OpEd: Connected but Neglected in Los Angeles
In an effort to hear more directly from the source, we’re asking entrepreneurs to give their take on starting a business in varying cities, targeting different kinds of marginalized groups. The first of these comes from Munir Jawed, LA-based entrepreneur and founder of KokoChe who is trying to boost local mom-and-pop operations in the area and reach out to the Hispanic population .
By Munir Jawed
LA is an emerging tech city, ripe with talent. What is not immediately clear, however, is whether the 11+ incubators in town are going to breed solutions that the City itself truly needs .
A large number of these creative tech startups seem sadly disconnected from the technologically-needy metropolis in which they are hatched: focused on medium-to-large enterprises or otherwise on consumers in rather affluent markets, many startups seem less intent on solving real-world problems than on creating cool digital add-ons to existing social networks and platforms.
Having pivoted my business several times since the Fall of 2010, eventually landing a gig at StartEngine, one of LA´s newest accelerators, I tried my best to maintain a consistent mission: boost local commerce for 60 million financially underserved American consumers. In “Silicon Beach,” this is a hard sell. Listening to my pitch in their plush ocean view suites, investors have a hard time disaggregating the notion of “financially underserved” from the following thoughts: “they don´t have any money so why build a business around them?” or “ it´s too insignificant of a market.” The bottom line has too often been: “We don´t really get that consumer segment, but good luck with your raise.”
I hear this even after forcefully clarifying that America´s underbanked collectively represent over $1 trillion in buying power and account for 1/3 of the US population…and that model applies to 95% of the rest of the world. Is that seriously not big enough?
There are infinite reasons why relatively few attempts have been made to systematically address the needs of the financially underserved, at least in the US: “they” don’t have high levels of access to credit cards and bank accounts, which are the structural gateways to almost any online transaction (e.g. Amazon, Groupon, PayPal, Ebay). Secondly, the underbanked represent a dizzyingly segmented market (by age, ethnic background, geography, etc.) for which consumer statistics are not as accurate, and therefore consumer behavior not as predictable. Lack of useful analytics makes it difficult for companies addressing this segment to make predictable conclusions about the market. Third, the underserved are falsely assumed to have no money to spend (as the investors above would have you believe), and are therefore deemed unworthy of building a business around. I can go on and on.
We clearly have something to prove: that our market segment is lucrative (as fragmented as it is), and that we are the palliative to a real pain in the marketplace. I remain confident that the underbanked are more primed than ever before to become loyal, valuable beneficiaries of our service, largely due to their increasing devotion to Smartphones.
KokoChé brings local flash commerce to 60 million cash-based consumers (57% of who own Smartphones). As the information pulse for the community, our mobile application makes it easy for local merchants to broadcast flash deals in real-time to surrounding neighborhoods. Using our platform, merchants can instantly increase business during their slow hours as well as reduce their excess inventory, while consumers can have access to immediate savings within earshot of their current locations.
Tailored to young, Smartphone-savvy cash communities, KokoChé is frictionless for both consumers and merchants; unlike most existing deal sites, consumers can sign up without a credit card, and merchants can keep 100% of the flash sales generated by their posts to KokoChé.
I envision a world of information that is mobile, immediately actionable, community-centric, and available to all. I want it to be the vibrant information pulse of every community, at the tap of the phone. Hungry anyone?