Dave Schappell's latest idea: weekly deals

A few months ago, TeachStreet founder Dave Schappell was lamenting the fact that nearly everyone he bumped into asked about his company’s “Groupon strategy.” Schappell didn’t like the hype, but now the Seattle entrepreneur appears to have caught a mild case of deal fever. TeachStreet today plans to announce a new offering, which allows its users to earn weekly discounts on everything from dance to knitting to Spanish classes.

It’s a natural move for TeachStreet, which operates a massive online directory of nearly 500,000 classes from more than 93,000 music, language and other teachers.

But what about those comments from a few months ago?

“We didn’t, and still don’t, like the idea of becoming ‘a deal site,'” Schappell tells GeekWire. “We think that’s a race to the bottom for the folks who only play in that space — attracting the worst deal-seeking-only customers, and having nothing else to offer service providers.”

The difference with the TeachStreet offering, he said, is that the Madrona-backed company already offers much more than daily deals.

“This was just another way for us to generate leads for teachers,” said Schappell, adding that the company also provides class listings, SEO, Craigslist support, social media marketing tools and more.

TeachStreet's first daily deal in Seattle

TeachStreet is starting out the new offering with discounts from Educator.com– $59 for a 6-month access pass normally valued at $150 — and from Arthur Murray Dance —  $25 for a 3-class dance package that normally sells for $59.

It plans to offer one weekly local Seattle deal, with expansion into other cities coming over time.

The company isn’t going into the business completely blind. In fact, it built the technology that powers the four-month-old daily deal offering for The Washington Post’s Service Alley site.

That provided a lot of experience and know-how in the emerging area, and led to the company building its own technology rather than partnering with other daily deal services. Schappell notes that some of the white-label offerings are expensive, and the technology itself wasn’t too hard to build.

The splintering of daily deal sites into niche categories was bound to happen, and we’ve already seen this occur in the Seattle area with the emergence of sites set up for a wide array of product categories and interests. (Baby products, guy’s products, etc.) [Previously: Following in Groupon’s footsteps, a parade of daily deal sites]

Schappell, for one, believes the focused approach will help the company attract interest and drive revenue.

“We think we’ll bring much higher quality customers to our schools/teachers, as our normal visitor is lifelong-learning focused,” he said.

Schappell declined to disclose the revenue split with the deal providers, but he did say that the company does not plan to compete with Groupon and others on price. The higher TeachStreet rates haven’t caused much concern among deal providers, who Schappell said are excited about getting the exposure on the site.

“..We’ll be delivering a much higher-quality customer versus the Groupon (and) LivingSocial’s of the world,” he said.

John Cook is co-founder of GeekWire. Follow on Twitter: @geekwirenews and Facebook.

Comments

  • http://kickstand.typepad.com jordanmitchell

    Good idea, and great pic Dave!

  • http://www.joshuamaher.com Joshua Maher

    I like it Dave – it will be interesting to see who else innovates with daily deals for things they are already a channel for…

  • http://www.kirillzubovsky.com Kirill Zubovsky

    You know what’s interesting – nobody asks Safeway why they are doing deals when sausages are at 50% off, but whenever an online business creates some sort of discounts, that’s all of a sudden shocking.

    • http://blog.sentientmonkey.com Scott Windsor

      It’s an old idea, applied to new technology (e-commerce & online services). Most good ideas are new spins on old ones.

  • Megan

    Goodness Sakes!!! There is a better way, it is called mobile marketing. You don’t have to jump on the Groupon bandwagon, you can reach your targeted and core customers, retain their loyalty and keep your revenues- or better; increase them! I wish people knew how easy, simple and effective mobile marketing is and how it can help a company immensely….

  • Bob Crimmins

    I definitely think that deals need to be more relevant and that we’ll see more and more industry/vertical/niche/etc deal offerings ahead… followed by improvements in the way deal aggregators filter and expose those deals… followed by GroupOn et al getting much better at specialization… followed by some consolidation in the industry… followed by deal exhaustion?? Actually, I think all these things will probably happen simultaneously. ;) Dave made the interesting choice to spin up his own deal site rather than plugging into someone else’s. I like it that TechStreet’s strategy is not to compete with the traditional deal sites but rather to use the concept of daily deals to drive other business factors they care about, like lead gen (and I suspect at least one other factor ;). As I have been working with vendors to source deals for Dealometry I’m seeing a ton of sites offer their own “daily deals”. Got a cigar site… offer a daily deal. Got a sporting goods store… offer a daily deal. I’ve talked to Dave about some of the details of his tech, his pricing and his strategy and I think his reasoning is sound and that he has a good chance of moving the needle that he’s trying to move… which is NOT the same needle that GroupOn is working on. GroupOn et al really have changed the way business thinks about marketing. The key in the case of TeachStreet is thinking about what else your business cares about beyond trying to scale deal revenue… which for a LOT of companies would be an unjustified distraction.

  • http://twitter.com/s_carlson Shane Carlson

    Yup, these Groupon like deals are showing up everywhere…Just not in my area. If you’re like me, and you live out in the sticks. These group buying sites don’t typically offer deals near your hometown.

    I thought I was missing the whole Groupon boat until I did a little research and found http://steals4all.com. I’ve signed up for their daily email and now get a list of all the NATIONAL Groupon deals available to buy, REGARDLESS of where I live.

    So as long as these deal sites offer national deals too, then I for one am happy.

  • http://pulse.yahoo.com/_OCKNB2R6P24XDOHOFVZTIZAWQA Jacob Andersen

    How Facebook Can Beat Groupon In Daily Deals. Big Tax Savings. It is my understanding that if a company such as a restaurant offers the deal (on its own) on facebook that it’s customers will pay tax on only the amount paid and not the total price of the meal. if a deal is $20 for $40 worth of food you will pay tax on just $20 if that deal is offered by the restaurant directly as opposed to going thru Groupon.

    This is a big deal for facebook and they should be highlighting it.

    Currently the restaurants are charging tax based on the $40 amount so when you get your bill the savings really arent that great.

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