Group-buying is one of the biggest crazes around, and probably one of the biggest trends in technology over the past few years. Certainly in Australia the four or five major players have proven discounts and coupon sites can become very valuable in a short amount of time.
But it’s not just the sites themselves that are valuable. Earlier this week Dealised, which sells group-buying platforms to group buying sites, received $US5 million in funding from SingTel and a Perth-based venture capital firm, Yuuwa Capital.
To be clear, Dealised isn’t a group buying site – its key asset is software that was designed for Spreets, and then spun off by the founders into a licensed software product.
This represents a great opportunity for many tech entrepreneurs. Are there pieces of your internal infrastructure that you may be able to sell? You could be sitting on a great product and don’t even realise it.
Look at your infrastructure, your systems, your in-house software and determine whether any of the projects you’ve developed have underlying technology or IP that could be valuable.
It’s been a long time coming but social gaming giant Zynga has finally filed for its IPO in the US this week. This five-year old company has attracted a lot of attention, and rightly so – it will be the first company listed on the American stock exchange to make its money only from virtual goods.
There are plenty of pieces of gold in this filing, particularly around just how many users the company has (232 million every month) and how much it wants to raise ($US1 billion, although that figure will likely rise ahead of the listing).
But one of the most thought-provoking statements was that Zynga gives away many of its products for free. It only makes its money from products bought in-game. In fact, founder Mark Pincus says it’s far more profitable that way.
The rise of in-app purchasing should make you question your business models as well. How have you organised your pricing structure? Should you be making some products free, and then pushing up-sells later on? Zynga’s model may not be great for everyone, but it definitely provokes some thought.
Unless you were hiding away from a computer this week you would have seen the news that Google launched its new social network, Google+.
So far, the service seems to be pretty popular even though it’s only in beta. In fact, the search giant has stopped giving out invitations due to popular demand. Even Facebook chief Mark Zuckerberg has an account, and it’s becoming one of the most popular pages on the entire network.
Whether or not Google+ will ultimately succeed can’t be answered straight away. But the launch of this product represents a good lesson – don’t be afraid to try a failed project again.
Google has failed before with social networking – Google Buzz and Wave were abject failures – but Google+ seems to have gotten the balance right.
If you’ve tried something before and failed, research why and try again. You may have every chance of succeeding.
DealsDirect has been on a bit of a buying streak lately. Two years ago it bought DinosaurDeals, and earlier this year it also purchased kidswear retailer The Kids Store – chief Paul Greenberg also says the company is looking at quite a few more small deals like this.
These acquisitions certainly aren’t material to the company’s overall success and Greenberg says the most recent, for online toy retailer ToyBarn.com.au, was under $1 million. But they highlight the fact there is now a good market for entrepreneurs who build small, niche-based online retail sites.
Earlier this year Groupon Australia also bought the daily deals site CrowdMass for its three founders, straight out of university. The trend is clear – businesses are scouting these small retailers for the best talent.
If you’re an online retailer, take heart. Make sure you build yourself a niche, get your products right and keep your community loyal – you never know who might be looking to snap you up. The founders of these businesses have gone on to be key players in their acquirers.
The tech industry is a minefield for trademark disputes. The latest involves group buying giant Scoopon, which took on a start-up called BeautyScoop saying the company may have infringed its trademark by using the word “scoop”.
(Scoopon is currently embroiled in a legal battle with group-buying giant Groupon over a similar matter).
These types of threats represent a great barrier to tech companies, especially small ones. The founders of BeautyScoop estimate they’ve spent between $5,000 and $10,000 on administration and legal costs and eventually changed their name to BellaBuy.
These battles can be costly. If you’re operating in the tech space, make sure you’re working on a solid trademark. Even if your name sounds slightly similar to something else, make sure you get it checked out with a legal team. The alternative is a lengthy legal battle that will drain you of all your cash.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
