Many thanks for your thoughtful comments on the Mobo business model.

Your points on past attempts at similar services in the mobile space are well-taken and certainly things that we’ve carefully examined in forging our strategy. We have modeled the business after successful online food ordering companies (Mobo is available online and via WAP as well as SMS) and mobile services and done extensive research on those that have failed to avoid the pitfalls that you address. I can assure you that Mobo will not require a large sales staff, and that we have found a way of scaling, operating, and maintaining the service with a small team and low operating costs.

Restaurants (both independents and chains) have been extremely eager to sign-up (covering our restaurant acquisition fees). Our existing restaurants have found that Mobo sales tickets are over 50% larger than average cash/credit transactions and that customer loyalty has nearly doubled when customers begin to order via Mobo.

I’d like to discuss this with you further over email, if you’d be willing to do so. I can tell that you’re quite knowledgable in this space and would value being able to continue communicating with you.
You can reach me by emailing info@gomobo.com.

Thank you for your valuable comments and input.

Regards,

Noah

Ewan at SMS Text News is continuing his interview series by speaking with Noah Glass, President and co-founder of GoMoBo.com, a mobile ordering company.What was your first cell phone? When did you get it? My first cell-phone looked a…

If I was the restaurant, would I be willing to shell out $100 for an indeterminate numbers of ‘increased customers’ who firstly have to find the Gomobo service, become members, pre-determine what they wish to order and then visit the establishment to pick up the ordered goods.

To me it appears that the value proposition to the customer is to queue jump on a purchase transaction of $4.75 (based on Starbucks prices, New York). I do not think the convenience aspect of using the mobile for payment is a value in this as we have seen previous services such as this pop up in Scandinavia 5-6 years ago, and sadly they exist no more – not enough transactions.

Now presuming the business case for GoMobo is to take a small profit from directing the customer to the service (assume 15%, lets call it $0.75c per cup). SMS costs from the operators will need to be covered from this margin and from what I see at the web site, a credit of $5 is being offered to the first customers – which adds to the burn rate. So let’s assume a margin per transaction of $0.50c

Unless the company can secure contracts at corporate level (eg the whole of the starbucks chain) the numbers of transactions are restricted to possibly hundreds per restaurant/businesses. With the cost of selling this service to each and every bricks and mortar business added to the overall costs, I cannot see the scaling of this business in terms of SMS transactions which must be the effective revenue generator with margin per product sold. Also the business they serve (restauarant) will want to see increased footfall, not to have Gomobo as a cost for a portion of its existing footfall.

My apologies for being negative on this matter, but I think it is worth any mobile busines to research beforehand on similar businesses that have already been there, done that and proven not to be effective propogators of mobile revenues before exploring such avenues.

I do hope the entrepreneurs behind this business do well in their endeavours but I think the organisation will need to be bloated with sales staff to sustain organic growth of the model.