The first piece of news I saw this morning is that Angie's
List has filed to go public to raise up to $75 million. This is a big moment
for the company, which started in business in 1995, and has raised over $100
million to date. The result of that investment: over 820,000 paid memberships
in 170 markets nationwide. 2011 revenue likely to push $80 million. Over 2.2
million reviews of local contractors, service businesses and more recently,
healthcare providers. Yes, the company is still losing money, but this is
primarily due to a huge marketing expenditure to drive its rapid growth.

What has long intrigued me about Angie's List is its deep
and expensive commitment to build and maintain a human face, the critical key to
building a true community of subscribers. And this has consistently meant
taking a longer, harder path.

Angie's List could just as easily could have been built as a
Web 2.0 site with a totally automated system that allowed anyone to anonymously
enter reviews, with everything free and an advertising-supported business
model. Instead, Angie's List built itself on a subscription model, despite
long-standing consumer antipathy to paid information products.

But Angie's List didn't stop there. The company's eponymous
founder, Angie Hicks, understood from the start that she needed to deliver more
than the ordinary and often unhelpful reviews one encounters on review sites.
Instead, she needed to deliver reviews that provide depth, color and real insight.
This necessitates a substantial, ongoing, expensive effort to develop reviews
that meet this high bar, and that's where this sense of community becomes
essential, because the content it sells to subscribers is sourced from its
subscribers. Consider the complexity (and delicacy) required to extract a large
quantity of high quality reviews from a limited pool of people who you don't
want to annoy because they are paying you money!

As it has grown, Angie's List has been a trail-blazer on
many fronts. It launched a print magazine for its subscribers, both to maintain
visibility and further develop a sense of community among members. Since trust
is everything to a company that sells reviews as a product, Angie's List has
its policies and processes audited by BPA each year. It maintains a policy of
"no anonymous reviews" in a world where anonymity is the norm. It has
been a pioneer in variable pricing, allowing it to charge less when it enters
new markets and has fewer reviews initially. And the strong sense of integrity
it has built has allowed it to generate substantial advertising revenue from
the very companies its subscribers are reviewing -- a neat trick few in the
reviews business have mastered.

A big chunk of the success of Angie's List has to be attributed
to its founder, Angie Hicks. When Angie spoke at Data Content 2008, the
audience was transfixed by her energy and excitement, wrapped in an "aw
shucks" persona that belies sharp entrepreneurial drive (and a Harvard

The model Angie's List adopted is a tough one, making its
resulting success story both durable and well-earned.

(For those of you interested in the nuances of the ratings
and reviews business, please download our recent, free white paper on this