San Francisco start-up Sosh delivers the best restaurants, events, and activities to your phone. But can it succeed where daily-deals sites have failed?
Finding new restaurants in a city is a chore.
There are dozens of websites dedicated to pointing out the best places to go out and eat. Email in-boxes fill up with new promotions and deals and the "9 Best Mac N' Cheese Dishes." Local publications promote their "Going Out Guide" and "Out and About" picks. And anyone can write a review on Yelp.
The problem is not quantity of recommendations. It's quality. Daily-deals sites don't give you good deals. Newspaper reviews are easily forgotten. And "Best Of" lists can be too long.
In what could be the next phase of willing your social life to the Internet, a new company may have found a way to fill in those gaps. It's called Sosh (pronounced like the first syllable in "social")—another San Francisco-based start-up run by twentysomethings who want to "change something about the world," according to its CEO and cofounder, Rishi Mandal.
In this case, the thing they're changing is the way people discover the best a city has to offer, without relying on unattractive deals, anonymous reviews, and tired listicles.
Sosh developed a mobile app and website that uses vast amounts of data and personal preferences to give users several timely and local options for restaurants, events, specials, dishes, drinks, and activities in a city. The app takes the best of all of those sites and services people use for finding new places and combines it in an easy-to-use platform. The company, if successful, could bring more money and attention to worthy businesses across the country, boosting these cities' cultural scenes.
So far, the app is in San Francisco, Chicago, New York, Seattle, and Washington, D.C., and looking to expand next in Los Angeles, Boston, Austin, and Portland, Ore. After two years in San Francisco, one in six residents use the app, according to Mandal.
How does it work?
In D.C. alone, where the service was launched this month, Sosh uses between 500,000 and 1 million sources (blogs, reviews, event listings, ticketing websites, tweets, Facebook posts, Instagram photos) to complete an algorithm that finds new recommendations. A Sosh employee in the city gives the green light on the picks and can use the guidance of "tastemakers"—a fancy term for local cultural leaders. Chefs Bryan Voltaggio and Spike Mendelsohn are two of them in D.C.
Recommendations are then individualized, depending on a user's history with the app, neighborhood preferences, and activities they're seeking. As you use Sosh, it learns about you. Sosh also has a partnership with the reservation website OpenTable, which shows seating availability at certain picks.
Mandal calls it a "personal concierge."
Avoiding the Groupon Trap
Sosh sounds like what LivingSocial and Groupon started off as: services that opened new restaurants at discounted prices to more people. But both sites have struggled financially (Groupon's stock has declined significantly just this year alone) and with their missions. Restaurants ended up losing money on the deals, and users complain now of websites with too many deals on products they don't want and fewer locally focused deals for restaurants.
Mandal knows this, and he cites it as one of the reasons his company may have an advantage in recommending new experiences. He's not giving you "an incentive to go try something that may or may not be good," he says, like with these daily-deal sites.
The problem with those sites, he continues, is "the people who want your help with distribution are usually the people who are not full every day, are not interesting, are not popular, and have an adverse-selection problem. Basically, people who have their traffic juiced and spiked are people who need that and not the ones who are interesting and successful."
What about the money?
The practice may be different than Groupon or LivingSocial, but Sosh still has to make money beyond the $15 million it's brought in from investors in the last three years—including from former Washington Post CEO Don Graham.
Right now, the app is free of membership fees, advertising, and sponsored content. The profit comes later and depends on the data it collects from users. Since Sosh notes every time you click on a recommendation or bookmark an event for later, the company gathers massive amounts of data from all over the city—so much, Mandal contends, that it can tell what kind of food options or events would be most popular in certain neighborhoods.
That's where the company's idea for profitability comes in. It's called it the Sosh Marketplace, which is in beta testing in San Francisco right now.
Sosh will take care of ticketing, logistics, merchandising, and promotion for local restaurateurs and artists who want to showcase their work to an audience they might not have been able to reach before. The company takes a 5 percent fee on ticket sales in return. The events are then featured on the Sosh website's marketplace section.
So far, the results have been positive, Mandal says. On average, event sales have doubled using the marketplace. The service could expand to other cities by the end of the year.
If this works, it could mean more profits for local artisans and restaurants. It could also prove that sites dedicated to giving people ideas for what to do on a Friday night can make a profit.