Getting Fruugo

Fruugo Main Page

Yesterday, I was among a group of people given an overview of Fruugo by their VP of Marketing Janne Waltonen.

I’m not 100% sure why a group of Nokia employees were invited. It seemed to be just a chance to build the word of mouth about the service in a positive way, and also to manage the somewhat unrealistic expectations of the service.

Janne was not selling too hard, and instead he used a jovial and relaxed manner to convince the audience that, although Fruugo was on to something good and it could and should acheive something of value, we should not to expect this to be new Google – contrary to what was quoted recently.

Oddly, there was no coffee or any other such niceties, which seemed a bit…frugal. But anyway, from what I could gather, Fruugo is building something of value.

I don’t think this is going to revolutionise the social side of shopping. Contrary to the “Web 2.0” look of the beta site, Fruugo is not a particularly social experience at all. So far there is only a comment field, a simplistic rating score, and … that’s about it. So it is certainly not revolutionary in the social sense.

But what it does do is allow SME’s to sell their products to other European countries. It allows consumers to understand what they are buying, and to trust that they will get it. In a nutshell: that’s it. Fruugo are trying to become the lubricant for SME e-commerce, starting in EU and then for the world.

I haven’t done a thorough analysis of the business potential here, but suffice to say the big name investors must realise that 99% of businesses can be defined as SME, and that these business make up 40-50% of GDP globally right now. These SMEs all suffer from the same barriers to trade: linguistic, logistic and legal. Fruugo will attempt to remove these trade barriers, or at least make them leapable hurdles rather than 10m high walls.

If they succeed with this, then they get a piece of the long tail. But this is not all about niche products. Many of these products are useful, fairly mass-market products that just cannot easily make it across the borders. Yet.

The good news for Fruugo is that, if it succeeds, it will have built something which will be very difficult and expensive to replicate, which is the essence of a sustainable competitive advantage.

These are not easy times to be starting a business that relies so heavily on consumer spending. But perhaps by reducing the barriers to trade, they may actually be one of the companies that gets us out of this financial mess we’re in. So, for that reason at least, I think we should all wish good luck to them!

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