In 2006, Dan Bensur, Kevin Seeker and Bill Catania were working together at Bensur Creative Marketing Group in Erie when they had the opportunity to go into Wegmans to do an audit of their loyalty program.
“We found out that they weren't using the program that well, and they were looking for a partner for their perks program,” recalls Bensur. “We were looking to build a new technology program for grocery that would allow for the issue and redemption of points — and for fuel and other things to be able to be measured and rewarded — on a mobile platform. The technology didn't exist. That's when we decided to start a new company.”
That company, M-Dot Network, was based on wireless loyalty (“Wireless Loyalty” was actually the original name). These days, issuing rewards through a cellphone seems like old hat, but eight years ago, that wasn't the case.
Though the team had a great idea, there were some stumbling blocks along the way. Shortly after founding the company, the team went to Safeway, the largest grocer on the West Coast, to launch the model.
“We quickly realized that the priorities and goals of a large grocer were very different than ours,” explains Bensur. “We wanted to grow our business, they wanted to grow a program. It was draining all our resources, we had to kill it and pretty much start all over.”
So they shifted the focus, creating a platform that could live inside the point-of-sale device (cash register) with a back-end in the cloud, so consumers could get information through their smartphones. With a technology office in Florida, M-Dot raised a little over $4 million from 100 investors in Erie and around the country.
The company partnered with IBM — who control around 75 percent of the retail space for point-of-sale machines. “We were 'on deck,' explains Bensur. “Our technology was embedded in the IBM technology. We could go to a grocery chain and say, 'Turning our software on is literally as easy as activating it.'”
In December 2010, the company entered the Amazon Web Services Global Startup Challenge — a yearly contest to recognize innovative startups built on a cloud computing platform. The field featured 1700 international companies; seven finalists travelled to Palo Alto to compete. M-Dot won the competition.
Then, three years ago this spring, M-Dot was sold to Inmar, the second largest digital coupon redemption company in North America, netting a nice return for investors.
“Kevin and I had a life experience — putting it very mildly,” says Bensur. “We have since been able to help other startups learn about fundraising, working with [venture capitalists], working with large companies. From the second round of the company, when M-Dot was launched, Ben Franklin Technology Partners of Central and Northern Pennsylvania got onboard, trusted in us, validated us. The team here in Erie was very helpful to us raising capital and staying on track.”
Building a stronger startup ecosystem in Erie has become a major goal of the M-Dot founders.
“When we started out, the local individual or two that were the funders of startups basically told us, flat out, that we would never be able to get this company funded and launched in Erie,” recalls Bensur.
“Ben Franklin, [meanwhile], really pushed us to improve our messaging and to make sure our marketing plan, our budget, our numbers were all validated,” he continues. “We had to find the assets here. Since then, Kevin and I have both been involved with a dozen to twenty startups, giving direction and advice. We've also been up to our elbows, really challenging the local ecosystem here, trying to figure out what we need to do to fix the process and give better support to startups.”