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A Venture on a Shoestring Budget, Helping Consumers on a Shoestring Budget

A Venture on a Shoestring Budget, Helping Consumers on a Shoestring BudgetI’m David Magier, co-founder and general counsel of Couptivate.com (www.Couptivate.com). I wanted to share my story about a web startup I built on a shoestring budget that is aimed at helping consumers live well on a shoestring budget.

Couptivate provides an online wallet for consumers to track, organize, redeem and get the most out of their daily deals (e.g. purchases from sites like Groupon and LivingSocial). Couptivate provides users with a personalized daily deal portfolio where they can see every daily deal purchase they make (purchases are automatically grabbed from deal sites without users having to do anything) on a single page, set email reminders when deals near expiration, access and print deal vouchers directly from their Couptivate account when they’re ready to redeem, add custom notes and tags to deals, and see deal locations via Google Maps. Our goal is to enable consumers to leverage the increasing number of deals, and deal sites, without becoming overwhelmed and disorganized. We also wanted to inject some heart and whimsy into the daily deal purchase experience, which is currently awash in stock photos and designed to drive volume, but not pleasure. That means every piece of art and animation on Couptivate is hand drawn. To create something that looked different, we had to build a team that was different. Our designer was highly accomplished in the art, design and branding world and has directed commercials for the likes of HP and Toyota, as well as done window installations for cutting edge designers in Paris, and we wanted to bring his vision to the web. Rather than simply re-displaying users’ purchases, Couptivate extracts relevant data and presents it in a highly innovative way. All of which begs the question: How did we put so much attention into detail, recruit a highly talented and experienced team and focus on originality (rather than utilizing off-the-shelf design and technology) on a limited budget? We wanted to share some of the methods we used to stretch our shoestring budget significantly further than we could have imagined.

We founded Couptivate in April of 2011, and Couptivate.com went live in September of 2011. Some might say that my co-founder and I decided to take this plunge into entrepreneurship for selfish reasons. As avid daily deal purchasers, we amassed alot of these discounted offers. As our daily deal purchase portfolio grew, we began to lose track of what we owned, where we had made purchases and when our purchased deals expired. As a result, we were wasting more and more money on daily deals that went unused and often expired. We were also wasting a lot of time when we tried to redeem deals. It was not uncommon for us to decide to redeem a deal, only to spend a half hour logging into each deal site in order to determine where we had made this purchase. At a certain point we questioned whether it was worthwhile to continue buying daily deals and began researching the issue, both formally and informally, more closely. What we discovered was a dirty little secret that daily deal sites will never tell you about: up to 30% of purchases for any given deal are never redeemed. The anecdotes we heard echoed this statistic: consumers intuitively understand that a high percentage of purchased deals will never be used and are hesitant to buy more deals because they assume they will forget about purchases and fail to redeem. This was troubling for a number of reasons (beyond our own personal issues with the daily deal purchasing experience). We saw the great potential of daily deals to allow consumers (especially in times of economic uncertainty) to continue to live well and we felt that this potential was being held back by the disorganization (some would say chaos) of the daily deal user experience. We were also struck by the amount of money being wasted on unused deals and felt compelled to tackle this problem so as to recapture some of that value for consumers. We also had the daily deal industry in mind: in the long run, a customer who gets good use out of their purchase is a happy consumer, while a customer who wastes their purchase quickly becomes an ex-customer. Any viable long-term vision for this industry would require someone to tackle this problem, why not us?

It became apparent pretty quickly that building the right daily deal organizational tool was neither easy from a technical standpoint, nor, unsurprisingly, given the technical difficulty, cheap. Undeterred, we scraped together funding from generous family members to make our vision a reality. Initially, we had some major concerns about stretching our truly shoestring budget far enough to build Couptivate. We soon found, however, that money is only one way (albeit a very efficient way) to build a product. We overcame our budgetary concerns by focusing on two things: 1) effectively communicating our passion for the product, as well as the potential for its success in the market and 2) finding the right team members and service providers and collaborating with them in a way that conferred a sense of ownership for everyone. As a result, we were able to extract more tangible value from our budget by an order of magnitude.

During our “construction phase” we relied heavily on free resources, such as Pivotal Tracker (www.pivotaltracker.com), a great, “freemium” project management tool and the suite of free collaboration tools that Google offers. Now that we’re seeking to grow our visibility and user-base, the challenge has become stretching our marketing and PR budget. Here too, tools such as twitter (twitter.com), facebook (facebook.com) and LinkedIn (linkedin.com are highly effective outreach tools, if utilized properly and diligently. Whether sheer irony, or a statement about the daily deal industry, we also utilize startups.com (startups.com), which offers daily deals targeted to the needs of startup companies. Fittingly, our most recent startups.com purchase was a class on “lean” startup methodology, by Eric Ries, which emphasizes building a “minimum viable product,” expending as little monetary resources as possible, rapidly getting your product into the market, and then intensively seeking user feedback and iterating based upon this.

You might find the recursive theme in our story a bit over the top. We built a startup on a shoestring budget, to help consumers live on a shoestring budget, using the very tools, daily deals, that we seek to improve, in order to operate within our own shoestring budget. The fact that, in an indirect way, the daily deal industry is enabling entrepreneurs to create solutions to its problems is interesting and fitting. At a high level, it’s why we’re so excited about Couptivate, and the daily deal industry. Many argue that the Internet has unleashed innovation and so many great companies because it has dramatically reduced the cost of the means of production. We feel that daily deal sites, in their own way, create a similar effect (reducing the means of leisure or living) by creating a more efficient advertising/customer acquisition channel, and routing some portion of the resultant savings to the consumer. When things get cheaper, people are able to do more, whether that means starting a business or taking a helicopter flying lesson. For all of its potential, the daily deal space has many imperfections, a number of which imperil it’s long term viability. We founded Couptivate to tackle one of the daily deal industry’s more pressing issues, it’s disorganization, in an effort to help consumers and to improve the industry’s long-term prospects.

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