Daily deals with a charitable twist
Monday, January 14, 2013/
It was a 12-month journey from idea to market launch for GOthat, founded by best friends Belinda York and Della Pin.
The business aggregates offers from leading daily deal sites and re-advertises them in one place.
York talks to StartupSmart about why GOthat is a lean operation, and the pros and cons of being best friends in business.
How did you and Della meet?
We’ve been friends for 15 years, but career-wise we’re from opposite ends of the spectrum. GOthat happened with our very special combination of inspiration and execution talents.
Other than that, we’re two mums who love shopping online and now have the opportunity to create a more convenient way to do that, and help others at the same time.
Della is a mother of two. Her 26-year-old daughter is severely intellectually disabled so work has had to fit around her daughter’s day program at the Windgap Foundation.
With this, part-time work has been her only option. Over the past eight years she’s been a teacher’s aide (special) in primary schools.
On the other hand, I started my first business at 20 and have seven business start-ups under my belt.
What inspired you to launch GOthat and how did you come up with your business model?
There is an enormous and growing need for charitable fundraising, coupled with the diminishing ability of people’s time, resources and the financial returns of traditional fundraising.
Della experienced firsthand the struggle for funding services for the disabled and with school P&Cs (parents and citizens groups).
Her school had been participating in a supermarket, voucher-for-schools promotion involving a lot of collecting, sorting, counting, paperwork and of course shopping.
Her thought was, wouldn’t it be great if every time someone bought something, part of their everyday purchase could go towards their school or special cause? Not just once a year, for a week or for a month but 24/7, 365 days a year… without admin! The best vehicle for that would have to be online shopping.
It was a light bulb moment. All our friends were buying dinners, massages, harbour cruises and knick-knacks on group buying sites, and that’s when it hit her.
Put all the best deals together on one site so it’s convenient for customers and, from the commission, donate half back to the customer’s chosen cause.
How did you the fund the business and what were your start-up costs?
Both Della and I have invested over $100,000 of personal funds and a lot of hard work to bring our idea to reality.
How many staff do you have?
No staff… just two mums working seven days per week. Sometimes our young adult children lend an online hand.
How do you promote the business?
We currently have 17 eminent Australian charities onboard, each of which has significant and passionate supporter bases.
We rely, in part, on our charity partners encouraging their supporters to shop via their GOthat page.
GOthat offers the convenience of the same deals, at the same price all in one place, and a very easy way to convert everyday shopping into fundraising.
For the charities, there is no cost, no admin, and the viral benefit of online increases both their supporter base and donation rate.
Charities promote their co-branded GOthat page with unique URL, via their Facebook pages, eNewsletters and via other internal and external communication vehicles.
A little effort upfront will hopefully lead to long-term sustainable fundraising as GOthat is a permanent fixture and not a once-off charitable promotion.
We’re also keen to help charities extend their relationships with their corporate partners by offering GOthat to their employees (in support of their cause.)
Social media is key so we also see Facebook as an essential tool to spread the GOthat message.
For our mid-November 2012 launch we employed the services of a PR agency. With this we gained some good TV and newspaper media exposure, and now have a strong following with key bloggers.
Moving into 2013, we have signed a 12-month radio advertising contract, which will launch our new GOthat eMall. This virtual mall will bring all the best online stores into one convenient online venue.
This year, we will also be looking for corporate sponsors who will be able to “white label” the site with their own livery and push out to their own customer base, so their customers can interact with their brand every time they shop online.
Otherwise, GOthat relies on good old word-of-mouth marketing; friends telling friends.
What are your revenue projections for 2012/13?
If we achieve 50,000 subscribers who spend $200 over a 12-month period, we will have a sales rate of $10 million and commission earnings of around $1 million.
Of this we will donate 50% to charities, leaving us retained earnings of $500k, which will give us a little over break-even.
If we are successful in attracting sponsorship, this will provide additional growth capital.
What’s the biggest risk you face?
Running a business on 5% commission means we have to be operationally lean, and need to reach out and attract a high volume of subscribers to achieve the turnover.
As we are basically just re-advertising and developing traffic for other online sites, with the transaction and all customer service taking place on the offer’s originating site, this means we don’t have a high admin or operations overhead.
For this reason, subscriber drive is our key risk.
What’s it like being best friends in business? What are the pros and cons?
We know each other’s strengths and weaknesses and balance our roles accordingly.
I think we are also more patient, supportive and understanding. We both share the vision, and are passionate and prepared to do what it takes to achieve our goals.
Given it is just the two of us running the site, the con at this time is that we like to go away together with our husbands/partners.
We are planning a five-day break in January. To do this, we have trained my niece to put up the offers and send the daily email to subscribers.
How do you intend to grow GOthat?
Everyone that hears about GOthat loves the model. We just need to get more people talking about it, so marketing, PR and advertising are key.
Our major growth area for 2013 is launching the online mall, which is an entirely new concept and has the ability to reach a broader demographic.
We will also be focusing on bringing sponsors onboard to enable this growth.