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Scoutmob finds surprise success with Etsy competitor Shoppe
Thursday marked a big day for Scoutmob. The Atlanta-based local deals startup partnered with Google’s Niantic Labs to integrate its local deals into FieldTrip, an Android-based mobile app that runs in the background and serves up information based on wherever the user happens to be. In one swoop, Google suddenly became a legitimate Foursquare competitor.
The Google deal isn’t the only thing happening in Scoutmob’s world, however. Today, co-founder and head of product Michael Tavani said that the company’s new ecommerce product, Shoppe, has been performing wildly above expectations.
Launched six months ago, Shoppe is like a cross between Etsy and Fab. It’s a marketplace for local artisans from across the US, but it’s curated by Scoutmob, so only a select group of micro-retailers are featured.
Tavani says the company launched the product as “literally an experiment.” In baseball terms, they thought it might be a “single” (as opposed to a double, or a home-run). They put a couple of people on the team and just decided to see what would happen. But the thing has taken off. The revenue, Tavani says, “has come out of nowhere.” It now accounts for between 30 and 40 percent of the company’s gross revenues, and Scoutmob, which is still not profitable, is considering raising a round of funding just for Shoppe. A pivot isn’t in the offing, but the company will certainly be putting more focus on that area in the year ahead, Tavani says.
Unlike Scoutmob, Shoppe isn’t even fully mobile yet. The DNA it shares with its predecessor, however, is that it’s locally focused. Ironically, thanks to the collapsing fortunes of daily deals companies Groupon and Living Social, Scoutmob raised its Series B round last May by stressing that it was a mobile company more than a deals company. That approach eventually helped it to bring in $3.5 million from Lerer Ventures, AOL Ventures, New Atlantic Ventures, Capital Broadcasting, and Cox Enterprises.
Despite that emphasis on mobile, Tavani feels that the very local approach is what differentiates it from other deals companies and location-based services such as Foursquare. While many of those companies give merchants a “self-serve” approach for offering deals, Scoutmob has sales teams in each of the 10 cities it currently operates in, and focuses squarely on local, independent businesses.
Scoutmob will dedicate the early part of 2013 to becoming profitable. Tavani won’t rule out raising money again, but he wants the startup to soon be in a position where it doesn’t have to if it doesn’t want to. “This year in general for startups is going to be a rough year for raising money,” he predicts.
Meanwhile, he sees the partnership with Niantic Labs – which pushes Scoutmob’s location-based coupons to FieldTrip users when they are in specific areas relevant to Scoutmob merchant partners – as an experiment. “It made sense to do a partnership purely to test what interest consumers have in getting deals in this kind of way,” he says.
He’s interested to see how well FieldTrip’s push notifications work as a deal driver. There are three options in FieldTrip to dictate how often you receive such notifications: frequently, occasionally, or hardly ever. Tavani is certain that Niantic will be tweaking those options a lot in the coming months. So far the early results from the partnership look good, Tavani says, but it is very early days.
According to the terms of the agreement, Scoutmob and Google will share the revenues generated from FieldTrip deals, with Scoutmob getting more than 50 percent of the pie. The startup has similar deals with Foursquare and Foodspotting. Tavani says that of the three partnerships so far, Foursquare produces is the most activity.