Bevvy: Getting Deals On The Down Low | Interview With Founder Niall Donnelly
There’s no question of the monstrous boom in popularity and success of ‘Deal of the Day’ business models, and for good reason, due to a volatile world-wide economic climate. But with continuing success of mega coupon giants like Groupon and Living Social, we can infer that consumers are still willing to enjoy themselves and spend money, but would prefer to be thrifty and keep costs down. But what about for night life? It can’t be the most impressive thing in the world to take a beautiful date out for a night on the town and slap down a crinkled up printout from your email inbox, prominently displaying your thrifty ways. Might work for some, but probably not all. Especially in LA. 
Enter Bevvy.com, an alternative food/entertainment discounts model that works a little differently. Users are given 50% discounts to popular nightlife venues with nothing more than a $10 reservation fee and a speakeasy-type password to the host. Pretty unique and kind of cool, we had a great time sitting down with Bevvy’s CEO and founder, Niall Donnelly, and speak about their company and how they’re rocking the coupon industry in their own way.
Nice of you to sit down and chat with us Niall, you mentioned you had a few investor meetings right?
Yes, we’re currently raising an angel round right now and we took a seed a few months ago. We want to take a bigger investment round to expand our service in Los Angeles and expand to New York and San Francisco.
Good luck on this round and congrats on the other. So what’s your story and background? What’s Arrogant LLC? (per your profile on Bevvy)
*Laughs* Thank you, it’s never easy. Arrogant is a holding company to control any projects I do in the US. I set it up two years ago with my first project in the states with Rolling Stone. I did the first licensing deal in the world to open up a night club – restaurant, and lounge in Hollywood. It was the first ever Rolling Stones venue to open. I opened it up at the start of this year and I did a deal with them to get licensing for other major cities in the US. My background in the UK was heavily involved in nightlife, bars, clubs, and restaurants. I still own a group over there. I’ve actually dabbled a bit across the board, dotcoms, did a bit with real estate in London; I’ve just been an entrepreneur in multiple places.
It’s interesting to see you guys went with a 50% discount + $10 reservation fee model instead of the one-time coupons like Groupon, etc.
Our beta testing actually started out with the coupon model. And it was pretty successful. However, the major feedback from our customers was that it’s just not the coolest thing to walk into a lounge or a bar with a date and bring out a coupon. It was obvious to us but we wanted to get feedback from the customers. That was the main feedback we got.
What about for the vendors?
With our vendors and merchants, there was also a major issue. There was no control over when these people would come into the venues. The coupon were valid for 90 days so they never knew when people were coming. So what we do is drive people at times when they’re needed. We sell excess capacity and we drive incremental revenue for the bars and clubs we work with (that they otherwise wouldn’t have). Another problem with control is (give Groupon as an example), if a bar does a deal with Groupon and it sells 2-3000 coupons, which is great, but with 2-3000 people coming through a place in just a few weeks is detrimental to a business. Staffing gets all over the place, service quality goes down, tipping becomes lacking; it’s a major issue for venues. Not that we were selling as many as Groupon, but we were finding it hard to even get sales with the merchants because of their experiences or what they’d heard about working with coupon systems. Another negative was deal terms. With the Groupon/Daily Deal model, the businesses normally lose 75% of the deal. Businesses can’t survive with just 25%. A lot of bars and restaurants are losing money at that. Nightclubs make a little bit because their pour costs are so high. We offer a 50% discount but we don’t take any money from the merchant.
How did your clients like this change?
I wanted to make it easier for the merchants as well as make it easier to sign them. We also wanted the best venues in the city and we’re currently signing merchants that won’t sign with anybody else. 75% of our client-base has never done a daily deal before or won’t. Another terrible thing was the payment terms for merchants. With us, on the night of redemption, they make their money, and we don’t take or share any of the money. For the customers, it was mostly the awkwardness or embarrassment of the coupon. This is very nightlife specific. For example, my girlfriend has no problem going to the salon or getting her nails done and handing over a coupon. Even when I go out with her (and we’ve been together for awhile), it’s just kind of weird to hand a coupon in for a nice evening.
And has it changed anything for your business?
Because of the way we run our model we can sign more upscale venues. And because of the 50% discount, we find that customers have no problem paying the $10 reservation fee.
So what kind of venues are we talking about here?
There’s a new place that just opened up called Next Door Lounge (best seller), The Malibu Inn (our 2nd best seller), Voyeur, a really hot club in Hollywood, Barney’s Beaner, and Red Rock (sports bars that don’t do daily deals with anyone else), The Belmont (Spanish Kitchen), Oakfire… we have quite a few, about 25. They’re all hand-picked and curated. And it’s not necessarily high-end, places that we feel people will like because we do. We like to do the high-end places but it’s not a necessity. Another great seller we have is this place in Koreatown called R Bar. It’s not a high end place, but it’s a really great speakeasy dive bar.
On the subject of Speakeasy, we really like that you’ve gone this route, with the speakeasy password vibe. Gives a good level of exclusivity too.
And that’s one thing we’ve really enjoyed, in that it’s not all poncey and in your face. Not like a velvet rope sort of deal. You don’t have to be an ultra wealthy person to go to a speakeasy, just gotta be kind of a cool person. We think it’s really appealed to people who have a bit of money, don’t necessarily have to be super rich, but do get a little awkward out of using a coupon for nightlife venues. And something else we’ve found is that the customer feedback has been great and that people are being trained to use the system, because when you do purchase, you need to make a reservation for a specific date.
Sounds great Niall, we’re excited for your guys’ continuing success and wish you the best. Thank you so much for taking the time to speak to us! We can’t wait to check out some of these venues!
