BUSINESS IDEA | STARTUP

Geolocation Discounts App📍  

When in roam

Available Domain: Near-buy.io

1. Problem/Opportunity❓

The Problem/Opportunity: When you think about it gift cards don’t really make much sense. You exchange money, which can be used anywhere, for a gift card, which can only be used in one place. But that doesn’t stop them rolling in…

But gift cards are getting more advanced. For example I have a gift card on my phone for a store that keeps notifying me whenever I get close to one of their stores, something which is pretty convenient but slightly concerning. But it got us thinking. Could you apply this idea across a wide variety of stores, and apply it to discounts instead of gift cards? Think of it like IRL Honey, without the deception and shady tactics of course. Here’s what we have in mind.

Market Size: The location-based retail services market is estimated at $35.1 billion globally in 2024, with projected growth to $68.3 billion by 2028

2. Solution ✅

The Idea: An app which delivers real-time discounts to consumers when they enter predetermined proximity zones around retail locations

How it Works:

• A brand signs up for the platform and elects to offer a certain number of discounts per day to shoppers who get within a certain range of the store (geofenced location)

• A shopper downloads the app and shares their location data with the app

• Once the user gets within a certain proximity of a participating store they receive a push notification with a discount code which they can use for a limited amount of time (1 hour period)

• If a user makes a purchase using the discount code the app earns a commission

Go-to-market: Leverage the brands’ audiences to drive initial users to the app and build from there

Business Model: Commission per transaction (2.5-4% of purchase value) and monthly subscription fees from retailers ($99-499/month based on size)

Startup Costs: This should be pretty cheap to build, but it will take time to onboard and work with the retail stores here

3. How You’ll Get Rich 💰

Exit Strategy: Sell to Klarna or another shopping app to allow them to get more into the retail space

Exit Multiple: Based on recent exits in the retail technology space you’d likely get a 4-6x revenue multiple exit here. RetailMeNot was acquired for $630m (4.2x revenue) and ShopKick was acquired for $200m (5.7x revenue)

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DRUNK BUSINESS IDEA

Edible Pizza Box

We consume a scary amount of pizza. In the US, it's estimated around 3 billion pizzas are sold in boxes each year. That’s a lot of cardboard boxes which has to be recycled or ends up in landfills. Well as with most things in life the answer to this problem is simple…more pizza.

Introducing the Edibox. It’s an edible pizza box that’s as effective as a regular pizza box but’s much more delicious, leaving no waste behind.

Saving the environment and getting to eat more pizza at the same time? Genius.

JUST THE TIP

Trend 📈: 75 Soft

Every few weeks it feels like there a new buzzy fitness challenge. A few months ago it was 75 Hard. Well apparently 75 Soft is now a thing too, which is basically a beginner-friendly version of 75 Hard. But this speaks to a wider, meta trend at play here around health and fitness challenges. Others that come to mind are Hyrox, Everesting…the list goes on. These fitness challenges aren’t going away anytime soon, so why not build a business in this space?

Business Ideas

• Strava for Fitness Challenges: An app for users to compete in and track different specific fitness challenges they’re competing in like 75 Hard

• Fitness Challenge Rewards Marketplace: A marketplace where users unlock discounts or other rewards from brands by competing specific fitness challenges

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THE MONEYSHOT

The Founder who Sold his Business to Coca-Cola…then Bought it Back

As a founder selling your business to one of the biggest brands in the world sounds like a perfect outcome.

Well this founder did exactly that…except after a few years he ended up buying his company back.

This is his story.

Mark Rampolla is one of the best educated founders I’ve ever seen.

In fact Mark spent almost 10 years in higher education, studying Business at Marquette University for four years, then studying Environmental Management at Duke University for another four years and finally getting his MBA from Duke, all between 1987 and 1997. But it wasn’t Mark’s time in the classroom that made him a founder, it was his volunteering that did.

During the 1990’s Mark worked as a small business development volunteer with the Peace Corps in Costa Rica. He lived and traveled extensively throughout Latin America and during his travels he made a few interesting observations.

Firstly he noticed that coconuts were everywhere in that part of the world. And while there was a well-developed infrastructure for coconut meat and oil, coconut water was often discarded as waste, even though it was delicious. Mark thought he could take this untapped commodity of coconut water and turn it into a healthy beverage brand for the masses.

So in 2004, Mark took a leap of faith. He left his corporate career, where he had been earning $300,000 a year as an executive at International Paper, and moved with his young family from El Salvador to New York to launch his coconut water business.

He founded ZICO.

With a small number of bottles in hand Mark now needed to find his first customers. So he went directly to them. He parked a van outside yoga classes in New York and started selling his bottles one person at a time. Back in 2004 this was a great way for Mark to make early sales. But today hanging outside a yoga studio in a van is a great way to get arrested.

Soon after launching though Mark ran into a problem. A guy named Michael. Michael Kirban, who we covered on a previous edition of Half Baked, had coincidentally decided to start his own coconut water brand in New York at the time called Vita Coco.

The two companies battled it out for market share, but the fighting was brutal. In fact early on ZICO faced several near-bankruptcy situations. But over time the brand started to gain some traction in NYC so the brand expanded to New Jersey, Boston, and Los Angeles, experiencing strong results in these markets as well.

But things really started to take-off when the brand started getting celebrity endorsements to boost brand recognition. This was back when celebrity endorsements held more weight than they do today.

After a few years the brand scaled to $100m in revenue and all of a sudden Coca-Cola wanted to taste some of that sweet, sweet coconut water. So in 2009, Coca-Cola acquired a minority stake in ZICO for $15 million. Then, just a few years later in 2012 Coca-Cola increased its stake to a majority share and by 2013, Coca-Cola had fully acquired the brand.

Mark did it. He managed to build, scale and exit his brand. Mission accomplished. And normally this would be the case. But it wasn’t for Mark.

After acquiring ZICO over time it started to struggle. The brand didn’t get the love and attention it needed since it was relatively small in Coca-Cola’s portfolio. $100m per year in revenue for Coca-Cola is a rounding error for them. ZICO’s sales started declining so in 2020 Coca-Cola announced plans to discontinue ZICO products. This was it for the brand. It was over. Until Mark stepped in.

In 2021, Mark, through his investment firm PowerPlant Ventures, reacquired ZICO from Coca-Cola. He renamed and relaunched the brand under the name ZICO Rising, but it’s basically the same company as before. But Mark has a lot of ground to make up to get the company back to where it once was. He’s done it before. Surely he can do it again.

All of which goes to show that starting a company isn’t just about getting rich or hitting that big exit. It’s a mission, a call-to-adventure that you’ve been asked to answer. For Mark that means he’s signed up to a second act with ZICO to try and get the brand back to its former self.

And who better to do it than the man who did it the first time.

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