28. September 2012–
Gathering hype in the Berlin startup scene like the next Berghain is Groupon antithesis, mobile phone app favor.it. Offering businesses the opportunity to target new and existing customers without resorting to the aggressive tactics that characterise the controversial deals site, favor.it is quickly attracting users that are after a more enjoyable selling experience.
We caught up with one of the founders, Josha Benner, to find out more about favor.it and why one downfall of using the app is that it can make you look like an alcoholic...
Hi, I'm one of the founders of favor.it, which is a forum for local businesses to connect with their customers and be discovered by new customers. At the moment we have a mobile app where our customers can follow their favourite businesses and, in turn, the businesses can send their followers news, deals or offers they've got going.
That’s relevant to the customers because they decided to follow a restaurant or a shop or cinema or whatever. And then if the user likes the deal they can buy something with the app, it’s two clicks on their iPhone and they've got it, because the app stores the credit card details. Users then have a voucher on their phone that they can use to redeem the deal. Since we launched at the end of July we already have over one thousand users on the site.
How did you come across your idea?
We came up with favor.it as a reaction to Groupon. We wanted to be better than Groupon, because it was once so successful, but right now it's doing really badly and lots of people are unhappy with their services. We want to be more sustainable, so that merchants want to use favor.it multiple times.
We chose businesses that wouldn’t do a Groupon deal, places that have a higher quality. We also wanted to avoid employing a massive sales force that calls all the businesses in the city and harasses them to set up deals and then takes 50 per cent commission. We don’t force businesses to give discounts, they can if they want to, but they don’t have to. The other difference is that the businesses put the offers up on our platform themselves, from anywhere around the world.
Who are the founders and how did you find each other?
We are a team of four founders, Jakob Miller, who worked in marketing and PR before, David Federhen, Florian Hübner and I, who all have backgrounds in consulting. I also founded my fashion company 13 Ost last year and that's where I got a taste for startups.
David and Florian have been friends for years, since school, and David and I worked together at Roland Berger in Berlin. We all know our strengths and weaknesses and how to communicate and, importantly, how to forgive people when they start screaming and going crazy!
What makes you different from everyone else?
We haven’t seen this specific business model anywhere else. There’s foursquare and Qype, where you can recommend places, and Groupon where you can get deals, but we haven't seen an integration of the two functions, where you can follow the places you like and purchase electronic vouchers. Also, we haven't found anyone else that has a platform which businesses can use to post their deals or news themselves. I don’t know when the first companies will start copying us or including the same features in their apps.
We also review the businesses that want to join favor.it, to make sure they are the right kind of place for us to host.
What does favor.it offer businesses?
Favor.it has multiple benefits for businesses – for example, if they want to get new customers, users just click on the favor.it app and see what’s near them. They can also see where their Facebook friends are going. This makes the app more personal than Qype, for example, as you're more likely to take your friends recommendations on board. Also, customers who haven’t been to a place for a while could be drawn back with the offers and news on favor.it.
And how big is the market potential?
At the moment, our audience is iPhone users, but we want to expand to Android soon. People using favor.it are from all kinds of backgrounds, party people who use it for the bars and clubs, sophisticated people who use it to buy books and listen to a famous authors read from their books, hipsters that hang out in Mitte.All kinds of people.
World domination is what we’re really after. We don’t want to stay in Berlin, we want to expand internationally and since it’s a platform that anyone can sign up to we could get anything from a restaurant in Munich to a bar somewhere in Asia on favor.it.
Who is financing you?
We’re in talk with VCs about financing, we’ve received investment from a business angel to start off with.
Is there something that you missing? An employee, an investor or an office?
We’re focused on getting funding first and then we want more tech people, we want to improve the product so that businesses can use it to follow their users and create more relevant products and offers for their customers.
Who would you like to have a lunch with and what would you talk about? (doesn't have to be business person)
I love Michael Jordan, so I’d have to pick him. I’ve always wanted to meet him and talk basketball.
Any advice you'd give for fellow startups?
Do what you like. Be brave enough to do something unique so you can focus on what’s really cool and not just worry about what someone else is doing. See from an early moment on if it makes sense to pursue what you're doing, talk to your customers and adapt quickly to their feedback. So if you have a vision that no one else shares or wants to do anything with then don’t be stubborn and keep going. Be flexible with your ideas.
Also, don’t wait too long until everything is perfect to go to the market, get something that works that is cool and show it to the world even if it's not perfect yet because you need the feedback from the customers to make it better.
Where will you be in a years' time?
In a year we will be in a few European countries and across Germany, we'll be well funded, have a large user base and extended services. We’d go to the largest cities in Germany at the beginning and then to European capitals.
Do you use favor.it a lot?
Yes definitely! Since it’s so easy to buy something the impulse purchases are dangerous. So two negatives are I’ll often go out and forget my wallet, because I’m so used to paying with favor.it, and then I do need money.
The other thing is, when I see something cool in the app, for example I saw an offer from Dr Kochan Schnapskultur, with six bottles of Monkey 47 gin for a ridiculously high price, but I like this gin so I thought I had to have it. So I bought 180 euros worth of gin in a second and I had to carry six bottles of gin on a Saturday afternoon through Prenzlauerberg and all these families were looking at me like I was an alcoholic...But at least I can have a great party!
Image credit: Flickr user cliff1066™
For related stories, check out