I’ve been doing a lot of back-to-school stuff lately, such as this gallery of useful online services for students, and have come across some pretty cool apps along the way. One of the niftiest is DrinkOwl for iPhone, Android and Blackberry, which directs users towards the nearest drink specials.
It’s obviously an app that is useful for penny-pinching students, but it’s also good for anyone who likes going to bars. It’s a free geo-location app that uses the phone’s GPS to determine where the user is. A map then displays all the nearby bars and clubs, and what drink specials they may have going on. It’s a great way to discover that the bar across the street has $4 martinis, or the one down the road has $10 pitchers.
The app is from Toronto-based software developer Konrad Group and now covers 75 North American cities, with London recently added. I was curious as to how the developer plans to make money with the app, as well as how the bar information is gathered, so I chatted with company head Bill Konrad. Here’s a snippet of our conversation:
What’s the business plan behind the app? How does it generate revenue?
It sort of has three prongs to it. When you look at revenue targets, you can either charge the consumer a dollar for a premium app or something like that, the bars you can charge or you can charge the brands—things like Jagermeister and Budweiser.
We explored all of those but it’s become pretty clear that trying to work one on one with the bars is pretty tough because those guys are just constantly trying to make it to the end of their day and trying to make sure that they don’t have a slip up and that their staff is there. They don’t have a ton of time to evaluate high-tech apps. Consumers are a fantastic target but to really get that part going you need a pretty serious critical mass. The brands on the other hand are a fantastic target and we’ve been working to build some kind of win-win with them, for example with Labatt and their Budweiser sales here in Canada and also Jagermeister. We’ve begun to list their events. We’re not charging them for that yet but the end point, to jump to the real answer, is mobile coupons and the whole Groupon type of thing. That’s where the real money is here.
The big difference between Groupon and what we’re trying to do is Groupon will go to a business and say, “Offer a bunch of coupons that are very likely to lose you a lot of money very, very quickly, you’re going to get swamped with business and then hope that there’s some sort of trickle-in effect that happens for the next six to 12 months.” Our business model is a lot more about sustainable coupons at these venues so it’s things like a bar can offer nachos for free, and that’s one incentive to have somebody come in there and think it’s a great way to start the night. Nachos might take 45 minutes to eat so they’re going to sit around and have a beer and once they have one, they’re going to have two. It’s about finding stuff that doesn’t hurt the venue much and comparably derives quite a bit of value for the consumer. In the long run, I think that’s pretty sustainable, whether it’s through the brand or the venue.
How scaleable is it? You don’t have humans manually adding all the information, do you?
That’s also a multi-pronged effort, nothing really happens one way. We started out with a dedicated in-house team and we did a ton of data collection, crawling Google Maps and finding the bars and calling them. The second part of that is this fall we’re kicking off a program in all of the Canadian universities and U.S. colleges where our goal is to tap into that market with a unique kind of internship opportunity. This whole local mobile craze is something that marketing programs are looking to figure out—how does it work, how do you spread this stuff, can you go grassroots and go to the venue level and talk to the owners or is this something where you have to be all over social media?
What we’re offering to those schools is a small marketing budget for a student or two, and they pretty much have carte blanche to go around and execute a plan whereby they collect drink specials data. They’ll also work with the local venues to figure out synergistic coupons that won’t bury their business like a Groupon. From there we’re building a referral program to see how much traction they can get through that sort of guerrilla local marketing through that campus environment by actually tracking how many downloads come from that campus ambassador. That’s a program we’re building through some of the fraternities and through a few other channels and it’ll probably be [going live] September 1 or somewhere around there.
So there isn’t a way to automate the gathering of this data?
From a software standpoint, not really. Some of this data is readily available but the important part is keeping it current. We have some pretty rock solid stuff on the back end that allows us to do checkups on venues in a way where we know when we’re going to find the manager there and not be calling them five times a week. We might call them every 30 days or we have some annotation about this is going to be a three-month special, so okay great we’ll call them back in three months. It’s going to be a one-week special? Okay, we’ll check in on the website in seven days. That sort of thing.