Five percent of Americans have resisted the siren song of cat listicles and hashtags. Specifically, they think the Internet is “irrelevant,” to use words of Pew, which just released a report on the demographic of Americans without Internet.
In total, 15% of Americans don’t go online for a variety of reasons. By far the largest reason is that it’s a “waste of time”. A smaller slice of Americans can’t get online for a few reasons related to the digital divide: the Internet is too expensive, it’s inaccessible in their area, or it’s too complicated. The delightful chart below shows all the glorious reasons why some Americans live off the grid:
About half (49%) of these offliners qualify for Medicare.
The very same percentage of older users do cheat a little. 44% of offliners have asked (probably their granddaughter) to use the Internet on their behalf”
But, perhaps the gem of the report is that 3% of Americans still hear fax-machine music to go online. Yes, a sizable slice of Netizens still use dial-up.
Gyft, a company building a digital platform to bring the plastic gift card industry to both web and mobile, has raised $5 million in Series A funding in a round led by Karlin Ventures, with participation from A-Grade Investments, Chamath Palihapitiya’s Social + Capital Partnership, Hass Portman and Yammer founder David Sacks. The company previously raised $1.25 million in seed funding from Google Ventures, Founder Collective, and 500 Startups, around the time of TechCrunch Disrupt SF 2012, where it was competing as a finalist.
Founded in early 2012 by Vinny Lingham (CEO) and CJ MacDonald (COO), Gyft first launched as a mobile application for iPhone that allows users to add their plastic gift cards to a mobile wallet of sorts. Here, they can then track their balances and receive notifications of offers and other discounts, designed to encourage them to spend their balances with the retailer. As the company explained at the time of its launch, a 2010 law made it so that retailers can’t actually book gift card revenue as sales until the cards are redeemed. That gives retailers a lot of incentive to work with a startup like Gyft, which can help them target those carrying around unused gift card credit.
Since its debut, the company has also expanded to web and Android, and introduced features like re-gifting options, APIs, bitcoin support, and, most recently, a new gift card registry option, which is something like a “wish list” for gift cards.
Today, the company is working with more than 300 retailers, and has seen over $10 million from 200,000 plastic gift cards uploaded to its platform. According to MacDonald, Gyft is now on track to sell over $5 million in gift cards this year, and is adding new cards at a rate of one card every two minutes.
In the near-term, he says the team will be using the additional funding to help it focus on building geo-targeting features into its apps, meaning retailers could send messages to shoppers holding balances when they’re actually near the store. This will likely arrive around or ahead of the holiday shopping season, alongside a refreshed look for iOS 7. In 2014, Gyft will introduce other features, including a card-swapping option (perfect for exchanging gift cards after the holidays) and will expand internationally.
The team is currently 14 in total, mainly engineering and product. They may add a couple more hires with the new funding, but MacDonald says they actually want to keep things fairly lean as they focus on what he says is a market “ripe for disruption” – the $100 billion gift card market.
To date, the company has declined to discuss customer numbers or revenue, pointing instead to the number of gift cards on its system and their value.
Gyft is about to hit its biggest season yet, as the 2013 holidays approach. More than 50 percent of annual gift card sales occurs in the fourth quarter, the company tells us. And Gyft hopes to tap into some of those sales within its own application and online.
“We are expanding the way consumers use gift cards and retailers think about their gift card programs,” MacDonald explains. “The current model of breakage does not work for consumers or retailers. Consumers often forget that they even have gift cards and the dollars go unused and retailers have no idea where these cards reside or who is holding on to them.”
Carriers haven’t typically been friendly with startups, especially over-the-top messaging players that circumvent native phone comms — viewing them as thieves of traditional voice and SMS revenues, as indeed (from the carrier perspective) they are. But the bad old days of telcos barring and blocking OTT services are slowly giving way to a greater willingness to partner with messaging rivals.
New research conducted by U.K. analyst mobilesquared reinforces this view, suggesting more carriers are becoming open to working with messaging startups — with more than a third (36%) of the polled telcos partnering with OTT providers this year, up from 32% in 2012. mobilesquared conducted its research between May and June this year, taking feedback from more than 40 mobile network operators, MVNOs, OTT providers and vendors.
The reason for this slow thawing of relations is partly the sheer size of the opportunity as a swathe of messaging players have grown very fat indeed in recent years, with highly engaged user-bases now numbering in the hundreds of millions, being eyed jealously by carriers. These include WhatsApp (300M monthly actives), WeChat (400M registered users, 236M monthly actives), Skype (1BN+ signs ups, 280M monthly actives) and Line (200M registered users).
This “exponential” growth of OTT services is forcing carriers to rethink their approach, according to the research. Continued growth in smartphone ownership — and the corresponding drop off of feature phones — is also fuelled an expanded OTT opportunity.
mobilesquared expects the OTT market to be worth $53.7 billion and have 2.1 billion smartphone users (out of a total pool of 3.1 billion) communicating via OTT services such as WhatsApp, Skype and WeChat by 2017. It says OTT comms’ penetration of smartphone users stands at 55% this year, which it expects to increase to 66% in 2017.
Another big incentive for carriers to work with messaging startups is of course the ongoing decline in their own messaging revenues — which is effectively forcing them to seek alternatives, as the whitepaper notes:
Operators realise they need to act sooner rather than later and most have stated they now have a plan in place and have moved away from blocking, imposing surcharges or lowering the quality of service. Their original approach to make money from charging for data is declining, and their preference is to partner with OTT players by renting out virtual phone numbers and terminating OTT traffic as they can participate in revenue streams.
According to the research, a majority of carriers are experiencing declining messaging revenues as a direct result of OTT clients being used on smartphones. The number of carriers stating they had not experienced a drop in messaging revenues for this reason stood at 62% in 2011 but that has shrunk to just 36% this year.
Interestingly, despite carriers viewing WhatsApp as the dominant OTT player, Skype is singled out as more of a threat by the research. Close to half (43%) of the carriers polled said they view Skype specifically as a major threat to their revenues — which may (at least) partially explain why carriers haven’t always been too keen to promote Skype-owner Microsoft’s Windows Phone platform.
Monetising mobile messaging
Charging for data is one way for carriers to monetise OTT messaging players but that approach is steadily falling out of favour, according to the research: the number of telcos generating revenues from OTT services this way is falling year-on-year.
In 2013, the figure was one-fifth, down from 26% the previous year, and 50% in 2011. The likely reason for that drop is more carrires bundling free access to popular messaging services as a way to attract customers to their network (customer churn being the other big threat to their revenues).
But that still leaves the question of how can carriers monetize OTT? And how can messaging startups capitalise on softening carrier attitudes?
An alternative approach to charging for data which mobilesquared expects carriers to increasingly exploit is to sell “off-net” messaging capabilities to OTT players — to allow them to offer their users the ability to send messages to people not currently using their service, delivering them as SMS or a mobile network voice call (Indian mobile messaging app Hike offers an SMS conversion feature already, as a way to differentiate its offering in its home market).
Off-net messaging gets around the inherent ‘walled garden’ limitation of many messaging services. There are messaging services that can reach off their own network, such as Yuilop, but they tend to be the exception. Major OTT players currently leverage their lock-in effect to keep customers from straying to other services.
But, in the long run, being able to offer their users the ability to chat with non-users could offer messaging giants a way to maintain user engagement (or startups a way to differentiate their messaging offerings), and also monetise that engagement — by charging their users for the ability to send off-net messages. This could be an alternative or supplement to other category business models in play, such as sticker sales, games, subscription fees and advertising.
mobilesquared reckons the global telco opportunity for “OTT off-net termination” will be worth $53.7 billion in 2017 — which it describes as “a substantial increase” from the $7.9 billion revenues generated in 2013.
For now, those figures are just a forecast, though. And it will be very interesting to see how this one plays out. Carriers may get cold feet. OTT giants may get too big for their boots — and try to build their walls even higher, rather than allowing users to reach out to other messaging playgrounds. Time will tell.
One final thought: carriers haven’t traditionally been known for having their finger on the Internet pulse but they haven’t failed to notice how much of a flop Facebook Home has been. According to the research, mobile operators put more store in Google+ Hangouts than Facebook Home.
Just 7% of mobile operators view Facebook Home as a major threat to their revenues vs 29% who worry about Google+ Hangouts.
Entrepreneurs Roundtable Accelerator (ERA) held its Summer 2013 demo day today — its fifth demo day in two years — with a customary ten companies taking the stage to show off the fruits of their labor. A relatively diverse class was on show today, and companies tackled markets ranging from college counseling and used industrial machinery to personal training and ad tech.
Take a peek at the full lineup below, and stay tuned for deeper dives with our favorite startups from this batch.
Finding used industrial machinery is hard. It’s not something most of us think about on a daily basis, but when Machinio co-founder Dan Pinto was asked by a friend to help him find a particular printing press — and failed to do so — he realized how fractured the marketplace for such parts was. Machinio is like an Indeed.com for machinery, aggregating listings that would otherwise be spread across dealer sites, marketplaces, and classifieds.
Described as the “Netflix for personal training” by co-founders Robert Victor and Dan Oved, Tapactive helps people find personal trainers online and schedule sessions for a monthly fee of $495. That might sound like a lot, but if you’re training just ten times a month, you’re beating most trainer rates. Tapactive currently has over 300 personal training, yoga, Pilates, boxing and other fitness instructors signed up in New York.
Gigzolo has created a platform for finding and booking artists, musicians, and photographers for events. Artists and potential clients can chat through Gigzolo — there is a plan to launch voice calling soon, too — and the platform has a Google Doc-like collaborative feature that allows both parties to edit the terms of the contract simultaneously. Reviews, videos, and pricing information allow for comparison shopping between artists, all of whom have been pre-screened.
Admitted.ly is a platform to help guide high school students through the college application process, beginning in their freshman year. Admitted.ly matches students to schools based on a personality profile, tells them which are reaches, likelies, or safeties, and gives them advice on how to improve their odds. In addition to students, there are also specific services for parents and guidance counselors. In the future, the team will be adding an application assistant feature, major and career mapping, financial aid planning, roommate matching, and test prep.
Piiku is a B2B service for publishers that aims to solve the problem of losing some 90% of readers who are presented with a paywall. The plan is to convert those consumers by offering them video ad-supported access, which encourages returns, maximizes video ad revenue, and encourages paid subscribers over time. Piiku announced today that they have landed a contract with the publisher Gannett.
Information travels fast, and it’s easy to miss something through traditional search methods. The goal of Agolo is to make social media data actionable in the real world, by applying a Natural Language Processing filter to multiple platforms to detect what is timely and important in a user’s social media feed. The initial product works with Twitter. Co-founders Sage Wohns and Mohamed Altantawy noted that while competitors mine real-time web data, no others are working in this specific area.
According to ClosetDash co-founder Jennifer Lee, ClosetDash targets the 60% of a woman’s closet that is too good for donation but not high end enough to sell at a consignment shop. The startup brings clothing swap parties online and allows women to trade in their clothing for credit, which can then be applied to any of the items listed on the site. ClosetDash has seen a clothing intake of 10,000 pieces to date — a 358% increase in the last month — with a monthly unique visitor count of 16,000.
List fiends, listen up! Metropolist is creating collaborative best-of lists for any local topic imaginable. It is a market that is otherwise split into two camps, founder JC Goodrich said: Yelp and other user-generated services, and editorial sites like New York Mag and Thrillist. These recommendations are often irrelevant, dated, or incomplete, Goodrich said, a problem that Metropolist aims to solve through collaboration.
This ad tech startup uses real time data to analyze user intent based on the sequences of their actions, rather than individual actions. The idea is to allow advertisers to run more efficient and targeted campaigns. Rockerbox co-founders Ron Jacobson and Patrick O’Toole both came to the venture from Appnexus. They are now processing over 1 billion ad impressions every day.
Nutmeg Education tackles the U.S. educational system from within. The startup focuses on helping teachers better prepare their students for the Common Core, the educational standards mandated in 45 states that define what students are expected to learn in school. The startup helps educators create tests and quizzes and gives them personalized feedback on student progress.
After previously dogfooding and then beta testing its same-day Amazon Prime and eBay Now competitor Google Shopping Express, Google says that today the service is launching to all those in its initial target markets in San Francisco and the wider Bay Area, from San Francisco to the Peninsula. As TechCrunch previously reported, Google Shopping Express allows consumers to shop for everyday items from a range of national, regional and local stores, and then have products delivered to your doorstep the same day.
Currently, the service is working with retailers including American Eagle, Blue Bottle Coffee, Lucky, Office Depot, Palo Alto Toy & Sport, Photojojo, Raley’s Nob Hill Foods, Staples, Target, Toys“R”Us/Babies“R”Us, and Walgreens. And with today’s public debut, Google is also announcing the additions of new retailers DODOcase, Guitar Center, L’Occitane, REI, and Whole Foods Market.
Consumers can shop for items in the newly launched Google Shopping Express apps for Android and iOS, launching later today, where pricing is the same as it is in store. The apps let you use your retailer loyalty program, as well, in order to get the same savings you would otherwise receive. Google may also charge a delivery fee on top of the product pricing for non-members, and the service offers a subscription-based membership program. Interestingly, Google did not mention pricing for this membership today, pointing users to sign up for a six-month free trial instead. That speaks to the fact that the finalized pricing is likely still in flux. Even GSX’s Terms of Service don’t detail what prices may be, but we had heard earlier the goal is to be competitive with Amazon Prime.
Shoppers can use the service to select a delivery window, from morning to 9 p.m. Delivery drivers will then be routed efficiently based on customer orders, and will show up driving Google’s new hybrid fleet of vehicles branded “Google Shopping Express.”
The product is one of many now competing in the same-day delivery space, and challenges the likes of Amazon Prime, eBay Now, which just announced expansions in Europe, Postmates, and Instacart, which also just expanded beyond San Francisco to new market Chicago.
Interested customers can visit google.com/shopexpress to get started.
Many brick-and-mortar merchants in the real world just want customers, but don’t have the time to learn the nuances of the various performance marketing tools and other programs at their disposal today. They just want new customers, or they just want to increase traffic during the slower parts of the day, for example. A new service called CardSpring Connect, launching today, now helps with that. The platform offers a self-serve online dashboard that allows merchants to easily create campaigns, connect apps like Foursquare, Trialpay, Thanx, MOGL, OnStripe and others, then sit back and watch as the analytics update in real-time with each swipe of a customer’s card at checkout.
CardSpring Connect is the latest from CardSpring, a payments infrastructure startup founded by former Netscape engineers as a means of connecting online and mobile applications to payment cards via APIs.
Foursquare had previously partnered with CardSpring and First Data earlier in 2013 to offer Visa and MasterCard cardholders discounts and other deals when they check in at particular venues. And in May, CardSpring partnered with VeriFone, integrating with the company’s PAYware Connect payments gateway to enable developers to build card-linked services for point-of-sale systems.
Until today, though, CardSpring was focused on letting developers build card-linked applications that trigger when a customer pays by credit or debit cards, but not on merchant-facing solutions. CardSpring Connect changes that.
Now, the company is targeting merchants via their financial partners and processors, offering them “set it and forget it” tools that let them build their own campaigns that they can then switch on or off with a click of a button going forward. By default, CardSpring will handle the campaigns on its own, automatically distributing the promotion requests to all the supported services, but merchants can choose to get more granular and restrict which programs are used.
In an online dashboard, merchants can access their account, connect apps to their business (like Foursquare, Trialpay, Thanx, MOGL, Roximity, Moblico, OnStripe, etc.), and track transactions. Here, businesses can see whether customers are new or returning, transaction amounts, the estimated lifetime spend for those customers and the cost merchants paid to the related service to bring those customers in.
To give an example of how this may work: say a business wants to target Foursquare to bring in new customers. They could go into the campaign manager and click through a form to create an offer (e.g. a dollar amount or a percentage off, or whatever deal they may want to run), restrict it to Foursquare, and click to turn it on. As the customers come into the store and swipe their cards at checkout, the dashboard is updated with the transaction data. Though customer names and personal details are anonymized, the merchant now has a better understanding of how well that campaign actually performed. And they only pay for the actual purchases redeemed, which is what’s meant by “performance marketing.”
“One of the things we hear most from people who use Foursquare is how much they love using our app to find great deals,” said Steven Rosenblatt, Chief Revenue Officer at Foursquare about the integration. He says the company is looking forward to the launch of CardSpring Connect because it provides an easy way for merchants to create card-linked offers that helps Foursquare users save more money.
CardSpring Connect itself is an open and neutral platform, allowing retailers to essentially turn their point-of-sale terminals into their own local marketing solutions, says Walther, who refers to the platform as a “local commerce operating system.”
“For the first time you can really see from all these providers, if they sent you new customers,” explains CardSpring CEO Eckart Walther. “That was one of the challenges with Groupon – something like 40% of the people who bought a coupon were not new,” he adds.
“Our whole value proposition is that we go out and help these old, traditional folks turn on our system…There’s really nothing like it in the offline world,” he says, explaining that, offline, there hasn’t been an easy way to identify which customers were new, which service brought them in, and what they’re spending.
With CardSpring Connect, merchants can use the system with any point-of-sale system. The system is typically white labeled, so companies providing the merchant’s credit card services (e.g. First Data, VeriFone, or local processors, etc.) could switch it on for their business customers. On this front, CardSpring plans to have additional announcements in the near future.
Getting other to partner with the company will be a critical step in CardSpring’s growth, since its business is built on a licensing model where publishers pay to use the platform. Walther explains that it charges similarly to the way credit cards are charged today – a small fixed fee, and if there’s a redemption, there’s sometimes a small percentage of that redemption. Generally, the charges are around 10 to 30 cents, he says. “It’s a fluid business model,” he says.”We charge when we create value.”
Following today’s launch of CardSpring Connect, the company will be announcing more partnerships with other financial institutions, payment networks, and point-of-sale makers that will help CardSpring gets its platform in front of more merchants. Interested customers can learn more here on the company’s website.
Zoho has launched a service that centralizes contacts for customers, helps them share them across different groups and manage related tasks. As part of the effort to reach small business owners, the CRM company and business services provider is also letting customers set their own price after a 30-day free trial.
The service is designed for the small businesses that find a CRM systems overwhelming but still need a system to share business contacts, said Zoho Evangelist Raju Vegesna in an email interview. Most of them end up sharing contacts through spreadsheets. ContactManager is basically aimed to bridge this CRM-Spreadsheet gap where business users can use the app to share contacts with colleagues.
Vegesna compared the new service to the company’s contacts app for managing personal contacts that comes with Zoho Mail. Zoho ContactManager is the equivalent for small businesses. As the requirements grow and for mid and large-size businesses, customers can move up to Zoho CRM.
The service is pre-integrated with multiple data sources like CrunchBase and Facebook. It is also integrated with Google Apps and is available through Google Apps Marketplace. It has mobile support, including apps like Card Scanner and ContactManager.
And then there is the pricing. Zoho lets the user choose what they want to pay. That’s a pretty good deal for a small business owner or any company looking for a way to better collaborate on leads. Or is it? The sophistication of mobile CRM services, task management offerings and contact management services allows small business owners options that go beyond what a commodity priced service will offer.
But then again there is the full gamut of what Zoho provides as part of its network of 30 apps. The question, then, is less about price and more about the quality and the product’s fit with the customer.