April 7, 2012

Pintley CEO Tim Noetzel Talks Strategy in the Craft Beer App World

I met Pintley CEO Tim Noetzel for the first time at a Sam Adams launch event around Great American Beer Festival last fall. I'd wanted to do a piece on them since, but when the news came down that they were joining with TapHunter to create the world's largest beer location database, it seemed like the perfect time. Pintley is a free smartphone app and site that recommends beers based on user ratings.

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I started the conversation with Noetzel by asking about the venture with TapHunter. Noetzel said it was not a merger, and they remain separate companies that have entered into a strategic alliance.

"We both have slightly different missions but we realized we have similar user bases," Noetzel said. He noted  that Pintley had started to move in that direction already, combining data from checkins with data gathered from the bars themselves.

The move comes in the context of a craft beer tech industry that has been growing in just as haphazard and rapid a way as the brewery boom it accompanies.

"The space has definitely been growing quite a bit," Noetzel said. He said that for Pintley, a key to strategy was remembering their focus.

"The thing we do best is help users discover new beers they'll love," he said.

Their core philosophy of Pintley is both axiomatically simple and a sort of response to the movement within craft beer toward objective, universal ratings: "a good beer is a beer that you love."

Pintley's main competitive advantage is their recommendation engine, which takes user ratings and suggests other beers the user would enjoy. BeerAdvocate called them "the Pandora of beer," but the actual algorithm is a bit closer to Amazon or Netflix in that it is based on consumer behavior.

Noetzel said that works better for beers than a Pandora-esque "genome" that would catalog each beer's characteristics, because it allows for recommendations that can direct the user to things that are related, just not obviously so.

Whereas Pintley might take your preference for big hoppy ales and suggest the odd imperial stout (since big beer people tend to like other big beers), a genome might stay too close to home to be really valuable. As Noetzel put it: "If all I recommended was IPAs for you, that would get boring really quickly."

Pintley's main competitor in the rating app space is Untappd, which is based around a Foursquare-esque system of badges and rewards combined with social sharing.

"They don't publish great numbers and neither do we, because the space is very competitive right now," Noetzel said when I asked about market share. "I think our user bases are of similar size."

Noetzel estimated that Untappd might have around 100,000 users, with Pintley maybe 10,000 fewer right now while cautioning that "both communities are relatively young."

"The bigger question is not how to get users, it's more about the business models," he said.

Early on, Pintley looked at using a system of badges, but abandoned it because, Noetzel said, that model requires a very large user base to sustainably profitable.


"The pricing and return on badges are very similar to the returns on straight banner advertising," Noetzel said, estimating that an app would have to get into the millions of users to sustain even a small staff.


Tim Noetzel wants you to find good beer.
"We have game mechanics, but ours are a little bit less gamey and  little more about the beer," he said. "I think for any Internet company, regardless of industry, it's not enough to say we're going to just focus on the [number of] users,' unless there's some extreme value."

Instead, Pintley's business relies on networking breweries and bars, and delivering a valuable connection to consumers that those producers of beer are willing to pay for.

"We've been focusing a lot on ways that we can help brewers reach their customers and we've been focusing a lot on ways that we can help brewers better understand the market."

That model allows Pintley to be less concerned with whether Untappd has a slightly larger market share.

"Are they a competitor? Sure. We definitely respect them," Noetzel said. "I get the sense we have a much larger share of clients."

The space has seen some players come and go. RedPint and Beerby were both social beer apps that folded in recent months.



"I think there's going to be some consolidation," Noetzel said, but added that he did not expect there to ever be a completely dominant firm. "It's very atypical to see an industry, even a niche industry, without a couple competitors."


And, he added, "there are new competitors every day."

The focus, Noetzel said, has to be on the highest quality of service and who can provide value to brewers. That's especially true because the nature of craft beer means that many companies are not looking to make a big exit for monetary reasons, but care about the industry and so would be happy to stay in it for many years: "I don't think any of these [craft beer app companies] are VC plays," he said.

Pintley, according to Noetzel, also has a long-term plan. "We'd like to be in the space for a while, if not permanently," he said.




I could not help but ask if the team at Pintley had had any conversations about acquiring or merging with any of their competitors.

"Any company in this space," Noetzel said, "if it's one of the leaders - and we think we are - if they're not thinking about that, they don't know what they're doing."

Because of its recommendation focus, Pintley has one interesting challenge. Hardcore craft beer fans - such as, say, me - do not really need help with recommendations. We already doggedly pursue new beers, and know what we're likely to enjoy. One could envision a scenario where someone used Pintley so much that he or she no longer needed it.

"That is something that we're thinking about," Noetzel acknowledged. Currently, Pintley allows users to be entered into a monthly contest to win "beer for a year" (a pre-paid $500 gift card), and Noetzel said that Pintley has plans to deliver more value to consumers, along with their development of their beer-producing clients.

Noetzel said that "a major announcement" along those lines will be coming up in the next two or three months from Pintley. Unsurprisingly he could offer no details, but said that Pintley will be stepping up their efforts as far as promotions, by sponsoring and attending release events, even outside of their home Boston area. Noetzel said the idea, internally referred to as the "Pintley World Tour" would further allow them to gain some exposure while maintaining focus on trying new beers.

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Frequent readers will not be surprised that I pretty quickly tried to steer the conversation to business and strategy. As someone now working in the tech startup space, I knew that most of my questions wouldn't get full answers, because the line between positive press and a proprietary advantage can be very thin and fuzzy. Still, I thought Noetzel's answers were remarkably candid and interesting. Hopefully I'll get to meet someone from Untappd soon and hear about their progress. In the mean time, if you have a friend who is getting into craft beer, I'd go so far as to call Pintley a must-have app.