I recently interviewed one of the co-founders/CEO of NumbersPay, Stephen Pecora. Numberspay is a group-buying site for the college student.
Hi Stephen, Thanks for joining us on YHP, how are you doing?
Im very excited right now. It’s great opportunity to be able to talk and network with an organization like YHP.
Can you quickly give us some background information about yourself before we move on?
I just graduated from Bates College in May with a Bachelor of Arts degree in Economics. Over the last four summers I have worked at three different companies. The first being a venture capitalist firm called Novitas Capital located in Wayne, Pennsylvania following my freshman year.
During my summers after sophomore and junior year I was the assistant of the CFO of a Biotech company named Progenitor Cell Therapy (PCT) located in Allendale, New Jersey. After graduation I have been working as an accountant for the John Theurer Cancer Center located in Hackensack, New Jersey. I am originally from Ridgewood, NJ but I currently live in Wyckoff, NJ.
When did you know you wanted to be an entrepreneur?
The internship at Novitas Capital really gave me a first-hand look at start-ups. People would come in with great ideas they created themselves and I was able to sit in on the presentations and watch people’s dreams become reality. That was what really sparked my interest.
Also, PCT is a company that, at the time, was in transition from being a start-up to an established revenue generating company. Seeing this transition was really what solidified my interest in becoming an entrepreneur.
Tell us about NumbersPay and how the idea came about?
NumbersPay is a group-buying site for the college student. My cofounders and myself noticed that social grouping has been a growing market on the internet. With established companies like Facebook and Groupon utilizing the power of social networking and people grouping together, we knew this was the industry where we could excel.
We had a few different ideas to start with, one being an auction site similar to Quibids called Biddown and the other was named USLearn, an informational site for foreign students coming to the US. However, we wanted our idea to be more translucent to our customer and focus on social grouping. We had basic accounting/business model we wanted to stick with and then we saw the rise of Groupon in such a short period.
We noticed they sold services and seemed to leave out specific manufactured products. We believed that there was an opportunity to take hold of that part of the group buying market. After several meetings in the basement of a building called Pettingill Hall, at Bates College, we came up with NumbersPay.
What would you say was probably the most difficult part of starting the business?
The most difficult part of starting the business was product procurement. Our business model is very different than the average retailer. While the average retailer asks for the price and minimum quota requirements, then places the order, we ask for the price and minimum quota requirement, then put it up on our site.
To be more simplified, after we reach the predetermined quota of people who want to buy the item we place the order. Even though we are able to pay upfront for the order many suppliers seemed very uneager to do business with us at first. Being four college students, many suppliers were hesitant in allowing us to place their products on our site.
What’s the toughest feedback you’ve ever received and how did you learn from it?
The toughest feedback I have ever received was the lack of response from the first 60 suppliers we contacted. This put us in a position to rethink our idea entirely. It seemed we would have to change the culture of the supplier to retailer relationship. Since we are only college students we basically taught ourselves how to interact in a business setting with these suppliers.
As a result, we would have to start in the reverse order of what we originally thought. Meaning we would have to start buying from the retailers and work our way up to the wholesale suppliers. This also included profit sharing on our minimal profit margins. By doing this we were able to get products to get off the ground for our initial test run.
What’s your business model?
We go to a supplier or retailer and ask what their prices and minimum quota requirements are for their products at wholesale discounts. If they agree to do business we then select the products we like and put them up on our site for about 5-7 days. We start at a discounted price and the more people who join the group the lower we drop the price. If the minimum quota requirement is met we place the order. If the quota is not met we dismantle the group and no one is charged.
Tell us some of the key lessons you’ve learned so far on your journey as an entrepreneur?
The two most important lessons I have learned is that nothing is going to work out off the bat and that everything is going to take longer than you think. You have to be very flexible with how you think and adapt your original thoughts to what is actually going to work in reality.
Your originally plan after months of work may have to get terminated and you’ll have to start all over again. You have to be able to handle that and continue to move forward. I guess it’s as simple as saying never give up and just get it done.
Where do you see your business in 5 years?
Our business is growing as we find the right products for our target consumer and hoping these products will be sold for the right discounted rate. We are slowly moving to a social networking platform where people can group together and tell us what they want. This will put us in the position of being able to go to a supplier with an exact order and act more like the average retailer.
What can we be expecting from you in the future?
NumbersPay in the future will not just be a discount site where you can get great deals on products. NumbersPay will become a group creator. Through our site people will be able to group together and find the products they want as a group.
Our customers will be able to communicate on our site and find each other through forums and our search buttons to find people with common product and brand name interests. This will allow us to go to suppliers with a pre-established number of people who are interested in a specific product or brand. We are re-launching a new version of our site on October 1st. It will be similar in function to our original model but we will be offering more then 1 or 2 products at once. Over the next 6 months we will be developing another version of our site.
What advice can you give to entrepreneurs out there looking to get involved in this industry?
My advice would be to understand that everyone who takes a leap of faith with their own idea is or was afraid at some point. Understanding that fear and leaning on your team members is essential to success. Collect yourself a team of people you trust, and understand that you can’t do it alone.
But that also means allowing people to do the job you brought them on for and not doing everything yourself. Be open to all ideas and allow everyone in your group to be innovative. If your team or your company is not innovative you’ll just be like everyone else, and personally I don’t think anyone becomes an entrepreneur to be like anyone else.