eGood, a new startup from Glendora, California, was chosen as one of the top startups to emerge out of Startup Alley at TechCrunch Disrupt SF today for its charitable spin on mobile payments and loyalty. In other words, eGood is building an in-store check-in and loyalty platform that enables those patronizing their favorite local businesses to not only buy a coffee, but give back to a local charity while doing it.
eGood is starting in Southern California (where the company is based), with plans to use the new $3 million in seed financing they announced earlier this week - a round that was led by serial entrepreneur and angel investor, Wolfgang Buehler - to expand its footprint in the region and throughout the U.S. Beginning with its first local partner in Los Angeles, Hama Sushi (and its other early partners in Southern California, like Golden Spoon frozen yogurt), local businesses - from coffee shops to hardware stores - will be able to sign up for eGood's service and easily make donations to good causes.
Once listed, business can choose local charities and non-profits, so that when consumers choose their business and check-into their store, any purchases they make there will include donations to the local charity the business is supporting. Once users choose their local coffee shop, for example, they'll be able to check-in at Rip's Local Coffee, with the business donating up to five percent of the purchase customers make to a local non-profit or charity.
As of now, eGood does not offer the ability for businesses to match user donations, or to let consumers choose the charity they'd like to donate to, which the founders tell us is part of an effort to encourage all businesses to “add purpose to their profit equation.” The company is still experimenting with its model and may add one or both of these features in the future, they added.
While eGood would like to eventually allow consumers to add in a local charity of their choosing to contribute to with each purchase, for now, they're focusing on testing a fundraiser app, which will allow businesses to contribute larger amounts - 10, 20 or 30 percent of purchases - to the beneficiary of their choice.
“Most importantly, it's an easy way for businesses to do some good,” says CEO Zack Swire. “Whether they're big or small, merchants can support good causes as part of their daily operations in a way that makes sense and gives their own business a bump without becoming a burden.”
eGood is also looking to add value to local businesses by serving as a loyalty platform, allowing that local coffee shop to offer their customers, say, a free coffee after 10 check-ins. It's a way to thank their customers for being faithful patrons and for supporting the local charity of their choice. Naturally, it also allows local businesses to help bring customer and local attention to that charity or non-profit, in turn making customers feel better about shopping there and giving a bump to their own reputations as a “socially conscious” business.
Furthermore, it acts as free advertising for the non-profit and, in theory, builds loyalty among customers who appreciate social action. After all, given the choice between two coffee shops, one that offers them the ability to buy a cup of joe and facilitate a donation to charity by doing so and another that offers the same old regular experience, the founders are betting you'd choose the former. For me, personally, they're probably right.
But, as far as eGood's functionality as a loyalty service is concerned, how well does this model actually work? It's still early, but Swire tells us that early testing has been promising. Classic Coffee, the startup's first test partner, for example, saw 5,900 check-ins for charity since launching the campaign six months ago - compared to 1,776 check-ins on Foursquare over the course of two years (without using eGood). In other words, on a per-day basis, the business saw 25-times as many check-ins using eGood.
While eGood very definitely offers a consumer-facing experience, and one that it hopes encourages loyalty (and support for local charities), it's also fundamentally a local services provider. In other words, it has to play in the same space as Groupon and any other business that provides a mobile solution - whether for payments, loyalty, support etc. - to local merchants. That means scaling is tough and requires capital, as eGood has to go recruit merchants, store-by-store, town-by-town, city-by-city and so on.
Another way of looking at it is that eGood is a mission-based local advertising company that makes businesses put their money where their mouth is. For the right type of business, this will be a non-brainer and should make early adoption easy. Selling the bigger players on this when there are now so many easy ways to donate and increase one's reputation as a socially conscious business - not quite as easy.
Nonetheless, eGood is sweetening the deal by offer a B2B version of their app as well, which offers businesses the ability to track transactions, customers, view analytics and take advantage of other loyalty features. The startup also offers service reps to help businesses with setup and integration, offering businesses advice and help on how to capture and record transactions, customer check-ins, data and so on.
Right now, eGood has started beta testing with 25 local businesses, but as it goes live with its beta later this fall, it will allow businesses to have their customers suggest their favorite local shops and causes and remove the barriers to the sign-up and on-boarding process.
For more, check out eGood's pitch on stage at TC Disrupt SF today below: