Even though Rohit Prakash was a dual MD and PhD researching optogenetics at Stanford University, his entrepreneurial itch kept returning him to his family’s small business roots.
He and his co-founder Nipul Patel began researching the travails of small business owners, interviewing countless entrepreneurs, trying to figure out what their risks were or what caused them to fail. (About half of small businesses fail within the first five years.)
Out of that came Townsquared, a Nextdoor-like platform for local business owners to connect and share resources. The company has raised $5.26 million from Floodgate and August Capital and are launching an iOS app today.
Inside the app, local retailers and businesses can share advice, organize local events and send crime and safety alerts in real-time. On the site, there’s a live feed, where Townsquared members can see updates from nearby businesses, topic channels for discussing specific problems, and member listings to get to know other local business owners. There is also a resources section on how to manage permits and licensing or seek loans and funding.
“There’s this whole economy of people and businesses that significantly impact the way our economy works. I know very viscerally how much of an impact these small businesses have not only in our neighborhoods, but on our GDP,” said Ann Miura Ko, who invested in the company from Floodgate.
The company’s platform is only currently available in New York City and San Francisco, but they have plans to expand across the rest of the country eventually.
Prakash said that like the contrast between LinkedIn and Facebook, there is a need for a platform that is specifically business-oriented.
“The cadence around professional conversations is just totally different,” he said. He pointed out that a user on Nextdoor might only really want to reach out to other local residents. But a small business owner might want to get to know the owner of a nearly identical local business in a different part of the country to share best practices.
Townsquared users have already banded together in unusual ways. A Noe Valley jewelry store owner who had installed security cameras to prevent theft, posted a still of a woman shoplifting from her store. A neighboring hairdresser had recently had the same woman in as a client and was able to report her information to the police.
Inside the platform, business owners can get urgent alerts for shoplifters-at-large or suspicious activity. This, of course, may also eventually raise the concerns that Nextdoor has had to address with racial profiling in the East Bay.
But in other cases, local business owners have gotten together in more compassionate ways. In one case, Prakash said several local businesses banded together to help find a homeless resident housing instead of issuing a restraining order.