In the past few years, it seems like there’s been the explosion of startups trying to convince local businesses to sign up for their marketing or loyalty tools, especially in the San Francisco Bay Area. In fact, LocalOn co-founder Shahbano Imran recalled going door-to-door trying to convince businesses to sign up and discovering that “small businesses are getting pitched by 20 startups a day.”
As a result, she said LocalOn’s initial efforts were “a complete failure” because “nobody wanted to hear from us.” Then she and her co-founder David Tolloupov came up with a better way to reach those businesses — working with local newspapers and merchant associations.
So instead of getting pitched by a random startup, businesses are offered a set of white labeled tools from a publication or an organization that they already trust. (The revenue is split between LocalOn and its resale partner.)
The approach seems to be working for the startup, which is part of incubator Y Combinator’s current class of companies. It has already partnered with 40 merchant associations and two newspapers in the Bay Area — apparently the partnership has generated $50,000 in new business for the East Bay Express newspaper over the past six months, and the OaklandGrown merchant association has seen a 20 percent increase in revenue from annual memberships.