Redbeacon won this year’s TechCrunch50 contest, getting $50,000 and bragging rights as on of the most promising startups of the year.  Previous TechCrunch winners have gone on to great success. was purchased this year for $170 million by Intuit just two
years after winning TechCrunch’s best-in-show prize.

The San Mateo-based company streamlines the model of online transactions in the same way that OpenTable did for restaurant reservations. Consumers can search for services like
plumbers, bakers and contractors and arrange appointments through the site.

Co-founder Yaron Binur is a former Google product manager who started the company with two other ex-Googlers: Ethan Anderson and Aaron Lee. I asked him about how Redbeacon plans to change local service exchange and we can expect from the company in the coming year. 

What do you think gave Redbeacon the edge to win TechCrunch50 this year?
I think that the TechCrunch team saw a big opportunity for innovation in the local search space, and thought that Redbeacon is addressing the consumer problem of finding and scheduling local service providers in an innovative way. Even with the innovation that Internet has brought to so many other areas, 9 out of 10 Americans still use the old-fashioned phone book to find and book local services, and Redbeacon aims to change that. The TechCrunch team also realized the huge market opportunity that RedBeacon is addressing, with $155 billion spent in local advertising in 2008 in the US, and Redbeacon has the potential to tap into a substantial part of that market. Finally, Redbeacon is the type of product that everyone can see the need for and can relate to the problem that it’s solving.

Do you have any plans to partner with local brands on advertising?
Most of the service providers we will be
working with will be local. Currently we are not offering separate
advertising opportunities for these service providers, but rather feel
that the most effective way for them to “advertise” is to sign up and
get new customers is through our system.

Do you have an ad model or are you taking a fee for setting up providers with users?
Redbeacon is completely free for consumers to use. For service providers, it’s free to sign up and free to get job offers and quote on them; they only pay a small commission (10% of the total job value) if they win the job. From a service provider perspective, they only pay when they get paid, which is the most effective kind of marketing one can have.

How important is natural language to your search feature?
language processing plays a key role in understanding what service the
user is looking for and also matching the specific service request with
the right service provider. We have filed a provisional patent to
protect this technology.

Are you aiming to have a comprehensive list of service providers available on Redbeacon?
Redbeacon does not have to be comprehensive, it does not need to have every single service provider in its system in order to be effective. For a given consumer service request, it is sufficient if Redbeacon has 3-5 service provider quotes from a diverse set of providers, in order to be effective for the consumer’s needs. To achieve that, Redbeacon only needs to sign up a subset of the providers in a given area for a given occupation. In addition, in the case that Redbeacon does not have enough service providers in the system for a given service request, we can sign up service providers from that area in real time and have them bid for the consumer’s service request. That way we can both expand our reach and ensure that consumers have a good experience.

Will the services offered grow as Redbeacon grows?
Absolutely, we see Redbeacon becoming the one stop shop for all local service consumer needs. Redbeacon will support both the most commonly thought of services such as gardeners, plumbers or maids, as well as the long tail of services, such as hip hop dance instructor, music therapy, or Latvian language instructor.

What do you have in the works for the upcoming year? How will Redbeacon look different in 2010?
We are working on many new features, but I cannot talk about them in detail at this time. Some areas we will be focusing on are mobile support for smartphones, including location-aware integration, as well as leveraging the social connections of users to better recommend service providers, based on whom their friends have used and liked.