After a chance encounter with an investor at Carson’s in downtown Milwaukee, entrepreneur Ruben Flores, 25, a largely self-taught computer programmer, is up and running on a new mobile app he’s been developing over the past 17 months to transform the way local businesses market themselves to customers.
[caption id="attachment_153934" align="alignright" width="500"] Top row: Jeremy Baccash and Sean Craig. Bottom row: Katrina Gutierrez, , Jesus Chavez, Ruben Flores and Diamond Lewis[/caption]
The app is called Sugr and it’s designed to accomplish two things: help consumers figure out where they want to spend their money, and help small local businesses that can’t afford to throw together sophisticated digital marketing campaigns on their own compete with large corporations that can, such as Starbucks or Panera.
“We’ve raised about $130,000 and we’re currently working on raising another $500,000,” Flores said. “The Internet is so giant, you get lost. The big problem with technology right now is you get so consumed by the net, you’re not aware of your own surroundings anymore. So we wanted to change that. Bring it down to the local stratosphere.”
Flores put his college career studying computer engineering at the University of Wisconsin-Milwaukee on hold to build the app, which can be downloaded for free from the Apple App Store.
It revolves around the idea of giving consumers an interactive way to sift through local businesses. From its main landing page, users can choose to navigate the app’s trove of information about local restaurants, bars, music venues and stores three different ways by tapping a menu at the top of the screen: channels, places or deals.
Channels is like an interactive digital lifestyle magazine. It’s flashy and stylish, and breaks businesses into different categories that users can scroll through for recommendations and promotions for cultural events happening throughout the city that are delivered in a format similar to Snapchat stories. It also breaks those recommendations and promotions out by each city neighborhood.
Places was built with more impatient users in mind who are, for example, trying to decide where to get dinner, Flores said. If a user taps “places” on the menu, several bubbles pop up on his or her screen with the names of nearby restaurants listed based on the location. Hit a bubble and you’ll get a plethora of relevant information about that restaurant on its landing page within the app – hours, location, deals. There’s even a map with directions on how to get there embedded on the page, as well as a guide at the bottom that details how long it would take to get there using Uber and an estimate of how much the Uber ride would cost. Click on the recommendation and your Uber app will automatically open on your phone.
[caption id="attachment_153344" align="alignnone" width="770"] Sugr creator Ruben Flores (left) brainstorms ideas for the app with team members, who write notes on the windows of his apartment with glass chalk.[/caption]
Deals organizes businesses based on their current deals, promotions, coupons and specials.
Flores said each menu is using the same information about each business or event, but presented in different ways depending on user preference. And no matter which route users take, they can share on social media what they thought about a local brewery, a show at the Riverside Theater or a restaurant in Walker’s Point, right from the app.
“The mission for Sugr, to me, is to redefine marketing,” Flores said. “In a capitalistic society, the backbone is buying things. Consumerism defines us. That’s already in our blood. But the problem I see in society is the way we are marketing. We are targeted. Selling marketing as an exposure thing. Charging based on how many people will see an ad. The problem with that is that it has created a negative perception from the user. They feel targeted and violated. It’s very intrusive. In a way, that has created a really big problem with the Internet where people don’t trust it. We feel spied on.
“Advertising is a necessity for businesses to survive. They depend on that. But the focus should be more on engagement than coercion. You don’t have to bother people. Why not just put (your information) in front of the user, find out what they want, and center it around a lifestyle or topic or channel? That will make the user feel like they have a say in the community.”
The app’s initial $130,000 investment came from Eric Falkeis, chief operating officer of Direxion Investments, an investment managing company based in New York City with a Milwaukee office. In simple terms, Falkeis, a Marquette University graduate, described the app as a “marketing platform for small businesses with a user interface.”
“But there’s multiple phases to this,” Falkeis said. “What I liked about it was I really thought it could be a marketing platform for small businesses. It’s a way for small businesses to use marketing in an app to compete with larger companies that have the technology and infrastructure to do that. And it empowers users. You own a small business, you don’t have a big marketing budget. This is a way for you to get your specials out and things like that.”
Falkeis and Flores met after a mutual friend of theirs, who works at Carson’s, connected them.
“(He) told him what I was doing and he was intrigued,” Flores said. “That’s how we met. We hit it off. We lucked out with him for sure.”
Flores and Falkeis broke down how the team will generate revenue through the app. First, they’ll bring Milwaukee hospitality and entertainment venues on board at no cost upfront. Second, they’ll build marketing schemes around them – help them set up deals, promotions, events and rewards programs. Third, they’ll charge consumers a processing fee on tickets or coupons purchased through the app.
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They’ll only make money if the app generates sales, Ruben said, and they plan to undercut the processing fees of companies like Groupon and Ticketmaster, which he feels are far too high and ripe for disruption.
They also plan to use data on how users are interacting with local businesses to inform owners what their most loyal customers are looking for and how to improve or better tailor their offerings to those customers’ needs.
“I’m excited,” Falkeis said. “The first milestone was to get the app out without going to outside investors. We did that. The team worked really hard at doing that. And now we’re entering the second phase.”
The second phase involves signing businesses up and cutting deals to start driving revenue. By Oct. 17, Flores was in discussions with Swarmm, a Milwaukee events company that organizes things like the popular city-wide “Shamrock Shuffle” bar crawl.
“We’re going to do a partnership with them where we’re going to start selling tickets with them through Sugr and giving them good analytics,” Flores said.
Sugr is attempting to raise $500,000 by the end of 2016 to help it expand throughout Milwaukee in 2017, Falkeis said. The app makers hope to eventually introduce Sugr to other cities around the country.
“As someone that travels for business, for me as I go to a city where I don’t really know much about it, it would be nice to have an app like this,” Falkeis said.