I met briefly last week with 8Coupons, which is based in NY. The very small company began life exclusively as a mobile platform for coupon distribution, doing direct sales to local businesses. Talk about hard: selling local SMBs on mobile couponing. (In past surveys I conducted with Opus Research, about 10% of SMBs said they were using mobile as a marketing platform; but I think that number is high.)
Over the course of the past couple years, 8Coupons has learned its lessons and is now using mobile simply as one distribution channel among others. The site’s also still focused on small businesses and local deals, but not as focused on selling ads directly to them. It’s also pursuing a range of relationships with third parties that will enable it to gain coupons and deals content without relying upon direct local sales.
They told me that the site is allowing users to post deals (like RetailMeNot), as well as SMBs directly — anyone can post a deal. Interestingly they said that they see NY area merchants sometimes posting coupons and linking back to MerchantCircle pages where those coupons were created. I was also told that they see roughly 22% redemption on average for their signature “Ocho Loco” coupon deals.
I’m always pleased when I see entrepreneurs able to make course corrections and finding success. I was somewhat skeptical of the model when I first heard about it last year:
Another thing that prompted me to write this was a conversation with a coupon startup in the NY area called 8coupons.com. The site is trying to sell coupons to local SMBs — lots of heavy lifting there . . .
But it seems that they’re doing well in their home market of New York, and they’ll be expanding over time (they’re in other markets but without the deals density of NY). There’s a new site coming and some other interesting developments as well. These guys are in a very crowded space but they’re forging ahead. They’re self-funded, so far. As they gain more visibility they’ll get more VCs coming out of the woodwork to offer them investment deals (each time they appear in the NY Times, for example [2-3 times to date] they get a call).