Interview by Mike Sullivan
Mike: Hey, everyone. I’m Mike Sullivan, and this is MO.com, where we feature small business owners and entrepreneurs. Joining us today is Eric Freiberg of SweepStreet.com. Eric, thanks for joining us today. Let’s just start with your background. Can you tell us a little bit about yourself? Eric: My background, I’ve always been a Wall Street guy. Back in 1993, after I graduated college, I really wanted to get a job in the finance industry. I was a retail stockbroker up until 1999. Then, I worked at a hedge fund where I was a proprietary market maker. After that, I’ve been working on the floor of the New York Stock Exchange for the past 10 years. I’ve always had a real entrepreneurial spirit and always have wanted to go out on my own and try to build something that I could call my own, that I started from scratch.
Tell us some more about SweepStreet.com. I know it hasn’t launched yet, but where did the idea come from, and what is it?
SweepStreet came out of an idea when I was driving into work one day, and I thought there really would be a great need to have — it would be fun to be able to enter sweepstakes online, where you could win different iPads or any kind of great prizes, where you’d be able to win for $5 or $10, where the entries would be limited, where there’s a very good chance for people to win.
With that idea, there are a lot of legal laws about sweepstakes rules. There needs to be a store along with it, so I decided that I think the idea should be that we will be selling designer jewelry, stuff that’s in the stores today, at 50% discounted prices. Every time you buy a piece of jewelry, you are able to enter one of six sweepstakes that we will always be running.
The unique thing about the sweepstakes that nobody else is doing, that I’ve never seen it, is that the odds are already set depending on the price of the prize. The odds will be 1 in 10, 1 in 50, 1 in 100. For example, an iPad would probably be a 1 in 100 prize. Every time somebody enters, you’ll see as it fills up, and a progress bar will let you know when it gets to 100%. At that point, a winner will be announced, and a new sweepstakes will start immediately.
If we’re doing as well as I think we should do, we’ll be having 20 to 30 sweepstakes a day. There’ll be a lot of winners on the site, and I think that will make it viral. I think that will really be giving a reason for people to come to the site every day, whether or not they’re looking to buy our product; or we think, if you get people in the store, that we should be able to get our product to sell.
The sweepstakes is really a marketing tool that we haven’t seen anybody do, but we think it should be a huge success.
At the time this interview is taking place, SweepStreet.com has not yet launched. When should we expect it to launch?
Our thinking right now is, within the next two weeks, we’re going to do a soft launch with a few hundred emails that we have now, and make sure that the sweepstakes are running smoothly, we’re shipping the jewelry out correctly and on time, and keep on adding a few hundred names every couple of weeks.
September 1st will be our official launch, when we really start aggressively marketing the website and try to get as many users there as possible.
I read in your press release that you sent a $2,500 necklace to Lindsay Lohan. What’s the story behind that?
Well, me and my partner were sitting around, and we were wondering: How are going to market the site? It was going to be hard to get our name online. We were just having fun with it. The Lindsay Lohan story was the big story in the paper every day. We decided, let’s send Lindsay Lohan a necklace to replace the one that she was accused of stealing in California.
We picked a necklace called the evil eye, which is supposed to bring you good luck, ward of bad spirits. So it was sort of apropos. We had our PR department send out a letter to all the different gossip websites saying that SweepStreet.com has sent Lindsay Lohan a Judith Ripka necklace to replace the one that she was accused of stealing.
It worked great. That day, 30 or 40 websites picked up the story and ran with it. Then it sort of died down for maybe two or three weeks. Then, Lindsay obviously got the necklace. She wore it to court one day. She’s basically doing a runway walk when she goes into court. The TMZ, the New York Post, Inside Edition were calling it, “That was the necklace that she got as a gift.”
It was a lot of fun. The next day, it was on the front page of the New York Post. I gave an interview with the Post. I thought it would be on page six. I couldn’t believe it when I picked up the Post, and the story was on the front page. We did an interview on “Inside Edition”, the E! channel, “TMZ”. It really got a lot of press.
Currently, since then, we’ve been speaking with Lindsay’s agent. Hopefully, we’ll be able to continue the relationship with her.
For you, what has been the most challenging step in the process of launching a new business?
The most challenging step so far has been dealing with all of the tech issues for building a website. I’m really more of a sales and marketing kind of person and didn’t totally understand what goes into building a website. Really have learned a lot along the way, dealing with developers and designers to see how much knowledge, how much hard work it takes to build a website that’s functional and easy to use.
We started this in November, so over the past seven months, it’s amazing how much I’ve learned about the Internet business.
How do you plan to further market SweepStreet?
We will have an aggressive email campaign. We’ve accumulated 25,000 emails since we’ve started. That will go out to our target market of 18 to 59-year-old women. We hired an advertising agency called Tenthwave, who are going to be having a paid search budget for us. We’ll be putting up banner ads on the appropriate websites. We’ll be a doing a campaign just for the SEO, organic type of search. The content that we wrote on the site hopefully will get us a lot of SEO hits as well.
I think, between those ideas, we should be able to generate traffic. Hopefully, within six months we really will have figured out how to get the right traffic of the people to our site, who hopefully are going to buy the items.
The sweepstakes really is the biggest marketing tool that we have. Somebody comes to the site, and it’s no purchase to enter a sweepstakes. You come onto the site, and whether it’s an iPad or you win a $50 iTunes gift certificate, and you win it that day that you entered, people are going to tell their friends. We think that it should spread around the online world pretty quickly.
It sounds like a lot of thought went around the model of using a sweepstakes as part of the business. But how did you select the product – jewelry?
The product that we’re offering, we bounced around a couple of different ideas what we should sell on the site. For a while, we thought about maybe doing a daily deal site. When we spoke to some of the VCs and private equity firms, they were saying the idea is great and it probably will catch fire, but there’s not a lot of sustainability to it.
The most important thing is really to find an idea that has some walls around it and make the barrier to entry very hard for competitors to get in. On day one of our launch, we’ll be offering Judith Ripka, John Hardy, David Yurman, Kenneth Lane jewelry – stuff that’s in the stores – for 50% off. Because of the relationships that we have made in the jewelry industry through my partner and my friend, no other company, in our mind, really will be able to replicate exactly what we’re doing.
Right now, the only sites who are competitors would be Bluefly, which just has closeout models of the designs that the stores or the designers could not sell. Then you have Gilt Groupe, who they only do flash sales, so a manufacturer like Judith Ripka would only be on Gilt Groupe three days out of the year. They’ll be on SweepStreet every single day, where you’ll be able to get a great deal on jewelry, along with the kicker of being able to enter the sweepstakes.
Eric, thanks for talking with us today.
All right. Thanks a lot, Mike.
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