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Firstly, I know what you are thinking already, "Not another daily deals website!" - it's true, I am entering an oversaturated, highly competitive market of daily deal websites. It's going to be an Australian daily deals website, only with a twist.

All deals are limited to a maximum of 100 deals, but if the deal is good deals can be limited to as low as 25. I believe the exclusivity will help protect businesses that are providing these heavily discounted deals as I read an interesting statistic that most businesses lose quite a lot of money from running daily deal campaigns.

My question is how can I sell my service to businesses and get them on board when it hasn't even launched yet? I want to acquire some daily deals for the site before it launches, exclusively awesome one day deals that will make people fight for 1 of the 100 or lower deal coupons up for offer.

I've tried sending a couple of emails to some businesses, but didn't really hear anything back. How did sites like Groupon get deals before they got big?

Are there things I should be saying in the email and things I shouldn't be saying? Should I perhaps exaggerate or could that come back and bite me later on in terms of credibility if expectations aren't met?

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My has my question being downvoted into a negative score? Is my question not deemed a startup question? I'm slightly confused here as I asked a very valid question. – DigitalSea Mar 3 '11 at 11:56
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Given that sourcing deals is a core competency of your startup, it's a bit like a masseuse asking how to perform a massage. – Krzysztof Kowalczyk Mar 15 '11 at 2:31
So Dwayne, How have you progressed? Did you start the site & what did you find as your major barriers.. Please advise.. – user11020 Jun 4 '11 at 4:57
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Don't be too harsh. It's a valid question that will be useful to many more startups as well, so it's worth answering it. – Alain Raynaud Jul 16 '11 at 16:23
Sadly this is off the table for the moment. Launch page and whatnot are up, I went and spoke to businesses in person which seems to have worked in my favour. I've got a few local stores and whatnot to offer up a few deals, some of which have even used Scoopon and Cudo before, so we'll see how the site goes. Hoping to launch in a couple of months, sourcing a few months worth of deals so I don't have to stress so much for a while and focus on other aspects of the site. – DigitalSea Jul 18 '11 at 0:01
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7 Answers

up vote 9 down vote accepted

Here's a Mixergy video interview with Andrew Mason, the founder of Groupon. It will probably tell you everything you want to know about how he made it work. If you're not a member of Mixergy, you can get the Podcast for free here. It's #67.

And my personal advice is to build some sales materials and hit the road trying to sell some local businesses in your area. If you can't sell it as the founder of your company, then no sales team will be able to either.

It's going to be hard work and it's going to suck having to convince small business owners that you're worth their time, but if you can make a few sales on no product and good faith, you may have identified a need and a workable business.

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Interesting stuff, thank you Andy. – DigitalSea Feb 17 '11 at 20:59
You're welcome, Dwayne. Hope it helps! – Andy Cook Feb 23 '11 at 3:27
up vote 2 down vote

You need a big sales team and a good group of evangelists who are out there building your user list.

You also should think about specializing in a particular sector, which is how a lot of new daily deals clones are trying to carve out some market share.

The evangelists should be people who are in your exact target demographic, because they will likely know a lot of people who are like them (ie, in your demographic).

Other than that, you really want to build your userbase as quickly as possible. The more people your daily mailings reach, the greater percentage of the cost of the deal you can demand from your business clients.

Also, I would recommend thinking long and hard about limiting your deals to 100. You may be artificially limiting your revenue, and there are some business who are looking to recruit customers in the thousands, not in the dozens.

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Pretty good feedback Tbaums, my only issue with that is that Groupon didn't have a big sales team when they started right? Who's to say I can't market the site myself and then hire other people as the site progresses? This is a bootstrapped start up, and I don't have the funds to hire anyone. Maybe 100 is a little limited, perhaps 300. The reason for limiting the deals is because I don't want businesses to lose out because of massive overselling of their deals as Groupon has shown can nearly send a business broke. – DigitalSea Feb 17 '11 at 11:02
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Businesses know what they can handle and what they can't. The reason you need a sales squad is that if you are doing a daily deals site, you need DAILY deals. Not every other day deals. Not every third day deals. DAILY deals. And they need to hit inboxes at the same time, everyday. That's what the customer expects. And that's what Gilt/Rue La-La/Groupon/Living Social all seem to have settled on. Must be a reason, no? If you're short on cash, then use the tried and true method for paying sales people: Give them a commission! – tbaums Feb 17 '11 at 11:28
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Also, Groupon wasn't starting up in an environment where it was competing with Groupon. You are. There seems to be a bunch of successful clones out there, but getting traction may be a challenge. – tbaums Feb 17 '11 at 11:38
up vote 2 down vote

Are you looking to do deals that save a big % on RRP or are you looking to deals that are unique? Every deals website out there promises savings on RRP. Big competition for a startup! There are other opportunities in Australia for a "deals" website. The suggestion to look around locally is a good one. Rather than ask the question "how can I grow my business?" ask "how can I grow other peoples business?" Think laterally like that and opportunities for "deals" will be seen.

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up vote 1 down vote

Like anything else, it takes a ton of work to make it viable. Also, you have to learn to work smarter and not harder. Groupon has the look, the backend functionality, but most of all, Groupon had AN INVESTOR. Someone with deep pockets who funded the startup. THAT is the major reason for its success. Get someone to invest even $10,000, and you'll have options that you didn't have before.

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I'm one of those types of developers that would only take investment if I desperately needed it. Having said that there are some types of start ups that will not thrive or survive without investment as investment allows more time to be spent on the idea. I've reconsidered this start up idea in some way, I think competing in an overcrowded market will make it hard to source deals. I've tried sourcing deals, but most people want to offer their own deals to customers and I respect that. – DigitalSea Mar 14 '11 at 22:55
up vote 1 down vote

Firstly I would focus on one sector first health & beauty, restaurants, dry cleaners etc. Feature at least six and start in your local area. (Relevant content) Set up the copy, blurb, website etc and make the deal start date some time ahead. Wait for a week and watch organic search in the search engines. If you get on the first page you can approach these businesses. You can also offer businesses a deal spot for free perhaps just a small admin charge. Set up your prices and for those businesses who come on board for free get them to agree in advance (writing) if they want to continue to pay a higher rate. Take any business which fills the criteria of your site on a pay as you go arrangement or split (70/30). At the moment you are trying to sell A CAT IN A BAG

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up vote 0 down vote

Call every store where you know someone, get them to sign up, if it goes well ask them if they have friends who would be interested, repeat.

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I guess the only issue with that is your friends not being in a position to make those kinds of calls nor being very influential in getting those kinds of suggestions heard in the first place. Having said that, if a friend were a manager it could work. It's actually a pretty good idea Zach, thank you. – DigitalSea Feb 17 '11 at 21:00
up vote 0 down vote

A marketing strategy is very important. It describes how you will gather merchants and attract consumers. This will really depend on the quality of deals being offered from the merchants.

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