Validated App For Free Rides
NO DEAL
EPISODE SUMMARY
đź•“ Air Date: April 14, 2017
Asking For:
$250,000 for 8%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Validated is an app that allows users to earn free parking and rides by shopping at participating businesses, aiming to alleviate transportation costs for consumers and boost foot traffic for brick-and-mortar stores.
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Background Story
Validated, a transportation-cost alleviation app, was founded by the Drew Carey triplets—Ian, Alex, and Tov—in the vibrant city of Portland, Oregon. The entrepreneurial trio brought a unique blend of skills and experiences to the table, contributing to the creation of a solution aimed at bridging the gap between brick-and-mortar businesses and consumers facing rising transportation expenses. Hailing from Portland, a city known for its support of local businesses, the Drew Carey triplets understood the challenges faced by traditional retailers in the era of online shopping dominance.
With a collective background in technology, business, and a passion for addressing real-world issues, they embarked on a mission to devise a solution that would not only benefit consumers but also rejuvenate the foot traffic for local establishments. The idea for Validated emerged as a response to the common pain point of escalating transportation costs hindering people from enjoying the experiences offered by their favorite shops, bars, and restaurants. Recognizing the need for a symbiotic relationship between consumers and brick-and-mortar stores, the triplets conceptualized an app that would incentivize shopping at physical locations.
The product idea revolves around an innovative app that empowers users to earn free parking and rides by patronizing participating businesses. By allowing merchants to set their own offers and spending thresholds, Validated provides a flexible and customizable platform for both consumers and businesses. The triplets’ vision is grounded in reversing the trend of declining foot traffic and reinvigorating the local business landscape through a win-win proposition for all stakeholders. The app officially launched in July, and the Drew Carey triplets are committed to navigating the challenges of the market, determined to make Validated a key player in transforming how consumers approach in-person shopping and dining experiences.
The Product
Validated, an innovative app, revolutionizes the way consumers approach in-person shopping and dining experiences. The user-friendly platform operates on a simple premise: by making purchases at participating businesses, users can accumulate validation credits to offset transportation costs.
Upon downloading the Validated app, users can easily discover local businesses willing to cover their transportation expenses. The process involves a few straightforward steps: users tap on a business to view the required spending amount and the corresponding validation credits. After meeting the spending threshold, users unlock these credits by conveniently scanning a QR code at the merchant’s location.
One of Validated’s standout features is its flexibility—merchants have the autonomy to set their own offers and spending thresholds, providing a customizable experience for both consumers and businesses. The app encourages users to stack credits from multiple establishments, allowing for significant savings on transportation expenses.
Validated credits can be redeemed for free rides or parking, providing users with tangible benefits for their loyalty to local businesses. The app aims to simplify the process, making it convenient for users to accumulate credits as they go about their daily shopping, dining, and entertainment activities.
Currently operational in launch cities Seattle and Portland, Validated aims to expand its reach, fostering a mutually beneficial relationship between consumers and brick-and-mortar establishments. While the app is free to download, users indirectly “purchase” transportation benefits by actively engaging with and supporting participating merchants. Validated’s unique model positions it as a transformative tool for reinvigorating local business landscapes and making transportation costs a less prohibitive factor for consumers.
How It Went
The company’s position before Shark Tank
Validated, currently in its early stages since its launch in July, is actively navigating the market with a focus on transforming how consumers approach local shopping and dining experiences. Presently operational in Seattle and Portland, the company boasts 50 participating merchants, indicating a growing network of businesses interested in the app’s innovative approach. Despite the early metrics suggesting an average of 25 validations per merchant, the company acknowledges the need for continued growth and adoption. In a strategic move to enhance its parking validation service, Validated is actively partnering with PayByPhone, a parking-payment processing app with 12 million users.
This partnership aligns with Validated’s goal of expanding its reach and providing users with a more comprehensive solution for transportation-related expenses. While the company faces skepticism from some Sharks on the TV show “Shark Tank,” the overall health and position of Validated are yet to be fully determined. The sharks, including Mark Cuban, Barbara Corcoran, and Kevin O’Leary, raised concerns about the complexity of Validated’s model, leading to their decision not to invest. However, the company’s response to these concerns will likely shape its trajectory in the market.
The company’s profits and losses also remain undisclosed, and its overall financial health will depend on factors such as user adoption, merchant engagement, and successful implementation of strategic partnerships. Validated’s success hinges on its ability to convince both consumers and businesses of the value of its validation credits. The company’s structure and scalability will be crucial in expanding its presence to new cities and creating a sustainable business model. The early stage and the challenges presented on “Shark Tank” underscore the importance of Validated’s adaptability and responsiveness to market dynamics as it seeks to establish itself as a key player in the intersection of technology, transportation, and local commerce.
The Negotiations:
The negotiations for Validated on “Shark Tank” unfolded with the Drew Carey triplets seeking a $250,000 investment in exchange for an 8% equity stake in their transportation-cost alleviation app. However, the pitch faced significant skepticism from the Sharks, with concerns raised about the complexity of Validated’s business model. Mark Cuban, a seasoned investor on the show, expressed reservations about Validated acting as both a consumer bank and the Federal Reserve. He foresaw ongoing bugs and complications, leading him to opt out of the deal. Barbara Corcoran echoed these sentiments, finding the concept overly complicated and ultimately deciding not to invest.
Kevin O’Leary went further, describing the model as heading to zero and deeming it a “dog,” prompting his exit from negotiations. Lori Greiner considered the potential appeal for restaurants but questioned the widespread adoption of the app, ultimately choosing not to invest. Chris Sacca, initially intrigued by the concept, became increasingly concerned about the complicated user experience and integration points. As a result, he decided to opt out, delivering the final blow to Validated’s hopes for securing a deal. Despite the challenges, the Drew Carey triplets remained resolute, defending their business model and emphasizing the broader market need for Validated.
The Sharks’ unanimous decision not to invest highlighted the perceived complexities and potential pitfalls in Validated’s approach, underscoring the importance of simplifying the user experience and addressing integration concerns for future success. The negotiation process showcased the tough scrutiny and high standards of the “Shark Tank” investors, leaving Validated to navigate the market and implement improvements based on the valuable feedback received during the pitch.
