With an out-of-town guest to entertain over lunch and 30 minutes to pick a place, Reg Stettinius scanned the slate of applications on her iPhone and turned up nothing.
She could call up the 10-day weather forecast or the Nikkei Stock Average, but there wasn’t a quick way to find the best lunch special in Washington. With the whole world at her fingertips, this was unacceptable.
Stettinius set out to build a better app.
In the year or so since, she and two associates have hired developers and sold local establishments on Venga, a smartphone app created for restaurants and bars to alert customers to happy-hour specials, live music and featured entrees.
The business model is simple: Venues pay a monthly fee for a profile on Venga, where they can spread the word about daily happenings or offer specials. Patrons can download the app for free to peruse the offers, share them on social networks or book a table on the restaurant’s Web site.
Venga is just the messenger. Each establishment crafts its own promotions.
Sticky Rice: Tuesday night karaoke!
Mr. Smith’s of Georgetown: Beer of the month — Sapporo.
Cuba Libre Restaurant & Rum Bar: National Empanada Day.
With a name derived from the Spanish verb meaning “come join us,” Venga was designed for people looking to make a decision on the go — a market its creators said was not served by daily discount e-mails.
But less than a month before Venga submitted its app to Apple for final approval, District-based LivingSocial launched a program for merchants to offer discounts via mobile phones. The national brand was suddenly a direct threat, adding to the already long odds for any start-up fighting to stand out in the sea of 350,000 available Apple apps.
“I’d be lying if I said, ‘Oh, I don’t care about them,’ ” Venga co-founder Winston Bao Lord said. “I think about them all the time. . . . You just have to. It would be irresponsible if we were arrogant and said we were different completely and didn’t worry about them.”
Competition is stiff in this class of entrepreneurs who view smartphones as the next frontier. Those who catch a windfall can blaze whole new industries.
The introduction of Apple’s iPhone in 2007 sparked the rise of an app culture. The most successful apps are the ones you use every day: to kill pigs with bird slingshots, share home videos, pay your bills or send flowers to Mom. Their ubiquity — and the chance that one could pay off big — has inspired techies and daydreamers alike.
Even so, in a field cluttered with players, the success stories are few. The costs of launching a tech business have fallen considerably since the dot-com boom, so start-ups are plentiful. But consumers’ attention can be hard to catch and keep.
Stettinius, Lord and a third co-founder, Sam von Pollaro, have tapped every contact for advice, partnered with local industry groups and signed on some of the region’s most popular haunts.
Still, success is not assured.
‘The D Word’
A jar labeled “The D Word” sat on the desk in Lord’s sparsely decorated office overlooking 7th Street NW. Five quarters rested at the bottom of it, one for each time the word “deal” had been uttered.
It was only $1.25, but it represented a drastic departure from the start-up’s roots. Once dubbed Blue Plate, the app was conceived as a deal purveyor that could ride the coattails of companies such as Groupon and LivingSocial, which offer discounts to spas, restaurants and shops. (LivingSocial chief executive Tim O’Shaughnessy is the son-in-law of Washington Post Co. Chairman Donald E. Graham.)
“We realized there was a ton of stuff that focused on the consumer,” Lord said, “but nothing out there . . . was directed at the restaurateur as to what did they want to do and what were they looking for.”
So the creators went another direction, with real-time updates and marketing efforts focused on aspects of the dining experience beyond the price of the check.
“Anyone can compete on price. That’s easy to do,” von Pollaro said. “It’s competing on the value that you’re giving that is more difficult, and that’s what we help restaurants and bars do.”
The founders’ biggest criticism of the LivingSocial and Groupon model is that it too heavily favors the consumer. Merchants must offer a steep discount on products and then share a substantial portion of the remaining revenue with the dealmakers.
“You always have to create that balance between developing a product that restaurants want but that consumers will also use,” von Pollaro said. “That’s where competitors have gone awry. We’re trying to very much walk that line to create something that in the long run is going to work for consumers and restaurants.”