn't itself be strange. So consider suspending your disbelief so you can see what Leapfish has to offer.
Leapfish was at first a site for calculating the estimated value of domain names, then it became a patched-together meta-search engine that prioritized timeliness. Now it's a gorgeous, smartly planned real-time search service with an introductory video that can only be described as epic. (See below.) The company has convinced businesses to pay hundreds, thousands or tens of thousands of dollars for year-long exclusive keyword advertising and the first right to renew each year. It's like an investment in the future viability of Leapfish, the company says. Leapfish at present only looks good, though, it doesn't really work that well.
Leapfish searches for user queries across 25 different services, from Google and Yahoo to Yelp, Digg and some Real Estate sites. The service determines which sources are providing the most relevant results and constructs a search results page accordingly. If users love Leapfish enough to marry it they can turn on as many as 35 different widgets to interact with things like their Facebook and Twitter accounts on the Leapfish home page.
The design of the site and results pages are quite nice and the fundamental idea is a good one. But how could Leapfish already be set to bank $10 million in revenue this year?
The Pleasanton, California company says it has 100 employees; 50 are listed on LinkedIn and almost every one of them are in sales.
The sales pitch is this: Leapfish is small today, but the keyword prices that companies (like this lady) are paying will be a bargain if Leapfish can really grow. It's an investment, and as such it's a very affordable one. Some companies have already resold the keywords they bought from Leapfish for a profit, the company says.
One part of what's being invested in is, no doubt, a vision of the future. Check out this absolutely cathartic video the company made about the real-time web.
It just might make you want to leap to your feet, pump your fist and shout "Go get 'em, Lead Generation Guy, go capture the future of the internet!"
Unfortunately, in our tests Leapfish doesn't work very well. Search results are often off-topic, there are software bugs in some of the most basic parts of the site on the day of its grand unveiling and the compelling vision isn't that exciting in reality. Check out our 5 minute tour of the site to see what $10 million in ads have been bought against over the last year.
If Leapfish can in fact pull it off, it wouldn't be the first time a company has sputtered oddly into a final, grand-slam iteration. It wouldn't be the first time a controversial entrepreneur with a business model that some people are skeptical of ended up capturing the world's imagination, either. Leapfish is right, the web has changed dramatically, and someone's going to figure out how to searching it effectively. The Leapfish story sure is a strange one, though.
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If Leapfish makes $10mio this year we'll do $100mio and we'll have 200,000 companies as customers.
Let's make bold statements in order to get attentention.
Usually, I'm the first one screaming "follow the money!" but this is so scammy.
Excellent reportage, Marshall.
Leapfish needs to play the music from their video alongside every search. THE NEW WEB....THE LIVING WEB!
I want an EPIC video reminiscent of the music from the Pirates of the Caribbean movie to create an image of what my company will be like, but hasn't yet achieved.
I knew it was too good to be true, lol. I tried to make an account and it got seriously buggy -- I tried refreshing and it wouldn't even bring me back to the login page after that point. It's an interesting concept, but so far poor execution.
Agreed with Jolie.
Sounds like leapfish invested a large chunk of its VC money in sales personnel as opposed to software engineers. That was a masterful sales job to get corporations to pay up front for the field of dreams ... but you don't deliver the user traffic, it will disappear in a hurry. The description in this story is of a midling meta search engine with a jazzed up user interface. Meh.
Hi Marshall,
Thank you for taking the time to speak with LeapFish last week and discuss our plans for the engine. Yes the engine will have bugs but will smooth out over the next several days.
Just some quick facts :
- Ben co-founded Reply.com in 2001 and left operations as CTO and Chief of Product in 2006, regardless of any smears, lies, etc produced online.
- LeapFish launched its Beta in November of 2008 and has been in business for over a year.
- 2009 LeapFish Ad revenue arrived primarily from one ad model that launched in late 2008. We've received a tremendous response.
- The company will be releasing new additional ad models over the next 6 months.
- Our advertisers benefit from a growing base of targeted traffic as well as the overall value of their keyword positions.
Some of the press from the past and customer testimonials can be found at our blog - www.blog.leapfish.com
We have big plans for LeapFish and the evolving space and look to release them to the community over the coming months.
Thanks again,
Mark Kithcart
Director, Marketing and Client Services
This is the total reversal of the Silicon Valley model and I love how offended you seem about its existence.
Instead of "build something of quality, get scale and people will pay for it later" this is "get people to pay for something on a large scale and build something that kinda works but people are already paying for it so quality doesn't matter". Guess which model produces more guaranteed revenue in the short term?
The model just violates everything that the Valley geek mythology holds dear and its hard to accept. Truth is that for all the ideology we hold dear its the business models we like least that often prove the most successful...
I feel the urge to watch Gladiator at double speed now.
Also - that video is amazing! Can they put me in touch with a sales rep?
The dramatic score is motivating me to pull out my wallet and light a few dollars on fire just for the hell of it.
Ron, I think that's a good take on things.
Okay then when I'll plan for my next startup company I'll hire 90% Sales persons rather than developers
Agree with Rarnar--music totally stolen from Pirates of the Caribbean (which totally stole it from the Rock). Epic.
Lead gen. Ah yes. Makes sense. Leveraging knowledge of how to acquire (real or fictitious) customer data to provide a better data discovery experience. Can't wait.
Furthermore, I disagree with what Ron said. I could care less about how and when a firm generates revenue. Good on 'em. Besides, the valley is full of companies that bootstrap. Duh.
I made 24k 2 minutes ago.
@ JP
"I made 24k 2 minutes ago."
Toss you for it!
I hope leapfish can live up to the hype. Wouldn't that be awesome!
I may be overly skeptical here, but it seems they have managed to convince people that aggregating a bunch of other sites badly is worth paying a lot of money for.
I do think real-time search is interesting, but authority within real-time would be even more interesting. It would be nice to see not just a load of real-time random information on a topic, but maybe real-time and more focussed on authoritative/useful information. And sentiment, you have to have sentiment these days.
Lastly, though I didn't realise it before this video, you absolutely certainly have to have bruckheimer music!
Hmmm... I think I'll just wait and see what happens on this one.
Nice review, I'll have to check them out, but overall, I'm not impressed based on what you've shown. Sounds like they tried to do a launch of the site before it was ready, and that may kill them if someone else now beats them to it.
Wow, nice reporting! That video was over-the-top. Maybe the company should be called "leapfrog", albeit the sentiment around leapfish seems to be on the edge today http://feeltiptop.com/leapfish/
Cheers,
Greg Martin
I got an invite to see a pre-launch demo but the canceled at the last moment blaming GoToMeeting.com. I wonder if the house was not cleaned up completely and they didn't want to open the door. We will see how it goes over the next couple of months.
About 8 - 10 months ago I would get 3-4 phone calls a day from Leapfish. Each time I requested to be removed from their phone list and it took them almost 2 weeks to finally remove me but in the mean time I had to endure countless phone calls.
Well epic video, if these Guys really made $10 M this way, Chapeau, if this is just a scam, well they will see the dead pool sooner as they think. Can't get enough of this video. And I think they removed the Beta label too early.
(Beta Comment)
Social media and business networking sites need a universal inverse search feature in order to enable everyone to connect with people and engage businesses outside of their network, people they can’t otherwise find, people they don’t even know yet, and bring them into their networks. http://inversearch.blogspot.com
Ben Behrauzi Indeed is a crook and so is the Black-hat company he hired to promote his bad business. The company's name si nichemicro.com.
Both ben and Cedric campbell aka sean dean aka sean campbell hires people on ODesk to do their Black hat work and never pay those innocent service provider. I know 4 such people.
I would warn people against using nichemicro.com's service. They are just a bunch of croocks, and Ben Behrauzi is perhaps with this sleazy team. nichemicro was earlier called SEOteamUSA.
Try searching for iPhone:
Your search for "iphone" did not match with any results.
(I say it's a scam...)