Although online deal sites like Groupon and LivingSocial boast plenty of fans, the model can be challenging for consumers and businesses alike. Those who change their minds about a product or service will lose money because they paid upfront, and for companies, demand can be so intense that more than one business has been shuttered by a Groupon deal.
Minneapolis-based startup lumaNEAR
believes there's a better way.
The idea for the deal site has roots at the University of Minnesota, where co-founders Scott Sailer and Kyle Ries were roommates while attending the Carlson School of Management. Sharing a passion for business efficiency, the pair tried a number of different startup ideas, but none felt large enough for eventual expansion.
Then, they started listening to complaints about the online group-buying model, and like the lightbulb in their logo, something clicked on. "We wondered what would happen if we removed the friction and hassle from both sides," says Sailer. "People could still get deals and companies could still get business, but without the headaches."
Their venture, developed with creative guru Teresa Facciotto, went into beta on April 6th. The platform lets users navigate a map with posted deals, but doesn't require pre-buying to take advantage of them. Unlike other online deal sites, lumaNEAR lets vendors tweak a deal at any time, or even remove them if they choose.
Best of all for both sides, the service is free. As a bootstrapped venture, lumaNEAR will likely add fee-based premium features for businesses in the future in order to begin turning a profit, but the co-founders are adamant that basic functionality will always be free.
"Our mission is to connect these two groups together, easily and with low cost," says Sailer. "We have lofty goals for expansion, and we're excited to see where this takes us."
Source: Scott Sailer, lumaNEAR
Writer: Elizabeth Millard