I’m announcing yet another launch. Hopefully this one will be successful.
The simple mission of Localstakes is to help small businesses connect with the people in their local communities, and do it efficiently and inexpensively.
Localstakes is a win for everyone. Consumers receive some great offers and a chance to win nice prizes. Local businesses get new customers and more visits from existing customers. As they become more profitable, the entire community is strengthened.
A simple description of Localstakes is that it is an advertising platform that incorporates a community-based sweepstakes, with weekly drawings and prizes that are all donated by local businesses.
The sweepstakes is key. Without it, Localstakes is just another advertising medium. With it, Localstakes becomes an exciting part of the community that helps build good will and trust for the participating businesses.
Localstakes is a simple concept, but it hasn’t always been that way. I had the idea of a sweepstakes with weekly drawings and prizes donated by local businesses as far back as 2014, but it was combined with other features, making it quite complex and requiring a lot of custom coding.
I didn’t call it Localstakes either. The first name I came up with was Bullbord.com (sort of like “bulletin board”). It was originally meant to be a combination of Craigslist, Yelp, and Groupon (classified ads, business directory, and deals site).
Adding a sweepstakes was an afterthought.
Back then, Drupal was my choice of content management systems because of it’s many powerful features. I learned a lot about Drupal and became somewhat proficient in building Drupal sites, but lacked the coding skills required to create what I had in mind.
After striking out a couple of times in trying to find a good Drupal developer that I could afford, I made the switch to WordPress. Even with WordPress, though, I had a hard time finding a good developer. I won’t bore you with all the details, but the whole concept went through several major revisions. In fact, I essentially started over from scratch at least 4 times, wasting a lot of time and money in the process.
Then there was the issue of marketing and promotion. How do you get something off the ground that requires the simultaneous cooperation of two large groups of people — in my case, consumers and small business owners — especially when you lack sales and marketing skills and the human connections you need in both groups to get off the ground?
Not to mention lack of capital…
You hear of startups that have raised millions of dollars and still aren’t profitable. I was trying to launch this project all by myself and with practically no budget.
I started and stopped the project several times — at times moving along well only to hit a roadblock. I’d get discouraged and then completely distracted with an entirely different project, and then return and start all over again when the new project didn’t pan out.
The name went through a few changes, too. I didn’t really like BullBord.com, partly because I knew people would have trouble spelling it, and partly because the concept for the website gradually strayed from the original bulletin board idea.
I can’t even remember all of the names we went through — GiantBull.com, SearchNearYou.com, Rivul.com, FridaySaver.com.
Yalzi.com was a domain my wife found. It was short and kind of fun-sounding. She really liked it as did some family members we ran it by. I reluctantly went along, and the name stuck for a couple of years despite the fact that I had reservations because the word had no meaning and I thought it would be hard to remember.
When I finally decided to focus on the sweepstakes feature, I renamed it Localstakes.com. I hope I don’t regret letting go of the Yalzi.com domain.
I also realized I didn’t as much custom coding as I had originally thought — at least to get things off the ground. Ultimately, there will be a need for a lot of custom coding in order to automate all the processes, but it can wait.
As for the question of how to launch the service, I think I finally figured that out as well.
At one point, I had the bright idea of partnering with local chambers of commerce and even had meetings with two chambers in this area to discuss. I offered to share revenue with them if they would help me promote the service.
It seemed like a great idea to me, but they weren’t impressed. I’m not entirely sure why, but I guess it was a matter of trust. They didn’t know me. They also didn’t understand what Localstakes was all about.
Up to that point, I was convinced that I had to somehow start with a bang and then keep it going — an overwhelming task for someone without a big budget or a lot of connections.
The plan all along was to have weekly drawings with the winner receiving several — perhaps dozens — of prizes. I felt it was necessary to give away several prizes in each drawing in order to make it attractive enough for people to sign up, and at the same time, reduce the burden on any one business.
What I finally came to realize is that it wasn’t necessary to award multiple prizes every week, even though that’s still the goal down the road. To launch the service, all I really need to do is award at least one modest prize each week.
Furthermore, since the prizes can be relatively small, it’s not too much of a burden to simply purchase the initial prizes myself — perhaps on Groupon or other deals website — and give them away to winners. This is far easier than trying to convince businesses to donate prizes while we are in our startup phase and they know nothing about us.
Purchasing the initial prizes can be viewed as a startup cost, along with the cost of building a list of subscribers — and is actually the smaller of the two costs.
I knew from past experience in building a list that I can use Facebook ads to do this, and keep the cost to around 50 cents per name. If we assume that we need at least 1000 names to start gaining some momentum, I would spend $500 for the list. Prize cost need only be $10 to $25 per week, which I may want to continue even after we start adding some clients in order to insure I’ve got at least one restaurant prize every week, which I think is important.
So far, I’ve been pleasantly surprised to see my lead cost stay well under my 50 cent budget.
Now it’s just a matter of slowly building a list and awarding at least one prize every week until we reach a point where business owners begin taking notice. I believe this is the most effective way to build the business, especially when considering my lack of sales and marketing skills.
When we begin awarding prizes, I expect that things will accelerate — and at some point we’ll have to deal with the good problem of being too busy.