Donnahill's List: plum district

• Plum District is a group buying website that focuses on mothers and their buying power. The company is headquartered in San Francisco and offers deals in North America as a 'Everywhere Deal' and in local markets including San Francisco, New York, Chicago, Los Angeles, and Seattle.

   

  In March 2011, the company was selected by Facebook as one of nine partners in its daily deal business.^[1]

   

  In July 2011, Soleil Moon Frye joined Plum District's Board^[2]. Moon Fyre, best known from her childhood role as Punky Brewster, has over 1.4 million followers on twitter, and 100,000 Facebook fans. She joined Kleiner Perkins Partner Aileen Lee, entrepreneur Steve Goodman, and CEO Megan Gardner on the Board.
• Plum District received $8.5M in funding from Kleiner Perkins Caufield & Byers and General Catalyst Partners,^[3] two top U.S venture firms. Previous financing of $2.1M came from a collection of angel investors.^[4]

• Plum District, too, takes a different approach in dealing with the small businesses it solicits for deals. Unlike Groupon and LivingSocial, the two biggest players in the deep-discount daily deals market, Plum District doesn’t have its own sales force. Instead, it solicits independent salespeople, mostly moms, to both cajole local businesses into offering discounts and then signing up customers to take the deal. Since the moms get a cut of the action, they’re motivated to make the discount offer work for the local business. That’s an innovative take on a key part of the daily-deals model, which requires aggressive, one-on-one solicitation of offers from businesses.
• uses a network of independent sellers

• You don't have to be a mom to know the incredible purchasing power moms have. You just have to pay attention to what goes on around you.
• When a group of investors interested in creating a clone of Groupon approached financial strategist and entrepreneur Megan Gardner in February 2010, she laid some stats on them: There are 50 million moms in the United States, moms are in charge of 85 percent of household spending, and collectively, moms spend $2.1 trillion annually. Yet no daily-deal site was targeting mothers.

• Gardner decided to change that. A little more than a year ago she launched Plum District ( www.plumdistrict.com), a mom-centric daily-deal website.

  "I saw this huge entrepreneurial opportunity. No one was looking at moms as a vertical," or a niche of the market, she says, ensconced in Plum District headquarters near San Francisco's South Park, where 30 employees including the 35-year-old CEO toil in one big open room.
• The daily-deal craze has spawned a proliferation of websites, following market-toppers Groupon (available in 44 countries) and LivingSocial (in 22 countries), that operate the way the old coupon books did, only electronically:

• Moms gobble up deals

  Gardner guessed right that "savvy moms," as the Plum District website calls them, would gobble up promotions and discounts for moms and families, from Brazilian waxes and restaurant meals to kids' cookie-baking classes and summer camp sessions.

  In one year, the number of unique visitors to the site has increased 3,000 percent, the staff has grown to 45 nationwide, and the company's reach has expanded from the Bay Area to 45 metropolitan areas, or "districts," including Los Angeles, Orange County, San Diego, Chicago, New York, Chicago, Minneapolis, New York and Washington, D.C.

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• Mom-based social daily-deals site Plum District is a Groupon clone with twist. It has the same daily deals that coupon sites are known for, but like Avon or Mary Kay, Plum District is counting on a female sales force to power its coupon engine.
• While many other coupon sites use call centers to find and negotiate deals, Plum District mobilizes the built-in army of mom customers and their PTA and soccer-team networking by turning them into partners. The moms who use the site can also be reps and earn a commission on every sale. 

   Plum District CEO Megan Gardner said she's happy to be compared to Mary Kay because it's a bit of a throwback to what has worked before. "We're taking on a new business trend with older-school sales tactics," Ms. Gardner said. 

   Plum District today is expected to announce an $8.5 million second round of venture funding. "We're seeing the incredible power of the mom population," said Aileen Lee, a new Plum District board member and partner at Kleiner Perkins Caufield & Byers, which led the funding round along with General Catalyst Partners. "This is a community with distinct needs and we're combining that with a small army of moms around the country who know the businesses around their area and their community," Ms. Lee said.

• Launched in May, Plum District's business has grown from just a couple of cities to around 20 "districts" -- what the company calls their sales areas, which now include San Francisco, New York, Minneapolis, Los Angeles, Washington and Denver.  

   Under Plum District's business model, a mom picks a vendor and asks it to participate in the daily deal. For her work, she earns part of the deal, multiplied by the number of people who use it. While Plum District won't disclose actual figures, some moms have made what Ms. Lee describes as a "full-time salary" working for the company and themselves.
• Ms. Lee said that when KPCB was doing the due diligence research before the investment, she spoke to moms around the country who were interested in finding a way to supplement their income as well as get great deals. "They were looking for a way to make money, have flexibility and leverage the skills of what they know how to do," she said. "These are the moms that are already involved in their communities."
• "We know we're doing something different because of the narrow focus of the audience -- no one us is focusing on the moms -- and the other thing is the moms sales force. We are not a one-hit wonder media buy."
• According to the Marketing to Moms Coalition Survey done in 2010, there are more than 50 million moms in the U.S. who are in charge of 85% of the household-spending budget, and they spend $2.1 trillion a year. Venture capitalists see moms' potential and it's growing quickly -- Along with July's first-round funding of $2.1 million, Plum District has gathered more $10.6 million in less than a year of existence.
• The upside to using moms is they tend to know the lay of the land in their local areas and can reach out to businesses tailor-made for the mom community -- groceries, family outings, children's classes, camps and babysitting services.
• earning a six-figure income through her sales at Plum District. Jillian Griffin of Newport Beach is a mom of four and Plum's top salesperson nationwide. "It's been a thrilling experience," Ms. Griffin said. "We've impacted our community and found new strategies and are able to impact the local business."

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• Daily deal site Plum District has raised $8.5 million in order to expand beyond the 20 districts where it currently offers deals. The Series A funding is led by Kleiner Perkins Caufield & Byers.

   

  Plum District attempts to differentiate itself from the increasingly crowded daily deal space by targeting mothers and their families. The site’s deals, which range from products like children’s clothing to services like portrait photography, are “sourced” by mothers who earn commissions for bringing in deals from local businesses. These women also help promote the deals using their own blogs, social networks, and discussion boards.
• Even with this tweak to the daily deal business model, Plum District faces stiff competition from some of the biggest online companies. Last year, Yelp and AOL both announced their own daily deal features. And last week, Mashable learned that Google also plans to join the game.
• On the other hand, none of these giants have attempted to target a specific demographic. And as far as niches go, Plum District has probably picked the most promising one. According to estimates by eMarketer, the demographic controls about 80% of household spending. While other sites like Daily Deals for Moms have their sights set on the same space, dominating it is still up for grabs.

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• Gardner Says Plum District, Groupon Users Different
• July 15 (Bloomberg) -- Megan Gardner, chief executive officer of Plum District, talks about the company's business model and Groupon Inc.  She speaks with Emily Chang and Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

• Social shopping site Plum District has raised $2.1 million in a first round of funding, according to a filing with the SEC. Like shopping sites Gilt, RueLaLa and Groupon, Plum District offers daily deals, but the site differentiates itself by catering its local deals–including day camps, groceries and spa treatments–to busy mothers. Backed by Vigran Ventures, the site launched in May and is currently available in the San Francisco Bay Area but has plans to expand to other major cities soon.