After a brief hiatus, I wanted to bring back the CEO & Founders interview series.

I met Philip James one afternoon in a bar in the East Village as he was introduced by a mutual friend and fellow entrepreneur. Try and think of an industry that dates back extremely far but is only now being touched by technology… you’d probably think of the wine industry. In a really interesting interview, Philip talks about his trade…

Please welcome Philip James…

1. Please state your name, title, and time you’ve spent with your current startup:
Philip James, Founder of Snooth, since February 2007.

2. What are you currently up to?
I run Snooth (snooth.com). It’s the world’s largest wine review and social shopping site. We have over 2 million reviews for around 300,000 wines.

3. Why are you doing this? You could be doing so many other things in the world, what about this particular idea strikes you?
I love data and efficiency (which is what snooth is and does, in a nutshell). I really enjoy what I do here. We’re solving a problem in an industry with a complex problem. My job is more varied and more exciting here than anything I’ve done before.

4. All startups should be addressing a problem in the market. What is that exact problem and how are you solving it?
Wine, being an organic and evolving product, is very complex. There are over 200 grape types, 2,000 regions and 40,000 wineries. It’s impossible for a single person to know all they’d need to know to make the best choice in a store or restaurant when it comes to wine. Snooth, like IMDB or Wikipedia, serves as an external brain pack for your wine knowledge. We gather the information, store your history and preferences and help guide users to better wines for their specific palettes.

Wine is a very social product but the buying of it rarely is. Snooth leverages social networking features (friends, recommendations, chat boards and so on) to bring this social element to the shopping part of wine.

5. Have you thought about your business model yet? I’m assuming so, so tell us a bit about it.
We get paid on a per click basis for referrals we make to partner merchant stores.

We have over 1,000 partners at this point. Out big push at this point is partnering with stores in the major markets outside of the US.

6a. If you’re looking at an ad-supported model, how are you going about it? Do you have in-house ad sales? Using a rep firm? What are the challenges that you’re facing with getting ad dollars?
I believe that everything is an ad. We don’t run banners, we don’t accept paid positioning, or branding of pages, however, we have a pay-per-click business model. You can’t buy a top slot in the search results, but once a user has found a wine they like, the merchant can buy a price listing on the corresponding “buy it now” page. To me that’s an ad for that merchant.

The big difference is that we are only paid on referrals so it’s simple for a merchant to evaluate the performance of their listings.

6b. If you’re selling a product/service/subscription, how is that coming along? What are the challenges? Are you using the freemium model?
Users don’t pay to use Snooth, so we don’t have this exact issue. The closest we have is that users can use the site without registering, however, there are benefits and additional features available to registered users.

I see that as pretty similar. How do you convince a casual user to ‘invest’ the time to register, invite friends, populate their profile and become a contributor rather than simply a consumer?

Its tough, but we stick to the core; the long term wins. We just continue to build out our feature set to make it more compelling. We also encourage users to invite their friends. That of course benefits us, but it also directly benefits both the new and existing user significantly.

7. As an entrepreneur or investor, what are your thoughts on competition? How do you view competition?
I simultaneously view everyone and no one as competition. We’re not simply competing against other online wine sites, we’re competing for people’s attention. We’re competing against literally everyone and everything. It’s an attention economy. If people aren’t using Snooth they could use a similar site, or they could be jogging, or eating at a restaurant or something else.

At the same time, no one does exactly what we do.

This is important, as it allows us to focus on what we do better than everyone else in the world, but also forces us to recognize that people want fun and entertainment and enjoyment out of everything they do, and to compete we need to integrate that into our site.

8. If your competitor called you up to have coffee and discuss shop, what would you do? Would you go? What would you divulge?

I’d be there in a heartbeat. Following on from the previous comment, the immediate competitors make up just a small fraction of the landscape. If we don’t talk and learn from each other we’re going to be fighting it out in a very small sand pit.

I’m actually on the Advisory Board for Wine 2.0, which is an industry group that fosters communication and knowledge transfer between companies in this space.

9. Is the current state of the economy playing to your favor? If so, why? If not, why? What is your forecast of the market throughout 2008 and do you see affects? Macro and Micro economic theory would be interesting to hear about.

I don’t think it makes a difference. For every person who no longer sees wine as an affordable luxury, there will be someone else who turns to a price comparison site like ours to ensure they get what they want at the best price.

10. How much of your time is spent working? How much is spent with family? Have you found the entrepreneurial quality of life yet?

I work hard, but not as hard as I should any more (I try to make that up by working efficiently). My life’s fairly well balanced and I’m happy with that.

My family is actually based in the UK, so I rarely see them, but I have time for friends and hobbies here.

Thank you Philip!

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This entry was posted on Monday, April 7th, 2008 at 2:52 pm and is filed under Startup & Venture Capital. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.