Stuart Wall graduated from Harvard Business School in 2009 and went on the common banking track. However, it didn’t take him long to realize that it wasn’t the right career path for him and instead pursued an idea he came up with at HBS before Groupon or LivingSocial even existed- a social network for bargain hunters. Wall came up with the idea based on the premise that most commerce still happens in stores and there’s not a lot of ways for small businesses to get foot traffic. Wall says foot traffic is so important, because stores have pretty high fixed costs with paying employees and rent. So it is really expensive when they have items that go unsold. With the potential to drive foot traffic and knowing consumers love deals www.signpost.com was created. Wall hooked up with two other HBS alums and bootstrapped the idea. They recently got about a million dollars in funding from Google Ventures and Boston-based Spark Capital.
I asked Wall if he was upset that Groupon beat him to the punch. He acknowledged they had a head start on Signpost but he believes there will be lots of winners in daily deals beyond just replicas of what Groupon is doing.
Wall differentiates Signpost from Groupon in two ways. From the business side, he sees Groupon as one size fits all. You get a daily email and you have one day to decide if you want to make a purchase and then you have one year to use it with a blanket discount at a store. Wall says that model works for a decent amount of businesses but some can’t operate in that one-sized fits all option. Signpost lets companies create their own deals and specify terms like when customers can visit, how many offers are available, whether it is a repeating campaign that happens every week and even what kind of customers can buy the deal. Wall thinks Signpost is much more customizable for businesses.
One example Wall gave to show how a small business uses his site is a barber in New York that is slammed everyday of the week except Mondays. The barber created a weekly deal where customers get 50 percent off on Mondays. The 20 deals sell out every week and the barber is beyond pleased.
Signpost combines exclusive for-sale deals created by local merchants, with user generated content from local city dwellers. Bargain hunters are able to share and find local deals in their neighborhood – from brunch specials, to sample sales, to happy hour deals. All of this information can be found on Signpost’s free iPhone app, which tells you deals are near you at any time. When someone signs up for Signpost they find out where you live and what you are interested in and then send you deals from their 1,500 businesses.
For local merchants looking to offer a deal to consumers, the Signpost Merchant Center is a self-service tool to help local businesses create and distribute pre-paid offers in real time.
Signpost currently has nine employees. Wall says Google has been a huge help in recruiting their engineering team. Instead of developing a huge sales force, which is the approach most daily deals sites use, Signpost encourages members to join their Deal Scout Program. About 100 people have applied and they have accepted 20 so far. Once you join this program you get business cards and become a member of their sales force. If they get a business to join Signpost that person either gets a free deal from that business or cash incentives. They also get some free Signpost gear.
Signpost is not posting profits but they are generating revenue and it has been doubling in the last four months. They launched back in October and started doing business deals in December and are on a fast track to being profitable. Signpost takes the money from the customer and then pays the business and they take a cut. He wouldn’t give us an exact commission, but said it is about half of what Groupon charges, which is 50 percent.
What do you think of Signpost? Do you think the daily deals space is too crowded already?
