RealSelf, Backed by Second Avenue and Rich Barton, Blazes Trail with Cosmetic Review Site

11/18/09Follow @gthuang

Who says consumer websites are dead? Maybe you don’t need the ridiculous traffic of, say, Seattle-based Cheezburger Network (LOLcats) to survive on advertising revenues. Maybe user-generated content around a targeted niche, especially where there are purchasing decisions being made, can work well after all.

That’s the sense I got after talking with Tom Seery, the founder and president of Seattle-based RealSelf. Launched in 2006, RealSelf.com provides information about cosmetic treatments in an online community format that includes user reviews, doctor listings, and expert advice from cosmetic surgeons, dentists, and dermatologists. The treatments in question—a multibillion dollar market worldwide—run the gamut from nose jobs and tummy tucks to orthodontic braces and breast implants.

RealSelf is particularly interesting because it sits at the intersection of a number of fast-growing (but also challenging) areas for startups—social and community review sites, health 2.0, and ad-supported media sites. The company has gained some traction, growing 150 percent year over year in Web traffic; it now gets more than 700,000 unique visitors per month, Seery says. In terms of local startups with a similar strategy for capturing niches of Internet content (but these are not competitors), I’d mention Avvo, TeachStreet, Raveable, Redfin, Urbanspoon, and Zillow.

Like most promising startups, the story of RealSelf began with some important personal and business observations. Seery was a longtime employee of Bellevue, WA-based Expedia (NASDAQ: EXPE), and he saw the competing startup TripAdvisor plug away at hotel reviews and other user-generated ratings until 2004, when IAC (which then owned Expedia) had to buy it. “That was the ‘aha,’” Seery says. He thought, “Where else can we take this empowerment of consumers?”

Around the same time, Seery’s wife was researching a laser cosmetic treatment, and was having a hard time finding trustworthy reviews. So he thought, “Let’s create TripAdvisor for the cosmetic space.” The key adjustment he made was to introduce medical experts to the user community. The challenge there, as with most e-health sites like WebMD and Revolution Health, is that doctors are skeptical and often jaded when it comes to connecting with new online communities. So RealSelf has worked hard to build relationships not only with individual doctors, but with medical associations—and also build up its content in a way that’s valuable to doctors, in terms of connecting them with prospective patients.

Investors liked the proposition. Seery says he was lucky to get early attention and funding from noted entrepreneur and VC Rich Barton, the co-founder of Expedia and Zillow. Seattle-based Second Avenue Partners has led two funding rounds for RealSelf so far. Seery wouldn’t reveal how much he’s raised, but did say it’s less than $2 million, and that the company has “plenty of money in the bank.” RealSelf, which has five local employees plus three more in the Philippines, is not yet profitable.

I asked Seery to clarify RealSelf’s revenue model, and how it compares to “lead-generation” sites or premium content sites. “We are entirely a media company. We don’t sell leads to doctors, we’re free to doctors. We’re building really rich content for advertisement to be placed against.” The company has made most of its money through Google AdSense, though it has also started doing some direct ad sales on its site. Seery says one of his investors told him, “I’ve never seen a company make money off AdSense like you do.”

Indeed, given how most consumer sites struggle to make money on Internet ads, Seery says a specialized niche or vertical focus is crucial. “Solving a problem where people are really trying to make a purchase decision is a place where I’d personally look to for finding the right business,” he says. “It’s going to be very hard for anyone to compete in generalized social connectivity. There’s not much opportunity for startups of our size and funding.” But, he adds, “vertical search remains a really interesting concept.”

Seery says the overall challenge now is figuring out “what takes us to the next level…How do we become a very large, meaningful company in consumer aesthetics”—including how to tap into much broader groups of consumers interested in blockbuster topics like weight loss and skin care (each alone is a multibillion dollar market). “We think we’re onto something really big,” he says.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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