Peter King, founder of coupon codes and discount codes search engine Mamma.com, discusses the origins of his company and the hurdles he faced along the way.
1. How did you come up with the idea?
I’m quite a frugal person and I’ve always been someone who will spend hours trying to find the best deal out there before I part with my money. One day I decided it’d be amazing to have vouchers and discounts all in one convenient place. There are already companies out there doing this, but I felt there was room for a better experience; I wanted to go one step further and start an international one stop shop with coupons and discounts for most of the brands all over the world. Am I crazy? Probably, yes! It’s a tall order when you are competing against sites like RetailMeNot and Groupon.
What advice can you give to other small business owners on starting up?
One of my main pieces of advice would be too make sure you can prove the business works and you know you are capable of doing it before you go ahead and register the business. When I was a lot younger I’d get carried away with company formations over actually proving a concept. Once you know, and only when you know, you then should look to register your company at Companies House and open a business bank account. On a practical level I used a software platform called Trello and broke all my work streams into different areas of focus; product development, sales and marketing, company formation, legal and tax requirements etc.
3. How did you raise money?
We raised a good amount of money through a private investor and then have continually reinvested our profits and plan on continuing to do so. For those who don’t have access to private investors, crowdfunding platforms like Seedrs and Crowdcube are a good place to start. Networking is also key as you can meet interesting people who not only help financially but also give ideas and inspiration to evolve the product.
4. How did you go about marketing?
The coupon and discount space is extremely competitive and to start from scratch would have required a lot of funds, and a lot of waiting. We decided to buy an old internet business and convert it into our solution rather than build from scratch. We settled on Mamma.com, which was previously owned by Mark Cuban and one of the world’s first meta search engines. Four weeks later we were the owner of the domain.
Once we had the basic site up we launched a number of stores and started to gain some organic rankings and this lead to a small amount of traffic being generated. Alongside launching our small set of stores we reached out to different websites including Forbes and Huffington Post and we got featured on these sites; their angle was the transition from being a search engine to becoming a discount search engine.
After this we focused our time on growing our mailing list and converting our organic traffic and we are still gradually growing our customer base and traffic.
5. What were the details of your first customer and how did it come about?
One of our first customers was actually a friend. As the business is a ‘discount site’ it’s hard not to mention it and try and steer your friends into using your site every time they contemplate shopping online.
6. Any challenges/particularly interesting anecdotes you would like to share about the whole experience?
We work with a number of affiliate sites and trying to get approval when you have a low amount of traffic can prove to be quite tricky, so you find yourself in a catch-22 as you are getting visitors but you aren’t earning money off those visits. Once you show you can actively grow your traffic then persistence is key with these networks. The other big factor is your site needs to be up to a good standard in terms of appearance otherwise they’ll turn you down.
One thing I found was that our initial design was quite antiquated compared to the modern feel of websites you find online today. This lead to hiring an external creative team leading a project to update the website and making it more ‘swipe’ and mobile friendly. It was costly to begin with but worth the investment in the long run.
7. What advice would you give to others going into this sector?
The barriers to entry in this industry are quite high so be prepared to take your time and wait for results. With dominant established companies leading the industry it is important to think how you can make your site different. What are your unique selling points? Why should customers come to you? Once you can answer these questions, marketing will get you in the forefront of customers’ minds. And finally, perseverance and persistence is key.