NOOM

Courtesy of Thrillist

A couple of Austin entrepreneurs are developing a business out of digital gift giving and more than 25 local retailers have signed up to get in on the action.
Sara Rodell and Jeffrey Schwartz launched Next One’s On Me Inc. earlier this month during the South By Southwest frenzy with a website www.noom.me and smartphone app that allows users to give virtual vouchers for small gifts such as cups of coffee, cupcakes or pints of beer. If Rodell and Schwartz have their way, it’ll make obsolete the age-old custom of writing a thank-you note to clients or associates.
The company generates revenue through the difference between the voucher price and what it pays merchants per redemption. It also eventually plans to produce advertising revenue, Rodell said.
The model is designed to enable merchants to sell products without the steep discount often required with online group buying and daily deals.
In early February, Next One’s On Me received $150,000 of a planned $500,000 round of funding from three investors, according to a filing with the U.S. Securities and Exchange Commission.
The backers have been friends, family and angel investors, Rodell said.
Next One’s On Me is targeting young professionals in the Austin area that are short on time. The gifts, which are not store specific and can be accompanied by a personal message, are available at three price levels: treats for $5, beer for $6, and bar & bites, $12.
Providing a sales channel to merchants at no extra cost is one of the keys to Next One’s On Me’s business model. Also, the understanding that conventional gift cards are too pricey for a small gift will work in its favor, said Robert Reeves, director of the information technology and wireless portfolio of Austin Technology Incubator.
“I felt that they cracked the code with the market and what it meant to give gift cards online,” he said. “It’s simple, it’s easy — and it’s how people want to give.” Before Next One’s On Me, Rodell was the associate director of U.S. institutional equity sales at UBS AG (NYSE: UBS) in New York. Schwartz was a senior analyst in business development and strategic planning for Los Angeles-based Sony Pictures Home Entertainment, a division of Sony Corp.
Caffé Medici on Congress Avenue in downtown Austin is one of more than 25 local merchants in the Next One’s On Me network.
Owner Michael Vaclav said he liked Next One’s On Me approach because it gives consumers flexibility while offering him a chance to attract customers at no cost. “It’s not really about the dollar value,” he said. “It’s about ‘I want to give you a gift, and you can use it at your kind of place.’”