7 ms·

FiveStars (YC W11) Picks Up $14 Million to Challenge the Loyalty Punch Card

59 points by jingsong 14y ago

josh33 14y ago
Is Apple's Passbook a competitor?
- theatrus2 14y ago
  I have a bootstrapped service coming soon which hopes it will be: http://stmpcrd.com http://stmpcrd.com Passbook is nothing directly - it requires third parties to make the wheels turn.
  - bryanh 14y ago
    You need a different name; don't fear the vowels.
jasondc 14y ago
Awesome company, actually the easiest reward card I've used. I use them at Rojoz in Palo Alto, give them my phone number, and the 7th wrap is free.
rabble 14y ago
55 employees before their A round? Either they raised a lot of money in a 'seed' round before this or they put a bunch of their own money in. Otherwise i don't see how they funded the growth to this stage on revenue.
- binarysolo 14y ago
  Knowing the space a bit, I'd guess most of the 55 people are a bunch of sales people on a commission-heavy structure, vs your 100k+stock devs.
dfriedmn 14y ago
Haven't we seen enough of these? I'm thinking punchd, Belly, LevelUp, Plink, not to mention offerings from Groupon, foursquare... They may be able to profitably acquire businesses now, but isn't it a coinflip as to who will win in the long-term?
- pclark 14y ago
  if by coin flip you mean whoever executes the best, yep. "haven't we seen enough of these" sounds extraordinarily condescending.
- prezjordan 14y ago
  The key here is that they are not introducing new technology. It's old school, and that appeals to local business quite a bit.
- salman89 14y ago
  I don't think this is a winner take all space. I am more interesting in understanding how these products are differentiating against each other, most importantly in how they plan to drive more sales for the business. I'm not sure how valuable social exposure is for businesses - do check-ins really drive more traffic through the door?
- pbreit 14y ago
  "but isn't it a coinflip as to who will win in the long-term?" One of the more ill-informed questions I've heard in awhile. Do you have any idea how much energy, persistence and brains go in to creating a successful, winning service?
  - beedogs 14y ago
    I'm guessing he does, which is why he's wondering exactly how there came to be a half dozen players in this incredibly tiny market niche.
    - AznHisoka 14y ago
      I think it's one of those sexy tech ideas everyone thinks they brilliantly discovered first.
lachyg 14y ago
And they're looking for rockstar developers!
- iamwil 14y ago
  What does this add to the conversation?
  - dbcooper 14y ago
    It's an entirely appropriate chastisement for their tacky, cliched, and rather lame corporate communication.
  - martey 14y ago
    It's in reference to the YC job ad at https://news.ycombinator.com/item?id=4332117 https://news.ycombinator.com/item?id=4332117 posted an hour ago (after the AllThingsD article was submitted). The first paragraph claims that they "can't go into too many details about the exact features of [their] software". EDIT: This might have been an old job ad that was reposted, as it claims the company has 8 employees, while AllThingsD states they now have 55.
  - tikhonj 14y ago
    On the front page, this article is directly above "FiveStars (YC W11) looking for software developers". Here's a screenshot for posterity: http://inst.eecs.berkeley.edu/~tikhon/img/fivestarRockstars.png http://inst.eecs.berkeley.edu/~tikhon/img/fivestarRockstars.... It leads to this job ad: http://news.ycombinator.com/item?id=4332117 http://news.ycombinator.com/item?id=4332117
    - nandemo 14y ago
      There's no reference to "rockstar" in that ad. They seem to have set a somewhat high bar, but I can't see how that equates to looking for "rockstars".
      - tkahn6 14y ago
aaronblohowiak 14y ago
I've seen quite a few companies in this space, and have never taken the leap. Maybe NFC will be the ticket..
TylerBrock 14y ago
These guys are a good group. I spoke with them last year at some point and they were really bright and seemed fun to work with.
larrys 14y ago
What a fluff article. You would think they have traction and tons of merchants on board. They don't. Do a location search. Zoom out the map on http://www.fivestarscard.com/locations http://www.fivestarscard.com/locations There are only locations in Silicon Valley, Los Angeles and literally a smattering of other places. Then there is this statement: "Since officially launching in 2011, FiveStars has signed up 400,000 customers across 11 states; those customers have purchased 3.5 million items and are on track to spend more than $50 million at participating locations this year — those same customers are earning about $100,000 in free rewards every month." But when speaking of the competitor, Level Up and Belly, it says this: "A similar service, called LevelUp, claims to have about 200,000 active users, who are spending some $2 million a month on its network. And Chicago-based Belly, which has an iPad solution, recently claimed to have 1,400 merchants and more than 200,000 active users." Why is Five Stars numbers referred to differently than the others whose numbers are "claimed" throwing doubt on those numbers. Aren't the Five Stars numbers also "claimed". Or are we to believe they were independently verified? And lastly, from the Press release (repeated on allthingsd) "FiveStars cards are currently available at leading retailers and local merchants across the country." Not true. It's not available "across the country" and "leading retailers" is certainly a stretch.
brianbreslin 14y ago
this looks a lot like a miami bootstrapped startup doing same thing http://freqent.com/ http://freqent.com/
dinkumthinkum 14y ago
Shows FB info and email address, etc? I think this could only better if it included audio that let other customer's know the user's sexual preference, medical history, etc, etc. I think Richard Stallman is going to love this. :) I actually like the punch card system better anyway. Besides the fact that I'm not adding yet another thing leak my identity all over the place, it is kind of more fun to have a visual representation, via the punches.
hncommenter13 14y ago
Broadly: Square, Punchcard, Stampt, PlacePop (dead?), Thumbpunch, Perka, Jodesco (dead), Paycloud, Loyalli, Key Ring App, Stampfeet, CardStar (Constant Contact), Cardmobili, Front Flip, Posiq. 1) Readily available angel financing makes it hard to rise above the noise of similar startups and results in fratricide. 2) The only way to escape the pack of other startups becomes to raise more money than one's competitors in order to outspend them on marketing, PR, hiring, product, etc. It's hard to be capital efficient when there's a winner-take-most competition, given the network effects. 3) Obviously, selling to small restaurants and retailers is a difficult, expensive proposition. Easier than it was a decide ago, no question. But still a costly slog. Most startups (and there aren't many) that have managed to acquire a large number of them as customers have spent a LOT of time and/or money doing it. EDIT: The list above is in addition to the ones mentioned below.
ricksta 14y ago
$100k rewards per month / 400k customers is 25cents of rewards per customer per month.

59 points by jingsong 14y ago

josh33 14y ago

Is Apple's Passbook a competitor?

theatrus2 14y ago
I have a bootstrapped service coming soon which hopes it will be: http://stmpcrd.com http://stmpcrd.com Passbook is nothing directly - it requires third parties to make the wheels turn.
- bryanh 14y ago
  You need a different name; don't fear the vowels.

jasondc 14y ago

Awesome company, actually the easiest reward card I've used. I use them at Rojoz in Palo Alto, give them my phone number, and the 7th wrap is free.

rabble 14y ago

55 employees before their A round? Either they raised a lot of money in a 'seed' round before this or they put a bunch of their own money in. Otherwise i don't see how they funded the growth to this stage on revenue.

binarysolo 14y ago
Knowing the space a bit, I'd guess most of the 55 people are a bunch of sales people on a commission-heavy structure, vs your 100k+stock devs.

dfriedmn 14y ago

Haven't we seen enough of these? I'm thinking punchd, Belly, LevelUp, Plink, not to mention offerings from Groupon, foursquare... They may be able to profitably acquire businesses now, but isn't it a coinflip as to who will win in the long-term?

pclark 14y ago
if by coin flip you mean whoever executes the best, yep. "haven't we seen enough of these" sounds extraordinarily condescending.
prezjordan 14y ago
The key here is that they are not introducing new technology. It's old school, and that appeals to local business quite a bit.
salman89 14y ago
I don't think this is a winner take all space. I am more interesting in understanding how these products are differentiating against each other, most importantly in how they plan to drive more sales for the business. I'm not sure how valuable social exposure is for businesses - do check-ins really drive more traffic through the door?
pbreit 14y ago
"but isn't it a coinflip as to who will win in the long-term?" One of the more ill-informed questions I've heard in awhile. Do you have any idea how much energy, persistence and brains go in to creating a successful, winning service?
- beedogs 14y ago
  I'm guessing he does, which is why he's wondering exactly how there came to be a half dozen players in this incredibly tiny market niche.
  - AznHisoka 14y ago
    I think it's one of those sexy tech ideas everyone thinks they brilliantly discovered first.

lachyg 14y ago

And they're looking for rockstar developers!

iamwil 14y ago
What does this add to the conversation?
- dbcooper 14y ago
  It's an entirely appropriate chastisement for their tacky, cliched, and rather lame corporate communication.
- martey 14y ago
  It's in reference to the YC job ad at https://news.ycombinator.com/item?id=4332117 https://news.ycombinator.com/item?id=4332117 posted an hour ago (after the AllThingsD article was submitted). The first paragraph claims that they "can't go into too many details about the exact features of [their] software". EDIT: This might have been an old job ad that was reposted, as it claims the company has 8 employees, while AllThingsD states they now have 55.
- tikhonj 14y ago
  On the front page, this article is directly above "FiveStars (YC W11) looking for software developers". Here's a screenshot for posterity: http://inst.eecs.berkeley.edu/~tikhon/img/fivestarRockstars.png http://inst.eecs.berkeley.edu/~tikhon/img/fivestarRockstars.... It leads to this job ad: http://news.ycombinator.com/item?id=4332117 http://news.ycombinator.com/item?id=4332117
  - nandemo 14y ago
    There's no reference to "rockstar" in that ad. They seem to have set a somewhat high bar, but I can't see how that equates to looking for "rockstars".
    - tkahn6 14y ago

aaronblohowiak 14y ago

I've seen quite a few companies in this space, and have never taken the leap. Maybe NFC will be the ticket..

TylerBrock 14y ago

These guys are a good group. I spoke with them last year at some point and they were really bright and seemed fun to work with.

larrys 14y ago

What a fluff article. You would think they have traction and tons of merchants on board. They don't. Do a location search. Zoom out the map on http://www.fivestarscard.com/locations http://www.fivestarscard.com/locations There are only locations in Silicon Valley, Los Angeles and literally a smattering of other places. Then there is this statement: "Since officially launching in 2011, FiveStars has signed up 400,000 customers across 11 states; those customers have purchased 3.5 million items and are on track to spend more than $50 million at participating locations this year — those same customers are earning about $100,000 in free rewards every month." But when speaking of the competitor, Level Up and Belly, it says this: "A similar service, called LevelUp, claims to have about 200,000 active users, who are spending some $2 million a month on its network. And Chicago-based Belly, which has an iPad solution, recently claimed to have 1,400 merchants and more than 200,000 active users." Why is Five Stars numbers referred to differently than the others whose numbers are "claimed" throwing doubt on those numbers. Aren't the Five Stars numbers also "claimed". Or are we to believe they were independently verified? And lastly, from the Press release (repeated on allthingsd) "FiveStars cards are currently available at leading retailers and local merchants across the country." Not true. It's not available "across the country" and "leading retailers" is certainly a stretch.

brianbreslin 14y ago

this looks a lot like a miami bootstrapped startup doing same thing http://freqent.com/ http://freqent.com/

dinkumthinkum 14y ago

Shows FB info and email address, etc? I think this could only better if it included audio that let other customer's know the user's sexual preference, medical history, etc, etc. I think Richard Stallman is going to love this. :) I actually like the punch card system better anyway. Besides the fact that I'm not adding yet another thing leak my identity all over the place, it is kind of more fun to have a visual representation, via the punches.

hncommenter13 14y ago

Broadly: Square, Punchcard, Stampt, PlacePop (dead?), Thumbpunch, Perka, Jodesco (dead), Paycloud, Loyalli, Key Ring App, Stampfeet, CardStar (Constant Contact), Cardmobili, Front Flip, Posiq. 1) Readily available angel financing makes it hard to rise above the noise of similar startups and results in fratricide. 2) The only way to escape the pack of other startups becomes to raise more money than one's competitors in order to outspend them on marketing, PR, hiring, product, etc. It's hard to be capital efficient when there's a winner-take-most competition, given the network effects. 3) Obviously, selling to small restaurants and retailers is a difficult, expensive proposition. Easier than it was a decide ago, no question. But still a costly slog. Most startups (and there aren't many) that have managed to acquire a large number of them as customers have spent a LOT of time and/or money doing it. EDIT: The list above is in addition to the ones mentioned below.

ricksta 14y ago

$100k rewards per month / 400k customers is 25cents of rewards per customer per month.