San Diego Magazine
By Erin Chambers Smith
Where do you go after starting San Diego’s fasting growing company, then selling it for millions? If you’re 26 at the time, like Jon Carder was in 2006 when he sold online loan comparison site ClientShop, you head to Indonesia to surf and mellow out. And then the drive and ambition that afforded you such leisure creeps in, and you get antsy.
“I was bored after a month,” remembers Carder.
The Point Loma Nazarene grad was soon back in San Diego and on his way to serial entrepreneurialism. His next venture, MojoPages (a pre-Yelp version of online yellow pages with user reviews) is still alive and ticking, but it’s his latest company, restaurant loyalty club MOGL, which launched in April, that has investors buzzing. And spending. Carder recently secured $2.4 million in venture capital from Avalon Ventures and is in the midst of another $10 million round of fundraising.
MOGL is an online club that pays back its users for eating at partner restaurants and bars. Give MOGL your credit card information, and whenever you use that card at any number of participating restaurants and bars (spots from Sammy’s Woodfired Pizza to Poseiden have signed up), you automatically get 10 percent of your bill credited back to your card. A smart grab at the recession sensitive wallets of consumers? Sure. An alternative to the super-saturated online coupon market? Definitely. A new way to use and improve credit-card tracking technology? That, too.
But Carder says there’s more to the formula that’s attracting consumers so quickly. For one, MOGL donates one meal to Feeding America for every bill closed by a MOGL user. Carder says it’s about tapping into other ways to motivate people. Not everyone gets off the couch to save 10 percent. Feed the hungry at the same time, and you’ve reached a new segment of the population. “I was learning about intrinsic ways to motivate my employees and then I started studying the psychology of it more,” says Carder.
Gaming is another psychological tool he’s applied to the loyalty program. A portion of every MOGL user’s tab is added to a jackpot. If at the end of the month you have spent the most money at that establishment, you win the jackpot (becoming the “MOGL”). “Becoming a MOGL at a venue is thrilling to those who like their name up in lights,” says Carder.
Feedback from restaurant owners is mostly positive. “I love that I can finally reward my regulars in a way that really makes them feel good about eating here so often,” said Mina Desiderio, owner of The Local in the Gaslamp. “From punch cards to wine clubs, loyalty programs haven’t changed much in the last 30 years. We’re innovating in that space,” says Carder, whose internal research shows MOGL users spend 120 percent more on average than other customers.
“We’re all about profitability for restaurants. It has to be profitable for the restaurant community,” says Carder.
The company has grown from 50 restaurants signed up to 120 currently participating. The user base has grown from zero to more than six thousand since April. “I’ve had fast growth in companies before, but never like this,” he says.
Aside from a minor glitch at the get-go with getting people paid quickly enough (apparently banks can’t move money as fast as MOGL can track their credit card purchases), the biggest challenge has been something every online idea faces: copycats. Carder has a team of attorneys working to patent his intrinsic motivation theory. But other than that, there’s nothing proprietary about the business. His best attempt at staving off the competitors? Keep growing; go national. Get all the restaurants and bars signed up and keep them happy. “There are 950,000 restaurants in the country and 85 percent of Americans dine out once per month,” he says. “That’s huge potential for this business.”
MOGL has already launched in Los Angeles and Orange County. And while Carder says he is committed to keeping the company headquartered in San Diego, if the $10 million round of funding comes through, he’s thinking big for his next expansion market: New York City.