Patrick Spain comments

Patrick Spain, the founder of Highbeam, emailed:

Probably the last thing you wanted was another HighBeam person weighing in, but I thought I would anyway and you can ignore it, if its not helpful to you.

Most of the differences in the business models of Factiva and HighBeam are apparent from looking at the sites. I leave you to say what you like about them. Their individual model is an annual fee and then payment on a per article basis. Ours is monthly or annual subscription that provides unlimited access to our resources. I am the first to admit that Factiva has more and deeper sources than HighBeam, though I would question whether most people need or will pay for “perfect” answers rather than just “excellent” ones.

The real difference is that Factiva, at least on its site for individuals, is still selling content. We aren’t. We think the time for selling content online is past. We are selling access to a research environment that has tools, content, and an easy to use interface. If we do it right, you get an excellent answer quickly and easily. Howard Schultz at Starbucks would call this selling the “experience” rather than just the coffee.

Furthermore, we give a lot of the tools and some of the content on HighBeam away for free and support it with advertising. The user base of the free part of our site is many, many times the size of the paying user base. We make money from both.

Another more fundamental difference is that our only focus is to serve the research needs of individuals in a variety of business environments. Factiva sells primarily at the enterprise level. There is a pronounced, yet underreported, shift toward employees purchasing the goods and services that they consume directly from the vendor, rather than through a central corporate purchasing entity. This trend, made possible by the Internet, is most evident in the purchase of travel services, which has almost entirely devolved to individual employees. But it can also be seen in in the information business and the software business. Salesforce.com will sell a single employee a seat at $50 a month.

We think that individuals within companies purchasing exactly what they need, when they need it, is the future. The old model of selling large ticket goods and services to central purchasing entities (many of which are now outsourced or gone altogether) with an expensive direct sales force is increasingly broken. Within this fundamental and irreversible shift lies immense business opportunity.

Patrick

Patrick Spain
Chairman & CEO
HighBeam Research, Inc.

Author: David Churbuck

Cape Codder with an itch to write

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