Birthdays are typically a time to both reflect on the past and contemplate the future, and that applies equally to businesses as it does to people. Well, Spreets has just reached its second birthday and the first anniversary of our acquisition by Yahoo!7, both of which are huge milestone for us in our fast-paced and highly competitive industry. Celebrations aside, we’ve learnt a lot of things in the past two years which I think put us in a good place to consider our future direction. While some of those lessons are specific to the group buying industry, the majority of them are simply good sense for anyone involved in starting up or developing a business.
The first of those lessons is that it pays to be first to market. I founded Spreets in 2010 after spending the previous six years building a Silicon Valley start-up. At that time, nobody could truly say they had first-hand experience of group buying or daily deals, and that includes me. The pioneers in the industry had to face a lot of uncertainty, but did so knowing that the potential rewards of being first were enormous. Spreets was the first group buying site in Australia and that initial market leadership position meant we could not only gain and hold a significant slice of market share, but also made it easier to consolidate that position as the industry matured.
Of course, that initial advantage of being first doesn’t last for long if you don’t work at it. We learnt our second lesson pretty quickly: understand your customers. In two years, we built up one of the largest group buying databases in Australia and we stuck to a simple set of values in everything we did as a business: provide experiences rather than just discounts; help merchants sustainably develop their business; and above all, deliver what we promise.
On the flip side, businesses need a healthy attitude to change if they want to keep celebrating anniversaries. We’ve seen a lot of things change in the last two years, especially the sorts of deals we offer. Beauty products and services used to dominate our revenue streams; today, our revenue is more or less evenly split over a whole range of sectors, from restaurants and bars to online retail and even adventure deals.
The price of deals is going up, not down, suggesting buyers are looking for quality and newness rather than just a good bargain. For us at Spreets, that’s an indication of just how rapidly the group buying market has evolved, and an indication of how important it is to keep your business adaptable. We’ve constantly adjusted and tailored the deals being offered based on research and feedback from our customers, as well as working to improve on our targeting mechanisms so each user gets an experience which is uniquely appropriate to them.
Being acquired by Yahoo!7 last year was a major leap for Spreets, but it’s given us the opportunity to support our work with some of the best media assets in the country while retaining a unique Spreets culture. It also works since the guys at Yahoo!7 have a strong focus on understanding users and that fits particularly well with our own approach.
Finally, we have learnt from our mistakes. The group buying industry has its fair share of ups and downs and it’s how a company responds to these trends that determines whether it folds, survives, or thrives. In our case, we’ve tried to make sure that our merchants really understand how group buying deals work and that’s involves doing some leg work. It involves providing a comprehensive guide for potential sellers which we constantly update, structuring our campaigns so that merchants don’t end up getting swamped by volume, and fostering regular dialogue based around how to grow our clients’ businesses. Getting this right is crucial in the group buying game and the fundamentals hold true for any business.
Two years in, what does the future hold for Spreets? Well, we plan to stay true to our core values, but we’ll have to stay nimble as the group buying industry continues to change at breakneck pace. Group buying is set to evolve significantly this year and we hope to be leading the charge.
Dean McEvoy is the co-founder and CEO of Australia’s first group buying site Spreets.com.au