Chad Billmyer, CEO of new group discount website DealBird, reflects on the social media startup industry in Providence and beyond.
Three of DealBird’s six employees have Providence ties – two are Brown University alumni and one is a Rhode Island native and Providence College graduate.
DealBird, which offers group discounts from local businesses to consumers and asks shoppers which companies should offer discounts, launched in Providence June 14.
PBN: DealBird works as the opposite of popular discount sites like Groupon and LivingSocial. Instead of offering daily merchant discounts to consumers, DealBird allows consumers to request deals from businesses. How did you develop the idea?
BILLMYER: In the automotive aftermarket, it is common to see group buying in online discussion forums. One auto hobbyist will source a part from a seller and the seller will offer better pricing if the buyer buys in bulk. The buyer then turns to automotive forums and asks who else among his fellow automotive buddies wants to buy the same part.
DealBird is about providing the software and payment processing platform to facilitate an actual group buy.
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PBN: DealBird launched its beta version in Providence June 14. Why did you choose Providence as the city to test your business?
BILLMYER: To start, the area is densely populated and we can reach lots of buyers and sellers with minimal travel. This is important in the social commerce space because, on average, buyers will only travel up to five miles out of their way for extra savings.
Compared to other cities we considered for our launch, the city boasts a welcoming, vibrant, and supportive entrepreneurial community through organizations like Brown’s entrepreneurship program, Betaspring, Providence Geeks, and the Rhode Island Center for Innovation and Entrepreneurship.
The cost of advertising through the use of new and old media is lower than larger metropolitan areas. We can efficiently reach members of the community on the buyer and seller sides. The sense of community is strong. The community actively seeks out opportunities to buy locally and that effort is supported by organizations and initiatives like Buy Local RI and Farm Fresh RI. After a few weeks of testing in Providence, we plan to roll out DealBird to more communities across the U.S.
PBN: What is your experience in startups?
BILLMYER: In 2000, here in Providence, I co-founded a company that sells back-office software to college financial aid offices and sold that company in 2005. I then transitioned into education lead generation, which is the referral of prospective students to undergraduate and graduate admissions offices. [DealBird Chief Technology Officer David] King co-founded a company that processes $6 billion in campus credit card transactions. Between the two of us, we learned the importance of providing value to our partners, sales, scalable technology, and secure online payment processing.
PBN: Who are your target consumers and businesses? Do you worry about inundating the already populous market for online discounts?
BILLMYER: We target buyers who have the potential to get better prices on the products and services they need through participation in buying groups. We target sellers who have the potential to profitably grow sales by moving more volume. DealBird works best when the buyer doesn’t need the item or service tomorrow and is thrifty. If you are in the market for a mattress, DealBird can save you money. If your hot water heater just broke, DealBird probably can’t help you save on the impending expenses.
PBN: How will the intersection between social media and e-commerce change or expand in the future?
BILLMYER: Aiding and abetting the formation and distribution of consumer sentiment will be a core component of the future of social commerce. What your friends say about a product or service will matter increasingly more than what an expert says.
By way of example, at DealBird, if a few of your friends are members of a buying group seeking a deal from a seller, that says something about their endorsement of that seller. DealBird currently incorporates and plans to launch many ways to signal a buyer’s endorsement of a seller or product within the buyer’s social network.
