You are not just facing the chicken and egg situation. You are also facing a huge crowded market. There are countless companies working on delivering coupons over the GEO enabled smart phones and over text messaging. Why is your technology better than anyone else? You need to differentiate your business from others.
When the information is overloaded, why duplicate the efforts or reinvent the wheel?
If you can prove your technology can be more effective, and prove your have user base. Those giant coupon companies will come to you and ask you to distribute their coupons.
Also, not all local businesses understand the new technology. They often reject their own coupons when some one print off the web.
Here are my suggestions:
Like someone mentioned above, find local businesses that understand all the benefits of using new Internet and Mobile technology and are currently publishing coupons using ValPak or MoneyMailer. Offer FREE services to them and use exactly same coupon offer on your site. Give them free services until you prove your service works.
Repeat that to get 50+ even more businesses listed on your site. Now you have eggs. You can start asking people to get coupons on their phone. If all goes well, you prove your system works.
Now take that statistic data, testimonials and show other local businesses. They will have to pay a fee.
Take the money you make and offer award to those cell phone users to referral their friends.
It's like rolling the snowball.
Or you can partner with other local coupons sites that already have businesses listed, but don't have ways to expand their reach over cell phone.
The good news is that there are tons local oriented coupons site out there need mobile coupons features. You have huge potential without all the hassle to get business customers on your own.
Or you can partner with local coupons site help them get local business listed with commission and get data feed from them. IT's WIN-WIN.
That's how we got started! Good luck!