A few days ago we had the chance to interview Steffen W. Frølund, the Co-Founder and CEO of Bownty.com (Update – March 2023: The startup seems to be no longer in business under this website, and we therefore deactivated the original link).
Bownty is a Copenhagen-based startup that aims to give you all your favourite deals in a single place. It could be described as the Kayak or Momondo for deals. Earlier this month, Bownty raised $1.1 million in new funding from Danish SEED Capital and Accelerace Invest.
When did you have the idea for Bownty and what made you sure it was the right one?
The idea of building a daily deals aggregator site like Bownty has its roots in the late summer of 2010. I came up with the idea while working for another startup called Billetto.dk (an online ticket sales system for private and public events), who happened to be sharing office space (and some owners) with Downtown.dk, one of the most popular daily deal sites in Denmark.
It really caught my attention how Groupon was moving quickly in the States and that imitation seemed to be occurring all over the world at record pace. I could see that the daily deals industry would soon be swamped with startups trying to grab a ‘piece of the pie’.
Keeping in mind that there are very low barriers to start a deals site, we figured that there would soon be many similar sites popping up, hence having an overview of new deals would increasingly become more difficult for the users. The only solution to this information overload – a daily deal aggregator.
Finally, we launched Bownty.com in march 2011.
What were the main stumbling blocks for Bownty as a startup (especially during the first year) and what would you have done differently from today’s perspective?
In the beginning it was quite difficult to reach to agreements with some deal sites. We were considered as a competitor, so especially some of the large deal sites were not interested in cooperating with us. At the same time, due to the fast growth and large marketing budgets across the daily deal market, it was very difficult to attract users’ attention.
The main stumbling blocks for Bownty were primarily external, so we could not change that. However, it is crucial how a startup reacts to those issues. At this point, our decisions have lead to continuous growth.
What makes Bownty unique or better than other Daily Deal Aggregators out there?
Daily Deal Aggregators are commission-based business models which impose a financial constraint for those businesses. Bownty already relied on external finance even before the launch of Bownty.com, which enabled us to move along the learning curve and get ahead of quite a few competing aggregators. We were able to focus more on customers’ needs. An example of this is the ‘Deal Wallet’ – a feature that we launched in late 2012. It helps our users to organise all their deal vouchers in one place and the ‘Deal Wallet’ reminds you by email before vouchers expire.
In addition to Bownty.com you’re also enabling your users to check out new or hot deals via the free Bownty-app for iPhones and Android devices. How important is mobile right now compared to Bownty’s business with desktop-users?
That’s right. There are free Bownty apps available for both iOS and Android. In addition, we also have a mobile version of our website which makes it easy to browse through the newest offers while you are waiting for the bus or sitting in a cafe. Many users do also read our newsletter on mobile devices.
Recently we saw an increasing shift towards mobile usage of our service. About 30% of our traffic comes from mobile devices. There is definitely a trend to focus more on mobile e-commerce in the near future.
What is your impression of Bownty’s market acceptance so far and what kind of marketing strategies do you use in order to promote your platform and Bownty as a brand?
Bownty enjoys a very good market acceptance and many users are replacing their sign-ups for different deal sites with one Bownty account. The users are very glad to get one customised newsletter that matches their personal interests and contains all the offers from different dealsites, instead of getting numerous newsletters from each individual deal site. It basically saves the users quite a lot of time.
We are doing online marketing, based on a widespread marketing mix, that is continuously controlled and optimised. Without revealing too much, you could say, that we are applying a kind of evolutionary approach. You might even call it ‘Marketing Darwinism’, learning and expanding the high performing marketing channels and stopping the inefficient ones.
Right now Bownty.com is available in English, German, French, Spanish and Danish. Are there any plans to add more locations or languages soon, and if so, which are they most likely to be?
Bownty will enter the Italian market soon.
Bownty just received $1.1 million in seed funding. How are you planning to spend/invest the money?
First of all we were very glad to be able to announce the new $1.1 million funding, which shows that investors still believe in our business model. Opposed to some critics we think that the daily deal market is not dead. Bownty is using the funding to continue its growth. We recently expanded our team so we can further improve our service and follow our vision of offering the best possible daily deal shopping experience for free.
How many people are working for Bownty at the moment and how do you support the corporate culture?
Currently, we are 15 people that share the vision I just mentioned. Shared competences and an ‘overall match’ with our team are very important in our recruiting process. This is contributing a lot to our corporate culture, which is characterised by a meritocratic spirit and a flat hierarchy.
Is Bownty hiring right now? And if so, what kind of talent are you looking for?
We are not hiring at this point; we just signed on some new people that add further tech and marketing knowledge to our team.
What’s your experience with Copenhagen as a location to start a company?
Copenhagen has an entrepreneurial subculture supported by quite a lot of different public programmes, to help people who are starting their own companies. European capitals such as London, Berlin and Stockholm are still the centers of European IT entrepreneurship, but Copenhagen might be considered as a growing, little sibling.
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