The Keys To (Revelevant) Local Commerce Are Now Within Reach

So since we all now know daily deals aren’t the holy grail of local commerce, it begs the question “WHAT IS the holy grail of local commerce?”

I’ll throw in my hat and suggest a real-time product and service discovery platform within your local community would be a strong contender.  Imagine if the right information hit your mobile device just at the right time, suggesting (or urging) you to make a purchase or buy a product from a favorite merchant of yours, who happens to be right in front of you at the moment.

keysIt’ll happen.  And OfferSavvy is already treading in these waters.

I spoke with Justin Boggs, one of the OfferSavvy founders about the future of commerce, where he sees it going and how they are looking to roll out their product discovery platform.

A few years ago Boggs started to think about how Groupon, LivingSoclal and other daily deal sites were taking huge cuts from each deal sold but not adding much value to local commerce.  He thought “how do we track offline transactions, and do it better and in a more healthy way for the local economy?”

After going through Bizdom, an accelerator in Cleveland where they got advice and connections, they are now headquartered in Long Beach, CA and rolling out their first version of the product as we speak – a personalized product discovery platform with CashBack incentives on any purchases through the system.

Ideally, they aim to build out this commerce platform and offer it to brick and mortar companies to establish a full blown local product recommendation system, akin to what Amazon does on their properties.

The goal is to create something meaningful for business owners and local consumers, with cash back incentives for both if they opt for social sharing.

I sure hope they succeed, I cannot wait to get relevant deals and offers from a system that actually knows who I am, knows my interests, knows my favorite local merchants and understands my purchase history.

You can read the entire back and forth conversation below.

What is OfferSavvy?

OfferSavvy is a social commerce marketplace where people come to discover, share, collect and buy their favorite products. We incentivize social activity and reward users with CashBack Offers on Products and Social Bonuses when their social activity leads to sales. Users can elect to have their earnings deposited into their bank account or they can donate those funds to charity AND OfferSavvy will match that donation.

We believe we have figured out how to truly create social engagement around the shopping experience in a meaningful way. Most importantly, our goals are to present each user with a personalized experience and a wall of relevant offers. So with our advanced recommender technology, artificial intelligence machine learning software, graph database, and natural language processing capabilities, we can acutely monitor a users interaction with our website and people on the site, and then begin to customize the experience for each user. Thus we help people shop for fun and with purpose.

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What’s the vision?  And what problem is OfferSavvy solving?

OfferSavvy is shopping evolved. People love to window shop, score great deals, and tell their friends all about it. OfferSavvy delivers that experience in one place, and we help people earn some extra cash based on their social connectivity. Moreover, the best form of advertising is word of mouth. Big brands and marketers know this. You probably realize this too, as your friend’s opinions are more important to you than some paid advertisement.

So, we encourage our users to be social and share offers that they discover through OfferSavvy. And each track every link that is shared. Therefore, when any social activity leads to new signups and sales through OfferSavvy, we give a little Social Bonus to the user for being the catalyst to that activity. Every user now has the power to earn dollars just for being social. Plus for the millions of American’s that need their dollars to stretch just a bit further, every product on our platform has a CashBack offer attached to it, so you can find the products that you really want- and earn CashBack in the process.

Our longterm vision for OfferSavvy is to build out the commerce rails to allow any business to actively engage with us and make Offers through our platform. This will give our users a unified experience, and allow them to stay on our website rather than be redirected third party websites to buy products. In addition, we have already written card linked offer software, as a means to close the loop for offline redemption in store. So, when I am able to build out this vision, OfferSavvy will be a grand catalog of CashBack Offers, both online and offline, to your favorite brands and merchants. We will be able to serve up real time, geo-located, personalized, mobile and cardlinked offers for our users. This way we can help people earn rewards off of every transaction they make each month. If you think about all the money you spend each month, how meaningful would it be in your life to get 5-15% of that back… we can truly impact lives here, while building cool technology.

How do users discover and use OfferSavvy?

We just went live last week, so we have started contact all of our friends, family, and connections directly. So people are coming to the site mostly through a direct link to the site. In addition, the website is built on the premise of social shopping, which means that each of us spends time using the product, creating collections, and sharing products with friends through social media. This has lead to promising traffic from Pinterest and Facebook, and a couple of visits from Tumblr and Stumbleupon.  As time goes on, traffic in large part will be through natural search for products, and given are large catalog, we can compete for page rank.

What’s the story behind OfferSavvy?  Any lessons to share?

The initial thoughts and ideas were came to me a few years ago, since that time I have continue to iterate and cultivate what is now OfferSavvy. Officially, the company was started June 2012, when we got some initial seed funding.

Some things I’ve learned from building startups is that nothing happens unless you do it, and you can truly never expect anybody else to be invested in your ideas the way you are. So you really need to be passionate about what you are doing, and love working, because for the first several years, work life balances shouldn’t exist- if you want to build something truly impactful.

Another interesting thought is just how startups are a lot about “hurry up and wait”. You have this grand vision for what this thing could be, and you want it tomorrow, but come to find out that it is going to take quite some time to build such a thing.

Also, as the founder, remember that you don’t have to be the best at everything, instead try to be the maestro, and get the right and best people for each role of the orchestra.. the genius is witnessing the music as your group plays in concert, in harmony.

What is the company’s current status? (funding, beta, users)

We have raised a little over $300k in seed funding thus far. We now have a live product open for consumption, and watching intently as users begin to interact with our platform. Ideally we want to use data and user feedback to shape this into the product that people truly want to use. And we can take the evolution in development and modifications in stride as we have structured release cycles in agile development. This allows us to be nimble, and redirect development efforts quickly as users begin to tell us, and show us the right way to go. We are also looking to raise additional funding that would give us a 9-12 month run rate, so we can focus on user acquisition and engagement on the website.

What’s next?

We have some fun hacks under way as we speak that is truly ground breaking. In the next few weeks you can expect to see the release of some social products that are completely unique to OfferSavvy. One such hack will allow users to not only make comments on products or collections, but respond with hashtags.  You might say, “Hashtags” aren’t new? To which I reply, ‘what if’ every hashtag pulled the top user generated tweets & Instagram Pics in real time into the thread?  People would not only be discovering new and interesting products, but they would find additional rich social content surrounding that product.

So with a hashtag system in place you could not only read what people think or how they feel about the products, you can see the latest tweets about the product from all over the web attached to that hashtag, and you could see the most recent Instagram Pictures that people snapped with that product or brand with that hashtag. Check out our “Featured” section today to see this in action in a slightly different way, but it will give you a good idea of the direction we want to go socially.

Founders RAW: Startups Are A Lot Like Surfing

This post was originally posted on GeekWire.

Seaton Gras started a tech incubator because he wanted to help entrepreneurs more easily create companies.  He named it SURF Incubator — an acronym for Start Up Really Fast.

But If you prod a bit more and ask him about the name, he might just dive into an analogy of how startups and surfing are quite similar. SURF is a great name since founders are constantly working against resistance to get a business up and running, he says.

Bromium founder Simon Crosby brought up that same analogy during one of my recent Founders RAW conversations.

He says:

“So you’re in the waves… and you got a board.  And your board is your ‘idea’.  And one thing you quickly realize is you cannot control when the waves come.. you have no ability.  When the wave comes, you gotta get on the board and you gotta surf… and there’s reefs and other dangerous things under you.  So you cannot control time, you’re in a very precarious situation at all times… and it goes up and down a lot, sometimes several times a day.”

New startups are being created at a fever pitch — and we’re coming off Seattle Startup Week where we crawled, sang, danced, learned, lived and breathed startups. But it’s important to remember: Not everyone surfs.

And they don’t for very good reasons.

It’s dangerous.  It takes time.  It takes patience.  It takes learning the ins and outs of the environment  so you can start predicting what’s going to happen next.  It’s not as glamorous as most make it out to be, sometimes it’s cold, it’s always wet and a mouthful of salt water doesn’t usually sit too well.

See the similarities?

Let’s not forget it takes lots of hard work and dedication to build great and lasting companies.  Here’s to hoping you paid attention this last week, made some great contacts and discovered your next steps to take. I know I did.

Now, it is time to act on those next steps.  Make a promise that your excitement and energy of wanting to be a part of the startup movement doesn’t get washed away just like the “NICK WAS HERE” signature I place in the sand of every beach I visit.

Below is the short clip of the surfing analogy from my conversation with Simon.  You can catch more of Founders RAW here.


Who Inspires Me?

You might wonder who inspires me as an entrepreneur and a writer.

There are many, but one person is Mark Suster.  He is a previous two time entrepreneur – sold his last company to Salesforce – and is now an investor and has been with with Upfront Ventures for about 6 or 7 years.

He’s great because he views startups from both the investor AND the founder perspectives, hence he writes at Both Sides Of The Table.   His straightforward tone and no BS attitude is something I have taken to my own words.  Like him I feel truth, honesty and controversial topics should be embraced by an influencer.  Ya’ll deserve it.

To get an idea of who Mark is, here’s a recent interview with Sarah Lacy of PandoDaily.

If you are an entrepreneur I suggest sitting back and taking some notes.  It’s long, but chock full of gems.

Here’s All You Need To Know About Conducting Customer Interviews

LIFFFT, an awesome startup here in Seattle, has put together a great presentation on everything you need to know about conducting customer interviews.

Discovering your customers and the exact problems they face is something you, as a founder, cannot predict.  So you must go and talk to them directly.  Here’s how you do it.

Pricing Is A Tricky Thing

6a00d8341c03bb53ef014e606f4675970c-800wiI was recently asked my thoughts on how to approach pricing digital products aimed at the local Small and Medium Business.

Actually, the exact question was:

Basically, I’m looking at how new startups decide on a pricing structure when they’re selling to SMBs. Essentially, you’ve got your product/platform/system, and you’ve pinpointed your target customers—now how do you determine how much to charge? Obviously market research is important, but what specific recommendations do you have in terms of how to pinpoint the right pricing for a new digital marketing/hyperlocal platform? 

My answer:

Pricing is a tricky thing.  Price too high and you put yourself out of business because no customers will pay that high of price for your product.  Price too low, and you run the risk of giving away too much for free and struggle to keep the doors open – again possibly going out of business. Digital or not, a startup needs to be able balance the need to generate revenue with the opportunity to attract as many customers as possible.

I think it comes down to doing a few key things really early on.  First, study the current market to determine who is offering what and at what price points.  You should be able to look at the market and see the high end/low end products and their associated prices.  You then look for the holes in the market – where’s the point where customers are paying too much for not enough value?  That’s where you can bring something highly valuable to the table at a more affordable price and undercut the market.

Second, it’s really important to determine what problems you are solving and what value you are actually providing.  If it’s just the same as others on the market then it will become a price war with competitors – which you probably don’t want since it usually is a race to zero.  Ask yourself how can you do something new and innovative that hasn’t been done before, and then you’ll have more freedom on the pricing structure.  McLean Reiter, CEO of hyperlocal startup Knotis, echo’s my thoughts.  He says “Most SMBs have less than $1,000 to spend on marketing, annually, so it needs to be affordable and if possible, monthly, to help them manage their cash flow better. So It all comes back to value – what do they get in exchange for what they are paying for. You need to price yourself according to the market and your overall objective, while also maintaining profitability.

Lastly, it’s truly impossible to determine your exact prices before you go to market and interact with customers.  Smart entrepreneurs engage with their customers early on, ask them about price points and adjust/iterate as they continue forward.  Founders should also use these customer interactions to uncover the hidden needs of customers, which becomes the real value of your product and thus helping to determine a pricing model.  People pay higher prices for things they really need and can’t get elsewhere.  And ultimately, companies should A/B test certain price points (offer variable pricing to random customers through marketing and study the results) to see which convert better and then optimize from there.  

 Pricing can be tricky.  So agree to understand you will not know what your pricing will be out of the gate, you will only learn what it should be over time.

Will AngelList Help Or Hurt Startup Fundraising?

Fall 2013 will be looked back on as the turning point in fundraising for early stage startups.   The JOBS Act, along with the acceptance of  “General Solicitation” has indeed changed the game for founders looking for startup capital.

Although changes in government regulation will have an impact on startup funding, I believe the biggest impact will come from innovations in the private sector – more specifically the Seed/Angel community.

AngelList has emerged as a black swan in the investment community and is opening up funding channels founders never dreamed of even just a few short years ago.   It allows well known entrepreneurs, advisors, and angel investors a digital network to follow startup activity and quickly jump into investment deals with new hot companies.  This makes it quite a bit easier for startups to close a round of seed funding.   The days of hitting Sand Hill road in hopes of simply getting your project off the ground are over.

And more recently, AngelList announced a new feature called Syndicates, where Angels can basically become “leads” and pool capital from other Angels (or Syndicates) to quickly create their own mini-fund.  They then use this to deploy into early stage companies on AngelList, with the transaction happening all through the AngelList platform.

I will not dive into details of Syndicates, please go here if you want a full description of how it works.  I simply want to touch on where this is going and why AngelList’s innovations are game changing to the larger startup community, for better or for worse.

The big question is how will this affect founders and the overall startup community?  Is it all good?  Or will there be unforeseen consequences which inevitably come with drastic changes?

Since I am not the expert I looked around to others and researched their take on the changes happening with Syndicates.

The innovations around AngelList are clearly going to benefit founders – namely to speed up the fundraising process.  Mark Suster believes it’s a net positive for the industry.  “The most obvious, syndicates can move faster in early-stage deals than rounding up 40 individual investors.”  Good, we don’t need to heard cattle as much anymore!

But what about for the angel investors?  Although it might be better deal flow, it seems market dynamics and economic factors are going to come into play on the investor side.  Hunter Walk sees interesting changes coming for angels, “My guess is there are also some angels who were popular when they represented a $25k check but won’t be as sought after if they try to push $300k into a round.”  The nuances here are not obvious and only time will tell if this is good for the angel community or not.

 Fred Wilson also believes this is good for founders.  “Angel List Syndicates are turning angels who have traditionally been followers into leads. That’s a good thing in many ways. The more folks who can lead a round, the better, at least for the entrepreneurs.”   But he goes even further to describe how it will force the investment community to grow and work harder.  “It also means that they will have to learn to lead and lead well. They will have to step up before anyone else does. They will have to negotiate price and terms. They will have to sit on boards. They will have to help get the next round done. Essentially they will have to work. That’s why they are getting carry from the syndicate, after all.”

So maybe it’s too early to tell how AngelList will affect the ecosystem but questions loom.

Is this actually going to flatten the playing field for all of us founders looking for seed capital?  Or is it just going to make it even easier for “highly connected” founders to close a deal even quicker than before?  You only get discovered on AngelList if you can float to the top by “trending” on the network.   What does “trending” mean on AngelList?  And how do you achieve that if you are not in in the Bay Area, in 500 Startups or a part of YCombinator?  Is AngelList inevitably the web 2.0 version of the Old Boys Club?  Or is it the fundraising mecca all of us founders have dreamed of when we say to ourselves “if only we had access to more angel investors!”

We shall see!

In the end,  AngelList is a new beast and we don’t know what the effect will be on the industry as a whole but I am fascinated with the direction things are going.  My hope – easier access to angels and seed capital for all qualified startups no matter their location.

In a recent Founders RAW conversation I asked Duxter founder Adam Lieb his thoughts on AngelList.

Great Founders Learn To Toe The Edge Without Falling Off The Cliff

19_20120115feet-cliff032That statement emerged from a conversation I was having recently with a founder friend of mine.

This individual is struggling in their current situation – not far enough along to support themselves with their endeavor but not wanting to let go (if only slightly) to do other work which would pay the bills.   They said it feels like being between a rock and a hard place, and it’s painful.  I felt it was more like a cliff.

I simply said:  “Great Founders Learn To Toe The Edge Without Falling Off The Cliff “

I know this spot really well because I was there for quite a while and I remember almost falling off more than a few times.

What I learned through the process was how to toe the line – balance on the edge if you will – without falling off the cliff.  I realized entrepreneurship is balancing the risk of great rewards with the risk of detrimental actions.

How do you know which is which and what to do when you find yourself getting weak knees as you get pushed towards the cliff?

You have to look deep inside yourself and ask “what do I gain from staying here?  Do I really only have one option, which is to stay here and not evaluate my other options?”

Notice I said “gain” not “lose”?  There’s a big difference between those two perspectives.  When you are standing on the edge looking far down the cliff, you have much to lose.  So much in fact it’s hard to pinpoint exactly what you are doing and why.  Founders face so much challenge and adversity they can easily lose their perspectives and clarity of thought.

I told my friend he needs to look inside and ask what he gains from staying there.  He needs to look out for himself first and foremost.  He needs to take care of his basic needs – be it money, food, shelter, stress relief, relationships – and only them will the company stuff  work itself out.

I said, “trust me, it won’t get any better if you don’t step away from the ledge.”

Stepping away from the ledge is exactly what I did and I am so much better for it.  Yes, I had to swallow the pill and realize my “first” attempt at building my company wasn’t going to end like I dreamed it would just a few short years ago.  But as I backed away from the ledge and got my priorities/basic needs back in order, things started happening I never thought possible.

You would be amazed what happens to your business life when you remove self inflicted pain and stress from your personal life.