From Dot Bomb to Great Recession to $30M Acquisition: The Eversave Story
By some counts, the Boston area is home to two of the top four local deals sites in the U.S. I’m talking about BuyWithMe (based in Boston and New York) and Eversave, which is based in Wakefield, MA. The big boys in the field, Groupon and LivingSocial, certainly have a strong presence in Boston, but they are based in Chicago and Washington, DC, respectively. Another frontrunner is Tippr, based in Seattle.
Observers have been predicting consolidation in the sector. So far, that has taken the form of these top players scooping up smaller players. Until last week, that is—when Eversave’s parent company, Prospectiv Direct, was snapped up by Connecticut-based marketing firm Affinion Group for $30 million plus earnouts.
But who the heck is Eversave (and Prospectiv), and what can it teach us about the deals sector?
“We’re a marketing company, not a daily deal company,” says Jere Doyle, Prospectiv’s founder and CEO. That gives him immediate credibility in my book, because it means he’s thinking much bigger than your typical Groupon clone.
Let’s back up a bit. In the mid-1980s, Doyle founded a European company in the travel sector with the nondescript name of Global Marketing. That company went on to get bought by an English firm, LSI, in 1998, also for tens of millions of dollars. In 1999, Doyle started Prospectiv with the idea of providing coupons for local businesses that consumers could print from the Web. Just one problem: There weren’t enough people printing stuff online. Also, the dot-com bust was upon them, and “people were saying Internet was over,” Doyle says. “We started at the worst possible time.”
So Prospectiv made a key switch to focus on national brands and coupons, rather than local, and play to its core strengths in customer acquisition for big businesses. After some tough slogging, the company started to build a national following. “It was nasty in the Internet world back then,” he says. “We didn’t have a lot of prospects, but we never lost hope.”
Fast forward to 2008-09, and the recession hit the company hard. It was time for another strategy shift, and Doyle found it by going back to his original idea: serving local merchants and … Next Page »