It does not require many resources at first to start a daily deals business. The real challenge lies in getting the attention to start earning revenue in a very competitive industry, growing a loyal community and keeping it. Much like with any other business model. But all this deserves an entire post of its own. For the moment we will be sharing the story of how Bownty was founded, with pieces of valuable information in-between on how you can start a business, too.
From Observations to an Actual Business Idea
The idea of building a daily deals aggregator site like Bownty has its roots in the late summer of 2010. Bownty’s co-founder and CEO, Steffen W. Frølund @steffenfrolund came up with the idea while working for another startup called Billetto.dk (an online ticket sales system for private and public events), who happened to be sharing space (and some owners) with Downtown.dk, one of the most popular daily deal sites in Denmark
“It really caught my attention how Groupon was moving quickly in the States and that imitation seemed to be occuring all over the world at record pace. I could see that the daily deals industry would soon be swamped with startups trying to grab a “piece of the pie.” – Steffen Frølund
Keeping in mind that there are very low barriers to start a deal site, Steffen figured that there would soon be many similar sites popping up, hence having an overview of new deals would increasingly become more difficult. The only solution to this information overload – a daily deal aggregator.
Let’s Talk Numbers Now
With any potential business idea it is vital to check the viability of the business plan on a lot smaller scale. Steffen first set out to create a Facebook fan page for a nonexistent daily deal business. He spent the next two weeks placing and promoting handpicked deals from four daily deal sites in the UK on his fan page wall.
A small marketing campaing with Facebook’s advertising tools (called Facebook Adverts) was also created. The ads stated that the dealsite collected all the local deals onto one page. In addition to this, they were specifically targeted to people based in e.g. London, as well as who were members of London-related fan pages on Facebook.
This quickly attracted a couple of hundred “Likes” and even some interesting income. The magic about Facebook members clicking “Like” on a particular fan page results in this person’s “Likes” showing up on his or her friends’ News Feed. This grows awareness about the product as a “word of mouth” type of promotion. If done right, your fan page and/or product could potentially go viral.
In order to figure out whether there is any meat on the bones of a particular business idea, a great deal more research, survey conducting and so forth may prove to be necessary. This in turn requires the finances to do so. Facebook is a tool that potentially help get an overview value proposition, which was luckily the case with Bownty’s test run. However, it depends a lot on the idea itself, as well as whether a simple social media site such as Facebook is the right tool to determine the commercial value of a particular business idea.
The Early Startup Days
A brewing business idea can hardly evolve if pursued in isolation. Hence, Steffen talked to some friends and family, who encouraged him to develop the idea. It was at this stage that Steffen contacted people at Copenhagen Business School, Downtown.dk and some other acquaintances, who had already started their own businesses. Without having to do much convincing to expand the core team of the soon-to-be-called startup Bownty, aboard came:
1) Palle Ladbye-Hansen @ladbye, who is the mastermind behind how Bownty.com looks like on the computer screen today;
2) Andreas Krüger, who speaks mostly in zeros or ones and handels Bownty’s IT development;
(Note: you can read more about the individual people on our “Who is behind Bownty” page)
The three men, who today can be called the founders of Bownty, decided to take the idea to the next level and start the website development process. They were determined to continue no matter what. Luckily, once it became obvious that without funding the business plan could not take off internationally, Marc Lucas entered the picture (today Marc is also part of the core team, working as a commercial director), who had heard about Steffen’s idea through mutual contacts at Downtown.dk.
Marc thought Bownty is a great concept and opened the door to other business angels. The four guys then proceeded to pitch their business plans to those possible investors (using Prezi - a presentation tool that looks much nicer than Powerpoint). After some terms were laid down from the investors side and changes made on Bownty’s end, the agreements were signed and Bownty was ready to happen in Denmark. This was November 2010, three months later.
Before Bownty was even launched on 5th March this year, the upcoming startup already had investors, an office and a diverse team to cater for the different needs of a daily deal aggregator business.
Posted by Kadi