An ultra-crowded industry didn't scare off Gerrid Smith. He aims to translate bravery — and a charity-focused business model — into success.
Founders: Gerrid Smith, Todd Smith and Josh Cearbaugh.
Initial investment: More than $100,000
Sales: Less than $10,000 since Oct. 1
Sales projected for 2013: $175,000
Fun fact: The charitable side of Save1 for Gerrid Smith is partially personal, not just business: Smith and his wife, Jessica, adopted a child from Africa in 2011. The experience, says Smith, is why he wanted to start a business that's connected to worldwide hunger charities.
With nearly a decade of online marketing experience, Gerrid Smith is well aware the Groupon craze is so 2010.
Still, the pull was magnetic when Smith, his brother-in-law Josh Cearbaugh, and his father, author and entrepreneur Todd Smith, launched a business together earlier this year. “We looked at a bunch of different business models,” Smith says. “We liked the coupon model, but there was a ton out there. So we needed something to make us different.”
That distinction, Smith and his business partners hope, is Lakewood Ranch-based Save1.
The business, in one way, is just like many other coupon websites. It's filled with discounts, to places like Target, Best Buy and Macy's — each with a minimum amount available. The catch: Save1 takes a percentage of the commission it makes off coupons and deals from retail partners and donates it to selected charitable groups that focus on feeding children worldwide.
Says Smith: “Our passion for helping save the lives of children who are dying from hunger and malnutrition around the world is what inspired us to start Save1.”
The company, with four full-time employees, is a for-profit enterprise with a mission, says Smith, for users to “save money, save lives.” In that regard the firm is like Santa Monica, Calif.-based TOMS Shoes, a for-profit company that donates one pair of shoes for every pair sold. That firm, whose founder, Blake Mycoskie, goes by the title Chief Shoe Giver, has donated more than 2 million shoes since 2006. It recently expanded to include eyewear.
Smith, 26, hopes the social entrepreneurship model catches on even more, both for Save1 and other businesses. “So many people view charity as only a nonprofit thing,” he says. “But we want to merge businesses with nonprofits.”
The first phase of the startup process with Save1, says Smith, was to find retail partners. That effort started slowly, but has since grown quickly, and Save1 now has signed up more than 5,000 companies. Recent examples of deals and coupons on the site include 75% off certain cruises through Expedia; 30% off any Banana Republic order; and 25% off toys at the Mattel online shop.
The Save1 site lists the offers, and under the text is a note stating how many coupons or deals are left at that price. A user clicks on an offer and if a purchase is completed at a partner's site, the donation is made from the Save1 commission. Save1's current charitable partners are Action Against Hunger, Feeding America and Project Peanut Butter, some of the larger and more prominent hunger groups.
The biggest challenge for 2013, says Smith, is to generate strong, sustainable buzz about what Save1 is and the savings it offers.
Marketing, therefore, is the company's biggest expense, both internal and with an outside firm. Smith, moreover, isn't afraid to go big. In one promotion, for example, on Black Friday, Save1 sent a company media packet along with a bag of coffee to 400 personal finance journalists nationwide. The company uses Facebook extensively, too, and had more than 43,000 likes through mid-December.
Smith got into online businesses while in high school, more than a decade ago. He later started several companies, including what has become his biggest one, SmithSEO, an Internet marketing firm for law firms. He likes the independence and control of running his own business.
“I knew I didn't want to go to college,” says Smith. “I wanted to be an entrepreneur and do my own thing.”