Groupon and the other daily deal services seem to have lost their luster. I mean, in addition to GRPN hovering at just a fraction of their IPO price, today’s Honolulu deal is for Vistaprint, which means that Groupon was unable to secure a local merchant to offer a deal today, so we’re stuck with the national deal. And, while merchants continue to wise up to the terrible deal that they receive from daily deal services, the market still seems to be saturated with daily deal clones.
One local developer, however, is taking a surprisingly novel approach to the deal arena.
friistyle (pronounced “free style”) focuses on only those deals that are free or by one, get one free (“bogo” deals). Interesting, yes. But what makes their service truly compelling is that it’s totally free for merchants to use. Let me state that again: Merchants get to keep 100% of the revenues driven by their friistyle deals.
Founded by two recently-minted MBAs from UH’s Shidler College of Business, Michael Martone and Adian Millar, friistyle is just the latest in a string of entrepreneurial endeavors.
“I started out in San Francisco during the dotcom boom,” recounted Martone. “I worked for a startup that went bust, and then moved into affiliate marketing for eBay, becoming one of their largest marketers. As that market changed, I started looking at business schools and ended up at UH, where I met Adian. We both talked a lot about building a tech company, and our ideas eventually turned into friistyle.”
“The whole Groupon explosion was really compelling to us,” Martone continued. “They were the fastest-growing company ever at one point, but as people continue to dig in to their model, it’s clear that merchants are getting a raw deal, so it’s not sustainable. And, since everything on the web eventually falls to free, we started thinking about an ad-supported version of Groupon.”
friistyle, currently available as an iOS app, lets merchants run their own deals and even gives them a virtual on-screen iPhone as they create their deals so that they can see exactly how the finished product will appear on handsets. Merchants can limit the number of deals available, how long the deal is available, and other attributes. Consumers can then browse through available deals and redeem them directly with the merchant. So, instead of the consumer having to purchase a deal that they might never use, they redeem the deal in real-time when they are physically at the merchant.
Merchants also get data on deals redeemed and get instant insight on ROI and how much lift, or additional sales, were driven by their friistyle campaign.
“At the beginning, we assumed that ‘free’ would be enough to make the deals compelling to consumers,” Martone recalled. “Turns out that people really don’t care about ‘free.’ They aren’t going to drive across town just for a free appetizer, since merchants were not willing to give away big items for free. BOGO enables us to offer bigger deals, like the Buy One Get One Burger at La Tour Cafe. Our ‘special’ deals are exactly like Groupon/Livingsocial deals ($20 for $40, for example) but the user doesn’t have to purchase them in advance and the merchant keeps 100% of revenues. Between our three deals types we can construct a popular deal for almost any kind of business”
Currently, Martone and Millar are self-funded and have some help with design, development, and sales, but they aren’t looking to stay small for long.
“We’re not looking at the tourist market,” stated Martone. ” We want to expand quickly to the mainland. We want to raise money next year to help with that expansion. And, while we’re currently ad-supported and merchants pay us nothing to use the service, we are exploring several other revenue streams but don’t want to do anything that takes away from the easy process that we’ve created.”
Here’s the 411 on this 808 Startup:
|808STARTUP||“Welcome to frii – The app that lets you explore your city with deals that are 100% free or Buy one Get One (BoGo) free!”|
|STARTERS||Michael Martone and Adian Millar|
|COMPETITION||Daily deal sites/apps, Scoutmob|