How ChaCha achieved its network effect

CEO and co-founder Scott Jones says mobile drives usage of the real-time Q&A service

It's often the case that companies zig and zag their way to success. If one business model isn't working, another is tried, and then another. If one distribution platform or strategy isn't working, they try another. But it's not often the case that a company dumps one business idea for another, only to have the new business idea enhance the old one. That's what happened at ChaCha, a real-time Q&A service that combines technology and human guides to come up with answers.

Five years ago, the Q&A service was merely online. In 2008, the company, which has raised $72 million in venture financing, changed its direction to focus on being a mobile Q&A service.

"Was this an extension or major directional change in strategy?" I asked.

"At the time, it was a major directional change in strategy," said ChaCha CEO and co-founder Scott Jones. But a year later, the SMS content was ported online and it was that "unique" content that began to drive ChaCha's online traffic and usage as well.

Watch the interview to hear Scott explain the company's success with mobile, how it achieved its network effect, and why its focus on delivering answers in one minute is its key to success.

(Note: Our next interview is on how ChaCha makes money. Fo Interview No. 1 -- "Who's using ChaCha?" - click here)