Posted in Business, Montreal, Opinion, Technology

15 reasons I’m not crazy about Capazoo

Roberto Rocha has an interesting article in today’s Gazette about Capazoo, a Montreal-based social networking website that wants to take on Facebook and MySpace.

What’s interesting about this project, unlike the thousands of other social networking sites, is that it’s starting big. Millions of dollars big. Before it even has 100,000 users, it’s going to flood the Web with advertising, spend millions on servers, and get as many famous people involved as possible to lure the young’uns on board. In other words, it’s going to use traditional marketing methods instead of the word-of-mouth methods that created Google, MySpace, Facebook, YouTube and everything else.

Their gimmick is a social currency (“zoops”) that people can exchange by “tipping” each other. Voluntary contributions toward people whose content you approve of.

I’ll reproduce here some of the concerns I expressed (and some new ones I’ve added) about the project on his blog:

Here’s my issues with Capazoo:

  1. The name. It’s a random nonsense word like every other forgettable Web 2.0 startup. And it tells me nothing about what the site does.
  2. Yet Another Social Networking Site. People assume they put up a website and they’ll get Facebook/MySpace-like success within months. That’s just not going to happen unless their site is much better or they have a distinct advantage with newcomers. Microsoft took advantage of the latter (leveraging its Hotmail and MSN services) to outseat ICQ in instant messaging. Google used the former to build its search engine and Gmail. I see neither as the case for Capazoo.
  3. It’s bad enough for startups that social networks require a large critical mass before they can take off. Nobody wants to join a social network that none of their friends are in. But their virtual currency system requires an even larger critical mass before any content producer sees real money.
  4. I got the same weird feeling as TechCrunch about tying virtual currency to referrals. It sounds like a pyramid scheme. And the value of a Zoop is about equivalent to the value of a Zimbabwean dollar.
  5. Content creators getting money is great and all, but the entire payment process is based on tips. And those tips might be worth a penny or two. I don’t see even moderately popular people making a lot of money this way. And even if they did, wouldn’t they feel obligated to zoop all of their supporters?
  6. What’s to stop someone from stealing a popular video off YouTube, putting it on their Capazoo page and profiting off it? How will they ensure originality of content? Any system that involves money will attract people who will try to game that system.
  7. You have to pay them money in order to get money. Which means you have to make more money. Thousands of these “zoops” just to break even.
  8. Deals with major content producers is a red herring that sadly a lot of people use. MySpace is good for listening to unsigned bands. Facebook doesn’t have any of these content deals (that I know of). Reprinting articles from wire services and major magazines is a gimmick, and isn’t going to overcome problems with the concept.
  9. I don’t like the layout. Facebook took away MySpace people (including myself) because it has a simple uncomplicated layout. Capazoo goes back to a giant mess with no apparent structure.
  10. The walled garden. I know Facebook uses this approach (requiring people to login to see anything), but that only works when the desire to see what’s behind the wall overpowers your frustration at having to register yet another account.
  11. Their terms of use. They have the right to terminate your account and take all your zoops for any reason at their sole discretion. Capazoo claims non-exclusive, unlimited royalty-free rights to your content for anything they want. They’re not even required to inform you of changes or ask for your consent.
  12. They don’t allow people under 16 to use the site. (At least not officially.) That’s going to cause problems if the site gets popular. They also allow only people 18 years or older to earn money. So the site seems to be completely pointless to a key demographic for these kinds of sites.
  13. Even if it’s successful, what’s to stop Facebook and MySpace from stealing the currency idea? Revver was started up as a competitor to YouTube in much the same fashion. So YouTube began compensating its top contributors. YouTube is still king.
  14. The entire premise is based on what I think is a faulty idea: That most users of social networking sites feel they should be compensated for the time they spend there and the content they provide. While there are some people who put up videos and blog posts and other stuff because they’re creative and want the world to see them, most people use social networking sites to comment on friends’ photos, see who’s broken up with whom, or communicate with old high school buddies they lost touch with. Nobody expects to get compensated for this.
  15. And finally, like the others, I think it’s silly to start with such a huge organization before the product is off the ground. Computing gives companies the ability to start small even when they’re starting big. It’s foolish to squander such an opportunity.

7 thoughts on “15 reasons I’m not crazy about Capazoo

  1. matthew

    Here are your concerns answered:

    1. The name stands out

    2. No one at Capazoo assumes the success will happen overnight. He have a solid team working very diligently on all aspects of our business. From partnerships to our backend systems, from member concerns to developing the next great feature or add-on – Capazoo.com’s team is not afraid of hard work and we believing it’s starting to pay off

    3. Everyone is given 25 Zoops when they sign up, helping to stimulate the economy. As well, we give 2500 Zoops weekly to the top rated, viewed and tipped videos, photos and music files of the week, injecting even more Zoops into the economy. Add in the fact that a portion of advertising revenues and corporate profits will also make their way back to our members and you have more Zoops in the economy

    4. The referral program is a way for charities and other entities to accumulate Zoops to eventually cash out. There’s nothing ‘scheme-y’ about it. There’s no money to put out in order to take advantage of the program and you actually do get some value for upgrading. The savings program is a real program that allows our members to save up to 50% with over 300,000 merchants in North America. You can save a lot more than the price of a membership just by using the program once! As well, you can use your Zoops to upgrade to Privileged or VIP status, thus never having to be out of pocket. A scheme? Doesn’t sound like it to me, sounds like real value finally from a social network

    5. As the so-called critical mass has not been reached of yet, the Zoops earned by members has not reached its full potential. Still, we have some early success stories like Hyderock, CoreyVidal, etc…. And compared to what you earn from the other sites, which is nothing, Capazoo gives content generators a place to feel appreciated

    6. We have a 24/7 member services team that is constantly scouring the site for illegal, unlawful and inappropriate content. All members also have the option of reporting a video/photo/music file they believe should not be posted. Simply put, we safeguard our members and their content, and we field all concerns and act on them

    7. Again, if your content is compelling it will earn Zoops, enough for you to upgrade without having to pay one day as well

    8. Our partnerships are very much real. We have major plans with National Lampoon coming in the New Year. We are already listed as a channel on their site and have several ways to get the Capazoo name out there in the next few months. As well, there are a ton of bands on the site that have come to us from our partner Emergenza. Other partnerships are also paying fruition. We don’t engage in partnerships for gimmick purposes, we do it to bring value to our members and to cross-promote with our partners

    9. Check out the site on January 7th, we have made some user-priented modifications that will take a great site and make it that much better from a navigation perspective

    10. You can view many multimedia fiels in our galleries without having to join. You can also read several articles in Capazine as well without having to join. We realize that we are not as big as some of the other networks out there, but we also have something very special and worth checking out, so we believe having to join to check everything out is worth the 3mins to register

    11. Terms of Use on all sites exist to protect the sites they exist on! Our member services team acts responsibly and protects the interest of our members. We take security very seriously on the site and our members appreciate our efforts

    12. We believe in ensuring safety above all else. Inviting those that are 16 and older to join the site allows us to focus in on our key demographic, actually, so a little contradictory to what the above article states. Moreover, if you are 16 and earn Zoops, we hold the Zoops for you until you turn 18. It becomes sort of a trust. So, no one is taken advantage of, minors can earn their Zoops and eventually cash them out. Sites really open themselves up to a lot of legal ramifications by allowing those under the age of 16 to set up shop on their site. We view the safety of our members as a top priority and restricting membership to 16 and over allows us to concentrate on the important issues of online safety and fraud. It also allows us to go out and sign partnerships without having to worry about how they will affect children who may be on the site

    13. YouTube is still king, correct. However, the genrators are still getting screwed. Unless you are one of the less than 1% of users that gets something from them, you get nothing, period. We believe in giving our members a member-driven economy and letting them feel empowered

    14. People do and should expect more. Feeling appreciated and valued is something we all deserve. Yes, you can to connect with friends and family, but you want to do in an environment that doesn’t take advantage of you

    15. Just because Capazoo’s model is more ambitious and equipped for success at the beginning, doesn’t mean it’s the wrong way to go about creating something new. We are doing something that’s never been done before and we believe in having the resources in place to go out and achieve our goals

    Thanks for reading my retort. Happy Holidays everyone.

    Reply
  2. blork

    From what I can see, I have no interest in this Capazoo thing. Yet another rat race, but more competitive this time, meaning no matter how hard you try to provide useful and thoghtful content you’ll always be trumped by some half naked chick dancing in her schoolgirl uniform or some idiot wiping out on his skateboard.

    While we’re dissing, a big boot to the head to the Gazette editors. The article you link to mentions someone named “Samuels” three times, but provides no other information. Just “Samuels.” Or maybe Samuels is the new McLovin.

    Reply
  3. Neath

    Yea, Capazoo is like the extreme cynical version of Web 2, we’re young, we’re loaded, and we are going to be cool! Actually, I hope this thing tanks. I am an old fashioned open source start up kind of guy who doesn’t begrudge internet success to those who started with zippo, hey, now there is a name for ya, KAZIPPO!

    Reply
  4. Paul

    Oh they’ll tank soon enough.
    Robert Samuels called McLovin, ironic. Actually to be honest I only met him once but I have heard A LOT about him. He is about as charming as an enema. He is the new chief at crapazoo.

    Reply
  5. Tyler

    Neath. Capazoo’s investors didn’t blindly invest. Capazoo must have a solid business plan. [Pointless insult deleted –Ed.]

    Reply
  6. WorkingOnWise

    Well, I an the odd man out here I guess. I love the lok and feel of Capazoo. I love the concept. I love the fact that the support team works hard to keep the site ethicly tidy. I don’t know if Capazoo will survive its infancy. I hope it does because I hate most social network sites beyond words! Capazoo has managed to catch and hold my attention. I am 38, so I may not be the “demographic” that many social sites target, and maybe that is exactly why none of them hold my attention.
    Oh, and lest you think I am on Capazoo for the money, it is so small now that if money were the motivation, I would have never given it a second look. Frankly I dont think there is any money worth talking about to be had untill the site passes 2 million users, so this site is gonna have to grow on its users and the content the users and Capazoo together can provide.
    I think Capazoo is worty of my time and attention. For you that think otherwise, that is fine. But, unless you want to go thru the efforts of designing, building, and coordinating a project such as Capazoo, you would be well advised to shut up, sit back, and observe. If it dies, you can gloat. If it thrives, I will have long since forgot this post because my attention will be on Capazoo’s success, not your naysaying.

    Reply

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