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There is something of a boomlet happening in American entrepreneurship right now. As the U.S economy has begun to rebound, public officials from New York Mayor Bloomberg to President Obama have championed the effects that small businesses have on the greater economy. And one new startup that launched in New York this year is well placed to benefit from that growth. FoundersCard is a new benefits program exclusively aimed at entrepreneurs.
FoundersCard launched in January and so far has about 2,000 entrepreneurs signed up worldwide, providing them with the kinds of benefits usually reserved for high rollers at large companies. I caught up with founder Eric Kuhn to discuss marketing to founders and how his shiny metal card helps increase business.
How did FoundersCard get started?
I had another company before this — Varsity Books. When I was thinking about a new business, I kind of remembered the loneliness and the challenges of being an entrepreneur attempting to really convince the whole world that you’re gonna build this great company and feeling like everyone was against you and everything was a great struggle. It always struck me as odd that these executives at these investment banks and these top companies would get these fantastic perks, and it was the entrepreneur, sort of the true value creators, that were left out. The original idea for FoundersCard was to create something like the Amex Black Card for the entrepreneur, this fantastic benefits program that would help lift entrepreneurs and really help them in ways that didn’t previously exist.
The other pillar of FoundersCard is to add this networking component. In addition to the benefit offerings, we have an amazing networking aspect to us. Clearly there are a lot of other organizations that provide networking. I think the key differentiator has really been on the benefits side to this point.
Why do businesses want to have access to potentially poor founders?
First of all, it’s a demographic that many of our partners, whether they’re W Hotels or Equinox Fitness, are not capturing in many successful ways. It’s a very influential demographic. We have a diverse mix of entrepreneurs, but the core of the membership base are the founders and CEOs of venture-backed companies. For our partners, that's a highly attractive demographic, because they are traveling a lot, so they’re obviously potential users and customers in a significant volume, and they’re influencers. These are the people that are building the companies of tomorrow, and it’s the people at their own companies that are looking at these founders as real influencers in many respects.
If you’re a hotel, you want these people staying there, but you also want these people out drinking at your bar. You want these people in your restaurants. Also, this is a demographic that hasn’t really been aggregated in this kind of way before. I think that’s the allure to a lot of our partners.
What is the attraction for founders of companies that are just starting out?
There are definitely benefits that really speak to the first time, true struggling entrepreneur. We have deals with companies like BizFilings or some of the very basic type needs of starting a business. We intentionally try to keep an array of benefits. There’s no question that they’re skewed to people that do have funding or have the ability to travel and have a certain kind of lifestyle associated with that. But we definitely aspire to help the full array of entrepreneurs. It’s a relatively very tiny number, as you know, of entrepreneurs that either ever go after or are successful at receiving venture money. We definitely want FoundersCard to be appealing beyond that demo.
It seems like there is really a big boom in start-ups and entrepreneurism going on right now. Did that factor into your launch this year?
it was sort of a nice coincidence. When I started Varsity, it was ’97 or ’98. That time, through the early 2000s, might go down as the great heyday of the Internet entrepreneurial world. But you’re absolutely right. The fact that there’s a resurgence of that in the past year or two, I think especially in New York (it hasn’t necessarily ever left the Bay Area). The timing of our launch and the resurgence of entrepreneurialism in New York has obviously been a happy coincidence.
We have members literally all over the world. To this point, the core of our membership base is New York and San Francisco. Combined, they probably represent about two-thirds of our membership base. But we have members in London. We have actually quite a few. We have members in pretty much every major city, and there are some local benefits, but for the most part the benefits of national or global in nature.
How do you think that the networking will develop? Is that a big interest area for you guys?
Absolutely. I remember from my own experience, the loneliness of running your own company and feeling like you were just sort of unconnected to so much. There’s no question that part of the goal behind FoundersCard was to come up with innovative ways for our members to communicate. The site has ways for people to communicate around the benefits, around cities they travel to, and many other aspects. We also have physical networking events, and then the ability for our members to post their own networking events. That’s an area that has increasingly become a focus.
It also occurred to us that we have so many of the founders and CEOs of these great, new companies. We started allowing them to post offers, and to create their own benefits. If you’re running a company and you’re a member, you’re able to work with us to create a benefit that’s available to other FoundersCard members. That is becoming one of the most exciting and popular aspects of our site.
What other ways are you hoping to expand the offers and deals that are available?
The key is really listening to member input. We don’t want this to be the kind of thing where we sit in a room and think of what benefits would be exciting for us, and then hope that there’s a match with our members' interests. Many of the benefits come from suggestions from members. Increasingly, that’s sort of the key to how we identify new partners.
Do you have any plans to market to the members of FoundersCard, since it’s a demographic that people really do want to be reaching?
That’s something that we’ve completely resisted. We do it in the form of deals. If you want to reach the founders of these companies through FoundersCard (which is obviously a great way) instead of a traditional way of using a banner ad or another traditional means of advertising, sponsoring one of our networking events or something like that, we have our partners do it through offering one-of-a-kind benefits.
Do you have big deals on the horizon or ways of expanding your offerings?
There are constantly deals on the horizon. Just this past week, we probably added another five or ten deals. And because right now so many of them are coming from members’ own companies or coming from referrals from members, the benefit offering has really started to scale. A key focus again isn’t just the number of benefits. It’s the quality of them as well. This isn’t something you can buy yourself into like a lot of other benefit programs. We’re really looking for uniqueness and something that’s very different and not available anywhere else on the benefit side. I’m not gonna say there aren’t some benefits that aren’t available elsewhere. But that’s really what we strive for: benefit offerings that are highly customized to our membership base and not available anywhere else.
How many members are you hoping to get?
So far, it's been exclusively word-of-mouth in terms of our marketing efforts. If you want to become a member, you have to be referred by an existing member. It’s growing quite quickly. At the same time, we’re intentionally keeping the growth in check. We really find we’re able to get highly attractive offers, with a significant base of members, but at the same time not too many members. There’s sort of like a happy medium of what the size of membership base is. Many of our deals are predicated on a certain limit of the membership base. We couldn’t get certain deals if we had bazillions of members.
Are you encouraging members to spread the word about FoundersCard online?
Oh yeah, definitely. We encourage members to refer other people that they think are going to be a good fit for FoundersCard. What I learned from my previous experience is the best form of marketing is when you have your own customers talking to others about how great something is. And obviously with the power of the Internet and Twitter and Facebook and social media in general, that is now an extremely cost-effective way for an organization to go from nothing — you know we didn’t exist a year ago — to a membership base today with some of the absolute best known entrepreneurs and venture capitalists and business partners that are top tier partners in terms of brands. That wouldn’t have been possible without utilizing the reality of the Internet.
Although your marketing is all word-of-mouth now, are there some high level founders that you'd consider approaching and asking to join?
We have among our members some of the world’s best known entrepreneurs and venture capitalists. There are definitely some very high profile members that are FoundersCard members now. But we don’t publish their names for privacy reasons. They’re obviously free to go out there and share that they’re FoundersCard members. And many people on Twitter do that every day.
That’s obviously been a form of marketing for us. But we don’t take it upon ourselves to say, “Hey, all of these people are FoundersCard members.” Clearly we like when people announce that they are members. Another thing that has been good is the actual card. The membership card is a pretty unique. It's metal, and a very high end card in itself. That has become a huge marketing component for us. A lot of people have taken pictures of it and put it online and things of that nature. Everything we’ve done with marketing has really been in that mold of trying to make it extremely appealing and customer friendly and high end, but in an approachable way, not in a snobbish kind of way.