Next One's on Me could redefine the spirit of giving. The free application enables consumers to acknowledge loved ones' birthdays, their achievements or their everyday awesomeness by purchasing gifts redeemable at local businesses. Gifts come in three categories--Treats, Beer and Bar & Bites--and users select the type of gift as well as the recipient from their list of Facebook friends, adding a message and completing the transaction via credit card. Once a gift is sent, Next One's on Me mails the recipient a Facebook notification directing them to the NOOM app (available for Apple's [NASDAQ:AAPL] iOS or on the mobile web); recipients can redeem their gift from a number of participating merchants, and once they've made their selection, a one-time redemption screen will appear. Show the screen to your server, and the only thing left to do is enjoy your beer, latte or snack.
Sara Rodell first conceived the basic idea behind Next One's on Me while working in New York City for financial services giant UBS; after returning to her native Austin, Tex., she teamed with co-founder Jeffrey Schwartz, a University of Texas graduate who came back to the area after spending a year in Hollywood as a senior analyst at Sony Pictures Entertainment. Earlier this month, Rodell and Schwartz formally launched Next One's on Me during Austin's annual South by Southwest conference; for now, NOOM gift-giving is limited to the Austin area, but the startup is already looking to expand to new markets.
FierceDeveloper spoke to Rodell and Schwartz about the logistics of giving gifts, solving problems facing consumers and merchants, and knowing when--and who--to ask for help.
Rodell and Schwartz
Sara Rodell on the origins of Next One's on Me: I worked at UBS for three years. I started in 2008, and first thought about the idea for NOOM while I was there. I had a lot of friends doing personal favors for me when I moved to New York, and I felt awful because I didn't have the time or the money to take them out for dinner or for a beer. I realized there is a lack of inexpensive items to give that are meaningful, and I wanted to change the logistics of that. Over time I started thinking more heavily about the idea--I felt there was a really interesting opportunity there and wanted to take the risk to see if it was worthwhile.
Jeffrey Schwartz on how Next One's on Me works: People want to make other people happy and make them smile, but time and location can make that difficult. Mobile solves that problem.
With NOOM, a mom in Denver can buy her daughter at [the University of Texas] a coffee before a big exam. The initial integration is all through Facebook, although subsequent versions of the app will integrate email and text. The NOOM app is pre-populated with all of the mom's Facebook friends, including her daughter. First she selects the city--which is only Austin for now--and then she sees the product selection screen. There are three categories: Treats, Beer and Bar & Bites. Prices are set depending on the market you're in.
The recipient receives an in-app notification prompting them to download the NOOM app or go to our mobile website. Each user has NOOM bank. You decide where you want to go to redeem your gift and what you want to redeem it for. NOOMs are open-ended gift certificates--they're not for any specific place. Staffers at our merchant partners are trained to redeem each gift.
The whole transaction takes place on our platform. All credit card information is stored and processed by a third party. No financial information is stored on the phone. We're very serious about privacy protection.
Users can attach notes to the gifts they send.
Rodell on the Next One's on Me business model: NOOM is a social media marketing vehicle. We started out creating an answer to a consumer problem, but there is also a lack of avenues for merchants to increase traffic and visibility. Every gift sold through NOOM is priced at a mutually agreed-upon amount--merchants decide the items they offer and the prices. They manage their own risk. It's not a discount model.
Our percentage of each sale depends on the merchant. We'd rather not disclose the amount we take on each transaction.
Twenty-five merchants are now live on our network, and there a few more in the pipeline. The biggest challenge and opportunity we face is scaling to support different merchants. In time we will allow vendors to sign themselves up online--we'll offer a web portal with training and everything else they need. We want to make the onboarding process as seamless as possible.
Rodell on developing Next One's on Me for iOS: The biggest learning curve for us was figuring out the limitations of what we could do--where it makes sense to add features, and where it makes sense to limit them. We wanted to build a functioning prototype--we envision that down the road, the app will have a lot more bells and whistles. We also have plans for a native Android app.
Right now, you can only give NOOMs to your Facebook friends. We want to enable users to give gifts to whomever they choose--you might only have someone's phone number, or you might know them through LinkedIn. What's important is that we maintain our focus on what NOOM is about. We don't want to become just a depot for gifting--we want to change the logistics of how gifts are exchanged.
Schwartz on what Next One's on Me learned at South by Southwest: South by Southwest is a great place to identify new opportunities. A lot of merchants learned about us because of our event. NOOM is designed to promote spontaneous generosity, so we treated attendees to coffee and cupcakes. The surprised look on people's faces when you give them something they're not expecting is exactly what we're going for.
When you develop an app, you have a lot of ideas of what users will do, but it's so different when you see them use it. It's so interesting to get that level of insight. You can only get it when you see people using it.
Rodell: The importance of the Android marketplace was also highlighted. When people learned about the NOOM app, the first place they went to look was Google Play. They didn't think to look for the mobile web right away.
Users can gift Treats, Beer and Bar & Bites.
Rodell on what's next for Next One's on Me: When I think about future growth, I think about the best strategic partnerships. The companies under that umbrella are really diverse. This is a platform for relationship management. There are so many different types of interactions and so many opportunities to explore.
Schwartz's advice for aspiring mobile developers: The hard part is coming up with the idea--when you know it's great, you can figure out how to do it. If you're not tech-savvy, you can find someone with the skills you need. There are ways to work around it. Don't be prohibited.
Rodell: There was so much we needed to learn. You just have to ask the questions. There are so many people to educate you and help you move your business along.
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