30 days after launch, Deal Garden sees profit, opportunity

Pat Lazure, co-founder of one of Omaha’s youngest startups, Deal Garden, didn’t hesitate to point out the obvious. “We’re unapologetic about being a daily deal site,” said Lazure during our conversation over dinner last night at Petrow’s. Launched December 17, 2010, with Deal Garden Topeka (Kansas), Deal Garden is now a three-person, profitable daily deal…

Deal Garden co-founders Pat Lazure and Mark Ludwin. Photo by Danny Schreiber.

Pat Lazure, co-founder of one of Omaha’s youngest startups, Deal Garden, didn’t hesitate to point out the obvious. “We’re unapologetic about being a daily deal site,” said Lazure during our conversation over dinner last night at Petrow’s.

Launched December 17, 2010, with Deal Garden Topeka (Kansas), Deal Garden is now a three-person, profitable daily deal startup looking to launch in two more cities – Manhattan, Kansas and Sioux City, Iowa – and hire two more employees in the coming weeks.

“It’s a very familiar space, there’s a lot of players in the market. There’s a lot of Deal Garden clones out there,” Lazure joked. And when he says “very familiar,” he means it quite literally. This past year, following a sale of his former startup WikiCity to the Omaha World-Herald in October 2009, he served as president of World Interactive Group, an Omaha World-Herald Company. There, he developed new mobile and digital initiatives, most notably the launch of six group buy deal sites, including Daily Deal Omaha.

To launch Deal Garden, Lazure partnered with long-time friend, fellow Creighton University alum, and an entrepreneur with a similar story – one that includes an exit. In the early ’00s, Deal Garden co-founder Mark Ludwin co-founded Medefis, Inc., a healthcare staffing vendor management firm. There, he served as president, taking the company in six years from startup to market leader. In 2009, Medefis was purchased by Welsh Carson Anderson and Stowe, the nation’s largest healthcare venture capital group.

Screenshot of Deal Garden Topeka, from dealgarden.com, taken Tuesday, January 19, 2010

With a newfound focus on daily deal sites, Ludwin joins Lazure to take what’s been successful in large markets such as Chicago and D.C. for Groupon and LivingSocial, and prove that there’s a spot for a player in smaller markets.

“We like the small- to medium-sized markets,” said Ludwin. “We like the 50,000 to 200,000 population markets with a bias towards college towns. We think that in those smaller towns those people are as hungry for these deals as the big cities that are getting 10, 15, 25 deal sites in each town.”

Lazure expanded on this strategy, “Although this won’t be this way in six months, we don’t have a lot of competition, we are the Groupon in some of these markets. They don’t have a deal site in Manhattan, Kansas, yet. We know that there will be sometime soon.”

“But that first mover advantage is somewhere we think we can gain a lot of credibility and real estate before some of those bigger players get there,” Ludwin said.

Their strategy also includes three deals a week versus five (Monday, Wednesday, and Friday), partnerships with local media, such as 785 Magazine in Topeka, marketing towards college students, and making the subscribers of the daily email a priority. Regarding the latter, the two are proud to say, “We’re slaves to the members.” And they think that other players in the market focused on smaller cities haven’t put the member first. Groupon, for example, has this luxury in their larger markets where they reject merchants that don’t fit a large, diverse subscriber base.

Deal Garden is bootstrapped and Lazure and Ludwin said they have no immediate plans to raise capital. They recently hired Nate Nordstrom, and are looking to hire two account executives to oversee new markets.

When ask about the next phase for a daily deal startups like theirs, Lazure and Ludwin provided these thoughts:

Lazure: “The deal of the day is frankly a bit of a one-trick pony and we know that and it’s easy to replicate and we’re dealing with that and a lot of the other players in the space are, too. But it will evolve, and there are a lot of additional revenue streams that I think are driving the Groupon valuation that seems to be climbing more and more every two weeks. People are realizing there are additional revenue streams to be had that further assist people with find and discovering great bargains.”

Ludwin: “It’s happening so fast. I don’t think anybody, including the leaders in the space, you know, the Groupons and Living Socials of the world, I don’t think they even know what’s around the next corner. So being an innovator is important but it’s not the be-all, end-all as Living Social has proven. Being second best is not the worst thing in the world in this space.”

This story is part of the AIM Archive

This story is part of the AIM Institute Archive on Silicon Prairie News. AIM gifted SPN to the Nebraska Journalism Trust in January 2023. Learn more about SPN’s origin »

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