Fivestars (YC W11) Raises $26M | Hacker News Reader

Fivestars (YC W11) Raises $26M

techcrunch.com

24 pointscktsai11 comments

Is a weird SF/Silicon Valley cognitive dissonance required to say that 100% automated software "communication" is "establishing a personal connection"? The fact that an algorithm asks me to come back after I stop frequenting a restaurant doesn't strike me as personal, just kind of overbearing and HAL 9000-esque.

Or a cashier reciting my name after reading it off a prompter. Safeway has been doing that for years and I don't feel a personal connection just because they're tracking my every move and making me well aware of it on a daily basis.

Because the alternative to automated communication isn't personal communication... it's no communication. Automated communication is still more of a personal connection than no connection.

I don't get why people opt-in to tracking and behaviour analysis just so they can get a free taco, that seems counter intuitive. There is little choice, when you purchase things online, but that doesn't mean it is desirable. There are really old fashioned ways of maintaining customer loyality, offer a good product, hire attractive waiters and maybe offer a stamp bonus card. Spam mail from the local coffee shop surely does not increase customer satisfaction.

It is innovative because it reduces effort for all parties while fulfilling the same function.

This might be a dumb reason, but I stopped using FiveStars because it was just such a hassle. The card interfered with the other NFC cards in my wallet, and eventually started showing up as unregistered when I did try to use it. In the months that I was using it, I earned exactly zero rewards at the venues that I was using it at.

Only 1 location in all of NYC so far, it seems.

> “We see things in order of a 20% lift,” says Ho. That means shoppers that would come into a store once a week now typically come in three times a week, he says. “

Is there some sort of new Silicon Valley math I wasn't informed of?

I saw this statement and was puzzled at first myself.

That would not be a 20% lift on number of visits by the customer, but it could be a 20% lift on revenue or margin from that customer.

In retail, "lift" is usually used in the context of sales. If you can consistently get customers who were visiting your store once a week to come back three times a week, but you only lift sales 20%, something is terribly wrong.

That said, the notion that there's a technology or technique that can sustainably triple repeat store visits on a widespread basis for small and mid-sized services businesses is absurd. If you could do this, you would not be raising $26 million from VCs.

Obviously, it's most likely that the author of this post simply didn't understand what he was writing. Or that I'm not hip to the New Math of the New New Economy.

Occam's Razor: They forgot a zero, they meant 200%.

As I wrote below, if you had a technology or technique capable of sustainably tripling repeat store visits on a widespread basis and/or lifting sales by 200% without killing margins, you would not be raising $26 million from VCs. You would literally have a license to print money.

Fivestars looks like a modern take on the punch card loyalty program. A 20% sales lift for those customers who opt to participate in a loyalty program (which is usually a small minority of total customers) is quite possible. A 200% sales lift would be unheard of, as would a tripling of repeat store visits.

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