Start-up: UForce
Founded: 2009
Location: Edina
Key players: Andrew Atkin, majority owner
Funding: Funded through margins of a separate business
Web site: theuforce.com
Are you a deal seeker? Who isn’t, right? Everyone likes to find a bargain. There’s something extremely satisfying about walking away from a purchase having saved money. It’s like a legal form of stealing, where everyone wins. Hence the phrase, “It’s a steal.”
Saving money is a powerful driver of purchasing—we know that, and so do retailers. Why do you think companies like Target put a line at the end of your receipt stating how much you saved? It’s because they want you to feel a sense of satisfaction from your purchase (and from the store). And it works.
Just a few months back, my wife returned from a trip to Target having saved over $100! She was so excited about how much money she saved that she posted it on Facebook. The post was met with a lot of “congrats” and “likes,” proving just how celebratory the feat of saving money really is. When’s the last time you’ve cared enough to post about your grocery shopping online, let alone have it met with kudos from your social circle?
Powerful stuff indeed.
Here’s the problem: Sometimes we get so caught up in the idea of saving money that we purchase products we don’t truly need. The old, “but it’s too good of a deal to pass up.” Honestly, I think we all know that it’s only a good deal if it’s something that we were planning to buy anyway.
Here’s the solution: Minnesota entrepreneur Andrew Atkin has launched UForce, which is putting power back in the hands of consumers by grouping people together to purchase products that they’re actually interested in.
By now, we’re all familiar with the daily deal e-mails from companies such as Groupon. These companies are great, and the offers are wonderful, but you don’t get to decide what deals you’re getting.
UForce has flipped that model by allowing you to choose what product or service you're looking for and letting the seller come to you.
Andrew Atkin is here to share more.
Please tell us what UForce is and how an average member may use it.
UForce is a 5 million member “group-buying marketplace.” Our members leverage their strength in numbers by forming buying groups around products they wish to purchase. Sellers—national and local brands that are registered on our system—receive an alert and then make an offer to a specific group that is based on group size. Currently, we have groups that have received the lowest hotel prices available on the Internet. Other groups have purchased cell phones at deep discounts from what the major carriers charge for the same phone. Other groups have received incredible pricing on back-to-school computers.
How did you come up with the idea for UForce?
In 2000, I founded a company called ClickIQ that brought together groups of people to provide feedback to national brands on a variety of issues. There, I learned the power of the group. As I was looking at my next business, I wanted to find a way to use group power in a different way. As I was researching new business models, I ran across a concept called tuangou. This is a group-buying model in China. UForce “Americanizes” tuangou for the U.S. buying experience.
Group buying is really hot right now. How are you protecting yourself from current and future competitors?
We create competitive barriers through our member acquisition strategy. Our business model is also unique. In our model, buyers have the power. They tell sellers what, when, and how they want to buy. Sellers respond to these promotional requests. This is obviously different from group coupon sites where the seller controls everything in the promotional process. We are also a marketplace, rather than a coupon site. We have groups receiving deals every day, as opposed to the deal-of-day strategy utilized by most group coupon sites.
As a start-up, how has social media impacted your business?
It’s a key component of our business. Our group-buying technology allows our members to automatically post buying groups they have joined and offers they have received on Twitter or Facebook. They do this to get more people to join a group, which results in a better price from the seller.
It appears your site is quite active. How many UForce members are there? Do you have a membership goal?
We have 5 million members. Through an affinity partnership with Augeo Affinity Marketing, employees from Starbucks, AON Insurance, the State of Alabama, and other large employers access our group-buying marketplace. Other recruitment sources come from unions, charitable organizations, membership groups, blogs, and other online communities.
What have you found to be your biggest challenge?
Maintaining marketplace liquidity. Insuring that there are always enough sellers to keep buyers active and vice versa.
Based on your experience, what advice might you give to other entrepreneurs?
1. Create a full business plan so that you know where you are going. Continuously refine the plan based on what you learn.
2. Be flexible. Change is inevitable as you learn more about our business.
3. Have great advisors and give them equity in the company.
4. Be laser-focused on your objective. Execute something small very well. Make sure it can scale if business takes off.
5. Start frugally. Do you really need an office day one? Do you need full-time employees, or can you use consultants to get the business up and running?
For more information on UForce, visit theuforce.com.
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