Backed by a recently-raised $1.4 million Seed round, Tout’d is amplifying the reach and effect of word-of-mouth marketing for local businesses

By Editor August 1, 2012

Tout'd_logoA Q&A with Tout’d co-founder Rob Morelli. The New York City–based company was founded in 2011 by Morelli, Saro Cutri, and Arron Kallenberg, and raised $1.4 million in Seed funding in mid-July. The round was led by Warner Hill Angels.

SUB: Please describe Tout’d, and the value proposition you bring to social recommendations.

Morelli: Tout’d is an easy-to-use social utility that will disrupt how consumers currently make purchasing decisions, especially within local markets. We want to enable the smallest of the small businesses to compete with the most well financed brands by focusing on the one thing that traditional paid marketing oftentimes tries to subvert—actual consumer experience.

We do this by amplifying the reach of the traditional word-of-mouth recommendations that already happen every day amongst friends. By focusing on the credibility and accountability that social recommendations provide, purchasing decisions can be made based on the quality of a service or product and not just on the last advertisement you happened to see or the highest Google search result. Our goal is to deliver consumers to those businesses which do the best job of pleasing their customers based on the metrics that matter most to them as individuals.

SUB: Who are your target users?

Morelli: Our target users are all tech savvy consumers—and we don’t mean super tech savvy but the casual Internet user. Besides that, there honestly isn’t one particular cohort that we are focused on over another.

SUB: Who do you consider to be your competition?

Morelli: Yelp, Angie’s List, Gogobot. All are sites that want to help inform users who are going to be making purchasing decisions.

SUB: What differentiates Tout’d from the competition?

Morelli: There are differences—some obvious and others more subtle—with each of our competitors, but I would say there are three major differences overall.

The first, and probably most important difference, is the way in which we source recommendations. Our spark for content generation is a simple call to help a friend in need—a question. Someone who has had a good experience with a vendor or a product more often than not, doesn’t run to a website to give a review of their experience for the world to hear. But if a friend happens to ask them if they know of a good—‘blank,’ most people are happy to share their experiences. We’re finding that by simply changing the motivation for sharing a recommendation, we are sourcing much more personalized, valuable, and actionable content to be shared amongst social circles than exists on our competitors’ sites. It’s a subtle difference that makes a major impact for our users.

The second major difference, and I already alluded to it, is that these recommendations are shared within ‘closed’ networks. Most sites are out there trying to get someone to say something about any business or product. This questionable content, when overlapped with SEO optimization and paid search results, has historically been perceived as viable, despite this obvious gaming of the system. We asked ourselves, “Why is this bar so low?” Our goal from the onset was to provide recommendations our users could actually feel confident acting on, whenever possible. Keeping our networks closed and allowing only socially vetted content was the most viable way to accomplish this. I guess you could say that we’d rather be a mile deep than a mile wide.

The third is that we allow for our users to have discussions on just about anything. You can’t go to Yelp and ask your friends for a great idea for a family friendly day trip outside of New York City, or for a great idea for a birthday present for your 10-year-old niece. By replicating what happens in the real world, word- of-mouth, and pushing it farther and faster, we want to serve our users’ needs in concert with our own. Too many of the bigger guys service their own needs at the expense of consumers and that’s why we know there is a place for Tout’d.

SUB: When was the company founded and what were the first steps you took in establishing it?

Morelli: We began kicking around the concept for Tout’d as far back as September of 2011. Having all been disciples of ‘The Lean Startup’ by Eric Ries, we tried our best to distill our concept down to its core principles. In fact, the wire framing that we did for the initial prototype of the site was based on a mobile app. Starting that way forced us to keep focused on only the most important core elements of our concept because there is so much less you can do on a mobile device over a web app. It was a healthy exercise for us. We then began the development of Tout’d in earnest in January.

SUB: What was the inspiration behind the idea for Tout’d? Was there an ‘aha’ moment, or was the idea more gradual in developing?

Morelli: It’s a bit strange, but the concept of Tout’d almost seems inevitable in retrospect given our backgrounds. Saro and I had co-founded a startup in the medical space called WhichDoc, which was aiming to improve patient experience within healthcare by enabling friends to help each other find and choose better doctors and dentists. Arron, through the TechStars program in 2007, had previously co-founded Villij, a social recommendation engine that was focused on connecting people who had similar interests. When we teamed up, we sort of melded these concepts together and Tout’d was born.

SUB: What have the most significant obstacles been so far to building the company?

Morelli: Finding quality development talent in New York City has probably been our biggest challenge thus far. We have built a great team of four developers that are doing solid work, but we could always use more. Do you happen to know anyone? Just kidding.

SUB: You just closed a $1.4 million Seed round. Why was this a good time to raise this round, and how do you plan to use the new funds?

Morelli: We have two major things we are working on. First, we are working on a complete visual redesign of the site that will be optimized for desktop, tablet and mobile devices. We expect that to be coming online within the next month. Secondly, we are focused on native mobile app development. That’s going to take a bit longer but we hope to have our first cut of this up by the end of September.

SUB: Do you plan to raise additional funds in the near future?

Morelli: We are a startup so it’d be naïve to say we aren’t conscious of the need to raise additional funds eventually. However, having just closed this round, we think we’ve purchased enough runway to implement the business plan that we presented to our investors.

SUB: How does the company generate revenue or plan to generate revenue?

Morelli: We have a dual business model. We plan on selling ad space to local vendors and businesses next to the recommendations given by socially connected users. We believe these ads tied to social endorsements are extremely valuable. We also currently offer the opportunity to purchase products that have been Tout’d to other users through Amazon’s affiliate link. We expect to roll out numerous other affiliate purchase partnerships as we continue development of the site for products ranging from hotel rooms and airfare to restaurant reservations.

SUB: What are your goals for Tout’d over the next year or so?

Morelli: Honestly, our goal is simply to make Tout’d a community where people can trust the content that they are seeing so that they can make more informed purchasing decisions. We want our technology to be a facilitator of content creation and sharing, not necessarily the star of the show. If we can achieve that goal, we’ll be well on our way.

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