Friday Feb 22, 2013 by Dennis Keohane - Contributor, VentureFizz
Headquartered on the upper floors of the landmark Old State House Building, mobile app Mobee hopes to forge a new chapter of history in Boston with its recent foray into some uncharted territory for a mobile app.
Prahar Shah, CEO and co-founder of Mobee, believes that there have traditionally been only a few ways to monetize mobile apps: have customers pay for a service, have companies pay for ads, create a premium (often ad-free) version of a free app, or have users purchase enhancements within the apps themselves. However, Shah thinks he may have discovered a new and possibly improved way to make money through mobile in a relatively niche industry, mystery shopping.
An alumnus of MIT Sloan, Shah had stints at Bessemer Venture Partners, General Catalyst Partners, and in Google’s New Business Development office, before coming up with the idea for Mobee after working part-time as a mystery shopper. As he put it, “Mystery shopping is an industry almost no one knows about; it’s a multi-billion dollar hidden industry operated on pen and paper.”
Basically, mystery shoppers are hired by companies to keep tabs on their various brick and mortar shops and franchises. For example, a mystery shopper may be assigned to pose as a customer at a local Dunkin Donuts. The experiences are recorded on a three page survey that cannot be taken in the store; questions need to be memorized, forms need to be scanned and often rewritten, and the whole process takes anywhere from 72 hours to a couple of weeks to turn the data around to the hiring companies.
Mobee turns the whole mystery shopping industry on its head, crowdsourcing tasks vital to large, multiple franchised companies. Piloted in Boston, the app allows users to complete any number or “missions” at local stores such as Starbucks, Panera Bread, and McDonald’s. Users are awarded points for completing tasks such as commenting on the speed of service or the cleanliness of a bathroom. Points can be exchanged for various gift cards and even PayPal credit, a regular mission can earn a member of Mobee’s “Swarm” anywhere from five to ten dollars.
Since launching in early November, the app has surpassed many of Shah’s goals and benchmarks. With 10,000 current users and 30,000 completed missions in Boston, Mobee has yet to share the massive amount of data it has collected with the multi-national companies it is currently tracking.
“We want to go get the data first,” Shah said. “There are two assets that are valuable: first, the data...a pretty valuable data set that no one else has. On the other side, basically, we are developing a mobile workforce. Some people in our “Swarm,” have earned thousands of bucks.” With the amount of money being made, Shah surmises that some users are even turning Mobee missions into full-time jobs.
Eventually, Mobee plans to share its collected data, offering companies an alternative to the industry quality assessment tool of mystery shopping. In so doing, they will be providing a more accurate, trustworthy, and expedited service than the current standard practice. Among the many benefits of Mobee as an alternative to mystery shopping are the “geofencing” and photo taking capabilities of the app. Before Mobee, mystery shopping had many loopholes and opportunities to falsify data; the app now tags each location with GPS and allows for clandestine “Swarm” members to take pictures and report on service while appearing to just be using their phones.
Mobee expects to begin a round of Series A funding sooner than they originally expected due to the app’s success. The company’s original $1.1 million seed round was funded by Jit Saxena, John Simon of General Catalyst, Rob Soni, LaunchCapital, and other angels and angel groups. Current members of Mobee’s board include industry veterans such as Saxena, the founding CEO of Netezza; Neal Yanofsky, former president of Panera and current International President at Dunkin' Brands; and Tod Loofbourrow, founding CEO of Authoria and past president at iRobot Healthcare.
Mobee expects to be available on Android this spring. It also will be submitting what Shah called “Mobee 2.0” to the App Store soon. The new version will add a new level of gamification to what already exists, as well as new notification menus and badges.
With the former City Hall as their hub, Mobee operates only in Boston and its suburbs at this time. However, Prahar Shah was quick to point out, “The beauty of Mobee is that it is scalable internationally; the Boston model can work in London and Paris as well as it could in New York and Chicago.”