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Where we are now. We’re currently piloting our product (version 7) in Central Square, Cambridge. We’re right now on target to hitting our goal of 100 stores in the Boston area by the end of the summer. This includes both businesses on the ‘pay-per-use’ plan as well as the monthly subscribers — see our pricing structure here. Right now the app is only available in the Cambridge area. Others can go to our website at redkart.io/join to hop on our waitlist. So how does it work? It’s a token-based mobile loyalty app for small businesses. Local businesses set up digital tokens on our mobile app, choosing each token’s price and reward. Customers redeem these tokens in-store for their reward using the app. Tokens can be bought, gifted, or received in a variety of different ways on Redkart. Learn more about how it works here. As of now, we have our product built, pitch-deck ready, and soon, proof of concept good to go. We have experience in the space, talked to countless stores, did our research, and analyzed this problem inside and out. Our priority right now on the dev side is providing the best user experience for our core product, from simplifying the token setup process to improving token gifting between users to providing better customer support. Other than monthly recurring revenue (MRR), we have our eye on two key metrics at the moment; total tokens in circulation and token redemptions per store.
What we’ve done. Late Q4 2022, we built out a new prototype of our product (the 7th iteration, or version 7), and soft-launched it in the early spring of 2023. There are certain limitations with the product (namely with integration to in-store sales), but it accomplishes its role as an MVP. Back in Q1, we created a range of guidebooks, pamphlets, and other materials to help guide the merchant through the setup process. In Q2, we began in-person business outreach in Cambridge, and started automating certain internal tasks with AI (like with our social media), which we plan to continue doing more of. As some of you know, I was based at the Columbia Startup Lab in West Soho for two years, starting in the Summer of 2020. To date, it has probably been my most useful resource. Being around other entrepreneurs, especially during the early days, has been extremely helpful, and the network continues to be an invaluable resource that I continue to tap into even today. My thanks to AJ and the folks at the CSL for their support. And lastly, in the early Spring, we reached out to Cambridge Local First (CLF), a local business organization of over 500+ independent businesses in the Cambridge area. CLF Director Theodora has been very receptive to new ideas to help solve the underlying problems of the small business community there, and has been open from the outset on ways her organization has tried to tackle our common mission. My thanks to her and the CLF team for their patience and willingness to work with us. Stay tuned for more on what we hope to accomplish with this partnership in the coming months.
What’s next. We’re projecting to hit 1000 stores by the end of this year, primarily in the Boston area. Over the following year or two, we want to expand to three primary markets: Massachusetts (statewide), New York City (within city limits), and then to California (the Bay Area). We have a range of features and products in the pipeline that can be built on top of this foundational token system. We’ll save this for a later date, but our final fully built-out product will likely utilize a unique combination of rewards (ie store-specific vs universal tokens), earned points (like a digital currency), and store memberships (communities with perks). We also have a variety of different ways to incorporate small business tokens into local institutions, like local offices and local universities, etc. All these features can create a new and fun way for consumers to interact with and support local businesses in their area, while also providing real value to the local merchant. We’ll be outlining our larger vision for a ‘Main Street 2.0’ in our annual report.
What you should know. Brick-and-mortar businesses today still have no website or mobile app. In fact, most of them have very little online presence, let alone an active social media account. Many are still cash-based, or have a very basic digital point-of-sale (not the iPad that swivels). As a result, their in-store digital experience is often lacking — from inventory management and product marketing, to customer tracking and sales data. As just one example: many stores I spoke to during Covid still had no email list or contact number for their most frequent customers, and therefore had no way to reach them, at a time when most businesses were fighting for survival. Local mom-and-pop shops sometimes don’t see the practical value of modernizing and going digital. For one thing, merchants feel like a mobile app or a loyalty program is not crucial to their core business offering (since customers will probably still show up either way). Technology can also sometimes be too complex, or time-consuming to maintain (ie social media requires consistent effort). Then there’s the cost, building your own mobile app for example can be expensive. So fancy tech, latest online tools, mobile loyalty programs etc, all seem optional and unnecessary to the local merchant. All while larger chain stores rapidly adopt new technology, and create modern and unique ways to engage their customers. Digitally modernizing your business is crucial. Store-based mobile apps (and digital PoS systems) for example are great with data collection and customer retention. The main reason why a lot of big chains have the downloadable rewards app is because 1) they can collect your info and track your sales and 2) they can give you rewards to keep you coming back. Simple mobile loyalty programs are often utilized by well-resourced national chains (like Chipotle, Starbucks, CVS), but often times missing at the local small business. And this is just one example. Modernizing can help the mom-and-pop shop compete with larger national chain stores in a myriad of different ways.
What we believe. Our mission is 3-fold: Modernize, Connect and Reimagine Main Street for the Digital Age. Modernize. We need to first catch stores up to the present. And tokens are the perfect starting point. It gives stores a simple and quick way to digitize, with a mobile app touchpoint, where they can retain loyal customers and market to new ones. Tokens also help brand a business, and help give them a digital presence they may not have had before. And customers can now digitally interact with and support all their favorite local businesses, without having to download an app for every store. Connect. We want to create a community of small businesses on Main Street. What separates us from other players in this space is our network effect, or the ‘inter’ as we call it. Most loyalty apps out there serve an ‘intra’ function, where a business retains and rewards their own customers. Our product plans to connect stores in a way where businesses on Main Street are working together, where shopping more at one business can earn you rewards at another, allowing customers to be rewarded the more they ‘shop local’ or ‘shop small’. With local helping local, we believe this will foster a stronger community of small business merchants and a more vibrant local economy in the future. Reimagine. This token-based app is a creative way for customers to experience ‘Main Street’, giving them a way to collect rewards, refer businesses, and support merchants, in a way they haven’t been able to before. But this is only the beginning. We know that no token/mobile app can make or break a business. We believe that what’s truly required for small businesses to thrive in the digital age is a complete reimagining, and this requires a range of different features and products. We’ll discuss more about that vision in our annual report.
What we need. To grow our company, we’re currently raising a $350k pre-seed round. The money will help us do 3 things: Integrations: To tie in-store credit card purchases to in-app token rewards, either via a third-party service like Plaid, or by building our own simple in-store point-of-sale. Blockchain: Adding an encryption layer for all ‘tokens’ will provide additional security and can even allow businesses to sell/gift our tokens on other platforms. Additional Features: for businesses including token sales tracking, marketing tools to broaden their reach to locals, simplified token redemption processes, etc.
Any investor contacts in this space are appreciated, be it those interested in merchant solutions, web3/blockchain, or SaaS. We also invite you to be a part of our fundraising by investing in this round. We’re always seeking people who believe in our mission to create a tech-forward and thriving small business community. ______________________________________________
While we have gone through a lot of ups and downs over the last few years, we know the problem we aim to solve isn’t going anywhere. Our intention was not to be quick, but to actually solve the underlying issue of the antiquated mom-and-pop shop. Moreover, the corresponding technology, ie web3, blockchain, mobile loyalty apps etc, are all here to stay, and we want to play our part in that space. We sincerely believe if we don’t take the opportunity before us and tackle this issue, someone else will. The time for us is now. We’ll send more frequent (perhaps shorter) newsletters in the months ahead as we build momentum from here, and shift from our proof of concept to fundraising and growth. As mentioned earlier, we’ll have more details on our overarching vision and prior product iterations in our annual report. As always, feel free to reach out to me directly with any questions and requests at neelan@redkart.com. Until next time!
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