Zozi Gets Cozy With Celebrities to Separate Itself From the Groupon Clones
After slogging it out for two years in the daily deals business, and facing competition from Groupon and hundreds of clones, Zozi believes it has started to find its niche.
Rather than focusing on extreme discounts, the San Francisco company has decided to offer extreme adventures.
Today, it is launching Zozi Guru, which sells high-end adventures taught and organized by professional athletes.
For example, you can go skiing with Olympic gold-medal skier Jonny Moseley, or go running with barefoot runner Eric Orton, or learn to kayak with Tao Berman, a three-time world-record holder for extreme whitewater kayaking.
Unlike typical daily deals, these offers are full price, and the merchants and celebrities involved will surely make money, which is in steep contrast to lots of sites that blast emails out to a list of subscribers on a daily basis.
“We don’t want to be a deals site. You won’t hear us use the word ‘deal.’ It’s all about experiences. We try to offer the best prices, but it’s about the adventure and exploration component,” said TJ Sassani, Zozi’s CEO and founder.
That hasn’t always been the case for Zozi.
It started off as a daily deals site, selling international trips in 2008. But Sassani said the opportunity wasn’t as big as the company had hoped, and Zozi shifted to local adventures. Intially, it used the Groupon model to grow membership, but now that it has some scale, it is shifting to full price.
Typical offers on the site range from bungee-jumping sessions to kiteboarding lessons, but Sassani said the business won’t ever reach Groupon’s scale. He said he definitely doesn’t aspire to have an initial public offering; however, he does believe that it could be a $1 billion to $2 billion opportunity.
So far, Zozi has signed up close to one million subscribers and is in 20 cities, up from only one market in 2010. It has just started moving into Canada, and other locations are coming soon.
“Groupon is much more like Wal-Mart, where they offer low-cost, low-quality items to discount seekers,” Sassani said. “But our average purchase price ($60) is more than double Groupon’s, and we target someone who would shop at REI. It’s a sophisticated customer, who is less price-sensitive.”
To help with the rollout of Zozi Guru, the company raised a small undisclosed inside round with investors last week. Previously, it had raised $10 million from Dave McClure’s 500 Startups, Launch Capital, ZIG Capital and others.
This week, Zozi is launching the new service with six celebrity athletes, but Sassani said the company has signed deals with 20 to 30 people, who will do a combination of 100 programs over the next year.
Sticking with its goal of offering premium experiences, the programs start at $1,000, and can go as high as $10,000, depending on the celebrity’s status and the event, which could include luxurious accommodations — one example might be a five-night visit to Hawaii, where you would learn how to surf from a professional, and stay at the Four Seasons.