How ChaCha achieved its network effect

Bambi Francisco Roizen · January 7, 2011 · Short URL:

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)

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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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ChaCha answers who, what, when, where and why, and has emerged as the No. 1 way for advertisers and marketers to engage their audience. Through its unique “ask-a-smart-friend” platform, ChaCha has answered nearly one billion questions since launch from more than 15 million unique users per month via SMS text (242-242™), online (, Twitter (@chacha), Facebook app, iPhone app, Android app, and voice (1-800-2-ChaCha™). Working with major brands such as Paramount, AT&T, Palm, Johnson&Johnson, P&G, Coca-Cola, McDonald’s, Sonic, and presidential political campaigns, is one of the fastest growing mobile and online publishers according to Nielsen and Quantcast.

ChaCha was co-founded by proven innovator and entrepreneur Scott Jones and is funded by VantagePoint Venture Partners, Rho Ventures, Bezos Expeditions; Morton Meyerson, former President and Vice Chairman of EDS as well as Chairman and CEO of Perot Systems; Rod Canion, founding CEO of Compaq Computer; the Simon family; and Jack Gill, Silicon Valley venture capitalist.


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