Elevator Pitch is a regular feature on Lifehacker where we profile startups and new companies and pick their brains for entrepreneurial advice. This week, we're talking with Michael Jankie, co-founder and CEO of PoweredLocal.
In 128 words or less, explain your business idea.
PoweredLocal offers automated, word-of-mouth marketing via check-ins on social media. Businesses provide free WiFi through PoweredLocal for free promotion on customers’ social channels – where it counts the most.
It’s pretty simple: to access the WiFi, customers automatically check into a social media account. By posting a check-in at the business, customers are recommending that business to their friends and family, who remain, for nearly all consumers, the most trusted source of advice. It’s particularly valuable for the healthcare industry, which legally isn’t able to take testimonials from customers.
The technology suits almost any business vertical, including retail, hospitality and entertainment in particular. Through the check-in, businesses can also collect customer data that can be used for demographic mapping and targeted marketing campaigns.
What strategies are you using to grow and finance your idea?
We’ve always focused on building cash-flow positive businesses – at least until we get to a stage where the business model is proven and established. For PoweredLocal, we bootstrapped the initial development and operations and slowed our growth. This allowed us to self-fund until we reached the right size and had enough insight into the business – including cost of customer acquisition – to develop a sustainable growth model.
After proving the business model, we took investment while continuing to re-invest cash-flow in order to accelerate sales. The Australian Research and Development Tax Incentive means we can also have a level of predictability on some of our funds, which will be rebated to us at a later date.
To sign up new customers, we use a number of different methods with differing costs. The trick is finding a balance between the methods that suit our customers’ capacity and funding.
What’s the biggest challenge facing your business?
We’re a pioneer business, rather than a copy-cat business. So while we don't really compete with anyone, we have to educate the market. This can be a challenge when business owners are constantly being asked to spend money on an array of services and all they want to do is turn a profit, not spend more, more, more.
So although our service has proven to make significant returns for our clients, a big part of our process is outreach and education, not sitting back and waiting for the phone to ring.
How do you differentiate your business from your competitors?
For us, the landscape is less about direct competitors, but more about the services and broader marketing aspect. We know our clientele and we know they are busy. We are clear that we provide word of mouth marketing, which requires no effort from the owner or staff. We also add on a bunch of less tangible, but still very valuable services – like seamless customer WiFi and on-site data acquisition – all in order to make it as much of an easy 'YES' as possible for the business to go ahead with. We aim to resolve any objections to the service with solutions that are out of the box. It’s actually kind of fun doing a presentation and seeing a customer’s objections disappear when we describe a feature set. Quite often our customers are left speechless because they are so used to finding a reason to say ‘no’.
What one phone, tablet or PC application could you not live without?
Slack. While there are a whole bunch of others apps and tools that are central to our operations, Slack is the one neat app that we use across the business. We’re highly focused on optimising the amount we spend on client acquisition, so tools like Slack save precious overhead in communicating alerts and updates across the team.
What’s the best piece of business advice you’ve ever received?
Pay yourself a wage. Even if it's measly, it forces a commitment to the business and to yourself.
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