Launching a mobile app, securing investors and raising funds are the typical steps for many B2C startups, but what about giving away a free car?
Even though Nyoobe founder Derek Tippins, a real estate broker, is currently raising $5 million in a funding round, he's convinced investors to let him give away a free yellow 2017 Chevrolet Camaro in honor of the app's launch. Those who download and register with Nyoobe once the app launches will automatically be entered to win. The startup will select a random user and will pay the taxes on the vehicle, Tippins said.
"Nobody ever does that and I was trying to think of something that would be unique," he said.
But what is Nyoobe? Tippins describes it as a "universal referral app," where users refer their favorite businesses to friends via social media and receive a share of the purchase for any redeemed referral.
A user simply takes a picture of their business experience---say, a picture of a meal at a pizza parlor---through Nyoobe and posts it on other social media sites like Facebook and Twitter. Other Nyoobe users who see and accept this offer through the app are linked with the referees member number. After making a purchase at the same business, those referred would take a picture of their receipt, upload it Nyoobe and both users would receive money.
"You made the referral so you get 33 percent of whatever the referral was," he said. "So if the referral was $10, you got $3.33. I receive the referral, so I get $3.33 and the app orchestrated it, so it gets $3.33 and the restaurant picked up a new customer and they (don't pay the referral fee) until after that transaction.
The businesses participating in Nyoobe pay for the referral fees, but have the option of decided what amount they're willing to pay, Tippins said. In return, the businesses attract new customers without paying any form of advertising.
"It gives you an incentive to make referrals to your friends and gives your friends an incentive to accept your referral," he said.
From restaurants to car dealerships to hair salons to lawn services, Tippins said Nyoobe is tailored to work with any kind of business that's looking for new customers.
"The business owner does not pay anything, there’s no cost for the app and there’s no cost for a member," he said. "The only time money changes hands is when a sale happens."
Instead of contacting businesses directly, Tippins said he'll rely on users informing owners of the app. Each time a user gets a business to sign up with Nyoobe, they'll receive 7 percent of Nyoobe's cut of every referral made at that business.
"It’s a simple concept, it’s just paying everyone who’s involved in it rather than the company," he said.
As a developer continues working on the backend of Nyoobe, Tippins said he plans to launch the app for iOS and Android with a test group of 2,000 users in November for about four to five weeks. Following the testing period, Tippins will open the app to everyone and allow users to start earning money for encouraging their friends to sign up.
"If you referred someone to download the app, you get a $10 bonus for everyone that uses the app and earns money," he said. "So if you invited 100, you could make $1,000…and they get a $10 bonus also, as a thank you for inviting them."
If the deals seem too good to be true, Tippins said he also plans to give away $5,000 twice a week. On designated days, the first 10 people to invite 10 new members on the app will win $500.
"We’re going to grow this thing organically," he said. "I want to get people exited about it. I want them to use the app and share it with their friends."
Working on the final touches of the app, Tippins said he's flown out to California three times in the last sixty days. He's raised a total of $300,000 for a $5 million round, but would not name investors at this time.
"I’ve met some very high rollers in the tech industry while I was out there so it’s been a fun process," he said.
When asked how he was able to convince investors to let him give away a free car to celebrate Nyoobe's launch---in addition to the other giveways---Tippins said those involved believe in his vision and like the idea of incentivizing the app's use.
"I thought people might like a Camaro," he said.
