e-savings Evolves

By Business Observer Staff
| 6:00 p.m. August 1, 2008
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Entrepreneurs

e-savings Evolves

The founders of Sarasota-based eCouponsFlorida.com began meeting about their other business interests, but quickly realized they wanted to be partners and formed a new kind of online coupon company.

entrepreneurs by Robin Roy | Contributing Editor

Steve Feder figured his old kitchen table would come in handy one day. "I knew it would make a great conference room table," he says.

Feder's wife wasn't as excited to haul that big, round glass table from Chicago to their new home in Sarasota two-and-a-half years ago. But Feder was convinced he would use the table again. He was right.

Feder and the seven other founders of eCouponsFlorida.com sit around that old kitchen table each Tuesday evening for their weekly board meeting.

So important was that table to Feder, that he had the boardroom on Porter Road east of Interstate 75 designed to accommodate the five-foot diameter table. The room has been dubbed "The Think Tank."

The group's Web site went online just two weeks ago, but the eight entrepreneurs began meeting nearly two years ago, not with the intention of creating an Internet company, or any business for that matter. The idea was just to network and refer business to each other.

Each person was already successful in his own field. And they came from all walks of life.

Steve Feder was an investment banker in Chicago for 25 years.

Cousin Al Feder is a lifelong Sarasotan who created a company that digs ditches in Sarasota and Manatee counties for developers to install their electric, cable and plumbing lines in new housing projects. The Feders also run a two-year-old Sarasota procurement company called "Talk to My Cousin."

Kelly Rigoglioso has been the branch manager of the downtown Sarasota branch of BB&T bank for the past eight years.

Mark Ring, CPA at Hough and Co. in Venice, has been an accountant for 25 years.

Mike Brinkmann is an Air Force officer at MacDill AFB in Tampa.

Brinkmann's brother, Tom, is the only eCouponsFlorida.com founder who is no longer in the area. He just moved to Stuttgart, Germany to sell Ferraris, Bentleys and Maseratis. But he still makes each Tuesday meeting on a conference call at 1 a.m. Stuttgart-time.

Tommy Rhinelander runs a financial services office and is involved in real estate.

And Scott Searles is a Web site designer and developer.

Although they all have different backgrounds, they all became fast friends. "There was an affinity," says Feder. "We'd talk business for a while, then talk about the economy, politics."

"It's tough to get things done sometimes, because we're laughing and having so much fun together," says Rhinelander.

The group of networkers began to enjoy their weekly get-togethers.

"We talked about creating a business that's sensitive to the economic downturn," Feder says. "We researched and found the coupon was no longer the step-child to the food stamp. People were using it to save money."

Rhinelander created a four-by-six card that he'd take to potential clients, which contained a series of facts about coupons.

• 74% of consumers used coupons in 2007.

• $331 billion in cost savings from coupons in 2007.

• $2.6 billion coupons were redeemed last year.

• In 2003, the average savings per coupon was 93 cents.

• In 2006, the average savings per coupons was about $2.

• 25% of coupon users turn into repeat customers.

Companies took notice of those statistics, says Rhindelander, and expressed interest in becoming eCouponsFlorida.com "subscribers." Subscribers are companies that offer coupons on the eCouponsFlorida Web site. There are 40 different categories of subscribers - from appliance repair to wedding services.

Democracy works ... for now

Currently, the eight founders of eCouponsFlorida.com are equals. They all put up an equal share for startup costs, though they don't want to reveal how much that was. They all own equal stock in the company, and they all have an equal say in how the company is run.

With eight successful business people, eight type-A personalities each with their own money at stake, can a true democracy really work?

According to Feder, the answer is yes - at least for the time being.

"Each of us has our own talent," he says. "As we go downstream, it's becoming more clear who has certain strengths."

Feder says it's his job to keep everything on track. Al Feder, Rhinelander and Rigoglioso handle the marketing and sales. Rigoglioso also takes care of any banking needs. Ring, the accountant in the group, serves as the CFO. The Brinkmann brothers and Searles are the I.T. department

The group is slowly moving toward a more traditional boardroom model. Someone will ultimately take charge and act as a traditional chairman would. The group already uses Robert's Rules of Order during its board meetings. Members issue motions and vote on them. And the majority rules.

"We are evolving," says Feder. "I think it will be easy to pick a leader eventually."

For the time being, the group has one goal, and that is to populate its Web site with as many subscribers as possible.

"We might jump on the table and yell and scream, but we walk away saying, "What a great meeting," says Rhinelander.

The eCouponsFlorida team jokes that one of their biggest debates was over their mascot.

"We all thought it was important to have a mascot," Rigoglioso says.

But that's where the agreement ended. One person suggested a pig, another wanted an Uncle Sam-type character and still another thought a crab clipping coupons with its claws should represent the company.

Rigoglioso says Feder called her late one night, saying, "I got it! I got it!" What he came up with was a frog - Freebie the Frog - whose tongue snaps out to catch flying dollar bills.

Freebie the Frog quickly became the ninth board member. A 7-inch likeness stands in the middle of the kitchen table during all meetings. He also graces each page on the eCouponsFlorida.com Web site.

Expansion plan

One of the challenges eCouponsFlorida.com will try to overcome is the stigma that's long been attached to people using coupons, says Feder. Waitresses have long frowned upon restaurant patrons who pull out a small paper rectangle to save a few bucks, because the size of their tips was based on the final bill and there is the appearance of stinginess.

Feder says others who stood in line behind a little old lady handing coupons over to the cashier to save 10 cents here and 10 cents used to get frustrated.

"Now when you look at that little old lady who saved $10 in the checkout line, 'Hey, that's 10 bucks! That's real money!'" he says.

"People are hurting right now," says Al Feder. "We wanted to do something to help both business and consumers."

ECouponsFlorida.com offers deeply discounted services compared to traditional coupon advertising, such as the weekly "clipper" paper that's delivered to driveways and the Valpaks placed in mailboxes.

For $399 per year, subscribers can place as many coupons as they want on the eCouponsFlorida.com Web site. Each subscriber gets its own page to place a photo and write a company description. They also can change their coupons as many times as they want.

"I had one person tell me one ad in the 'clipper' cost him $1,200," says Rhinelander. "When I say we charge $399 for the whole year, they say, "I spent that on my boat this weekend.'"

At those deep discounts, how will eCouponsFlorida.com make money?

The company was set up as an LLC for "taxation reasons," Ring simply says. It has also secured the Internet domain names for all 50 states (eCouponsGeorgia.com, eCouponsAlabama.com, etc.), as well as 18 large cities, such as Tampa, Orlando, Miami and Los Angeles.

The plan was to launch the first site, work out the kinks and possibly begin other sites within a year.

There are currently 50 subscribers on eCouponsFlorida.com, with another 50 pending. Board members have hired independent salespeople to market the product.

"The response (from the salespeople) has been overwhelmingly positive," says Feder.

Beginning Aug. 8, the site will feature free classified ads in the same vein as CraigsList.org. The board hopes banner ads on those pages will generate revenue.

"The reason we're doing classifieds is to get thousands of Web hits a day," says Brinkmann.

None of the eight co-founders plans to take a salary for at least 12 months, and maybe not for a while after that. For the time being they plan to take any proceeds and plow them back into the Web site. Their hope is to be open for business nationwide within five years. They don't plan to look for a buyer.

"We want to grow (the business) and go national," says Rhinelander. "If we sell, we're not completing our dream of serving the communities. We really want to serve the mom-and-pops."

"We'd like to look back years from now and know we started this in Sarasota in the Think Tank around my kitchen table," says Feder.

ECoupon

Marketplace

ECouponsFlorida.com certainly wouldn't be the first online coupon clearinghouse. But its founders say they offer a distinct difference. "My brother (Tom) said there's nothing that serves the mom-and-pops," says partner Mike Brinkmann.

Some of the other top Internet-based coupon providers include:

• AllOnlineCoupons.com

• BestOnlineCoupons.com

• Coupons.com

• CouponCabin.com

• Coupons.SmartSource.com

• ECoupons.com

• HotCoupons.com

• MyCoupons.com

• Valpak.com

• Wow-Coupons.com

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