When I first heard about a new Boulder startup called FEED Tribes, I was thinking here’s a wanna be Paypal mobile or TextPayMe. FEED Tribes is not really at all like those services. This is an effort to change things at the point of sale.
The fundamental differentiator of FEED Tribes as compared to something like Paypal mobile and TextPayMe is that it’s designed to operate at the point of sale and is integrated into the existing in-store merchant system. Imagine that you’re standing in line at Noodles (they’re testing it) and you send a text message and get an automatic response containing your balance and a PIN code that is valid for just a few minutes. You give that code to the merchant, and you’re done. Now, to me, that is absolutely not more convenient than using my credit card. But there is a market for this. Ask any college kid about the one thing they don’t leave home without – it’s their cell phone not their Amex. It’s this same market segment that can benefit from better control over their budget.
Conversely, Paypal and TextPayMe have solutions that are more focused on consumer to consumer payments. For example, these services are very handy when you’re buying things like (ahem!) “concert tickets” through CraigsList and meeting the buyer on the street.
A system like FEED Tribes is better for some buyers because of convenience and budgeting. But perhaps more importantly, it’s better for all merchants. Merchants pay lower fees when they accept payments this way. Clear benefits to both supplier and buyer make for a more efficient marketplace. That is a formula for success, at least in this portion of the market. It blows my mind that Visa, MasterCard, and the gang are not all hard at work at this already. Maybe they are, but as we know it’s not about the idea, it’s about the execution.
I can imagine that once you establish a system like this, many other opportunities to market to this audience present may themselves. Noodles is testing the system, and said some interesting things about where they’re headed with it.
FEED Tribes is launching a public beta in January for the Denver and Boulder market. Founder Rod Stambaugh told me that the company may look to raise an institutional round of funding in mid to late 2007, in order to roll the service out to more cities.