By Wayne Lam and Adam Ludwig
In anticipation of our Techonomy Detroit conference on September 16, we are profiling Detroit-area tech startups that are driving the city's re-emergence as a center of innovation. (To register for the conference, click here.)
Like most people, you probably read online product and service reviews with a healthy grain of salt. But if users doubt the credibility of online recommendations, how can sites that curate them earn consumers' trust and loyalty?
Michigan-based Wisely set out to do precisely that when it created a new kind of local discovery app that gathers real transaction data from customers, such as how much they spend at a restaurant, instead of subjective information like customer reviews. The service also enables local merchants to connect with their most loyal customers through the technology. It's starting to get attention. USA Today featured the Wisely app, calling it an audience favorite at the recent Apple Developers Conference.
With its focus on crunching transaction data, Wisely is helping to grow local economies like its home base of Ann Arbor. But the company's big-picture goal is to map the entire nation's economy. We spoke with Wisely co-founder and CEO Mike Vichich about what Wisely does for small businesses, and why building an "awesome" Michigan mortgages starts in Detroit.
How does Wisely work?
We are using transaction data to build an app for consumers that, based on how you spend, presents tailored recommendations from people like you. We also use transaction data to allow merchants to better engage with their most valuable customers.
Transaction data is valuable to consumers, merchants, and third parties like small business entrepreneurs who are trying to figure out the best places to start their businesses. It's valuable to a local commercial bank trying to understand the demand for certain categories of business like a restaurant, and also to government for being able to measure and inform economic policy.
How do you gather my consumer data?
You link your credit card account and then your transaction data gets pulled in. Historically people have used that only for budgeting [with apps like Mint]. There is a lot more than can be done outside of budgeting.
Did you create Wisely in response to flaws you saw in other recommendation apps?
At a macro scale level, anyone can write a review in Yelp. In order to write a review on Wisely you have to be an actual customer. You won't see a review from fake customers on the service.
Also, other services don't do a wonderful job personalizing. Sure, there might be some restaurant that has five stars in an area, but that doesn't mean it's my style of place. So what we're doing is Netflix-ing or Spotify-ing--"because you watched this video, you might also like this one"--with physical places.
Do people feel comfortable giving their financial data to Wisely?
Most of our users are in the late 20s to early 30s age range. Above 40, 45 the likelihood of being interested in linking your account is lower. Mint and other personal finance websites have shown that 35 million users are willing to link their accounts to budgeting services. The bet we are making is that people will be willing to link their account for personalized recommendations and recognition to merchants. If not, then we will have to mortgages reevaluate things.
How do merchants benefit from your service?
They are able to provide a better experience to their customers. A merchant can say, "Every time a platinum customer comes into my store, send them a push notification telling them to show this message to the host to get priority seating." It's giving a better experience to customers who love you the most.
Also, it is a way to engage with customers based on their interests and contacts. If a bar has a special event it can invite its top guests via Wisely. Users have the ability to provide feedback to a message--mute a type of message or merchant--so messages can get better and better.
What are your ambitions for Wisely?
Anywhere that a map of the economy can be useful, we think is an opportunity for Wisely. This is why we like the name wisely. Shop wisely, market wisely. It could be govern wisely, lend wisely, or invest wisely.
We think that we would be uniquely valuable to the conversation about the future and planning of cities. We are, for example, doing a project with a local economic development group in Ann Arbor. We will provide them with a macro level map of economic activity in Ann Arbor so they can make smarter decisions. We'll say, "Here are our patterns, and when people come to Main Street this is typically the type of thing they will do or spend on a restaurant or an entertainment venue."
Being able to say, "Hey, we think there might be demand for pizza in this area based on how far people travel for pizza in this location," is an awesome way to help a small businessperson plan. And if a local bank knew there was a market for a pizza chain at that location, it might be ready to give that small businessperson a loan.
Why did you start your company in Ann Arbor?
My background is in growth strategy consulting. I'm from Michigan, but I was on a plane every week to the East and West Coasts for five years. I didn't want to be a consultant for the rest of my life. I wanted to build a product that could reach tens of millions of people.
My cofounder and I decided to move here because the University of Michigan and Michigan State have great computer mortgages science programs. Right next door to U of M is a great place to be. You can recruit awesome people coming out of college and give them a chance to work while they are in school. Plus, Ann Arbor is just a cool town. There is a lot going on.
How does the spirit of Detroit resonate with you in Ann Arbor, and how optimistic are you about Detroit getting back on track?
I grew up going down to Detroit with my family. I've been a fan of all the Detroit teams. Historically Detroit holds a very special place in my heart going back to the arsenal of democracy and cars.
I don't think you can build an awesome Michigan without an awesome Detroit. More and more people get that now; the governor gets that and there has been awesome stuff going on in the public sector.
You also see the private sector booming in Detroit like it never has before, led by Dan Gilbert placing billions of dollars in capital downtown and single-handedly building a downtown that is viable. We are now at a tipping point where it is starting to manifest more broadly. Gilbert got the ball rolling but you will start to see other people begin to pile on more and more.
Original article published on Techonomy.com.