While group buying sites like Groupon and LivingSocial have helped ecommerce stores thrive, small businesses with little to no marketing budgets have struggled to keep up.
Two Melbourne entrepreneurs think they’ve come up with a platform that may be able to help. Chung Yew Wai and Scott Walters began working on Godoko, an advertising platform for SMBs, in 2013 after spending big on advertising their gym in various ways and seeing low returns.
“We recognised a gap in the market. We knew there were other SMBs like us, locally and globally, trying to advertise their products/services without any positive results. It was also at this time that we started to notice that majority of businesses, both large and small, had some sort of promotion at the front of their stores, such as signage, a-frame chalk boards or window advertisements that promoted what they had to offer,” Wai said.
“How effective were these signs? Would a person looking for somewhere to eat notice advertising on the opposite side of a busy street, a café promoting their lunch special? If the person had never been to the café would he know the café was promoting their lunch special on Facebook? These questions were the same for our martial arts business. It was at this point when we realised this idea was worth pursuing.”
Simply put, Godoko lets small businesses advertise to a wider audience than would normally be possible within their limited budget. Instead of putting flyers in letterboxes or an ad in the local paper, a suburban hairdresser can put up a promotion on Godoko. Interested consumers can then visit the store and get the deal or discount by mentioning the ad they saw on Godoko.
With limited funding, Wai and Walters gave their initial group of developers equity to build the platform. They then raised just over $100,000 to further Godoko’s development, with Wai leaving his banking job in April last year to work on it full time.
There are currently just over 200 businesses on the platform, with about 30 coming on board each week. Wai believes that the team’s experience in small business means Godoko is properly tailored to small business owners.
“Having run businesses prior to the Godoko project taught us how to communicate with other small businesses. We believe we understand the SMB because we have been and currently are small business owners. Godoko’s management team have also worked in a number of industries from business consulting to large financial corporations such as ANZ and that has helped us hone our skills in business analysis, project management, IT transformation, business process and operations management, finances and more. Having owned small businesses we’ve learnt to be frugal and lean, which is the backbone to most SMBs,” Wai said.
As businesses can advertise on Godoko for free, the startup is working on a number of revenue streams including banner ads for larger companies and premium advertising for SMBs.
Wai doesn’t see group buying sites as competitors in any way, rather Godoko is a completely different product.
“If a consumer sees an offer they like on Godoko, they can simply click on the offer to gain more information about the business and any other offers the business may have. The user isn’t forced to buy anything from our site, as he/she can freely visit the business. The SMB benefits from gaining wider exposure for their brand,” he explained.
“Effectively, the Godoko platform is a giant online message board that provides users with the best products and services local merchants have to offer. We view Godoko to be a service that SMBs will continue to use because we provide them with an ongoing advertising platform.”
Currently operating in beta in Melbourne, Godoko will be launching in a few weeks. Just like any other startup, only time will tell whether Godoko will take off, but given it’s free, there’s no reason why businesses wouldn’t want to advertise on the platform. However, while it may be easy to get businesses on board, the platform must be marketed well in order to get consumers to look at it, which is, of course, the point of it all.
The team aims to expand into other states later this year, and is already looking ahead to international expansion.
Wai said, “Our aim is to make Godoko the global online advertising platform for SMBs. We envision a world where a person could travel to another country, open Godoko in that country, and look for products or services from local businesses.”