For a few young entrepreneurs, success comes and goes. For others, it just keeps on coming.
That was the case for 24-year-old Jeff Nobbs. 2 yrs after launching Extrabux.com from his dorm room at the University of Southern California in 2006, Nobbs and his co-founder entered the cash-back and coupon shopping site in to the university’s business plan competition — a move that won them $25,000 and a stamp of credibility to improve more funds.
Extrabux, gives participating customers from 1 percent to thirty percent cash back on the purchases, now works together with some 2,500 retailers including Walmart, Walgreens, Nordstrom, Victoria’s Secret and Kate Spade. The San Diego-based company in addition has raised a lot more than $800,000 from family, friends and angel investors. It’s profitable, cash-flow positive and with 150,000 members worldwide, it’s on the right track to generate a lot more than $4 million in revenue this season. That is clearly a 400 percent uptick over 2011 levels, claims Nobbs.
"If you are a young entrepreneur, your rivals frequently is more seasoned entrepreneurs," Nobbs says. "We spent considerable time whenever we were at university just learning everything we’re able to about the e-commerce space."
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Just how exactly did Nobbs turn his campus startup right into a goldmine? The name of the overall game is social shopping — sales generated through social-networking platforms, discount-shopping sites and related media — and it’s really hot nowadays. Consulting firm Booz & Company this past year estimated that the global "social commerce" market will grow from $9 billion this season to $30 billion in 2015, with the U.S. share rocketing from $3 billion to $14 billion over the time. And the ones figures are estimates for the purchase of hard goods only, not services.
Nobbs, who earned a bachelor’s degree running a business administration, with a concentration in entrepreneurship, also credits person to person. Since shoppers will get supplemental income back for referrals, each participant winds up referring another member typically, he says. "The business enterprise model is nearly viral naturally."
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But of course, launching Extrabux hasn’t all been easy. "In 2006, whenever we were looking for our first big retailer partners, it had been type of the chicken and egg problem," Nobbs says. "Which comes first?" Big retailers required Extrabux to create more traction, nonetheless it was difficult to create that traction without big retail partners, Nobbs adds.
Even though Extrabux hardly ever really landed an individual big fish, as time passes the company were able to attract some guppies, which in turn begun to reel in bigger and bigger retailers.
It had been also tough to attract users initially, says Nobbs. "We’ve bootstrapped this business, with reduced financing, therefore bringing eyeballs to the website without a lot of a marketing budget was also very challenging." But on Cyber Monday in ’09 2009, HELLO America cited the portal as the most recent money-saving shopping tool. And that morning, Extrabux was among the top keyphrases on Google, in addition to the mention resulted in more media exposure, Nobbs adds.
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Today, Extrabux users do all of the work, Nobbs says. "After we hit that tipping point, marketing became due to providing an excellent customer experience," he adds. "Our users now do the marketing for all of us."
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