Business-to-Consumer App from Startup Nation
Jeff Sloan, founder of Startup Nation and several other small business ventures, is launching a business to consumer app that borrows from email marketing and aims for a national rollout by next year.
Wantify Inc. is testing its app that connects local merchants to their best customers, and shares insider information and special sales. Since January, the beta is being run in 15 Birmingham merchants and now is being expanded. The first merchants in Lake Orion signed in on Friday, and others will follow in Oxford, Holly, Flint and Lapeer over the next 30 to 45 days, Sloan said.
Backed by $2 million in venture capital funding, the Birmingham-based company will have expanded throughout Michigan by year-end, Sloan told Crain’s.
“We want to be able to … scale rapidly in the most efficient way,” he said. He expects a $5 million second-stage venture capital infusion to support the national rollout, with investors already interested. He declined to name current or potential funders, adding many are individuals who have worked for tech companies including Apple and eBay.
Sloan and his team have launched or assisted with the launch of such companies as Rubicon Genomics and Clarity through his Aria Ventures. He’s been working on Wantify on and off since 2012, with a few pivots in focus and direction.
Since the new app launched at the end of January, Sloan and his team of five have signed up around 60 Birmingham merchants, and around 250 consumers, all through word of mouth. It’s been “test and tweak, test and tweak, all under the radar,” he said.
Wantify put itself on the radar recently by sponsoring the Michigan Downtown Association conference in Dearborn, where Sloan shared details of the company’s plans. The company expects to expand by working with local downtown associations and chambers of commerce as the “local champion” for the mobile phone based app.
“We have seven figures into this app in total. We’re in the throes of getting some traction right now,” he told the downtown association.
Yet some experts say traction may be difficult in the crowded small business and consumer communications app world. Businesses already rely on tools such as Constant Contact or MailChimp — email programs — or social media to stay in touch with shoppers.
“There’s a lot of these out there — intermediaries between restaurants and retail and consumers,” said Ron Stevens, associate regional director of the Michigan Small Business Development Center. Many of the retailers and boutiques he works with use Pinterest, Instagram and Facebook to connect, and he’s seen a few people with ideas similar to Pinterest or Wantify in his office in Ann Arbor, on average two a year.
“Wantify has to have good marketing — maybe marketing in the stores” to compete with larger social media platforms, Stevens said.
Wantify faces other challenges. It’s hard to develop an app without signing up a lot of consumers or a lot of stores — and each wants to see the other participating before they join, Stevens said. Wantify has that worked out: It will emulate the email marketing services such as Constant Contact. “It’s the businesses responsibility to get the consumers on board,” he said.
The app gives merchants a direct way to share updates — hard-to-find toys or a special menu item — to consumers who opt in, cutting through the clutter in Facebook and Instagram. Businesses download a merchant version of the app, available for iPhone and Android; they send updates, almost like a text message, Sloan said.
He acknowledges it will be tough to develop a successful small business “loyalty app” but believes it is important to support small businesses. “This is not going to be easy. We are a values driven business” intent on helping Main Street businesses, he said.
The app will carry no paid advertisements. “We don’t want any advertising on it at all. Consumer crafts the experience based on what they’re interested in,” he told the downtown association members.
Instead revenue will come from merchants who after an initial free trial, will pay $29 a month to connect to consumers, plus some premium add-ons. Wantify also will test some other revenue streams, but Sloan declined to discuss those.
From the current 15 businesses using Wantify, the business base will grow to 100 within 45 days and 200 by the fall and 500 merchants by year end, when it covers the entire state, Sloan said.
Axis Music, one of the test businesses, is sold. “We love the platform — the instantaneous nature of notifications,” said Donny Klemmer Jr., marketing manager. Because consumers get a message similar to a text, they’re “guaranteed to see it” and on a good promotion, Wantify may generate up to half of a day’s revenue for Axis, which provides music and voice lessons and classes.