Final Blog Entry

Originally we had set out to make a T-shirt emphasizing the new Bridgeforth Stadium. However, we thought that this original idea was not innovative enough. So then the idea came to us to start our current venture, a text messaging service that would contact JMU students instantly of local restaurant deals in Harrisonburg. This could help boost revenues and foot traffic during slow periods. Most college students carry their phones with them, so instantly alerting them of deals is more convenient than cutting out a coupon and having it with you. This idea seemed to be more promising. With sites such as LivingSocial and Groupon taking off right now, there seemed to be a market for digital couponing. We decided to couple this trend with the low budgets of college students. Therefore, we thought this college town would be the perfect niche for our venture.

We first had to pitch to JMU students in order to see if they were interested in being instantly alerted of local deals. Throughout the process we developed a database of students' phone numbers. This was our selling point to businesses when we pitched our idea. We decided to make a list of local restaurants in Harrisonburg that we could contact. When we first invisioned our venture we were planning to use familiar restaurants that JMU students already frequent such as Jimmy Johns and Tutti Gusti. This ended up being the wrong approach because the more successful businesses were more reluctant to use our service. The chain restaurants were not flexible in their marketing tactics due to corporate regulations. So we later took the approach of targeting less known local eateries. After fourteen failed pitches, we finally got our first deal with Franco's.

Our next step was to research mass texting services. There were many to choose from with varying prices. Eventually we chose "Trumpia" texting service as the best fit for our venture. However, we thought it would be a strategic move to not purchase the service until we got our first restaurant deal. This ended up saving us $45 dollars because we only got one deal and we were able to send the deal to our contacts through our personal unlimited text messaging plans.

After researching the methods that Groupon uses to conduct their business, we realized the key to their success-yet a major problem for our venture. We found that the business that Groupon advertises for do not pay the company until a certain amount of customers purchase their deal, and then the deal will become active. This puts the businesses at basically no risk of trying the service because they will only be charged if they have a large increase in sales. One of our main challenges was businesses' reluctance to pay for our service because they were not convinced it would necessarily generate increased sales. The only way we could attempt to duplicate Groupon's method would be if we sent out local deals and then went in later and asked the restaurant if they had an increase in sales, and as for payment after the fact. This would be risky and we were nervous that the businesses would not necessarily be truthful. This led us to our beta approach, however it requires a lot of time and the businesses could end up not continuing our service after they use the free trial.

We had originally thought that this would be a successful venture. However, the reality of our business wasn't as profitable as we had thought. It turned out that businesses were reluctant to want to purchase our service, so we came up with a "beta" version where we wouldn't charge any businesses for our first advertisement for them. After pitching our idea to local businesses the managers all seemed interested and told us to get back with them after they got in touch with their owner. Unfortunatley, this only slowed the process and our follow-ups were not successful.

The difference between how successful we thought it would be and the reality of the situation was due to the fact that it took our group a while to come up with the "beta" version idea as well as targeting the right local eateries. The smaller businesses were normally more interested, so targeting them to begin with could have made the key difference for our success. We had also spent a long time researching on the internet for the right mass texting service that would allow us to contact our database for the lowest cost (while being effective). If we were to start this venture over again, we would have included the "beta" version as well as contact the less common eateries from the start.

Even though this business wasn't as profitable as we assumed, we were able to gain a lot of experience through pitching to the various local businesses and gaining feedback. We could have attempted to sell X number of tee-shirts, yet we took the avenue of expanding our knowledge in a service based industry.

If we could offer advise to future entrepreneurship groups we would suggest to take time to conduct market research in the area. This can be easily done through actually starting the project and not spending time on assuming or researching the internet. We would also suggest to pick an idea that you could enjoy doing given that you will be working with this business the entire semester. Finally, we believe that it is okay to change an idea. You are not committed to any business and if it doesn't work, change it. Not only will this business project reflect your grade, it will also help you succeed in any future business venture.

Going to Local Businesses

This week we edited and simplified our company contract. We divided the contract into potential benefits for the organizations as well as how we hope to benefit from the organization. After completing the contract we went to the following local businesses and talked to managers and pitched our venture:

            -El Charros (new one under 865 East)

            - Vito’s Italian Kitchen

            -  China Jade

            - Boston Beanery

            - Mr J’s Bagels

            - Bravo Italian Restaurant

The managers are passing our contract on to their owners and we should be hearing back from them within the next week. We hope to launch our deals next week before thanksgiving. 

Contracts and Companies

Recently we have drafted a contract to give to businesses we are interested in offering our service. This will show the legitimacy of our service and also show exactly what we have to offer the businesses; as well as how they can help us. After this class we will re-visit Jimmy John's and Tutti Gusti to have the contracts with us to diminish time spent meeting and negotiating with these restaurants before coming to an actual agreement. We have also been researching Groupon's website, after Professor Wales recommendation. We found this statement on Groupon's website and we feel that it aligns perfectly with the goal of our business:

"Groupon negotiates huge discounts-usually 50-90% off-with popular businesses. We send the deals to thousands of subscribers in our free daily email, and we send the businesses a ton of new coustomers. That's the Groupon magic."

We hope to somehow replicate this model except on a smaller scale, with a more focused niche to have a goal discount range for businesses, limiting the use our service to busnisses' deals that are in the same 50-90% off range. Through our research we also learned how Groupon deals are not activated unless a certain number of customers buy them. We are currently trying to incorporate some version of this into our venture, however it will have to be modified severely because once we send out our text it will be active and able to be used by all subscribers. Lastly, Groupon encourages users to share the deals with friends and we are going to encourage that as well by allowing users to forward the texts to as many people as they would like.

Updated Business Model: October 21, 2011

Getting Feedback from Restaurants

On Tuesday, we went to Jimmy Johns and Tutti Gusti to get feedback from local businesses, and to see if they would be interested in our company. We talked to managers at both places and they sounded interested, but said we needed to bring back formal documentation to show their owners.

Although, Jimmy Johns said that they don't offer any discounts or coupons, they said they could potentially help us by allowing us to work with their marketing team. The manager, shown above, said that their marketing team goes to different places around Harrisonburg everyday and hands out free subs. We are hoping that we can go with the team and sit on the commons and try and get students to sign up for our venture and give us their phone number. In return, they will then get a free Jimmy John’s sub.

We are now in the stages of creating a formal document that we can hand out to all local businesses, when we go to pitch our idea. We intend to have this accomplished by this weekend and on Monday we will go to the rest of the businesses around town and pitch our idea. We then would like to see what business could give us the best deal to use during our Beta testing. We are going to send out a blast text for that one deal, at no charge to the restaurant, as a trial run, to see if students actually come in. After our results we will reevaluate our venture. 

GoDaddy.com and Facebook!

We purchased a domain name through GoDaddy.com for $29.15 and are now in the process of developing a website (ALCasterz.com). We have also made a Facebook event in hopes that this will entice more people to sign up for our services through our blog. We have invited over 600 people to this event so hopefully we’ll get more contacts!

5 Biggest Problems We are Facing

In class on Monday we discussed the five main problems we are facing in creating our venture. The five we came up with were:
1) Getting enough contacts to create value for businesses
2) Finding a compatible and affordable text service
3) Convincing businesses that we can create value for them
4) Should we create a more specific niche?
5) How/Should we limit companies to the amount of texts they can send?

We are still in the process of solving these problems and haven't decided on any permanent solutions at this time. We are currently waiting to hear back from companies and then we will proceed with a trial (beta) run to help us better adjust to what will work best.

Business Model as of October 7, 2011

Changing the Idea

After discovering that it would be tough to expand our original idea in the future, we decided to change the concept completely including our original blog. We then thought about advertising and how we could provide instant blast SMS text messaging to local businesses (mainly food orientated) that would enable them to reach out to consumers when their revenues are slow. One thing we considered early on was that we didn't want these restaurants spamming our pre-gathered potential clientele. So a limit would have to be put in place on how many alerts these businesses could send out per week/day. In order to organize or contact list, we created another page on our blog to facilitate the large quantity of contacts we may acquire. We are currently in the process of finding the best blast SMS text website to fit our business model.

Mocking it Up

It then came to us, we wanted to change up the idea slightly; we now wanted to put a picture of the new Bridgeforth stadium that had a caption relating to this year. after some deliberation, we agreed upon a shirt that would now read, "We saw it First." This T-shirt would create more value than any other because it could be seen as limited time only.

Drawing it Out

Getting the Idea

After deciding on the team name, ALCasterz, we then went to work brainstorming ideas for our business creation. We tried to think of needs college students had that we could satisfy. Right away we came up with the idea of a cleaning service and would clean up for them after a party. We assumed there would be a significant demand, since we live in a college town, and we also thought that we could make a high profit by charging around $20 for an hour of cleaning. After thinking the idea through a little more, we realized that this idea was not ideal. It would have to be very time consuming and the cleaning supplies could get expensive. We also were concerned with safety since we would be entering the home of strangers. Lastly, we were slightly disgusted at the idea of cleaning stranger's toilets. thus, we decided to scratch the cleaning service idea. Since cleaning was not at the top of our list we tried to come up with other carious ideas such as a Sunday Football Catering Service. However, we realized most students that watch games order pizza and/or wings anyways. Eventually we stumbled on the idea of a tee-shirt company. We though there weren't that many tee shirts focusing on tail gating. We realized there would be a lot of problems with selling JMU tailgating shirt in that we would be competing with the bookstore. Finally we decided there could be a market for tee-shirts that focused on the new stadium.