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Start Your Business Success Stories

By Combing Social Media, LocalResponse Gets Down to Business

LocalResponse Nihal Mehta / Credit: Nihal Mehta

Picture this.

You are fed up with AT&T's customer service, so you change your Facebook status, tweet your displeasure or post in another social media forum to let others know just how you feel about AT&T. Seconds later, you receive a message, not from your friends, but from Verizon offering you $100, if you switch. 

Think that sounds like something out of the future? Think again. That is an actual campaign being conducted by a new social advertising platform called LocalResponse.

"This is a relatively new phenomenon that people are raising their hand and saying, 'I'm here,'" said Nihal Mehta, CEO and co-founder of LocalResponse.  "They are broadcasting their location and what they are doing." Mehta said his company analyzes that data and helps marketers respond with relevant offers.

LocalResponse is able to do that by analyzing data posted on Twitter, Facebook, foursquare and other social media platforms to target customers both with banner ads and exclusive offers that apply to people's purchasing decisions.

I always knew I wanted to create something on my own

LocalResponse launched in 2011, but Mehta's career in business began well before then. 

"My real inspiration to start my own business came from watching my parents build a business in the basement of my house when I was 7 years old," Mehta said. "I literally got to see the Ping-Pong table turn into a full office. My dad came over from India in the 1970s with $1,000 in his pocket that he had borrowed from his uncle. It was definitely the American dream story. I always knew I wanted to create something on my own."

That interest was strengthened when Mehta interned at Microsoft. In 1999, when Mehta was a senior at the University of Pennsylvania he started Philly Tonight, an Internet-based city guide. Soon after starting the business Mehta had a tough decision to make.

"A big turning point happened when I graduated college," Mehta said. "I was offered a job with Goldman Sachs, I still have the signed offer letter in my possession, and all of a sudden we had a website that was growing as well. My parents told me, 'You can always go back to Goldman Sachs, now is the time to jump into your business.'  I never looked back." 

Philly Tonight soon turned into a network of city guides called Urban Groove, but when the dot-com bubble burst, Mehta was forced to adapt

"We created a program with Philly Tonight that allowed any user to put in their phone number and select what city they were in and what music they liked," Mehta said. "So if you liked hip-hop and you were in New York City we would text you that evening our hip-hop recommendation for that evening and that service became really popular. That was before there was interoperability with text messages on different carriers and we registered 10,000 people in a short amount of time."

Mehta felt there was potential to take that feature and turn it into a business-to-business service. In 2001, Mehta started ipsh!, one of the first full-service mobile marketing agencies. After initial struggles, Mehta soon had McDonald's, Coca-Cola, Proctor and Gamble and Unilever as clients.  The success of ipsh! drew the attention of top marketers.  After months of negotiations, Mehta sold ipsh! to Omnicom in 2005.

Mehta began working for Omnicom and started investing in other businesses, including AdMob, which was acquired by Google in 2009 for $750 million. Mehta soon tired of his new role. 

[Local Business Goes Digital in Myriad Ways]

"I left Omnicom in 2007 because I was itching to create again," Mehta said. "I wanted to start my own business again. I started a company called buzzd and that was essentially a real-time city guide that allowed people to post what they thought of a bar when they were there and people could read the post."

When the location-based services arena became crowded with several other applications, Mehta used his marketing and B2B knowledge and turned buzzd into LocalResponse. With the help of co-founders Kathy Leake and Michael Muse, LocalResponse now serves clients like Coca-Cola, McDonald's, Walgreens, Microsoft and Verizon, to name a few.         

"It started with SMS, then it was banner ads and now it is this," Mehta said. "I truly believe with all the data out there that this is a huge opportunity. Google monetizes intent to research to the tune of $6 billion a quarter.  We are trying to monetize intent to purchase everywhere else, which we hope has the potential to be a piece of that."

Currently LocalResponse has 19 employees and the company has offices in New York City and Chicago.

You can have the moon if you want it

"The thing I always tell other entrepreneurs is, you never fail until you quit," Mehta said. "That is something that I live and die by.  All of these businesses go through ups and downs, you run out of money and things happen, but if you don’t quit you will find a way."

Mehta credits his father for instilling that confidence in him at a young age.   

 "My dad always told me I could have anything I wanted," Mehta said. "My dad would say, 'You can have the moon if you want it,' and that stuck with me at a young age. It influenced my confidence and my ability to persevere."

Reach BusinessNewsDaily staff writer David Mielach at Dmielach@techmedianetwork.com. Follow him on Twitter @D_M89.

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